Space Station:

Contract Oversight and Performance Provisions for Major Work Packages

NSIAD-92-171BR: Published: Apr 14, 1992. Publicly Released: May 19, 1992.

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Pursuant to a congressional request, GAO reviewed the National Aeronautics and Space Administration's (NASA) management of three work package contracts for Space Station Freedom, focusing on: (1) how the NASA centers managing each of the contracts responded to Federal Acquisition Regulation requirements for post-award contract administration and quality assurance planning conferences and for quality assurance plan development, review, and approval; and (2) award fee provisions of those contracts, the amounts of fees awarded, and contract provisions related to the performance of contractors' products.

GAO found that: (1) all three centers requested that the Defense Contract Management Command (DCMC) perform some contract administration functions; (2) the centers held the required contract administration and quality assurance planning conferences, and DCMC submitted the required quality assurance plans for approval and review; (3) all three work packages are under cost-plus-award-fee contracts; (4) the prime contractors have earned approximately $80.3 million, or 86 percent, of the $93 million in available award fees; (5) the three contractors' earned award fee percentages have ranged from 69 percent to 93.8 percent; (6) various contract provisions in the three contracts address contractor-furnished hardware performance and NASA recourse should those items fail to perform as specified, and generally require the contractors to repair or replace any item that does not conform to contract specifications for up to 6 months after government acceptance as long as the government pays the cost to do so; (7) under one contract, the contractor agreed to pay repair or replacement costs for any items accepted by the government that are found to be defective before launch and to forfeit one-half of all previously earned award fees if the failure is attributable to the contractor's failure to meet contract specifications; and (8) one center based part of the award fee on the product's on-orbit performance, another center is currently negotiating to add award fees based on on-orbit performance, and the third center did not have any similar existing or planned on-orbit performance provisions for its contract.

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