Training Necessary to Address Data Reliability Issues in NASA Agreement Database and to Minimize Potential Competition with Commercial Sector
Gao ID: GAO-11-552R May 26, 2011
Today, GAO issued a correspondence identifying the internal controls that the National Aeronautics and Space Administration (NASA) has in place for reimbursable Space Act agreements and assessing to what extent the agency is adhering to those controls. Specifically, our review focused on NASA's internal controls related to (1) fair reimbursement from agreement partners; (2) interference between agreement partners' work and NASA's use of its facilities; and (3) alignment of agreement partners' work with NASA's mission. In that correspondence, we reported that NASA was generally adhering to its controls for entering into reimbursable Space Act agreements. In our review, however, we also found several instances in which agreements were not completely and accurately recorded in the Space Act Agreement Maker (SAAM) database. In addition, we identified one instance where NASA awarded a reimbursable agreement when similar services may have been available in the private sector. This action appears contrary to the National Space Policy and may have also been contrary to the Commercial Space Competitiveness Act. Federal government standards for internal controls state that control activities should help ensure that all transactions are completely and accurately recorded. NASA's SAAM database, managed by the Mission Support Directorate, is used to assist in writing and storing information relating to Space Act agreements. Although agreements are not required to be written using the system, Space Act agreements and related documentation, except for international agreements, are required to be stored there. According to NASA officials, the agency relies on SAAM-generated quarterly reports to help maintain the integrity of the system's data. For example, NASA officials stated that agreement managers use quarterly reports to identify (1) agreements that were begun, but not submitted (i.e. false starts); (2) agreements that have been submitted, but have not completed the review process; and (3) agreements that have been submitted and completed the review process, but have not been signed. Agreement managers at each NASA center also use monthly reports to track Space Act agreement-related work at the center. These reports are also sent to the Office of International and Interagency Relations at NASA headquarters for awareness and coordination purposes. The Commercial Space Competitiveness Act provides that federal agencies, including NASA, may allow nonfederal entities to use space-related facilities on a reimbursable basis if the Administrator determines that, among other things, equivalent commercial services are not available on "reasonable terms." The 2006 and 2010 National Space Policies state that agencies should refrain from conducting United States government space activities that compete with U.S. commercial space activities, unless required by national security or public safety. NASA has developed internal controls related to this statutory provision and policy. For example, the agency has issued a Space Act Agreement Guide, an agency-level guidance document, and an interim directive on reimbursable agreements which reiterate the importance of avoiding competition by the federal government with the private sector. In addition, when drafting the agreement in the SAAM database, the responsible agency official (technical point of contact) is required to discuss how NASA goods, services, or facilities to be provided are unique and not available from the U.S. commercial market. Depending on the technical point of contact's response, the agreement could be flagged for additional review by the NASA center's Office of Chief Counsel.
As part of our assessment of NASA's internal controls regarding fair reimbursement, we utilized the Space Act Agreement Maker (SAAM) database to identify partially reimbursable Space Act agreements, or those agreements with waived costs, awarded in fiscal years 2009 and 2010. In selecting agreements to review, we identified 20 agreements out of 58 whose agreement type had been incorrectly coded, resulting in inaccurate data within the SAAM database. This represented almost 34 percent of agreements awarded in fiscal years 2009 and 2010 that had been coded as partially reimbursable or fully reimbursable with dollar figures in the waived cost field. For example, some agreements that had been coded as partially reimbursable Space Act agreements were actually fully reimbursable or non-reimbursable Space Act agreements - both of which do not involve waived costs. For other agreements labeled as partially reimbursable, NASA actually paid the partner instead of receiving payment from the partner. NASA officials told us that these were interagency acquisitions rather than Space Act agreements. We also identified 12 Space Act agreements that were labeled as fully reimbursable or fully non-reimbursable in SAAM, but included dollar figures in the waived cost field. NASA officials subsequently reported that 8 of these agreements were partially reimbursable, 3 were non-reimbursable, and only one was a fully reimbursable agreement. We later determined only 6 of these agreements were partially reimbursable. During our review of partially reimbursable Space Act agreements, we identified one agreement from Glenn Research Center that may have been contrary to the Commercial Space Competitiveness Act and the National Space Policy. The agreement involved conducting small engine jet testing services for a commercial firm at a cost of $78,685. NASA's technical point of contact for the agreement, who was unaware of the limits on NASA competing with the private sector, told us that the commercial firm approached NASA in an attempt to receive small engine jet testing using Glenn Research Center's Propulsion Systems Laboratory at a cheaper rate than what was charged commercially. Officials from Glenn Research Center's Office of Chief Counsel stated they did not know that these services were available commercially because the technical point of contact had indicated in the SAAM database that NASA had unique capabilities to conduct this testing and that the services were not generally available commercially. As a result, NASA entered into the agreement to perform the work as it helped to sustain a core facility and competencies and even waived the center management and operations costs associated with performing the work. While we did not independently verify whether these services were available commercially, regardless, because of the technical point of contact's lack of understanding of restrictions on competition with the private sector, the controls NASA had in place to prevent competition with the private sector were ineffective. To improve the data integrity of the SAAM system, we recommend that the Administrator of NASA direct the Mission Support Directorate to 1. Rectify the data inaccuracies in the SAAM database that we have identified in this report. 2. Assess why the coding errors we have identified in this report occurred and develop procedures for enhancing the accuracy of the data. To improve data integrity and ensure NASA does not violate statutory provisions or policy regarding competition with the private sector, we recommend that the Administrator direct the Mission Support Directorate to 1. Provide refresher training, as part of NASA's annual Space Act agreement community of practice, to SAAM users that explains the various agreement types, stresses the importance of accurately inputting data into the SAAM database, and clarifies NASA's policy regarding competition with the private sector.
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.
Director:
Cristina T. Chaplain
Team:
Government Accountability Office: Acquisition and Sourcing Management
Phone:
(202) 512-4859
GAO-11-552R, Training Necessary to Address Data Reliability Issues in NASA Agreement Database and to Minimize Potential Competition with Commercial Sector
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May 26, 2011:
The Honorable Charles Bolden:
Administrator:
National Aeronautics and Space Administration:
300 E Street, SW:
Washington, DC 20024-3210:
Subject: Training Necessary to Address Data Reliability Issues in NASA
Agreement Database and to Minimize Potential Competition with
Commercial Sector:
Dear Administrator Bolden:
Today, GAO issued a correspondence identifying the internal controls
that the National Aeronautics and Space Administration (NASA) has in
place for reimbursable Space Act agreements and assessing to what
extent the agency is adhering to those controls.[Footnote 1]
Specifically, our review focused on NASA's internal controls related to
(1) fair reimbursement from agreement partners; (2) interference
between agreement partners' work and NASA's use of its facilities; and
(3) alignment of agreement partners' work with NASA's mission. In that
correspondence, we reported that NASA was generally adhering to its
controls for entering into reimbursable Space Act agreements. In our
review, however, we also found several instances in which agreements
were not completely and accurately recorded in the Space Act Agreement
Maker (SAAM) database. In addition, we identified one instance where
NASA awarded a reimbursable agreement when similar services may have
been available in the private sector. This action appears contrary to
the National Space Policy and may have also been contrary to the
Commercial Space Competitiveness Act.
Federal government standards for internal controls state that control
activities should help ensure that all transactions are completely and
accurately recorded. NASA's SAAM database, managed by the Mission
Support Directorate, is used to assist in writing and storing
information relating to Space Act agreements.[Footnote 2] Although
agreements are not required to be written using the system, Space Act
agreements and related documentation, except for international
agreements, are required to be stored there. According to NASA
officials, the agency relies on SAAM-generated quarterly reports to
help maintain the integrity of the system's data. For example, NASA
officials stated that agreement managers use quarterly reports to
identify (1) agreements that were begun, but not submitted (i.e. false
starts); (2) agreements that have been submitted, but have not
completed the review process; and (3) agreements that have been
submitted and completed the review process, but have not been signed.
Agreement managers at each NASA center also use monthly reports to
track Space Act agreement-related work at the center.[Footnote 3] These
reports are also sent to the Office of International and Interagency
Relations at NASA headquarters for awareness and coordination purposes.
The Commercial Space Competitiveness Act provides that federal
agencies, including NASA, may allow nonfederal entities to use space-
related facilities on a reimbursable basis if the Administrator
determines that, among other things, equivalent commercial services are
not available on "reasonable terms."[Footnote 4] The 2006 and 2010
National Space Policies state that agencies should refrain from
conducting United States government space activities that compete with
U.S. commercial space activities, unless required by national security
or public safety. NASA has developed internal controls related to this
statutory provision and policy. For example, the agency has issued a
Space Act Agreement Guide, an agency-level guidance document, and an
interim directive on reimbursable agreements which reiterate the
importance of avoiding competition by the federal government with the
private sector. In addition, when drafting the agreement in the SAAM
database, the responsible agency official (technical point of contact)
is required to discuss how NASA goods, services, or facilities to be
provided are unique and not available from the U.S. commercial market.
Depending on the technical point of contact's response, the agreement
could be flagged for additional review by the NASA center's Office of
Chief Counsel.
Inaccurate Data in Space Act Agreement Maker Database:
As part of our assessment of NASA's internal controls regarding fair
reimbursement, we utilized the Space Act Agreement Maker (SAAM)
database to identify partially reimbursable Space Act agreements, or
those agreements with waived costs, awarded in fiscal years 2009 and
2010. In selecting agreements to review, we identified 20 agreements
out of 58 whose agreement type had been incorrectly coded, resulting in
inaccurate data within the SAAM database. This represented almost 34
percent of agreements awarded in fiscal years 2009 and 2010 that had
been coded as partially reimbursable or fully reimbursable with dollar
figures in the waived cost field. For example, some agreements that had
been coded as partially reimbursable Space Act agreements were actually
fully reimbursable or non-reimbursable Space Act agreements - both of
which do not involve waived costs. For other agreements labeled as
partially reimbursable, NASA actually paid the partner instead of
receiving payment from the partner. NASA officials told us that these
were interagency acquisitions rather than Space Act agreements. We also
identified 12 Space Act agreements that were labeled as fully
reimbursable or fully non-reimbursable[Footnote 5] in SAAM, but
included dollar figures in the waived cost field. NASA officials
subsequently reported that 8 of these agreements were partially
reimbursable, 3 were non-reimbursable, and only one was a fully
reimbursable agreement. We later determined only 6 of these agreements
were partially reimbursable. See table 1 below for further details
regarding the agreements that we identified as being incorrectly coded
as partially reimbursable agreements within the SAAM database. See
table 2 below for further details regarding the agreements we
identified as being incorrectly coded as fully reimbursable or fully
non-reimbursable agreements with waived costs.
Table 1: Incorrectly Coded as Partially Reimbursable Space Act
Agreements:
SAAM Number: 7730;
Center: Ames Research Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Interagency acquisition.
SAAM Number: 8109;
Center: Glenn Research Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Fully reimbursable[A].
SAAM Number: 6212;
Center: Headquarters;
Partially reimbursable;
Correct status: Interagency acquisition.
SAAM Number: 7372;
Center: Johnson Space Center;
Partially reimbursable;
Correct status: Fully- reimbursable.
SAAM Number: 6689;
Center: Langley Research Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Non- reimbursable[B].
SAAM Number: 6206;
Center: Langley Research Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Fully reimbursable.
SAAM Number: 8160;
Center: Langley Research Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Interagency acquisition.
SAAM Number: 4569;
Center: Marshall Space Flight Center;
SAAM Coding Error: Partially reimbursable;
Correct status: Non- reimbursable.
[A] Fully reimbursable Space Act agreements are those under which NASA
is fully reimbursed for costs associated with the undertaking of an
agreement.
[B] Non-reimbursable Space Act agreements involve NASA and one or more
partners in a mutually beneficial activity that furthers NASA's
mission, where each party bears the cost of its participation and there
is no exchange of funds between the parties.
[End of table]
Table 2: Incorrectly Coded as Fully Reimbursable or Fully Non-
Reimbursable Space Act Agreements with Waived Costs:
SAAM Number: 7492;
Center: Glenn Research Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 7507;
Center: Glenn Research Center;
SAAM Coding Error: Fully non-reimbursable with waived cost;
Correct status: Non-reimbursable.
SAAM Number: 5406;
Center: Goddard Space Flight Center;
SAAM Coding Error: Fully non-reimbursable with waived cost;
Correct status: Non-reimbursable.
SAAM Number: 5060;
Center: Johnson Space Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 7793;
Center: Kennedy Space Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 4646;
Center: Langley Research Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially Reimbursable[B].
SAAM Number: 5161;
Center: Langley Research Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 5896;
Center: Langley Research Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Non-reimbursable.
SAAM Number: 8263;
Center: Langley Research Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 4528;
Center: Marshall Space Flight Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable.
SAAM Number: 4987;
Center: Marshall Space Flight Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Fully reimbursable.
SAAM Number: 5592;
Center: Marshall Space Flight Center;
SAAM Coding Error: Fully reimbursable with waived cost;
Correct status: Partially reimbursable amendment[A].
[A] NASA officials initially identified this transaction as a partially
reimbursable agreement. However, upon reviewing the documentation, we
determined that this transaction was actually an amendment to a
partially reimbursable agreement awarded in 2004. We did not include
this amendment in our review.
[B] This agreement was not included in our review as it was originally
identified by officials as an interagency acquisition.
[End of table]
NASA Awarded Partially Reimbursable Space Act Agreement when Similar
Services May Have Been Available Commercially:
During our review of partially reimbursable Space Act agreements, we
identified one agreement from Glenn Research Center that may have been
contrary to the Commercial Space Competitiveness Act and the National
Space Policy. The agreement involved conducting small engine jet
testing services for a commercial firm at a cost of $78,685. NASA's
technical point of contact for the agreement, who was unaware of the
limits on NASA competing with the private sector, told us that the
commercial firm approached NASA in an attempt to receive small engine
jet testing using Glenn Research Center's Propulsion Systems Laboratory
at a cheaper rate than what was charged commercially. Officials from
Glenn Research Center's Office of Chief Counsel stated they did not
know that these services were available commercially because the
technical point of contact had indicated in the SAAM database that NASA
had unique capabilities to conduct this testing and that the services
were not generally available commercially. As a result, NASA entered
into the agreement to perform the work as it helped to sustain a core
facility and competencies and even waived the center management and
operations costs associated with performing the work. While we did not
independently verify whether these services were available
commercially, regardless, because of the technical point of contact's
lack of understanding of restrictions on competition with the private
sector, the controls NASA had in place to prevent competition with the
private sector were ineffective.
Conclusions:
Inaccurate data in SAAM limit NASA's visibility over Space Act
agreements and the agency's ability to make informed agreement
management decisions. NASA's internal controls on avoiding competition
between the agency and the private sector are only as effective as the
people implementing them. When technical points of contact either lack
a thorough understanding of the limits on competing with the private
sector or do not provide complete and accurate information regarding
proposed partner activities in the SAAM database, the controls can be
ineffective.
Recommendations for Executive Action:
To improve the data integrity of the SAAM system, we recommend that the
Administrator of NASA direct the Mission Support Directorate to:
1. Rectify the data inaccuracies in the SAAM database that we have
identified in this report.
2. Assess why the coding errors we have identified in this report
occurred and develop procedures for enhancing the accuracy of the data.
To improve data integrity and ensure NASA does not violate statutory
provisions or policy regarding competition with the private sector, we
recommend that the Administrator direct the Mission Support Directorate
to:
1. Provide refresher training, as part of NASA's annual Space Act
agreement community of practice, to SAAM users that explains the
various agreement types, stresses the importance of accurately
inputting data into the SAAM database, and clarifies NASA's policy
regarding competition with the private sector.
Agency Comments and Our Evaluation:
We provided a copy of the draft report to NASA for comment. In
commenting on the report, the agency agreed with our overall findings
and concurred with our recommendations. NASA indicated that the agency
has already taken several actions and has planned additional action to
address the issues we raised. For example, NASA stated that it has
taken steps to identify and correct data inaccuracies that were
reported herein. Further, the agency stated that the Mission Support
Directorate has assessed why the coding errors occurred and identified
two primary causes which they are working to address through additional
training and changes to the SAAM database. Finally, the agency stated
that it conducted training on proper agreement classification protocols
and legal and policy requirements related to the competition with the
private sector issue. NASA also provided technical comments that we
have incorporated throughout the report as appropriate.
Scope and Methodology:
The findings in this management letter were based on work completed as
part of our review of NASA's internal controls for reimbursable Space
Act agreements.[Footnote 6] As part of that review, we assessed the
reliability of the SAAM data by (1) interviewing agency officials
knowledgeable about the data, (2) reviewing existing information about
the data and the system that produced them, and (3) performing
electronic testing for obvious errors in accuracy and completeness. In
the course of our review, we identified some limitations in the data,
such as some agreements being incorrectly coded within the database and
NASA officials acknowledging that the database did not contain all
agreements. We took additional steps to mitigate the impact of these
data limitations through further examination of agreements that
appeared to be coded incorrectly or were not originally listed in the
dataset as partially reimbursable Space Act agreements. We provided a
list of partially reimbursable Space Act agreements and 12 fully
reimbursable or fully non-reimbursable Space Act agreements with waived
costs to NASA and officials confirmed that several had been coded
incorrectly in the SAAM database. Through these mitigation steps, we
were able to build our own list of partially reimbursable Space Act
agreements to include in our review. We determined that our list of
partially reimbursable Space Act agreements was sufficiently reliable
for the purpose of that report. We reviewed all 44 partially
reimbursable Space Act Agreements awarded in fiscal years 2009 and
2010, as identified in SAAM, at five NASA centers, including Glenn
Research Center, Johnson Space Center, Kennedy Space Center, Langley
Research Center, and Marshall Space Flight Center. We also reviewed
public laws, the 2006 and 2010 National Space Policy, and NASA policies
and procedures for reimbursable Space Act agreements. We identified one
agreement at Glenn Research Center where NASA potentially competed with
the private sector, interviewed the technical point of contact and
agreement manager responsible for managing and overseeing the
development of the agreement, and obtained a written response from
Glenn's Office of Chief Counsel.
We conducted this performance audit from July 2010 to May 2011 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence we obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
We are sending copies of this report to interested congressional
committees. In addition, the report will be available at no charge on
GAO's Web site at [hyperlink, http://www.gao.gov]. If you have any
questions, please contact me at (202) 512-4841 or chaplainc@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this letter.
Key contributors to this report were Shelby S. Oakley, Assistant
Director; Jeffrey Hartnett; Morgan Delaney Ramaker; Laura Greifner;
Jean McSween, Megan Porter; Andrew Redd; Swati Thomas; and Alyssa Weir.
Sincerely Yours,
Signed by:
Cristina T. Chaplain:
Director Acquisition and Sourcing Management:
[End of section]
Enclosure: Comments from the National Aeronautics and Space
Administration:
National Aeronautics and Space Administration:
Headquarters:
Washington, DC 20546-0001:
May 20, 2011
Reply to Attn of:
Office of the General Counsel:
Ms. Cristina Chaplain:
Director:
Acquisition and Sourcing Management:
United States Government Accountability Office:
Washington, DC 20548:
Dear Ms. Chaplain:
The National Aeronautics and Space Administration (NASA) appreciates
the opportunity to review the Government Accountability Office (GAO)
draft reports entitled "NASA Reimbursable Space Act Agreements" (GAO-
11-553R; report number 120926) and -NASA Data Issues and Compliance"
(GAO-11-552R; report number 120983). NASA values the continued open
communications between NASA and the GAO team and appreciates the
constructive comments arising as a result of this effort.
NASA agrees with GAO's concern regarding managing programs and projects
as efficiently and effectively as possible, especially within a budget
that is likely to be constrained due to the fiscal limitations
currently faced by all Federal Government agencies. NASA remains
dedicated to continuous improvement of the Agency's Space
Act Agreement's (SAA) internal controls and business practices. We are
pleased that GAO recognized the policy requirements and other internal
controls in place related to Agency SAA practices and found that NASA
is generally adhering to those controls.
We also appreciate GAO's constructive findings from the two reports
regarding the need to clarify existing Agency guidance in regard to
certain Reimbursable SAA pricing policies (i.e., waived costs), the
need for improved training and internal controls to ensure the data
integrity in NASA's Space Act Agreement Maker (SAAM) system, and the
need for improved training and internal controls to ensure that NASA
does not violate statutory provisions or policy regarding competition
with the private sector. NASA is committed to promptly addressing these
issues and, in fact, has already taken several actions and has planned
additional action toward that end, as discussed below.
In the two draft reports, GAO makes a total of four recommendations to
the NASA Administrator to address the findings identified in the
reports. Those recommendations, and NASA's responses, are as follows:
GAO-11-553r:
Recommendation 1: Direct the Offices of the Chief Financial Officer and
General Counsel to refine the agency's policy to clearly define the
type of information that is required to support the justification in
the estimated price report. This type of information may include
documenting that there is a clear and demonstrated benefit to NASA and
quantifying the benefit to the extent practicable.
NASA's Response: Concur. The Office of the Chief Financial Officer
(OCFO) is already working with the Office of General Counsel (OGC) and
other offices addressing this recommendation. We are in the process of
reviewing these and other refinements to NASA Interim Directive 9090.1,
as part of the transition to a NASA Procedural Requirement this year.
Among the refinements being reviewed are reporting requirements
including the additional types of information recommended above.
GAO-11-552R:
Recommendation 1: Direct the Office of Program and Institutional
Integration to rectify the data inaccuracies in the SAAM database that
we have identified in this report. NASA's Response: Concur. All of the
data inaccuracies identified in the GAO report have been corrected in
coordination with the respective Center and Headquarters Agreement
Managers.
Recommendation 2: Direct the Office of Program and Institutional
Integration to assess why the coding errors identified in this report
occurred and develop procedures for enhancing the accuracy of the data.
NASA's Response: Concur. The Mission Support Directorate (MSD) has
assessed each instance and found that there were two primary causes for
the data entry errors:
1) Initial misclassification by the Agreement initiator due to a lack
of understanding of how to classify certain Agreements in the system.
We also identified some problematic SAAM data entry protocols that
confused users and allowed erroneous classification entries such as
"Fully Nonreimbursable" or "Fully Reimbursable [with waived costs
entered]," which contributed to this problem.
2) Failure or inability of the Agreement Manager to update the initial
classification of an Agreement if it changed during the course of
discussions with the partner (e.g., from "Fully reimbursable" to
"Partially reimbursable" or vice versa). We also found that system
restrictions that prohibited the Agreement Managers from being able to
directly make changes to the agreement classification after it had been
initially established contributed to this problem.
In order to enhance the accuracy of the system data, we conducted
training on proper agreement classification protocols during the Space
Act Agreement Community of Practice Meeting at Stennis Space Center on
May 18-19, 2011. In addition, we implemented changes to the SAAM system
to allow designated Center and Headquarters Agreement Managers to make
changes to the classification of their Agreements as needed. Finally,
are in the process of implementing additional changes to the SAAM
system to automatically "flag" such errors and eliminate the
possibility of confusing or contradictory agreement classification
entries.
Recommendation 3: Direct the Office of Program and Institutional
Integration to provide refresher training, as part of NASA's annual
Space Act agreement community of practice, to SAAM users to explain the
various agreement types, stress the importance of accurately inputting
data into the SAAM database, and clarifies NASA's policy regarding
competition with the private sector.
Management's Response: Concur. MSD will conduct training on proper
agreement classification protocols during the upcoming Space Act
Agreement Community of Practice Meeting referenced above. As part of
that training, we discussed the findings from the GAO's audit and
provided both policy and technical training regarding how to properly
classify and enter SAAs in SAAM, emphasizing the importance of users
accurately inputting data into the system. During the meeting, MSD and
OGC also covered the legal and policy requirements relating to the
"competition with the private sector" issue and the related policies
and internal controls in place to prevent that.
The GAO report finding regarding "competition with the private sector"
in SAAM 7492 (GRC's SAA3-1112 w/Technical Directions Inc.), we have
reviewed the circumstances surrounding that particular agreement. We
agree with the facts as stated in the GAO report, and offer the
following additional background information for further context.
Under the agreement, GRC performed work on a small jet engine that the
company was developing for the Department of Defense (DOD) using GRC's
Propulsion Systems 4 Laboratory (PSL). The PSL is NASA's only ground-
based test facility that can provide true flight simulation for
experimental research on air-breathing propulsion systems. When the
Agreement was initiated, the GRC Agreements Manager relied on the
written statement in SAAM by the PSL facility manager that there were
no other vendors available who could do the work, After additional
inquiry, however, it appears that there may have been another vendor
capable of performing the testing conducted under the agreement.
GRC indicated that, although the agreement was with a commercial entity
(DTI), the work was known to be for the direct benefit of DOD.
Accordingly, the testing was conducted within the context of a policy
arrangement between NASA and DOD regarding aerospace research of mutual
interest to both agencies. For example, GRC waived certain costs
incurred under the agreement pursuant to its practice of waiving such
costs for testing conducted in conjunction with the DOD. While we
understand that these facts do not fully address the issue of avoiding
competition with the private sector, we believe that the context of
NASA and DOD mutual commitment to conduct joint aeronautics research at
reduced costs and on appropriate terms and conditions is useful in
providing an understanding of the circumstances surrounding this
particular agreement.
GRC is planning to conduct additional Center-level training in response
to the GAO report finding. Specifically, GRC has taken the following
three corrective actions: (1) Since January 2011, shortly after this
issue became known, the GRC Agreement Managers make it a standard
practice to more extensively question GRC staff to gain better
understanding of the uniqueness of requested NASA facilities and the
possible existence of other potential vendors; (2) The GRC Office of
Chief Counsel and the GRC Chief Technologist convened a meeting with
the Propulsion Systems Laboratory facility manager and his management
on May 3, 2011, to re-emphasize and explain the NASA policy that NASA
must not compete with the private sector in performing reimbursable
work; and (3) The GRC Offices of Chief Counsel and Technology
Partnerships and Planning have agreed to hold refresher training
sessions for GRC staff on initiating and implementing Space Act
Agreements.
NASA is committed to continuous improvement of our SAA internal
controls and practices, as with all Agency practices, in order to
explore and utilize Space in an affordable way for the benefit of the
Nation. Toward this end, we look forward to continuing to work with the
GAO to measure and improve our performance and management practices.
Thank you for the opportunity to comment on the two draft reports. If
you have any questions or require additional information, please
contact Richard McCarthy at (202) 358-2031.
Sincerely,
Signed by:
Michael C. Wholley:
General Counsel:
[End of section]
(120983):
Footnotes:
[1] GAO, Reimbursable Space Act Agreements: NASA Generally Adhering to
Fair Reimbursement Controls, but Guidance on Waived Cost Justifications
Needs Refinement, [hyperlink, http://www.gao.gov/products/GAO-11-553R]
(Washington, D.C.: May 26, 2011).
[2] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C., November 1999).
[3] Monthly reports include information on (1) new agreements since the
15th of last month; (2) new agreements since the beginning of the
fiscal year; and (3) ongoing agreements that will expire within the
next 60 days.
[4] 51 U.S.C. § 50504
[5] The SAAM database provides two separate fields to identify
agreement type. In the first field, the user selects fully or partially
while in the second field the user chooses whether the agreement is
reimbursable or non-reimbursable.
[6] [[hyperlink, http://www.gao.gov/products/GAO-11-553R].
[End of section]
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