NASA's System for Tracking Foreign Contracts and Subcontracts
Gao ID: GAO-07-142R November 9, 2006The National Aeronautics and Space Administration (NASA) is the nation's leading research and development organization in the fields of space and aeronautics. Each year, NASA spends almost 90 percent of its annual budget on the acquisition of supplies and services in order to fulfill the agency's mission to pioneer the future in space exploration, scientific discovery, and aeronautics research. NASA purchases these supplies and services from both U.S. and foreign contractors. Although most contracts were awarded to U.S. contractors, NASA, in fiscal year 2004, also awarded contracts to vendors in 23 countries. The National Aeronautics and Space Administration Authorization Act of 2005 requires the NASA Administrator to annually report to Congress on NASA's contracts and subcontracts performed overseas and purchases from foreign entities. The report should also indicate contracts and subcontracts and their dollar values for goods and services that are only available from foreign sources as well as items and their dollar values for which the Buy American Act was waived pursuant to obligations of the United States under international agreements. According to the reporting requirement, the first annual report is due no later than January 2007. Based on Congressional interest in ensuring that NASA will have the data to meet the new reporting requirements, we examined how NASA will track contracts and subcontracts performed overseas, foreign purchases, and the use of Buy American Act exceptions. We also determined whether NASA collects and analyzes data to assess its supplier base.
NASA will not fully meet congressional reporting requirements on fiscal year 2006 foreign purchases by January 2007 because it is not collecting all the data needed to do so. Currently, NASA can track its contracts performed overseas and purchases of foreign goods and services through information contained in the Federal Procurement Data System-Next Generation (FPDS-NG)--an upgrade to the governmentwide information system on federal procurement contracts. As NASA relies on FPDS-NG, which currently does not track information on subcontracts or Buy American Act exceptions used in foreign purchases, NASA officials stated that they cannot report on this information at this time. A recent change made to the FPDS-NG will allow NASA to start collecting Buy American Act data for its fiscal year 2007 purchases, and NASA plans to work with the Office of Management and Budget (OMB) to collect subcontract information under a pilot program to be implemented by July 2007. However, NASA will not have this information available to meet the January 2007 reporting date. In addition, although NASA has collected supplier base data for its Space Shuttle program, it does not collect or analyze agencywide data on its suppliers.
GAO-07-142R, NASA's System for Tracking Foreign Contracts and Subcontracts
This is the accessible text file for GAO report number GAO-07-142R
entitled 'NASA's System for Tracking Foreign Contracts and
Subcontracts' which was released on December 11, 2006.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
November 9, 2006:
The Honorable Mark Udall:
Ranking Minority Member:
Subcommittee on Space and Aeronautics:
Committee on Science:
House of Representatives:
The Honorable Jerry F. Costello:
House of Representatives:
Subject: NASA's System for Tracking Foreign Contracts and Subcontracts:
The National Aeronautics and Space Administration (NASA) is the
nation's leading research and development organization in the fields of
space and aeronautics. Each year, NASA spends almost 90 percent of its
annual budget on the acquisition of supplies and services in order to
fulfill the agency's mission to pioneer the future in space
exploration, scientific discovery, and aeronautics research. NASA
purchases these supplies and services from both U.S. and foreign
contractors. Although most contracts were awarded to U.S. contractors,
NASA, in fiscal year 2004, also awarded contracts to vendors in 23
countries.
The National Aeronautics and Space Administration Authorization Act of
2005[Footnote 1] requires the NASA Administrator to annually report to
Congress on NASA's contracts and subcontracts performed overseas and
purchases from foreign entities. The report should also indicate
contracts and subcontracts and their dollar values for goods and
services that are only available from foreign sources as well as items
and their dollar values for which the Buy American Act was waived
pursuant to obligations of the United States under international
agreements. According to the reporting requirement, the first annual
report is due no later than January 2007. Based on your interest in
ensuring that NASA will have the data to meet the new reporting
requirements, we examined how NASA will track contracts and
subcontracts performed overseas, foreign purchases, and the use of Buy
American Act exceptions. We also determined whether NASA collects and
analyzes data to assess its supplier base.
Summary:
NASA will not fully meet congressional reporting requirements on fiscal
year 2006 foreign purchases by January 2007 because it is not
collecting all the data needed to do so. Currently, NASA can track its
contracts performed overseas and purchases of foreign goods and
services through information contained in the Federal Procurement Data
System-Next Generation (FPDS-NG)--an upgrade to the governmentwide
information system on federal procurement contracts. As NASA relies on
FPDS-NG, which currently does not track information on subcontracts or
Buy American Act exceptions used in foreign purchases, NASA officials
stated that they cannot report on this information at this time. A
recent change made to the FPDS-NG will allow NASA to start collecting
Buy American Act data for its fiscal year 2007 purchases, and NASA
plans to work with the Office of Management and Budget (OMB) to collect
subcontract information under a pilot program to be implemented by July
2007. However, NASA will not have this information available to meet
the January 2007 reporting date.
In addition, although NASA has collected supplier base data for its
Space Shuttle program, it does not collect or analyze agencywide data
on its suppliers.
In view of NASA's ongoing actions intended to address congressional
reporting requirements, we are not making recommendations in this
report.
NASA Relies on FPDS-NG to Meet Reporting Requirements:
NASA officials told us that NASA relies on the FPDS-NG to meet its
reporting requirements. Therefore, what NASA can report depends on
whether the needed data are part of the data fields included in the
FPDS-NG. If needed data are not included in the FPDS-NG, NASA could
amend its FAR Supplement to collect the data.
NASA Can Track Foreign Purchases through FPDS-NG:
FPDS was established in 1978 to collect governmentwide information on
federal procurement contracts. Executive agencies, including NASA, are
required to submit data into the FPDS-NG on their procurements
exceeding $3,000. The information includes contract types, dollar
values and dates, purchaser information, product or service
information, competition information, and contractor information.
Federal agencies can query the data system to generate reports needed
to meet reporting requirements, based on the data included in the
system.
Through the FPDS-NG's advanced search capability, NASA can create its
own custom reports using the following three data elements currently in
the system that would allow it to meet part of the congressional
reporting requirements:
* Principal Place of Performance--the place where the work is being
performed;
* Vendor Country Code--the country code of the contractor's address;
and:
* Extent Competed--a code that represents the competitive nature of the
contract.
NASA plans to query the Principal Place of Performance data field to
compile a list of contracts performed overseas and then further query
the Vendor Country Code for contracts performed by foreign vendors in
order to compile a list of foreign purchases. In addition, within the
list of foreign purchases, NASA plans to use the Extent Competed data
for a list of sole source contracts that would indicate that the items
purchased were available only from a source outside the United States.
While these data fields will enable NASA to report part of the
information required by congressional requirements, we believe that the
accuracy and consistency of the data will depend on NASA's contracting
office staff inputting accurate data into the system and contractors
providing correct information.
While FPDS-NG is intended to provide more timely and accurate data,
enable users to generate their own reports, and provide easier user
access to data, we recently found that the upgrade may have some
limitations. Specifically, in September 2005, we reported that the FPDS-
NG may not achieve its intended improvements. We recommended that the
Office of Management and Budget (OMB) work with agencies that have not
moved to an electronic data submission environment to connect to FPDS-
NG via contract writing systems as soon as possible and develop a plan
to improve the ease of use and access to data.[Footnote 2] OMB
concurred with the recommendations and is in the process of
implementing them.
NASA Unable to Track Foreign Subcontracts or Buy American Act
Exceptions until Changes Made:
Because not all the data needed to satisfy the congressional reporting
requirements are currently included in the FPDS-NG, NASA has to either
collect its own data or wait for changes to be made to the FPDS-NG. The
following data are not being tracked by NASA but are needed to satisfy
the congressional reporting requirements:
* subcontracts performed overseas,
* subcontracts that are purchases from foreign entities,
* subcontracts for which the goods or services are available only from
a source outside the United States, and:
* foreign purchases for which the Buy American Act did not apply due to
U.S. obligations under international trade agreements.
The Federal Funding Accountability and Transparency Act of
2006[Footnote 3] enacted on September 26, 2006, requires OMB to
establish a database containing, among other things, contract and
subcontract data. The act requires OMB to commence a pilot program to
collect subcontract data no later than July 2007. NASA plans to work
with OMB to determine if the new system will satisfy NASA's subcontract
reporting requirements. If not, NASA will consider development of a
supplemental subcontract database.
In addition, in October 2006, a change was made to the FPDS-NG that
will allow NASA to start collecting Buy American Act exception
information for its fiscal year 2007 purchases, in response to a fiscal
year 2006 appropriations act[Footnote 4] governmentwide reporting
requirement. Also, in response to this reporting requirement, the
Federal Acquisition Regulation (FAR) was changed on September 28, 2006,
requiring offerors to provide "Place of Manufacture" data. According to
agency officials, along with this information, contracting officers
will be required to enter into the FPDS-NG the appropriate Buy American
Act exception category for procurements of items that are manufactured
outside of the United States--one of these categories being U.S.
obligations under trade agreements. On October 6, 2006, NASA issued
guidance to its contracting officers on how to enter Buy American Act
exceptions data into the FPDS-NG. This information will enable NASA to
collect the data needed to meet its reporting requirements.
NASA procurement officials told us that contracting officers will need
additional training to properly input new data elements, such as
information on the Buy American Act exceptions, into the FPDS-NG. The
FAR Acquisition Law Team, that participated in preparing the FAR
changes, recommended that an on-line training module would be
appropriate to assist contracting officers to understand how to
determine the applicable exceptions to the Buy American Act. NASA plans
to include training on Buy American Act exceptions as a part of its
training planned for its contracting personnel when its new contract
management system becomes operational in November 2006.
NASA Supplier Base Assessment:
With the exception of the Space Shuttle program, NASA is not collecting
or analyzing data for its agencywide supplier base. For the Space
Shuttle program, NASA has identified its active supplier base and made
analyses for planning purposes. Such information collected agencywide
could allow NASA to make an assessment of its total supplier base.
NASA officials told us that they do not track agencywide data on its
suppliers, but that some individual NASA program offices may collect
such data as needed. For example, NASA conducted a transition planning
study[Footnote 5] in 2005 for the phasing out of the Space Shuttle. As
a part of the study, NASA collected supplier base data. The study, for
example, identified 1,542 active suppliers spread across 43 states and
analyzed a list of critical vendors on their capabilities and
alternative sources. While a follow-on study was requested by the Space
Shuttle Program supply chain manager to study the viability of some of
the suppliers, the official told us that the study was cancelled due to
a lack of funding.
Agency Comments:
We provided a draft of this letter to NASA for comment. NASA concurred
with our report and had no comments.
Scope and Methodology:
To assess how NASA will track contracts and subcontracts performed
overseas, foreign purchases, and the use of Buy American Act
exceptions, we met with NASA officials to obtain information on NASA's
FPDS-NG data tracking system; interviewed NASA officials on current
tracking of foreign purchases and plans to collect data needed to meet
reporting requirements; and met with other federal agency officials on
proposed changes to the FAR and the FPDS-NG that would allow for the
collection of foreign purchase and Buy American Act data. In addition,
we analyzed contract files at NASA's Goddard Space Flight Center to
determine how Buy American Act exceptions are documented.
To determine whether NASA collects and analyzes data to assess its
supplier base, we interviewed NASA officials to determine what studies
NASA has done to collect supplier base data and what type of data
analysis has been conducted.
We conducted our work from May 2006 to October 2006 in accordance with
generally accepted government auditing standards.
As requested by your office, unless you publicly disclose the contents
of this report, we plan no further distribution of it until 30 days
from the date of this letter. At that time, we will send copies to
NASA's Administrator and interested congressional committees. We will
also provide copies to others upon request. In addition, this letter
will be available at no cost on the GAO Website at [Hyperlink,
http://www.gao.gov].
Should you or your staff have any questions on matters discussed in
this report, please contact me at (202) 512-4841 or at
ChaplainC@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. Principal contributors to this report were John Neumann,
Assistant Director; John Ting; and Kathryn Smith.
Signed by:
Cristina Chaplain:
Acting Director, Acquisition and Sourcing Management:
(120536):
FOOTNOTES
[1] Pub. L. No. 109-155, § 709.
[2] GAO, Improvements Needed to the Federal Procurement Data System-
Next Generation, GAO-05-960R (Washington, D.C.: Sept. 27, 2005)
[3] Pub. L. No. 109-282.
[4] Transportation, Treasury, Housing and Urban Development, the
Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006, Pub. L. No. 109-115, § 837 (2005). The Act
requires each federal agency to report to Congress on the amount of
acquisitions from entities that manufacture the articles, materials, or
supplies outside of the United States. The report should include the
dollar value of any articles, materials, or supplies purchased that
were manufactured outside of the United States, an itemized list of Buy
American Act exceptions for these procurements, and a summary of the
total procurement funds spent on goods manufactured in the United
States versus funds spent on goods manufactured outside the United
States.
[5] NASA, Integrated Space Operations Summit III, Enabling Exploration,
ISOS Space Shuttle Program Transition Panel Final Report (Apr. 15,
2005).
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site.
To have GAO e-mail you a list of newly posted products every afternoon,
go to www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548:
Public Affairs:
Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
