This is the accessible text file for GAO report number GAO-03-832R 
entitled 'National Science Foundation: Status of the Business Analysis 
Plan Contract' which was released on July 10, 2003.

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July 10, 2003:

The Honorable Christopher S. Bond:

Chairman, Subcommittee on:

VA, HUD, and Independent Agencies:

Committee on Appropriations:

United States Senate:

Subject: National Science Foundation: Status of the Business Analysis 
Plan Contract:

Dear Mr. Chairman:

In June 2002, the National Science Foundation (NSF) awarded a 3-year, 
$14.8 million contract for a business analysis plan to support three 
key management areas at the foundation: its business processes, human 
capital, and information technology. The contract is to be completed by 
September 30, 2005, and is to result in seven deliverables, including a 
project plan to guide the contractor's work.

You asked us to obtain information on (1) the status of contract funds 
budgeted to the key management areas and contract deliverables, and 
overall plans for the contract; (2) the extent to which the contract 
will address management issues previously reported by audit and 
oversight bodies; and (3) NSF's management of the contract and plans 
for integrating any recommendations made by the contractor. We provided 
your staff with a formal briefing on our findings on May 14, 2003. A 
copy of our briefing is enclosed.[Footnote 1]

In summary, we found the following:

As of May 31, 2003, NSF had spent about $1.9 million on the contract, 
with business processes and human capital management accounting for 
about 75 percent of the expenditures and information technology 
accounting for the remainder. Expenditure data by individual contract 
deliverable were unavailable because NSF did not estimate and is not 
tracking the costs of deliverables due from the contractor. NSF's 
current schedule for the contract reflects delays for early 
deliverables, including the first deliverable, the project plan. The 
contractor delivered a draft project plan to NSF on June 30, 2003, and 
NSF is working with the contractor to finalize it by July 15, 2003, 
over a year later than originally planned. Agency officials attributed 
delays of early deliverables primarily to funding limitations during 
fiscal year 2002 and the first half of fiscal year 2003. Despite the 
initial delays, NSF still expects the contract to be completed by its 
originally planned date. NSF plans to spend only the original base 
amount of the contract--$12.8 million--and does not have any current 
plans to use the additional $2 million it reserved for ad hoc analyses.

The extent to which key management issues identified by audit and 
oversight bodies will be addressed under the contract is unknown. Over 
the past few years, audit and oversight bodies such as GAO, the Office 
of Management and Budget, and NSF's Office of the Inspector General 
have reported on various management issues at NSF, including issues 
related to budget performance, financial management, human capital, 
information technology, and award and project management. NSF's initial 
contract documents, such as its statement of work and request for 
proposals, contained provisions for the majority of these management 
issues to be included in the scope of the contract. The awarded 
contract requires the contractor to perform early survey work to 
determine the specific issues to address within the contract 
deliverables. Therefore, until the survey work and project plan are 
completed, the extent to which the key management issues will be 
addressed under the contract is unknown.

Before and since the award of the contract, NSF contract management 
staff has kept senior-level officials apprised, through periodic 
briefings, of its plans for and progress on the contract. The NSF 
organizations that have been involved in monitoring or oversight 
activities of the business analysis plan contract include:

a steering committee for the contract, chaired by the contracting 
officer's technical representative and consisting of senior-level 
management and nonmanagement staff in all program areas covered by the 
contract;

senior management officials, including the Director and Deputy Director 
of NSF and the heads of most research directorates and staff offices;

the Business and Operations Advisory Committee, which advises both the 
Director of Budget, Finance and Award Management and the Director of 
Information and Resource Management;

the National Science Board's Audit and Oversight Committee; and

NSF's Office of the Inspector General.

Some of these organizations also have provided advice and guidance on 
the contract. For example, the Business and Operations Advisory 
Committee encouraged the business analysis team to consider, among 
other things, how other government-wide efforts, such as enterprise 
architecture, might affect its work and recommendations. In addition, 
the committee encouraged the team to coordinate with other ongoing work 
at NSF that might have implications for the business analysis plan. 
Also, in the early stages of contract development, the Office of the 
Inspector General encouraged strong oversight of the contractor by NSF.

To implement any recommendations resulting from the contract, NSF plans 
to work the recommendations through its normal chain of command. For 
some recommendations requiring agencywide change, NSF's Office of 
Integrative Activities, which is responsible for integrating many 
crosscutting issues across the agency, will develop an implementation 
strategy and devolve the actual implementation to the relevant division 
or office. For other crosscutting recommendations, NSF will decide on a 
case-by-case basis whether to assign development of an implementation 
strategy to an existing working group or create a new one. NSF plans to 
request additional appropriations, as necessary, to cover the cost of 
implementing any recommendations resulting from the contract. For 
example, NSF already has requested $1 million in its fiscal year 2004 
budget request to implement human capital recommendations anticipated 
from the contractor.

We provided a draft of this report to the Director of NSF for comment. 
In response, we received oral comments from the NSF contracting 
officer's technical representative responsible for managing the 
contract and from other senior management officials including the Chief 
Human Capital Officer and Chief Financial Officer. The NSF officials 
generally agreed with the information presented in our report and 
provided some clarifying comments that we incorporated as appropriate.

Our methodology is discussed in the enclosed slides. We performed our 
work from January 2003 through June 2003 in accordance with generally 
accepted government auditing standards.

- - - - --:

We are sending copies of this report to the Director of NSF. In 
addition, this report will be available at no charge on the GAO Web 
site at http://www.gao.gov.

If you have any questions about this report or need additional 
information, please contact me at (202) 512-3841. Key contributors to 
this report were David P. Bixler, Michael E. Gilbert, and Lynn M. 
Wasielewski.

Sincerely yours,

Robin M. Nazzaro:

Director, Natural Resources and Environment:

Signed by Robin M. Nazzaro:

Enclosure:

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[End of section]

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FOOTNOTES

[1] We have updated our briefing slides to reflect current expenditure 
data and a revised estimated project plan completion date discussed in 
this report.