NASA Contract Management: Improving the Use of DCAA's Auditing Services

NASA completed the revision of the Source Evaluation Board Handbook. However, NASA decided that this was not the proper vehicle for deterring contractors from claiming unallowable costs, and subsequently decided to rely on the penalty and certification provisions in the Federal Acquisition Streamlining Act and the guidance contained in NASA FAR 42.1501 covering unallowable costs in lieu of the Federal Acquisition Streamlining Act. NASA intends no further action on this recommendation.

NASA amended its Procurement Survey Guide to strengthen oversight of documentation; the new guide is being printed. In the interim, NASA headquarters sent a memo to all center procurement officers reemphasizing the importance of documenting the status of inapplicability of all contractor business systems in negotiation memoranda.

NASA developed an audit planning process plan that provided for each agency to work in concert to establish priorities in the conduct of audits. The plan was tested at NASA's Johnson Space Center and DCAA's Houston office. Following review of the pilot test and comments received from each organization's field installations/regional offices, NASA headquarters decided not to implement the JSC model on an agencywide basis because it would be too resource-intensive. Because the number and size of procurements at NASA centers varies greatly, each center was told to use the JSC model as a guide, implement the new process in conjunction with the local DCAA office, and provide headquarters with a written summary of how this will be accomplished. Because NASA reduced the number of open audits by 50 percent between December 1995 and June 1996, it believes these actions comply with the recommendation, and no future effort is planned.

NASA issued a new NASA Federal Acquisition Regulations Supplement on March 31, 1995, that included audit tracking resolution provisions. NASA is also developing a NASA-wide tracking system for DCAA cost audits similar to a tracking system now in use for GAO/Inspector General audits. The tracking system is expected to be online in late 1997.

NASA's Associate Administrator for Procurement established a policy requiring all NASA contracting officers to maintain an ongoing dialogue with Defense Department administrative contracting officers (ACO) who have been delegated activities on NASA contracts. The new policy also requires contracting officers to conduct semi-annual reviews on the status and disposition of significant audit findings and document the results in contract files. This new policy is a significant change from past practice of not coordinating with DOD ACOs on a regular basis. Though the policy does not specifically establish a headquarters monitoring function, it does set up a monitoring mechanism at the level most able to deal with audits on a detailed, contract-specific basis. As such, this action satisfies the intent of the recommendation.

NASA has undertaken 3 initiatives to reduce existing backlogs of delinquent physically completed but unclosed contracts: (1) the Associate Administrator for Procurement sent a letter to all procurement officers reiterating the use of quick closeout procedures to the maximum extent possible; (2) all procurement officers are now required to complete a training and awareness program for all procurement professionals involved in the closeout process; and (3) the Office of Procurement at NASA headquarters added closeout data to its metrics tracking program. Further, in an effort to eliminate as much of the backlog of overage contracts as possible, NASA provided DCAA with a listing of those contracts for the audit agency to target.