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. 

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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). 

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