Space Station

NASA has contracted with Grumman Corporation to provide engineering and other services for the Space Station Freedom. NASA and Grumman's working relationship has been turbulent over much of the contract period mainly because of: (1) NASA's belief that Grumman did not promptly change from a program support contractor to an engineering and integration contractor when asked to do so; and (2) Grumman's belief that NASA's failure to resolve issues stemming from organizational changes in the wake of the Challenger accident had hamstrung Grumman's ability to quickly assume the program integration role. NASA's concern with Grumman's program management became so acute that by early 1990 the Fee Determination Official significantly cut Grumman's award fee. Since then, NASA and Grumman have made progress in redefining Grumman's role as the engineering and integration contractor. Both parties now believe that they have a mutual understanding of their roles and that no barriers exist that might preclude full performance by the contractor.

GAO found that: (1) although the contractor was first designated a program support contractor and then an engineering and integration contractor, the contract has always included numerous systems engineering and integration tasks; (2) NASA and the contractor appeared to have similar formal expectations about the contractor's verification role prior to the start of the contract; (3) the later differences in expectations were more about the kind of verification role the contractor was to play; (4) NASA viewed the contractor as being inflexible in accommodating its changing needs, and lowered the contractor's award fees; (5) the contractor believed NASA arbitrarily and abruptly changed the definition of the contractor's integration role, and that it was being evaluated by a new set of criteria prematurely; (6) the contractor took until mid-1992 to fulfill its promise to become a fully operations engineering and integration contractor; and (7) NASA and the contractor agree that no significant barriers to fulfillment of the contract remain.