NASA Procurement

GAO reviewed 65 cost and schedule modifications of contracts at NASA's four largest procurement centers and found that NASA caused most of them by changing contract terms, specifications, or scope. Contractor performance and unforeseen circumstances beyond the control of NASA or the contractor caused the other modifications. NASA had significant problems in administering some of these contractor modifications. Problems included (1) new work noncompetitively added to contracts without justifying sole-source procurement, (2) negotiations of contract changes not completed in a timely fashion, (3) unauthorized personnel directing contractors to do additional work, and (4) proposed contract changes not adequately evaluated. During the last several years, NASA's procurement management surveys have identified some of these same problems, and NASA has made changes on the basis of survey results, including improving and expanding training. In addition, although NASA recently started to enhance procurement management surveys, these surveys could be further improved by adjusting their focus, scope, and frequency.

GAO found that: (1) such NASA center actions as changing contract terms, specifications, or scope caused more than half of the 65 cost and schedule modifications, with contractor performance causing 19 percent of changes and unforeseen and uncontrollable circumstances causing 29 percent of the modifications; (2) NASA could have resolved some of the problems causing the need to make the modifications, including defective or incomplete plans, specifications, and work statements, before awarding the contracts; (3) the 65 modifications collectively increased the contracts' costs by about $51 million and extended delivery schedules by about 21 years; (4) NASA centers experienced such contract administration problems as noncompetitive addition of new work without sole-source justification, untimely completion of contract change negotiations, unauthorized personnel directing contractors to perform additional work, and inadequate evaluation of proposed contract changes; (5) although NASA uses procurement management surveys to evaluate the quality and effectiveness of its procurement operations, its actions to correct identified problems have not always been effective or timely; and (6) NASA conducts procurement management surveys too infrequently, and the survey methodology is sometimes too inflexible or too broadly focused for maximum effectiveness.

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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