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. The Chairman, Senate Committee on Appropriations, Subcommittee on VA, HUD, and Independent Agencies, 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.

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. 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.

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