Review of Selected Contracts Awarded by NASA's Goddard Space Flight Center
PSAD-79-103: Published: Sep 12, 1979. Publicly Released: Sep 12, 1979.
- Full Report:
A survey was made of contract administration at the Goddard Space Flight Center.
Three service contracts out of the nine reviewed were either written improperly or appeared to lack the essential internal controls for minimizing fraud and assuring that contracted services are actually provided. The administration of a sole-source painting contract had the following faults: (1) the specifications in the contract did not adequately define the work to be performed; (2) the Goddard estimate of the work to be performed was incorrect; (3) the painters did not meet contract qualification requirements; (4) the contractor's request for payment appeared excessive; (5) the calculation of actual square feet of surface area painted was incorrect; and (6) one building may not have needed painting. The award of a cost-plus-award-fee contract for health services was found to be inappropriate, and Goddard failed to verify that the services paid for were actually received. A computer support contract was found to have the potential for fraud because of a lack of security procedures to detect and prevent fraudulent or unauthorized use of the computers.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: Goddard officials should terminate or renegotiate the painting contract with new specifications; determine why the imperfections in this contract were not detected during the contract review process; remove the technical monitor on the contract; determine whether the contractor has received any excess payments and, if so, recover them; and determine whether one building needs to be painted before doing so. The following recommendations were made concerning the health services contract: (1) the option to renew the contract should not be exercised and the renewal contract should be converted back to a fixed-fee contract; (2) NASA procurement regulations should be amended to incorporate the limitation contained in the NASA handbook, and exceptions should require approval from NASA headquarters; (3) NASA headquarters should determine if any NASA centers have similar award-fee contracts in which most of the award fee is paid automatically, and any such contracts should be reviewed to determine their potential for conversion to a fixed-fee or some other more appropriate contract; (4) Goddard's policy prohibiting technical monitors from performing periodic floor checks should be reevaluated; (5) the technical monitor in this contract should periodically perform floor checks to verify the accuracy of contractor-submitted time and attendance reports and the monitor should document his observations and use this data in approving the contractor's invoices; (6) all NASA centers should be informed that technical monitors should perform periodic floor checks often enough to act as a deterrent to false contractor claims; and (7) if a NASA center relies partially on Defense Contract Audit Agency auditors to perform floor checks, center management should assure that floor checks are performed often enough to act as an effective deterrent. It was also recommended that the NASA risk assesment program be applied to the computer facility as soon as possible to determine what threats exist, their significance, and the cost of any additional controls needed to prevent unauthorized or fraudulent use. If the risk assessment shows that the additional security procedures needed are not cost effective, NASA should consider using Goddard employees to provide these services.