NASA Procurement:

Proposed Changes to the Jet Propulsion Laboratory Contract

NSIAD-93-178: Published: Jul 15, 1993. Publicly Released: Jul 28, 1993.

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Pursuant to a congressional request, GAO reviewed the management and performance contract between the National Aeronautics and Space Administration (NASA) and the California Institute of Technology (Caltech) for research and development at the Jet Propulsion Laboratory (JPL), focusing on: (1) current contract provisions; and (2) proposed contract changes.

GAO found that: (1) the existing contract between NASA and Caltech contains 27 approved deviations from federal acquisition regulations (FAR) which limit Caltech's exposure to financial liability and affect internal controls on indirect costs; (2) although NASA has proposed dropping more than half of the deviations and strengthening FAR language in the remaining deviations, future contract deviations are possible and will be determined through contract negotiations; (3) the current solicitation contains fewer deviations that are narrower in scope and changes in allowable cost, financial risk, and cost accounting standards; (4) although NASA has reduced the number of deviations and strengthened other solicitation provisions, potential internal control weaknesses remain; (5) NASA needs to clarify certain provisions involving the type of work to be performed, new or revised federal regulations, and the allowability and reasonableness of certain costs such as meals and tuition benefits for JPL employees; and (6) although Caltech has received a fee under past contracts, NASA needs to clarify its policy regarding paying fees to educational institutions and justify the reasonableness of the amount.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The contract was renewed before any determination was made on continuing the college tuition benefit. The only review of this issue currently being done is based on its compliance with existing policy, not its reasonableness. OMB Circular A-21 establishes its allowability. A governmentwide GAO review of this matter is recommending a review of the existing A-21 policy. Based on that broader consideration, this recommendation is being closed.

    Recommendation: Before the JPL contract is renewed, the Administrator, NASA, should decide whether and to what extent NASA should continue paying college tuition support for dependents of JPL employees.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: The unallowability of "working meals" was not included in the new contract. Instead, under new JPL policies, such meals are unallowable. The new policies also strictly limit meals and refreshments at JPL-sponsored functions.

    Recommendation: Before the JPL contract is renewed, the Administrator, NASA, should specify in the new contract that working meals are an unallowable cost.

    Agency Affected: National Aeronautics and Space Administration

  3. Status: Closed - Not Implemented

    Comments: The options clause in NASA's proposal was not included in the final contract. GAO will continue to look at this issue in future work relating to the management of JPL.

    Recommendation: Before the JPL contract is renewed, the Administrator, NASA, should ensure that appropriate government regulations will be added or updated and a review of the continued need for JPL as a FFRDC will be completed if contract options are exercised.

    Agency Affected: National Aeronautics and Space Administration

  4. Status: Closed - Implemented

    Comments: The broad nature of work at JPL remains in the new contract. However, the language has been changed to require that tasks for non-NASA agencies "be confined to" efforts that apply JPL expertise. The prior language had been "to focus on." NASA oversight activities at JPL have increased to help ensure that non-NASA work is confined to areas of JPL expertise.

    Recommendation: Before the JPL contract is renewed, the Administrator, NASA, should ensure that scope of work is as specific as possible for differentiating between work that should be performed by JPL as a federally funded research and development center (FFRDC) and work that should be performed by others.

    Agency Affected: National Aeronautics and Space Administration

  5. Status: Closed - Implemented

    Comments: The fee under the JPL contract, which had previously been a fixed amount, is now partly variable based on NASA's assessment of JPL's performance.

    Recommendation: Before the JPL contract is renewed, the Administrator, NASA, should authorize a deviation from NASA policy to pay a fee only if its purpose and amount have been adequately justified in writing and, if a fee is authorized, apply the NASA agencywide initiative for contract excellence to the JPL contract and base the fee on management performance.

    Agency Affected: National Aeronautics and Space Administration

 

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