NASA Procurement

During fiscal years 1989-91, NASA spent more than $10 billion annually on work done by contractors, much of which was supervised by other government agencies--primarily the Defense Department (DOD). GAO found widespread and significant deficiencies in NASA's management of delegated contracts. For example, planning conferences between NASA and DOD were not held as required. In addition, delegation letters from NASA to DOD were often either late or unclear about the functions being delegated. NASA did not obtain most acceptance letters in a timely manner, and some were not obtained at all. Some NASA contracting officers were unaware that their contracts had been delegated to DOD or did not know why functions had been delegated. Further, NASA could not verify the amounts or services that DOD was billing for. While NASA has changed its regulations and procedures to resolve these deficiencies, GAO believes that additional steps are needed to ensure that these problems are adequately corrected.

GAO found that: (1) although the NASA Federal Acquisition Regulation Supplement (FARS) requires NASA centers to conduct a conference with DCMC delegatees to plan contract administration activities on contracts expected to exceed $5 million, NASA centers have not conducted such conferences with DCMC on 88 percent of the contracts reviewed that exceeded $5 million; (2) although NASA FARS requires NASA to send letters to delegatees identifying their responsibilities within 15 days after the contract award, for 36 percent of the contracts reviewed, NASA did not send the letters within 15 days and, in almost 40 percent of those contracts, NASA either took months to send the letters or did not send them at all; (3) although NASA FARS requires NASA to send instructions to delegatees in certain circumstances, the centers failed to send those letters in about 30 percent of the reviewed contracts that required such instructions; (4) since NASA instructions in its delegation letters to DCMC generally do not specify which of the 77 contract administration functions it has delegated to DCMC, DCMC has to infer from the delegation letters' regulation references which contract activities apply; (5) for over half of the 119 contracts reviewed, the centers could not document whether DCMC had accepted responsibility for a delegated contract and whom to contact at DCMC to discuss contract issues, since DCMC either did not timely send acceptance letters or did not send them at all; (6) the centers did not routinely notify DCMC of contract modifications; (7) NASA was often unaware that its contracts had been delegated to DCMC; and (8) NASA has negotiated with DCMC to revise the billing format and system, since it was having difficulties assessing the accuracy of DCMC bills. GAO also found that NASA identified contract management as a material weakness under the Federal Managers' Financial Integrity Act and recently changed its regulations and procedures to address most of the identified problems.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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