Procurement
Management
Survey Report

Ames Research Center

June 13 through 24, 2005

OFFICE OF PROCUREMENT
HEADQUARTERS
WASHINGTON, D.C.

PREFACE

The NASA Headquarters Office of Procurement conducted this Procurement Management Survey at Ames Research Center under the authority of NASA Handbook 1101.3, The NASA Organization. The survey was conducted from June 13 through June 24, 2005. The report contains the survey strengths, weaknesses, and considerations.

An exit briefing was held, to discuss survey findings, at Ames Research Center on June 23, 2005. Mr. Tom Luedtke, Assistant Administrator, Ms. Monica Manning, Ames Survey Program Manager, Mr. John Trahan, Co-Lead and the survey team members represented NASA Headquarters. Ames Research Center representatives consisted of Mr. Rick Serrano, Director of Center Operations (Representative), Mr. Daryl Wong, Acquisition Division Chief (Acting), Mr. Gary Heagy, Deputy Division Chief (Acting), Mr. Gene Moses, Chief, Acquisition Branch for Business & Policy (Acting), Ms. Marie Dorish, Chief, Acquisition Branch for Center Operations and Space, Ms. Dee Morrison, Chief, Acquisition Branch for Information Systems, and Ms. Ronnee Gonzalez, Chief, Acquisition Branch for Aeronautics (Acting).

On June 24, 2005 an exit briefing was held with Ames' Center Management to discuss the findings of the Procurement Management Survey. Mr. Tom Luedtke, Assistant Administrator, Ms. Monica Manning, Ames' Survey Program Manager and Mr. John Trahan, Co-Lead represented NASA Headquarters. Mr. Scott Hubbard, Center Director, Mr. Rick Serrano, Director of Center Operations (Representative), Mr. Daryl Wong, Acquisition Division Chief (Acting) and Mr. Gary Heagy, Deputy Division Chief (Acting) represented AMES Research Center.

This report serves as a basis, in part, for fulfilling internal control requirements in accordance with the Federal Manager's Financial Integrity Act of 1982 (P.L. 97-255).

Monica Manning
AMES Survey Program Manager
Analysis and Assessment Team
Office of Procurement, NASA Headquarters

CONTENTS

SECTION I        OVERVIEW

SECTION II       ORGANIZATION — MANAGEMENT

SECTION III      PRE - AWARD

SECTION IV      POST - AWARD

SECTION V    PRICING - FINANCIAL - AUDITS 

SECTION VI   GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS, AND OTHER ISSUES

SECTION I

OVERVIEW

The Procurement Organization at the Ames Research Center is providing meaningful support to their program customers. The Procurement Management Survey Team interviewed randomly selected technical and program representatives to ascertain any issues or concerns with the current processes. A significant degree of customer satisfaction is apparent from the interviews with the technical community. Additionally, interviews with numerous acquisition professionals, at all levels of the Ames organization, regarding the effectiveness of the procurement office were conducted.

The interviews of technical and acquisition personnel are given roughly equal survey emphasis as the review of contracting actions which focused on compliance with procurement statutes, regulations, and procedures. The thrust of the compliance portion is directed towards systemic procurement processes, as opposed to focusing on individual file anomalies. Attention was also directed to current procurement innovations, both Agency-wide and Center specific.

The results of the compliance reviews and the interviews are detailed as strengths, weaknesses, and areas of consideration. Also, to promote the exchange of successful lessons learned and innovative procurement methodologies between Centers, the team sought to identify Ames processes or initiatives that might benefit other Centers and, likewise, looked to other Centers for suggested approaches that might be exported to Ames.

The exit conference at the conclusion of the survey consisted of a direct exchange of observations and ideas between the participants. To emphasize Center ownership of the resolution of any identified weaknesses or considerations, the survey follow-up process will focus on the corrective actions or initiatives undertaken by the Center. At an appropriate interval (approximately six months after this report is issued) the Ames Procurement Officer will brief the Assistant Administrator of Procurement and the survey program manager on Center achievements in these areas.


Below is a list of team members and the areas reviewed by each individual:

The survey could not have been accomplished successfully without the support from Johnson Space Center, Kennedy Space Center, Marshall Space Flight Center, NASA Management Office at the Jet Propulsion Laboratory and the following individuals:

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SECTION II

ORGANIZATION - MANAGEMENT

1. Organization -- Management

The structure of the Ames Research Center (ARC) Acquisition Division has remained relatively constant through multiple survey periods. The Acquisition Division consists of three operational branches: Center Operations and Space (JAC), Information Systems (JAI), and Aeronautics (JAZ). These branches are responsible for planning, awarding, and managing procurements for customers at the ARC. A fourth branch, Business and Policy, continues to provide guidance and focus to the Acquisition Division personnel on a wide array of procurement policies, initiatives and overall administration of the procurement function at ARC.

The ARC Acquisition Division continues to struggle in the resource area since the last survey period, and the continued decline in FTEs is evident, leaving the organization at significantly less than full strength.

The ARC has 49 permanent full time employees, 2 fulltime FCIPs and the use of two Army acquisition personnel, which subsequent to this report, will no longer be supporting the organization due to the Army's restructuring.

Four of six management positions are filled by individuals who are performing the function in an acting capacity. The following management positions, which are critical to the infrastructure of this organization, have personnel serving in an acting capacity: Procurement Officer, Deputy Procurement Officer, Division Chief and two Branch Chiefs (Business and Policy Branch Chief and Chief, Acquisition Branch for Aeronautics). In addition, in FY2005, the Small and Disadvantaged Business Specialist, Procurement Analyst/MIS Specialist, Procurement Analyst (Policy Officer), Grant Specialist, and Administrative Specialist (2 Positions) positions became vacant.

Due to retirements and natural attrition, the Acquisition Division anticipates the following five positions will become vacant in FY2006: Acting Division Chief, Acquisition Strategy Manager, Branch Chief, Contracting Officer and Administrative Assistance.

In the midst of dwindling staff and increased workload, program uncertainties, resulting from major Agency challenges and program redirection; the Acquisition Division has been responsive to meeting the needs of its customers.

Despite the reduction in workforce, the ARC Acquisition Division has continued to provide a "high level" of support to its customer community and award numerous complex requirements; however, this situation is creating an environment of increased stress to most if not all employees within the organization.

There are several factors impacting and will continue to impact the Acquisition Division's ability to maintain this level of performance: (1) vacant and/or acting management positions (2) increased administrative workload due to new Agency/Procurement initiatives and (3) further reduction in procurement personnel.

Although staff reductions have occurred there has been and continues to be an increase workload experienced by the Acquisition Division personnel due to administrative functions such as: IFMP core financial process, P-card management, Procurement functional process Lead, super users for various systems, etc. The ARC Acquisition Division is also experiencing increased earmark activity, workload to support ESMD, the transitional from ARMD to SMD and potential "non-traditional" procurements. Other "high level activity" includes the Safety/Voluntary Protection Program, Contract Management Module involvement, NSSC involvement and ARC Project Management Information Improvement (PMII) Project.

It is noted that the 2002 Procurement Survey had the following comment - "ARC has a workforce that appears to be stretched to capacity now and has the potential to lose an additional 38% (22/58) through retirements alone over the next five years. It is recommended that the Procurement Officer continue to aggressively pursue efforts with ARC Senior Management to add new hires at least to the ceiling of sixty personnel with a goal of eventually raising the ceiling to a more optimal level."

We find the same concern under this current survey only the situation has been compounded by the fact that the staff has been reduced to 49 permanent compared to 58 permanent in 2002. The workload does not appear to have been reduced as contract obligations increased significantly from $428 Million in 2002 to $517 Million in 2004. In FY05, obligations through seven months are similar to those in 2004. In addition, the individual staff interviews have indicated that they are currently and have been for some time "working beyond capacity". This is negatively affecting morale and increasing lead times for procurements and administrative requirements.

It should be noted that the ARC Acquisition Division is taking action to identify alternatives to the current way of doing business in an upcoming divisional transformation plan. They will be looking at process changes including collaborations with other centers, alternative organizational structures, and accelerated development of junior staff.

STRENGTH:

The ARC Acquisition Division and its personnel are commended for performing effectively and successfully meeting customers' requirements during this period of transformation.

CONSIDERATION:

It is recommended that the Acting Management Team continue to aggressively pursuer efforts with the ARC Senior Management to fill vacant positions, promote eligible candidates, hire new employees and eventually raise the ceiling to a level commensurate with the workload.

2. Procurement Interviews

Interviews were conducted with 12 procurement professionals within the 1102 workforce to gain insight into their perspectives on the effectiveness of the organization. All of the individuals interviewed were between the GS-7 and the GS-13 grade level. Upon the suggestion of the ARC Procurement Officer, two GS-14 group leads were added to the interview process. Individuals from all procurement offices were represented in the interview process. This methodology allowed the Survey Team Program Manager to make an assessment utilizing representation of various grade levels and offices within the ARC Procurement Organization.

The procurement workforce responded favorably in the interview in the areas of training, communications, and management support. The individuals interviewed were very satisfied with the communication from Center management and management within the procurement organization in the midst of these uncertain times as a result of severe budget constraints. The interviewees also indicated that they felt that management's support of telecommuting and alternate work schedules has had a very positive impact on morale within the organization. It was also noted in the interviews that individuals who were co-located with their technical customers appeared to have a better working relationship which tended to boost morale.

The vast majority of the individuals interviewed were very concerned with the workload placed on the organization. This huge workload causes several problems within the organization from the perspective of the workforce: 1) experienced contract specialists and contracting officers don't have time to provide mentoring to less experienced employees; 2) there are many functional single points of failure within the procurement organization; 3) individuals are being asked to perform dual duties which were in the past performed by two individuals; 4) the consistency and quality of the work products suffer as a result of the huge workload. Some of the individuals interviewed also expressed concern with the acting roles and perpetual movement of management within the organization. At times, this situation caused confusion within the organization as to whom issues should be raised to for resolution. During the interviews, it appeared that promotions within the 1102 series were being handled differently depending upon the office you were working in. During the survey, management was apprised of this situation and they indicated that they would try to identify any inconsistencies in the process and work to resolve them.

3. Customer Interviews

The survey team interviewed a number of employees from various project and program offices regarding the effectiveness of acquisition support and the level of customer satisfaction.

The overall technical community is satisfied with the level of acquisition support being provided by the procurement personnel, with comments being uniformly positive. However, it was noted that there appears to be a higher degree of customer satisfaction in areas of communication and responsiveness from procurement staff co-located with technical customers.

Most in the technical community find the procurement staff to exhibit a "willingness to solve problems" and feel that the staff is knowledgeable about procurement and have the expertise to accomplish various procurement activities.

STRENGTH:

The Procurement organization is commended for their professionalism in supporting their customers.

Almost every customer interviewed cited a concern with workload issues within the Office of Procurement. The technical community's perception is that burnout and the lack of a permanent management staff will negatively impact the work product overtime. They find the rotations of management staff to be disruptive to the procurement staff. Accordingly, customers are afraid that their current satisfaction with their assigned Procurement counterparts could eventually be negatively impacted.

CONSIDERATION:

Customers were uniformly concerned about resource issues in the Office of Procurement. Workload and management rotation were all seen as stressors that potentially could have a negative impact on customer satisfaction. Procurement managers should ensure communication is maintained with the technical community and work to manage workload in the procurement organization.

 

4. Legal Office Interview

Two representatives from the Office of Chief Counsel (OCC) were interviewed to assess the relationship, which exists between the OCC and the ARC Acquisition Division. The results of this interview indicated that overall there is a good functional relationship between the two organizations with no substantial barriers to communication back and forth. However, the interviewees did express some concerns with the procurement organization.

One of the major concerns expressed was the lack of consistent management control over the organization (acting managers). They believe that this situation puts working level Contracting Officers in a very difficult position when it comes to "pushing back" on ideas/proposals from the technical organizations regarding contractual issues. CO's are less likely to question requests made by the technical organization when they feel management is either unwilling or unable to back up the CO's position regarding contractual matters. At times, this situation causes questionable procurement packages to arrive in the legal office which may take more time to review or require the legal office to get involved in the procurement to ensure that sound/defendable business decisions are made by the Government.

Another concern expressed by the legal office was that the Procurement organization is severely understaffed considering their workload. The legal office noted that at times the quality of procurement packages reviewed by the legal office over the last couple of years has suffered as a result of this situation. While the legal office believes that the Procurement organization has some "extremely talented individuals", their excessive workload causes mistakes to happen when they are pressured to get things done quickly. They stated that they feel over the last couple of years, they have been performing more of a procurement review function rather than a legal review function. They also have the perception that the level of expertise ranges widely among contract specialists and contracting officers within the organization and not all individuals responsible for high-level type work are adequately knowledgeable.

5. 1102's Career Development Training

The ARC Training Coordinator is responsible for overseeing the Career Acquisition Training Program in support of ARC's Acquisition Workforce. An examination of the training files as well as interviews with procurement personnel, the training coordinator, and the Acting Deputy Procurement Officer were included in this review.

The training coordinator maintains a database which tracks educational background, grade level, warrant status, CON courses completed, and certification levels for all of the 1102s at ARC. This database indicates that the vast majority of their employees have received the appropriate amount of training and appropriate certification levels for their grade and length of service at the Center. For individuals who have not obtained the necessary CON certifications, the ARC procurement management has assessed the warrant level of these individuals to ensure that their warrant level is commensurate with their certification level. A sampling of the backup documentation to support the database indicates that the database is not updated when some of the certification level certificates are received and at times the individual class certificates are not present in the file documentation to substantiate that the class has been completed.

ARC utilizes a number of activities to assure that their employees in the acquisition workforce meet the minimum 40 hours of continuing education training every two years. Some of the training opportunities include classes and seminars sponsored by a relevant professional organization, procurement related training sponsored by ARC utilizing outside training professionals, Defense Acquisition University on-line courses, and internal workshops utilized to address areas of concern within the procurement organization. ARC acquisition employees are required to complete Individual Development Plans (IDP's) which document near term and long term training requirements. These IDP's are discussed with their supervisors during the performance evaluations process. During employee interviews, the employees were very satisfied with the availability and applicability of training opportunities offered by management.

WEAKNESS:

The ARC Procurement Officer should ensure that the training database for the acquisition workforce is current, accurate, and complete and that the necessary back-up documentation is available upon request.

6. COTR Delegations and Training

NFS 1842.270 stipulates that the cognizant contracting officer may appoint a qualified Government employee to act as their representative in managing the technical aspects of a particular contract. If an appointment is made, NASA Form 1634, Contracting Officer Technical Representative (COTR) Delegation, shall be used to appoint COTRs. These COTR's are required to obtain comprehensive training and subsequent refresher training which is required once every five years at the Ames Research Center. ARC provides two comprehensive training courses and two refresher training courses per year. The Business and Policy Office maintains a database which tracks COTR comprehensive training and COTR refresher training.

The review of 12 contract file documentation indicates that COTR delegations are not being made in accordance with the NFS. In some instances, the Contracting Officer or the COTR are not signing the delegation. In other instances, it appears that delegations are not being executed in a timely fashion. In three instances, the COTR delegation form, NF 1634 was not executed because the technical monitor was assigned in the body of the contract. In other instances, the assigned COTR had not received the necessary training or refresher training nor had the Contracting Officer received permission from the Procurement Officer to make a temporary COTR appointment as required by NFS 1842.270(g).

WEAKNESS:

The Procurement Officer should ensure that all COTR delegations are made on the NASA Form 1634, delegations are made in a timely fashion, and individuals have the necessary comprehensive and refresher training to perform their assigned duties.

CONSIDERATION:

(1) The Procurement Officer should consider requiring COTR's to participate in refresher training more often than once every five years.

A review of NFS 1842.270(f)(2) should be conducted by NASA Headquarters to determine if a policy change is warranted.

 

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SECTION III

PRE - AWARD

1. Market Research

Part 10 of the FAR prescribes policies and procedures for conducting market research to arrive at the most suitable approach for acquiring, distributing, and supporting supplies and services. In addition, the NASA Virtual Procurement Office (VPO) provides a Market Research Guide, which includes a template for a Market Research Report. NASA is required to conduct market research before soliciting offers for acquisitions with an estimated value in excess of the simplified acquisition threshold.

From the contracts reviewed, the survey team found the majority of these files to have documented the market research performed, commensurate with the dollar values and complexities of those procurements. Print-outs of e-mail correspondence with prospective offerors and technical customers, as well as print-outs from searching NAIS, the CCI database, the GSA Schedule, and one-on-one discussions with industry were all included in the file. Given the breadth of market research conducted, these findings are consistent with the previous survey. Therefore, ARC's strength in this area continues.

While it was apparent that good market research was being performed, a Market Research Analysis Report was never utilized. The report format provided through the NASA VPO provides a synopsis of efforts in this area, and provides insight into the decision-making process of the Contracting Officer.

Not all market research documents were filed under the "Market Research" tab as indicated on NASA Form 1098. Sometimes market research was addressed only in the JOFOC (if applicable) and sometimes it was addressed in the Acquisition Plan notes.

STRENGTH:

ARC is commended for utilizing several different methods of market research which resulted in a very thorough analysis of potential sources. (REPEAT FINDING)

CONSIDERATION:

The Procurement Officer should ensure that a separate market research analysis report, which synopsizes market research efforts and provides additional comments that clearly document accomplishments of the research, be filed under the "Market Research Analysis" on the NASA Form 1098.

2. Consolidated Contracting Initiative (CCI)

The survey team reviewed a random selection of files to determine the extent to which ARC is implementing the CCI. Two of the sample contracts were research and development contracts for which CCI did not apply. The remaining contracts contained evidence in the file that the CCI Internet site was consulted prior to proceeding with the procurement action. In searching files for the CCI documentation, there was inconsistency in the tab numbering for the CCI website print out. COs must use the most recent version of the NF 1098, so that the CCI verification documentation will be located at a consistent location throughout the procurement organization's files.

ARC has one active contract that is awarded under the CCI: Brace Management, which is a service contractor to manage contract close-outs. ARC is applying sufficient consideration to the use of the CCI.

3. Justification for Other Than Full and Open Competition (JOFOC)

Nine noncompetitive contract files were reviewed for compliance with FAR Subpart 6.3 and NFS Part 1806. Dollar values ranged from $343K to $49.5M. Statutory authorities included (c) (1) - only one responsible source, and (c) (2) - unusual and compelling urgency. Most of the JOFOC's appeared to contain sufficient rationale to support the sole source, and all but one were reviewed and approved at the appropriate level. The one exception did not contain an approval signature on the JOFOC signature page. None of the JOFOC's contained all of the information required by FAR 6.303-2. Two JOFOC's did not mention a synopsis and no synopsis or waiver was found in the file. The remaining files contained synopses but failed to include information in the JOFOC regarding synopsis issuance, responses received or any required follow-up action. FAR 6.303-2 requires JOFOC's to contain a description of efforts made to ensure that offerors are solicited from as many potential sources as practicable, including whether a notice (synopsis) was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies, and a listing of sources, if any, that expressed, in writing, an interest in the acquisition. ARC Acquisition Division Acquisition Requirement No. 3 entitled JOFOC Preparation and Approval, also stipulates synopsis requirements, the need to analyze responses, and the need to include in the JOFOC a listing and analysis of any sources that expressed an interest in the acquisition.

Two of the files added the synopsis information after the JOFOC's were approved. In these cases, the synopses were issued 12/21/04 and had response dates of 2/4/05. The JOFOC's were approved 12/28/04 and contained a statement that a "listing and analysis of the sources (if any) that expressed an interest in the acquisition will be listed in Attachment 1". Attachment 1 was not added until February 2005, more than 30 days after the JOFOC's were approved. In the meantime, the solicitation was released 1/3/05, only 13 days after the synopsis was issued. FAR 5.203 require that a synopsis be published at least 15 days before issuance of a solicitation. JAB "Snowflake" Advisory No. 92 regarding Commerce Business Daily Synopsis/World Wide Web Posting also stipulates this requirement.

In other cases where the JOFOC's contained no synopsis information, the JOFOC's were approved either during the synopsis response period or before the synopsis was even issued. Several of the JOFOC's were based on only one responsible source due to the probability of substantial duplication of cost or unacceptable delays in fulfilling the Agency's requirements, but did not provide supporting data. One file contained a note on the JOFOC review/approval sheet to "see comments in email". No email was found in the file so it was not evident what the comments were or if they were resolved.

One file contained JOFOC's for two separate extensions to the period of performance due to delays experienced in the follow-on competitive acquisition. The first extension was based on "unusual and compelling urgency", and discussed delays to the solicitation release and award, but gave no details as to when the acquisition process started. NFS 1806.303-70 requires that a JOFOC based on "unusual and compelling urgency" to extend the performance period of an existing services contract document that the acquisition process for the successor contract was started early enough to allow for adequately planning and conducting a full and open competition, together with a description of the circumstances that prevented award in a timely manner. This was not documented. The second extension provided much more detail on the circumstances that delayed the follow-on acquisition, which appeared to meet the NFS requirements, but this JOFOC was based on "only one responsible source" rather than "unusual and compelling urgency". Both JOFOC's were approved after the extensions to the periods of performance commenced (but at the same time or prior to the contract modifications). Unrelated to the JOFOC issue, it was also noted that both contract modifications were executed after the extensions to the periods of performance commenced.

WEAKNESS:

CO's should be required to adhere to the requirements for JOFOC content listed in FAR 6.303-2; adhere to the publicizing and response times in FAR 5.203; ensure that JOFOC's are signed/approved; and ensure JOFOC's are not approved until synopsis response times have elapsed, and any expressions of interest are resolved and the results are included in the JOFOC. JOFOC's covering work for period of performance extensions should be approved prior to the start of the extension periods.

CONSIDERATION:

ARC should develop a template based on FAR 6.303-2 to ensure that all information required by the FAR is covered in the JOFOC. Each FAR content item could have its own section or heading with appropriate narrative which would ensure coverage of all required information and facilitate review. This is a repeat consideration from the 2002 survey. A sample template could easily be developed based on the JOFOC Checklist currently included in the ARC Acquisition Division Acquisition Requirement No. 3, JOFOC Preparation and Approval.

4. Government Furnished Property

Contract files were reviewed for compliance with procedures for providing Government property to a contractor. The review focused specifically upon: Pre-award review by the Supply and Equipment Management Officer (SEMO) as required by NFS 1845.102-71(b); Execution of a Determination and Findings (D&F) required under FAR 45.302-1(a)(4) and 1845.302-1(a)(4); The appropriate delegation of property management as applicable (PIC 01-24).

Only two of the files reviewed included pre-award SEMO reviews on record and were in accordance with NFS 1845.102-71(b), which states: "The contracting officer shall provide a copy of the solicitation (or contract if no solicitation is used) to the center supply and equipment management officer (SEMO) for review for acquisitions with an estimated cost greater than $1,000,000, or for acquisitions over $50,000 when work is to be performed at the center, existing Government property is being furnished, or contract acquisition of Government property is required or permitted."

In one of the files, the required Form JA 022 Coordination/Approval Document was not used to document SEMO concurrence through signature on the form. Rather, there was evidence of SEMO review in a memo to the file written by the Contracting Officer. The memo indicated SEMO action items resulting from review, and the respective resolution of those items. However, there was no actual SEMO review signature in the file to document the required review. In the other instance, the Form JA022 was used correctly, and was filed under the indicated tab in the NASA Form 1098, Checklist for Contract Award File Content.

Of the files reviewed, only one contained a Determination and Findings as required under FAR 45.302-1(a)(4) and 1845.302-1(a)(4). In a different file, there was a memo for record indicating that the contract was for an emergency follow-on effort. The previous effort had been approved for GFP, and the memo stated that as a result, the D&F for the original effort provided a sufficient basis not to require a new D&F. A separate D&F is required for each individual procurement action.

PIC 01-24 requires that property delegations for contracts, grants, and cooperative agreements with commercial firms will be performed by Defense Contracts Management Agency (DCMA) and property delegations for non-profit and university contracts will be performed by the Office of Naval Research (ONR). Documentation on file indicated that delegations were performed accordingly. However, PIC 01-24 also requires that the Contracting Officer should ensure that these instructions are acknowledged; very few of the files included this written acknowledgement from DCMA or ONR. In addition, several delegations were not found under the "Delegations" tab on the NASA Form 1098. Many files were identified to the procurement management survey team as containing property on the contract. However, several of those selected for review from the spreadsheet did not in fact contain any GFP. One contracting officer indicated that the data in the spreadsheet that was provided by ARC for the team was pulled from FPDS, and that the information contained within that system is not accurate. In addition, there were several files that included documented property delegations in the file, and yet there was no property on the contract. One contracting officer stated that the delegations are put into place in the event that property comes onto the contract at some future date. For those contracts where there is property noted in Section J of the contract as an attachment, the attachment must be maintained in the contract file with the fully executed contract. In one instance, none of the attachments identified in Section J were included under the "Contract" tab as indicated on the NASA form 1098.

WEAKNESS:

1. The ARC Procurement Officer should ensure that Contracting Officers document SEMO review of the solicitation or contract in accordance with NFS 1845.102-71(b), on Form JA 022 Coordination/Approval Document (Acquisition Division Acquisition Requirement (AR) No. 02, ARC Review Procedures).

2. The ARC Procurement Officer should ensure that the Contracting Officer's decision to provide GFP (facility items) to a contractor is documented in a Determination and Findings (D&F) per NFS 1845.302-1. (REPEAT FINDING)

5. Pre-Negotiation and Negotiation Documentation

The survey team reviewed eighteen contracts to determine if they implemented the requirements of FAR 15.405, 15.406, NFS 1815.406-170, and 1815.406-3 to provide adequate pre-negotiation and post negotiation memorandums. Overall the contract files reviewed documented the Government's pre-negotiation and post negotiation positions adequately by comparing the contractor's proposal to the Government's position. All variances in the pre-negotiation memorandum were identified. Post negotiation memorandums thoroughly covered the procurement and addressed negotiated amounts.

Review was made on contract files ranging in value from $70K to $40+M. It was observed that the quality of pre-negotiation and post negotiation documentation was consistently thorough in smaller and larger dollar value actions.

In most files reviewed, DCAA provided rate verification reports, both written and oral, in support for pre-negotiation memorandums. Contract Specialists performed additional cost analysis for justification of travel and other direct costs. However, it was noticed that one contract file did not address DCAA's contractor "system" deficiencies and CAS issues, or, what impacts they might have had on negotiations, if any.

CONSIDERATION:

Contracting Officers should be reminded of the NFS 15.406-3 (4) requirement to include documentation of any contractor systems to the extent they affected and were considered in the negotiation.

6. Technical Evaluation

The survey team found technical evaluations in all eighteen contract files that were evaluated, ranging in value from $500K to $49M. Technical evaluations were thorough and covered all the required information. SEB procurements were very detailed and addressed strengths and weaknesses of the contractor's proposals. Several contract files contained instruction sheets identifying questions to technical evaluators to consider when preparing technical evaluations. In all files containing the questions, the technical evaluator covered each question and provided sufficient detail in which to establish a Government negotiation position. In SEB actions, strengths and weaknesses were identified and explained.

STRENGTH:

ARC procurement personnel are commended for providing instructions with technical requests and being diligent in placing all evaluations in contract files. Technical personnel are commended for being thorough and detailed in their analysis of proposals.

7. Synopsis of Contract Award

Fourteen contract files were reviewed for compliance with FAR 5.301 for synopsis of contract awards. Less than half of the files contained the post award synopsis. Few of those that did not contain a synopsis appeared to meet one of the FAR exceptions. Some files contained a Center Director ANOSCA or a press release under the post-award synopsis tab, but no synopsis.

CONSIDERATION:

CO's should be required to comply with the post-award synopsis requirements in FAR 5.301. ARC should update its JAB "Snowflake" Advisory No. 92 to include requirements for post-award synopses.

8. Source Selection Procedures and Documentation

The survey team reviewed the procedures and file documentation to support source selection decisions at ARC. Source selection procedures are documented in Acquisition Requirement #09 entitled, "Source Evaluation Board/Committee (SEB/SEC) Handbook". The pre-award contract files reviewed provided good documentation that the source selection processes and procedures documented in the handbook are followed in reaching award decisions.

The monetary expense, time and effort of planning, developing, and supporting the proposal submitted for the government's source selection process are important factors contractors consider when making their decisions on whether to protest the government's source selection decision. The Debriefing is the point at which the contractor usually makes the initial determination of whether it was treated fairly and if the government followed the evaluation criteria and evaluation processes stated in the Solicitation. The agency is moving forward on a position that stresses the importance of routinely performing debriefings as part of the source selection process. ARC's Procurement Staff is commended for the procedures set-forth in its SEB/SEC Handbook, and especially for the fact that the handbook cites debriefings as a standard part of the source selection process.

CONSIDERATION:

As a means to further improve its internal procedures, ARC should consider incorporating pointers identified in PIC 04-11 "NASA Procurement Debriefing Guide" into its SEB/SEC Handbook". Other valuable pointers are provided in PIC 04-10 "NASA Source Selection Statement Development Guide".

 

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SECTION IV

POST - AWARD

1. Exercise of Options

In March 2004, the agency implemented policies and procedures to improve the option exercise decision making process. Particular focus was placed on (1) conduct of market research, (2) importance of role played by Program/Project Management, (3) importance of considering satisfactory contractor performance in accordance with NFS 1842.1503 and/or as evaluated and documented by NF 1680, and (4) Initiating these processes in time to make an informed business decision as to whether the option exercise continues to be the best programmatic path (i.e., instead of routinely notifying the contractor of the government's intent to exercise the option, which is usually forwarded 60-90 days prior to the contractual option exercise date). The review of ARC's option exercise modifications did not indicate that ARC has implemented the option exercise improvements, which were first promulgated in March 2004 (and shortly thereafter implemented as NFS 1817.207-70). One of the several option files reviewed included an option exercise determination format and some of the consideration factors set-forth in the revised procedures (including signature of the COTR/Program Rep on the Option Determination). But, the determination fell short of addressing all of the revisions (e.g., there was no indication that the contractor's performance during the prior period was considered in making the option exercise decision). It is also noted that one option exercise modification changed the option periods and apparently incorporated slight changes in scope but was still exercised as a unilateral modification when a bilateral modification (with additional justifications) should have been used.

WEAKNESS:

The Option Exercise decision process is not in compliance with NFS 1817.207-70.

CONSIDERATION:

The Procurement Officer should consider adding Acquisition Requirements to ARC's Management System (the Center's equivalent to ISO standards) implementing Option Exercise procedures to ensure compliance with NFS 1817.207-70 and the Option Determination format. It is also advised that the market research activities performed in support of option exercise determinations be conducted within the spirit and intent of PIC 03-17 "Market Research Analysis in Support of Option Exercises and Sole Source Contract Actions" dated September 2, 2003.

2. Subcontract Consents

ARC continues to display the use of a good process for consent to subcontracts that meets the requirements of FAR 44.2 and NFS 1844.2. The ARC subcontract consent checklist appears to be a contributing factor. The subcontractor consents reviewed by the survey team addressed the considerations listed in FAR 44.202-2(a). In keeping with the focus of the survey team to suggest ways in which procurement policies and procedures might be improved, suggestions were provided in the consideration section.

CONSIDERATION:

A memo may be added to the file by the Contracting Officer or Contract Specialist stating the reason the consent request was necessary. (2) In cases where the Prime Contractor's request for Subcontractor consent is denied by the CO, the file should be documented to state why consent was not given.

3. Undefinitized Contract Actions (UCA's)

The team reviewed the ARC UCA's identified in the most recent quarterly report submitted to the Headquarters Office of Procurement. The file review focused on age, dollar value, appropriate approval level, justification and file documentation in accordance with NFS 1843.70. Two UCA's identified in the Headquarters quarterly report were issued against contract NAS2-97001. The first UCA was issued in February of 2003 under modification #82. The modification has yet to be definitized by the Center. The file documentation had approval to issue a not-to-exceed of $1.5M; however, the modification included a not-to-exceed value of $2.3M. The Contracting Officer should have obtained the subsequent approval before issuing the modification. The second UCA was issued in January of 2005 under contract modification #104. ARC has yet to receive a proposal to definitize this action in a timely manner. The review team is concerned about ARC's approach to achieving the Agency's goal of definitizing actions within 180 days from issuance.

WEAKNESSES:

(1) The ARC Procurement Officer must ensure that all UCA actions are definitized within the Agency goal of 180 days. Definitizing these actions in a timely fashion allows NASA to minimize risk to the Government.

(2) The ARC Procurement Officer must ensure that all approval signatures have been received in accordance with NFS 1843.70 thresholds before issuing any UCA's. If the not-to-exceed amount is changed prior to issuing the contract modification, reauthorization is required.

CONSIDERATION:

It is recommended that the Procurement Officer incorporate a definitization schedule and language stating that any costs that exceed the NTE will not be fee bearing in the contract modification. This bilateral arrangement will make both parties cognizant of the goal to definitize the action in a timely manner.

During contract file reviews, the team noted that a letter contract had exceeded the NTE approved by the Assistant Administrator for Procurement. There was no documentation found in the file or verbal approval granting an increase to $35M which equates to an approximate 89% increase to the NTE.

WEAKNESS: (Letter Contract)

The Procurement Officer must ensure that all appropriate approvals are received before issuance of letter contracts or subsequent modifications increasing the NTE.

4. Closeouts and Unliquidated Obligations (ULO)

The team review of closeouts and unliquidated obligations consisted of trend analysis (i.e. schedule time frame by contract type, use of quick closeout procedures, open actions, and overage ULOs) for the closeout of completed contracts, purchase orders, grants, inter-agency agreements and the status of unliquidated obligations.
As of June 16, 2005, ARC has approximately 558 physically completed contracts, which are not administratively closed where obligated monies are not yet liquidated. The total value of unliquidated obligation is approximately $7 million. The percentage of actions and ULO's are 28% and 42% (primarily grants and cost reimbursement contracts) respectively that are identified in the overage category. The overage factors can be contributed to DCAA final audits, technology office concurrence and receipt of funding from Headquarters as a result of final audits.

Metrics are used to track monthly closed and deobligated dollars by action type of category, open, closed, and overage cumulative summary reports.

The Agency closeout contractor, BRACE Management Inc., provides support to the acquisition division. They are responsible for preparing all closeout documentation for the Contracting Officer's review and approval.

CONSIDERATION:

It is recommended that some emphasis be placed on closing older physically complete cost reimbursement contracts and grants to free up obligated dollars for other efforts.

5. Performance Based Contracting

In the 2002 HQ survey, a weakness was identified in the area of PBC. The specific weakness was related to the incorrect categorizing in the ARC system regarding the extent to which contracts were or were not performance based. For this survey, five contracts were reviewed. Of those five contracts, three were correctly categorized. Of the other two contracts, both should have been categorized as 100% PBC. A review of various SOW/Task Orders indicated that in general, they were written in performance based terms. In some of the SOW/Task Orders, there was evidence of measurable performance standards.

FAR Subpart 46.4, Government Contract Quality Assurance, requires that where appropriate, contracts should have Quality Assurance surveillance plans that are prepared in conjunction with the preparation of the Statement of Work. The surveillance process directly reflects the management approach applied by the requiring organization to a specific contract. FAR Part 46.01 also requires that the plans specify:

(1) All work requiring surveillance; and
(2) The method of surveillance.

Surveillance plans are effective tools to monitor contractor performance as they provide:

• baselines for project monitoring and scheduling
• a mechanism for assessing and assuring contract compliance
• the ability to identify areas requiring corrective action
• a reminder for determining the extent of contract completion
• facilitation of transition from one COTR to another to ensure appropriate level of monitoring and surveillance continues, and
• a mechanism for identifying, assessing, and documenting risks of contract performance, as well as tracking and mitigating risks.
  

Of the five contracts reviewed, three had approved surveillance plans, one had a draft surveillance plan in the file, and one was asked for but not received. One contract incorporated a Contract Surveillance Risk Decision Tree in their plan. Since risk analysis is an integral part of contract surveillance, the use of a decision tree, to determine whether to use a proactive or reactive surveillance tool, is commended.

Overall, the surveillance plans reviewed are generally considered acceptable. The use of data and metrics should also be considered whenever possible as part of surveillance plans.

WEAKNESS:

The Procurement Officer should ensure that all contracts are accurately depicted in the ARC system as PBC, partial PBC, or not PBC (REPEAT FINDING).

6. Task Orders (Competition under Multiple Award and Delivery Order Contracts)

For the multiple-award DO's and TO's, the files reviewed indicated the orders were awarded on a competitive basis. There were a few cases where only one of the two contract holders responded to RFQs, but these instances do not negate the fact that a competitive process is used. The CO was queried as to the method used to inform the two contract holders of the availability of an RFQ. The CO responded that the two contract holders are faxed copies to ensure that they receive them relatively at the same time. Copies of the RFQs are also mailed to the contract holders. The multiple-award contracts provided sufficient evidence that Delivery Orders and/or Task Orders were being competed.

7. Quality Assurance Surveillance Plans for Delivery Orders and Task Orders under IDIQ/Time and Material Type Contracts

In order to ensure that contractors perform in compliance with the Government's Performance Work Statement (PWS) or Statement of Work (SOW), and to monitor the contractor's progress toward providing acceptable quality levels, FAR 37.602 states that agencies shall develop quality assurance surveillance plans (QASP) when acquiring services (NFS 1837 has no additional requirements). Seven contracts covering numerous Delivery Order (D.O.) and Task Order (T.O.) files were reviewed to substantiate whether the contract files included the use of QASPs. Only one of the contract files indicated the use of a QASP.

During clarification discussions on the QASP issue with one of the CO's having responsibility for most of the contracts reviewed, the opinion expressed was that the contracts were for R&D activities where studies and reports were deliverables. However, as indicated by the PWS's/SOW's within the awarded Orders ARC was first and foremost acquiring engineering, technical and/or scientific support services. As such, the requirement for QASPs remained applicable. Since the FAR also stresses Performance-Based Contracting (PBC) for services, the PBC process is where QASPs may be most useful.

WEAKNESS:

The Procurement Officer should ensure that D.O and T.O contracts for services and Orders placed under those contracts include approved QASPs.

CONSIDERATION:

The Procurement Officer should consider adding an Acquisition Requirements to the ARC Management System that implements a standard procedure to require QASPs for all Contracts, Delivery Orders and Task Orders inclusive of any DO's or TO's awarded by ARC under multiple award contracts both within NASA (e.g., SEWP) and outside of NASA (e.g., GSA's Federal Supply Schedule and Federal Technology Services contracts). The detail of the QASP should be commensurate with the complexity, risk and funding level of the Order and/or Contract.

8. Incremental Funding

The survey team reviewed a total of nineteen contracts, purchase orders and delivery/task orders and 58 modifications of various types to ensure compliance with guidance provided in Procurement Notice 97-68 dated February 20, 2002. One of the purposes of PN 97-68 entitled "Limitations on Incremental Funding and Deobligations" was to reduce the quantities of modifications issued by restricting the minimum amount funded and/or de-obligated to $25,000. With the exception of two files, the balance of the orders and contracts reviewed met the criteria set forth in PN 97-68.

During review of these files, several anomalies were noted, such as 1) lack of a Purchase Request in the official contract file or a memorandum to file regarding its location, 2) lack of evidence regarding contractor concurrence for the period of performance funded, 3) timeliness of incremental funding modifications resulted in a potential anti-deficiency situation since several days passed before the follow-on incremental funding modification was issued, 4) Purchase Requests were not included with applicable modifications but instead filed under the basic contract, and 5) deliverables were not attached to the contract in Section J. It is noted that these actions are not indicative of systemic issues.

In the previous survey, there were instances where the Limitation of Funds or the Limitation of Government's Obligation clause was filled with "TBD" upon contract execution. It was observed during this survey that NFS 1852.232-81 "Contract Funding" paragraphs (a) and (b) were filled with "TBD" upon contract execution. Of the nineteen contracts reviewed during this survey, there was only one occurrence of this situation. It is evident from the review of these files that efforts have been taken to alleviate this area of weakness noted in the previous survey.

9. Award Fee/CPIF (Cost Plus Incentive Fee)

The 2002 HQ survey identified this as an area of strength. For this survey, five Award Fee contracts were reviewed. Of the five reviewed, two were awarded less than 6 months ago and no evaluation had taken place. Two contracts did not meet the 45 day fee determination period. For these two contracts, FDO decisions occurred anywhere from 3 months to 10 months after the Award Fee period ended. We also found that four of the five contracts reviewed did not have approved Performance Evaluation Plans (PEP) in place prior to the start of the AF period.

For one of these contracts, the Performance Evaluation Board did not use a PEP to develop a final recommended score and instead, relied on an informal review based upon the contractor's monthly assessment reports, self assessment, and their own observations (the contractor was awarded a final score of 100). For this same contract, there was no approved PEP until approximately 4 months after completion of the 2nd AF period. NASA Far Supplement 1816.405-274, Award Fee Evaluation Factors, states that explicit evaluation factors shall be established for each award fee period. While the use of a draft PEP gives both the Government and the contractor an indication of the basis used to determine a final score, a formally approved Plan should be provided to the contractor and the evaluators prior to the start of any AF period.

One of the contracts reviewed had a CPAF/IF hybrid arrangement. There is an understanding among the parties that at the end of each 6 month Incentive Fee evaluation period the baseline will be adjusted (+/-) by the Government to take into account impacts not originally contemplated when the baseline was developed. While this adjustment was only a +4% increase to the cost base for the first evaluation period, it appears that this is a rolling baseline that may be counter to an effective IF arrangement.

WEAKNESS:

(1) The Procurement Officer is reminded that in order to adequately evaluate contractor performance, a Performance Evaluation Plan should be in place before the evaluation period begins.

(2) The Procurement Officer is reminded that the NASA goal is to have FDO decisions no later than 45 days after an evaluation period completion.

CONSIDERATION:

The Procurement Officer is reminded that contract type determinations should take into consideration the stability of the contract baseline.

10. Contractor Performance Evaluation (NASA Form (NF) 1680)

Seven contract files were reviewed for compliance with FAR 42.15 and NFS 1842.15, including 16 evaluation periods. All but one file contained the required NF 1680 forms.

The file that had no NF1680 forms contained a memo from the contract specialist that the NF1680 form would not be completed until the end of the contract period of performance on 6/30/05. The memo was dated 6/7/05 and appears to have been placed in the file when it became known that the NF1680 forms were selected for review by the Procurement Survey Team. With a period of performance beginning 9/13/02, there should have been several completed NF1680 forms in the file. When asked, the contract specialist said he thought a NF1680 form was only due at the end of the contract.

None of the contracts could be found in the NASA Past Performance Data Base (PPDB), at least not through the normal process. With the help of ARC personnel, it was shown that some contracts did have evaluations in the PPDB system, but the final step of signing/dating the NF1680 form on the web by the CO had not been done, so the end results of the evaluation could not be viewed outside of ARC. Although all seven contracts were in the PPDB system, only four had evaluations that could be reviewed, and one of these only contained blank forms for three evaluation periods. It was noted for this specific contract that the contract file also contained copies of the blank forms for the three evaluation periods. For the other three contracts, the PPDB system stated "no evaluations found".

It was also noted that JAB "Snowflake" Advisory No. 02-02 regarding electronic submission of the NF1680 stipulates that the CO must sign page 2 of the form in order to "finalize" the submission into the PPDB. Evaluations having an unsigned page 2 are designated as "draft" by the system and will not be viewable in the PPDB reports section. It was apparent that the ARC guidance was not being followed.

NFS 1842.1502 requires that within 60 days of every anniversary of the award date of a contract having a term exceeding one year, contracting officers must conduct interim evaluations of performance on contracts subject to FAR 42.15. Of the files that contained completed NF1680 forms, most may have started on time, but only about half were completed on time.

WEAKNESS:

CO's should be required to comply with the FAR and NFS requirements regarding contractor performance evaluations, including meeting the 60-day lead time for completion of the evaluation; providing substantive narrative to justify the ratings; and entering the data into the PPDB.

CONSIDERATION:

ARC should consider a training session for procurement personnel to facilitate implementation of the FAR and NFS requirements and to ensure inclusion of the evaluation results in the PPDB.

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PRICING - FINANCIAL - AUDITS

1. Cost and Price Analysis

The survey team reviewed eighteen contracts for adequacy of cost and price analysis pursuant to the requirements of FAR 15.404. A cost or price memorandum was found in all contract files. In most cases contract specialists requested DCAA to provide labor and burden rate recommendations/verification, both oral and written, to contractor's proposal. Other analysis consulted salary.com for comparisons. DCAA's involvement provided a detailed and thorough labor and burden rate analysis. Direct material and subcontract cost analysis, on the other hand, were not complete in all instances. One contract file provided no support on cost in excess of $3.0M while other files did not provide support for lesser amounts. Generally, the quality and adequacy of cost/price analysis was good. Broad Agency Announcements and NASA Research Announcement files reviewed also contained adequate cost/price analysis.

CONSIDERATION:

The Procurement Officer should remind Contracting Officers and specialists of the requirements in FAR 15.404-3 to determine price reasonableness for material/subcontract cost and to document the results in the cost/price memorandum.

2. Use of Structured Approach in Profit/Fee Objectives

The survey team reviewed eighteen contract files for compliance with NFS 1815.404-470, NASA structured approach for profit or fee objective. All files reviewed and awarded by negotiation contained the NASA Form 634, structured fee approach, in developing pre-award fee positions. Explanations of weights and factors chosen were explained and attached to the NASA Form 634.

STRENGTH:

ARC is commended for using the required NASA structured fee approach in developing fee positions and providing appropriate file documentation.

3. Financial Management Reporting (NF 533)

Five contract files were reviewed for compliance with NFS 1842.72, NASA Contractor Financial Management Reporting. All of the contracts met the contract type and dollar thresholds requiring financial management reporting. All of the contracts included NFS clause 1852.242-73 requiring NASA Financial Management Reporting. The clause requires that the detailed reporting categories to be used shall be set forth in the contract, as well as the number of copies and time and manner of submission. All of the contracts contained data requirements descriptions that covered the required information.

NFS 1842.7201(a)(1) requires CO's to monitor contractor cost reports on a regular basis to ensure cost data reported is accurate and timely, and to pursue adverse trends and discrepancies discovered in cost reports through discussions with financial and project team members. All but one of the files were documented to show that the CO's did any kind of review and/or analysis. Documentation ranged from CO initials on the face of the NF533 noting it was reviewed; to an "adequacy checklist" completed and signed by the CO; to CO notes regarding timely receipt, checks for overruns, and review of any variance report. There was no standard practice being used, just whatever the CO considered necessary. Interviews with the CO's did disclose that they were aware of and were diligent about complying with the NFS requirements.

Although the "adequacy checklist" noted above may be helpful to ensure that all of the necessary fields on the NF533 have been completed, it does not contain any information regarding timeliness, accuracy, any analysis that was completed, or any necessary follow-up corrective action. It was noted that ARC does have excellent guidance regarding reviews of NF533 reports in their JAB Snowflake Advisory No. 02-07, but, based on the documentation found in the files, it is not apparent that the guidance is being followed. It was also noted that ARC procurement personnel were recently able to attend a NF533 review and analysis training program sponsored by the ARC CFO.

CONSIDERATION:

CO's should be reminded of the need to document the review of the NF533's. A standard checklist/form that all CO's can use to document the file may be helpful. The checklist/form could provide 533 due dates and received dates, verification that the 533 was checked for accuracy, notation of any irregularities or discrepancies found, notation of any follow-up actions that were taken, and a signature block for the CO. A sample checklist/form deemed to be a best practice from KSC is provided for ARC's consideration. Alternately, information from the ARC Snowflake noted above can be used to develop a standard template that could be used by all ARC CO's to document their files.

4. Audit Follow-Up

ARC currently has no outstanding OIG, IG or DCAA audits or audit recommendations. Therefore, the review focused on the process and procedures in place to track and close-out these audits. The survey team interviewed AMES's Audit Liaison Representative and Defense Contract Audit Agency (DCAA) Liaison, and reviewed the process to coordinate and close out DCAA and Office of the Inspector General (OIG) reportable audits over the last two years. The following audits were closed out during the last two years: 1) audit of sole source and limited competition contracts, 2) disposition of hazardous materials and waste, 3) management of procurement workforce, and 4) review of the Girvin Institute Agreement.

ARC's Audit Liaison Representative for GAO and IG has access to track audits and audit recommendations in the agency online Contract Audit Tracking System (CATSII). Each GAO and IG audit and audit recommendation is entered into CATSII with target resolution and closure date and is updated at least quarterly. The Acquisition Division tracks DCAA audits and audit recommendations using excel spreadsheets. However, when such audits and recommendations exist, they are tracked by the Acquisition Division Business & Policy Branch (as opposed to the Audit Liaison Representative) thus, utilizing two systems dividing audit tracking.

NASA Headquarters lends strong support to audit follow-up activities. NASA's Deputy Administrator is the approval authority for extensions to OIG requests. The Office of Procurement at NASA Headquarters issues quarterly calls for reportable audits. Center liaisons are required to provide an explanation for all audit recommendations that are overage and update the audit data in CATSII. Additionally, NASA HQ appoints analysts that work with the Center liaisons to resolve audit recommendations involving more than one NASA Center. These analysts also support the Center liaisons by: issuing audit policy; maintaining an Audit Liaison Representative web page; informing the Center liaisons of all audit announcements, reports, and closures; and providing support to the Center liaisons in the form of training materials, conferences, and sample audit communication letters.

STRENGTH:

ARC has a solid audit follow-up process that effectively tracks, resolves, and closes IG, GAO and DCAA audit recommendations.

CONSIDERATION:

The Procurement Officer should consider tracking open DCAA audits in the (CATSII) database. This action would create one point of contact and source of information for tracking and resolution of GAO, OIG, and DCAA open audits.

5. Contractor Pension/Insurance Reviews (CIPR)

Procurement Information Circular (PIC) 00-23, Contractor Insurance/Pension Reviews" (cancelled on March 22, 2004) defines the CIPR as follows: A CIPR is an in-depth evaluation of a contractor's insurance program; pension plans; other deferred compensation plans; and the related policies, procedures, practices, and costs to determine whether they are in compliance with the FAR and pertinent contract clauses. The review of a contractor's compensation structure, including pension plans, and its insurance plans are two of the contract administration functions found at FAR 42.302 normally delegated by NASA to the contract administration office (CACO). PIC 00-23 also stated that CIPRs are usually self-initiated by the ACO; however, if NASA or any other Government agency believes that a review should be conducted, a recommendation to that effect should be provided to the ACO. If the ACO concurs, the review may be conducted as a special CIPR or as part of an already scheduled CIPR.

Of the Contracting Officers interviewed, only one had requested a copy of the contractor's CIPR. However, none of the Contracting Officers had a copy of a CIPR in their files.

CONSIDERATION:

The Procurement Officer should ensure that Contracting Officers are requesting and obtaining copies of CIPR's pertaining to their contracts and that they understand any issues arising from the CIPR that might affect their contract.

6. Compensation on Service Contracts

Cost reimbursable service contracts were reviewed to ensure compliance with NFS 1831.205-670 related to the evaluation of contractor and subcontractor compensation plans during the review phase of competitive and non-competitive service procurements. In addition, files were reviewed to ensure compliance with the NFS regarding the evaluation of the contractor's compensation plan at least every 3 years after award.

Based on the files reviewed, ARC is not in compliance with the requirements of NFS1831.205.670 to evaluate contractor compensation plans before award and within every 3 years after award. None of the RFP files reviewed contained the equivalent of NFS 1852.231-71 requesting submittal of a compensation plan, nor was separate discussion found in any pre-negotiation position memorandum or price negotiation memorandum as required in paragraph (e) of 1831.205-670. It is noted that DCAA does review periodically the contractor compensation systems and reports on their acceptance. Service contracts existing beyond 3 years did not contain evidence of a compensation review after award other than those performed by DCAA.

WEAKNESS:

The Procurement Officer should take appropriate action to inform Contracting Officers of the requirements found in NFS 1831.205-670 and NFS 1852.231-71.

 

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GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS,
AND OTHER ISSUES

1. Grants and Cooperative Agreements

NASA is planning to consolidate the management of grants and cooperative agreements at the NASA Shared Services Center (NSSC), which is projected to occur in FY 08. When this change becomes effective, ARC will no longer award new grants and cooperative agreements. ARC will maintain the grants and cooperative agreements currently in place within their procurement activity, and will continue to be responsible for the administration and closeout of those remaining files.

A. Grants

A random sampling of grants, based on dollar value, was reviewed. All of the grant files reviewed included records of rate verifications, purchase requests documenting the funds available for award, certifications, and other required documentation for grant awards. All of the grant files included letters of designation to technical officers. These letters were properly maintained in the file, and covered relevant instructions with respect to the technical management of the grant activities. However, none of the letters included the signature of the technical monitor, which would create a record of acknowledgement for the grants officer.

Each grant award file reviewed included the form entitled, "REQUIRED PUBLICATIONS AND REPORTS" as part of the award documentation (under Tab 9). This form identifies specific reports and their corresponding due dates for submission to various offices as deliverables under the grant. Several reports were to be submitted to the grants office for each grant according to the forms. As of the date of this survey team review, three of the files should have had specific deliverable reports already in the file according to the due dates specified. None of the files included any of the required deliverables, nor was there a record of the technical officer having received the documentation within the files.

One of the grants reviewed was awarded based on an earmarked appropriation. The value for this grant was $3,000,000, for a two-year period of performance. The grantee requested two one-year no-cost extensions to the period of performance, which were approved by the grants officer. This resulted in a four-year period of performance, and yet there were no progress reports or information from the technical officer in the file to indicate that any work was actually being accomplished under the grant.

When asked about the lack of deliverables on file, the team lead for the grants group informed the survey team that there had been a system of tracking suspense dates in the past for deliverables and funding needs on grants. However, as a result of the downsizing within the procurement group as a whole, this supportive function is no longer being performed given the other priorities of the office.

WEAKNESS:

Required deliverables such as progress reports must be maintained in the contract file. The grants office should work with the grants' technical officers to re-establish a tracking system or methodology for securing and maintaining records of deliverables required for proper grant administration.

NOTE: If it is determined that the progress reports are not required for the file, the grants office may elect to modify the "REQUIRED PUBLICATIONS AND REPORTS" form to require that only the technical officer receive reports, and then request that technical officer provide e-mail notification to the grant administrator to document receipt of the report for the file.

CONSIDERATION:

It is recommended that the Procurement Officer ensure that designation letters be routed to the technical officer for signature, with a copy maintained in the grant file for the official record.

B. Cooperative Agreements

The survey team reviewed a sampling, based on dollar value, of cooperative agreements. All of the cooperative agreement files included rate verifications and purchase requests documenting that funding was available for award. Most files had all of the required certifications from the offerors. Four of the files did not contain the Civil Rights Certification, NASA Form 1206 with the documentation of the initial awards. However, one of these cooperative agreements did include the Civil Rights Certification under a subsequent supplement to the agreement, as required by the Grants and Cooperative Agreements Handbook.

In the event that scope was added to the original cooperative agreement, proposals for those efforts were included in the file. Technical and cost reviews were included as back-up for the additional work as well. However, in one cooperative agreement supplement both the technical and cost evaluations were Xerox copies from a previous supplement, with the date erased with "White-Out". A new date was written in ink over the "White-Out", and the Xeroxed copies were then used to provide back up for a different supplement. There is no evidence in the file that the technical officer was aware that the grants specialist had changed the information and dates on the cost and technical evaluations subsequent to the technical officer's signature.

CONSIDERATION:

Each supplement must have its own, unique technical and cost evaluations, in order to properly support the award of the supplement.

C. Comments Pertaining to both Grants and Cooperative Agreements

Within the review of both the grants and the cooperative agreement files, there was a noticeable trend (18 out of 39 actions reviewed, or 46%) of both basic awards and supplemental awards being made AFTER the effective period start date. Although the GRANTS HANDBOOK (Section 1260.3 (b)) permits this, the guidance (same section) also states, "Expenditures made prior to award of a grant are incurred at the recipient's risk". There is no indication in the file that any notice has been given to the grantee that they are conducting this effort at their own risk, nor is there information in the file to indicate who (Grants officer or technical officer) authorized the grantee to begin work. In the future, if it is known that the grantee is conducting effort under a potential grant award prior to the award date, it is recommended that both the grants officer and the technical officer sign off on a letter providing notification that any expenditure are being incurred at the grantee's own risk.

Also noted within the review of both grants and cooperative agreements was a lack of documentation to indicate adherence to the ARC review policy for reviews and approvals. Acquisition Division Acquisition Requirement (AR) No. 02, ARC Review Procedures, paragraph 5.5 states that: "Form JA 022, Coordination/Approval Document, shall be used as the official record of approval unless there is a designated format for the particular action." Per the AR 02 attached Acquisition Action Desk Guide, Procurement Action number 82, Cooperative Agreements with private industry, grants and letter contracts above $2.5M, there should be a form JA 022 in each of the relevant grants and cooperative agreement files, indicating the appropriate reviews, concurrences, and approvals had taken place. This form is required per ARC policy. When used, it provides a clear, concise record of reviews and approvals for the file.

Each of the grant and cooperative agreement files contained minimal levels of technical evaluations and justifications for acceptance of unsolicited proposals. However, the evaluations were often superficial in detail; for example, there was little discussion of whether the proposed labor skill mix was appropriate, whether the number of hours looked reasonable for the scope of work proposed, and whether the number and purpose of trips were appropriate. In addition, awards made as a result of either a NASA Research Announcement or Cooperative Agreement Notice should not only reference, but include as back-up material, all relevant review documents associated with selection under the announcements.

WEAKNESS:

The Grants team should request more rigorous reviews and documentation supporting the rationale for awarding grants and cooperative agreements from their technical officers.

CONSIDERATION:

The grants and cooperative agreements office must use the Form JA 022 to document the review and approval of awards over $2.5M. NOTE: A weakness in this area was noted in the Internal Policies and Procedures section, as this was a systemic finding within a large number of the contract files reviewed by the survey team.

2. SBIR

Four Phase 1 and seven SBIR Phase 2 awards were reviewed. It was concluded that overall, ARC awards were well managed. All SBIR awards reviewed contained a detailed technical evaluation and the appropriate Representations and Certifications. All Technical evaluators were asked to comment on the Scientific/technical merit and feasibility, the future importance and eventual value to NASA, Capability of the Small Business Concern, Commercial Merit and Feasibility Applications, perform a budget review (including evaluation of skill mix, labor hours, material, and Other Direct Costs), and determine whether Government Furnished Facility Requirements are required. This information was used by the Contract Specialist to develop a Government pre-negotiation position. All pre-negotiation positions and negotiation summaries included in the files were compliant with the requirements of the FAR and NFS. With the exception of one, all Phase 2 files contained the NASA structured fee approach for determining profit or fee objectives. All files were reviewed and approved in accordance with the ARC Review Policy - Desk Guide.

3. Simplified/Commercial Acquisitions

Eleven Purchase Orders were reviewed. The files were reviewed to determine if appropriate documentation existed, and that a reasonable selection was made in the award. Specifically, the review consisted of the following: was there a certified PR and completed ARC 796, Certification and Special Approvers for SAP Purchase Requests included in the file; was the requirement split to circumvent the procurement process; was there evidence in the file that FAR Part 8, Required Sources of Supplies was considered prior to completing the purchase; if noncompetitively awarded, was the reason adequately documented; if noncompetitive over $25K, was the requirement synopsized; was a determination of price reasonableness completed; was Market Research adequately performed; were the appropriate Terms and Conditions used; were CCR and Cage Codes included in file; was there evidence that the debarred list was checked prior to award; was VETS compliance required; and was the file reviewed at the appropriate level.

Of the files reviewed, two did not have the required synopsis, three did not have VETS compliance, five did not include or included an incomplete ARC 796 in the file, three had poor sole source justifications, two did not have Market Surveys, one had a poor SOW, one had a poorly written Responsibility Determination, and one was mistakenly categorized as being awarded to a small business.

CONSIDERATION:

The Procurement Officer is reminded that all SAP files should include complete and accurate documentation.

3. Interagency Agreements

Six interagency agreement files were reviewed for compliance with FAR 17.5 - Interagency Acquisitions Under the Economy Act; NFS 1817.70 - Acquisitions with Military Departments; and NFS 1817.72 - Interagency Transactions. The review was to ensure compliance with the FAR and NFS requirements for a Determinations and Findings (D&F), including content (see FAR 17.503 and NFS 1817.7202); use of the Space Act as authority (see NFS 1817.7201); use of a NASA-Defense Purchase Request (NDPR) (NASA Form 523) (see NFS 1817.7002); and inclusion of a payment provision (see FAR 17.505 and NFS 1817.7203).

Four of the files contained the required D&F and two contained an appropriate memo documenting that a D&F was not required due to the action being the result of a broad agency announcement (see NFS 1817.7202(d)). Only two D&F's contained all of the information required by the FAR and the NFS. The other two did not identify the period of performance. One file cited the Economy Act as the authority in the D&F.

All of the files used the NDPR form. Four of the NDPR's cited the Space Act as the authority. Two of the NDPR's did not cite any authority. Three of the files did not contain a payment provision requiring the servicing agency or department to submit a final voucher, invoice, or other appropriate payment document within six months after the completion date of the order.

WEAKNESS:

The Procurement Officer should ensure that CO's comply with the FAR and NFS requirements for interagency transactions regarding information to be included in the D&F and the NDPR. Development of a standardized template for both may be beneficial to ensuring all correct and appropriate information is included in the files.

4. Construction Contracts

There were only two active construction contracts at ARC. Both of the contracts were reviewed by the survey team. The review covered all aspects of the acquisition cycle. Both contracts were found to contain the required and appropriate clauses and provisions, including environmental clauses. The contracts provided for liquidated damages and rationale was provided in the files.

A concern addressed in the previous survey was the lack of government approval of the Safety and Health Plan. Although both contracts contained the appropriate Safety and Health Plan clauses and the pre-construction meeting minutes stated that work could not be initiated until government approval of the Safety and Health Plan was issued, there was no evidence of such approval in the files. It was noted that the technical evaluation did not include signatures of all the members of the Source Evaluation Team (SET) in the contract file.

WEAKNESS:

The Procurement Officer should ensure that Contracting Officers obtain Government approval of the Safety and Health Plan prior to commencement of work.

5. Progress Payments for Construction Contracts

Of the two active construction contracts at ARC, both were reviewed to ensure compliance with FAR 52.232-5 "Payments under Fixed-Price Construction Contracts". During the previous survey some of the requests for progress payments did not meet all of the requirements of this clause. These two construction contracts were reviewed to determine if the requests for progress payments adhered to the requirements set forth in FAR 52.232-5. Both files reviewed contained the current version of the clause. The files reviewed during this survey showed that there is continued inconsistency regarding the submission of subcontractor's information and contractor certification. Some of the requests did not include a listing of the amount of work performed by each subcontractor, amounts previously paid to each subcontractor or certification by the contractor regarding work performed.

WEAKNESS:

The Procurement Officer should ensure that requests for progress payment for construction contracts are in compliance with FAR 52.232-5. Requests for progress payments that are not compliant should not be accepted. (REPEAT FINDING)

6. Environmental Clauses

FAR 23.405 applies to the procedures relative to acquisition of EPA-designated products and PIC 01-027 "Applicability of Affirmative Procurement", dated October 16, 2001 further clarifies the Contracting Officer's responsibilities when supplies or services purchased may contain recovered material. The survey team reviewed numerous purchase orders and contracts to determine if the appropriate environmental clauses were included, when required, in accordance with PIC 01-27, "Applicability of Affirmative Procurement", dated October 16, 2001. Contracts reviewed were found to be compliant.

7. Contract Safety Requirements

Contract files were reviewed to verify compliance with NASA FAR Supplement Subpart 1823.70 entitled Safety and Health. For clarification purposes, it should be noted that all contracts reviewed in this area had estimated values of $500,000 or more. In accordance with NFS 1823.7001(d), the contracting officer shall insert the clause at 1852.223-75, Major Breach of Safety or Security, in all solicitations and contracts with estimated values of $500,000 or more. All of the files that were reviewed contained this required clause. All of the contracts reviewed should have contained either clause 1852.223-70 Safety and Health or 1852.223-72 Safety and Health (Short Form) depending upon the input received from the technical organization and the safety organization. All of the reviewed files, including construction contracts, contained the required safety and health clauses.

NFS 1823.7001(c) states that if clause 1852.223-70 Safety and Health is incorporated into the contract, the contracting officer shall include the contractor's safety and health plan into the contract after receiving the concurrence of the center safety and occupational health official(s). There was one instance in a non-construction contract, when the contract contained clause 1852.223-70 Safety and Health, but the contractor's Safety and Health Plan was not reviewed and approved by the cognizant safety office as required by NFS 1823.7001 (c).
Also, during the file review, it was also noted that ARC has a viable Voluntary Protection Program that has been certified by OHSA for the next five years. Although this is not a FAR or NFS requirement, the procurement and program offices have implemented this program for the use of civil servant and on-site contractor safety awards, self submitted safety suggestions, and a Contractor Council that can select the top safety contractor on Center during the calendar year.

STRENGTH:

ARC is commended for implementing and receiving certification in the Voluntary Protection Program.

WEAKNESS:

The ARC Procurement Officer should ensure that all safety and health plans are reviewed and approved by the government and incorporated in the resultant contract.

8. Deviations and Waivers

Six contract files were reviewed for compliance with FAR 1.4 and NFS 1801.4. All submittals met the requirements of the FAR and NFS and were well documented. Rarely was additional data or clarification needed. All were reviewed and approved at HQ with no significant issues. All contract files included the appropriate approval documentation received from HQ. With one exception, all deviations were approved prior to executing the associated contract action. One deviation for a period of performance extension was not approved until after the extension began.

Two contract files were reviewed for compliance with NFS 1832.702-70 regarding NASA policy for waiving conditions necessary to incrementally fund fixed price R&D contracts. The files contained the appropriate documentation and approvals, however, the approval records were not being maintained by the procurement officer during the fiscal year as required by NFS 1823.702-70(f).

CONSIDERATION:

Deviation requests for period of performance extensions should be submitted to HQ in a timely manner to allow sufficient time for review and approval prior the start of the contract extensions.

The procurement officer should ensure that a record is maintained of all waivers authorizing incremental funding for fixed price contracts. This is a repeat consideration from the 2002 survey.

9. Bankcard Program

The team focused on the internal controls including file documentation, training, number of card holders, automated tracking system, monthly reconciliation, violations, delegations exceeding $2,500, and monthly limits placed on card holders pursuant to the government bank card regulations.

Each card holder is required to complete agency-wide training and receive a certificate on-line. Solar or P-Card training is also available in a laboratory style environment prior to issuance of a bank card. Approving officials must also complete the required training certification before approving any transactions. The printed completed training certificate is maintained along with the procurement office delegation of authority letter in the individual's file. All card holders must take refresher training every three years. The Bank Card Manager and staff also offer training to card holders every three to six months to go over recent updates to the regulations. However, based on the team's review of card holder data, it is recommended that the acquisition division put more emphasis on timely refresher training.

ARC currently has 359 card holders that are authorized to use the credit card to purchase goods and services not exceeding established dollar limits. This represents approximately 12 percent of the Agency's card holders. ARC has reduced the number of card holders by 10 percent since the last survey.

Each card holder with the exception of one acquisition branch chief has a $2,500 limit per transaction and a cumulative monthly limit of $25,000 which has been reduced from the $100,000 since the last survey. In addition, all current card holders will have their $100,000 limit reduced to $25,000 upon the card holder's renewal date
The automated tracking systems allows the Bank Card Manager to see who has been certified or needs recertification, number of card holders, depicts violation(s) by individual, and reconcile any monthly billing differences between ARC and the bank records.

Internal audits are performed each month by acquisition personnel. Files are randomly checked for compliance with the purchase card regulations. In the event violations are found, that individual will be held accountable for the action. The approving official will also be notified of the violation(s). If deemed appropriate, the individual must be recertified to receive card holder privileges.

Bankcard and PR purchase procedures for training acquisitions exceeding the $2500 limit, where procurement authority is planned to be delegated to the Human Resources Division was also reviewed. The Acquisition Division has a signed Memorandum of Understanding (MOU) with the Human Resources Division to train and monitor a Technical Buyer to receive a warrant not to exceed $25,000 for GSA orders. The MOU identifies the acquisition division responsibilities for defining candidate goals, and measuring progress such as ensuring that the candidate completes one 40-hour course in GSA Simplified Acquisition and receives a certificate.

The technical buyer's progress will be reviewed by the acquisition branch chief/contracting officer and the division's self-assessment program concerning file documentation and additional on the job training. The Human Resources salient responsibilities are to pay for tuition, transportation, and per diem to attend class, provide all the necessary tools for the buyer to perform his/her duties, and any resources needed for refresher training.

ARC presently has one candidate that is nearing completion of the program. Upon successful completion of the course requirement and on the job training, the branch chief must provide a written recommendation to the Procurement Officer stating that the candidate is eligible for a warrant.

STRENGTHS:

1. ARC is commended for reducing the number of card holders since the last Survey conducted CY 2002.

2. ARC is commended for maintaining a dedicated Laboratory that assists potential card holders in acquiring the mandatory training before issuance of a purchase card. This approach also mitigates any uncertainty about what the rules and regulations are governing the card use.

CONSIDERATIONS:

1. It is recommended that the Procurement Officer emphasize the importance of card holders need for completing refresher training.

2. It is recommended that the MOU be changed from 60 days to 30 days to conduct an audit on the file documentation including the invoicing for any acquisitions for the technical buyer. Since this is a new candidate, it may be prudent for such a reduction in the number of days initially. The Procurement Officer always reserves the right to increase the audit review at a later date. The acquisition should also ensure that the technical buyer is familiar with Procurement Information Circular 02-16 for Acquisition of Training.

 

10. IFMP (SAP) Policies and Processes

Since 2003 when SAP was implemented at ARC, much advancement in the understanding and working of the system has been made. To handle SAP issues at ARC the functional super-user has been designated as the prime point of contact. Each of the four branches has 1-2 super users and with the functional super-user comprises the supersets group. As the prime SAP resource, the functional super-user discusses issues and finds solutions through weekly telecons with the Competency Center and other centers. During these sessions they also work to establish policies to resolve systemic problems with SAP. The information gleaned at these meetings is then passed to the procurement SAP users in weekly staff meetings. This method of disseminating information to the users is an excellent communication tool to keep users updated.

Since each contract specialist is responsible for entering their own data into SAP, the SAP super-users group created a User Handbook for SAP Entry and a SAP User Workbook. Through the extensive use of SAP screenshots to explain the procedures, these aids provide detailed information regarding common tasks likely to be encountered, such as creating, modifying and deleting purchase orders and canceling, deleting and de-obligation of line items. For new employees, the group also created a training package which includes PowerPoint presentations, classroom and hands-on instruction. Users can access additional information on the internal ARC homepage which has links to the IFMP and SAP websites.

Implementing and continuous monitoring of SAP issues has proven to be a labor intensive endeavor resulting in procurement losing the equivalent of one FTE contract specialist since that person is providing full time support to SAP.

Currently negotiations are being held with the finance organization regarding the transfer of the requisitioner super-user role from procurement to finance in FY06.

If possible, problems with SAP are resolved locally and if unable to resolve, are raised to the Competency Center level.

The survey team interviewed several contract specialists. Overall, the users were satisfied with the system as the result of increased knowledge and exposure to the system. Unforgivingness of the system continues to be the main concern of the users.

STRENGTHS:

1. ARC SAP super-user group has developed an employee handbook and workbook providing detailed guidance for tasks encountered in SAP in an easy to understand format. *Best Practice Consideration

2. Holding weekly staff meetings to provide users with current SAP information is an excellent tool to make current information available.

11. Metrics Measurement

As a result of the early buy-out program offered to ARC employees, the principal person responsible for tracking many of the procurement office's metrics retired in April of this year. The supervisor for that individual also elected to accept the buy-out. Subsequently, two individuals have been tasked with the work resulting from that departure, and both face steep learning curves since much of the institutional knowledge for tracking and reporting left the organization this past Spring.

Metrics for PR lead times and contract awards were maintained up through the first quarter of FY '05 by the previous lead for that effort, and were posted in the hallway of the procurement groups' office area. However, these metrics are not being currently maintained as a result of the substantial loss of institutional knowledge, and the above mentioned learning curves. The two individuals that are now responsible for these metrics are not yet producing the metrics reports on a consistent basis. The reports are complicated and are time-consuming for them to develop, and both individuals must prioritize these new metrics reporting responsibilities with their other workload obligations.

In order to ensure that the organization as a whole is functioning well, the ARC Procurement Office is working to re-establish the following metrics reports: Purchase Requests lead times, New Awards, and Socioeconomic Goals. Undefinitized Contract Actions (UCA's) are reported on a monthly basis to HQ. Since Close-Outs and Over Age Unliquidated Obligations (ULO's) are managed through the use of the Agency-Wide contractor, Brace, there are up to date records on file recording the number of close-outs and associated de-obligations. There are two full-time and one part-time Brace employees located within the office area of the civil service procurement group. Brace reports their progress to their headquarters office, which is then responsible for reporting progress to NASA HQ.

Bankcard Transactions are managed by a team of three individuals, who administer this program as a collateral duty to their principal responsibilities within the procurement organization. The head of this team took the lead on the Bankcard Program in January of 2004, when the previous individual resigned, leaving behind nine months of validations backlog. The lead was able to set up several spreadsheets to track the progress of working through the backlog while simultaneously managing the day to day activities required to keep the program running smoothly. The team was able to successfully catch up with the backlog of validations in just eight months. In November of this past year, the team was able to successfully begin paying the Bankcard on-line, which was a very significant milestone for the team.

The bankcard team reports to the IFMP Competency Center at Marshall on a weekly basis, providing updates to their status and to maintain an open line of dialog for the successful implementation of the program.

STRENGTH:

Mark Lefler, AnJennette Rodriguez, and Alma Garcia are the Bankcard team at ARC. They are to be commended for doing an excellent job tracking and maintaining metrics for the timely management of the Bankcard Program.

WEAKNESS:

The Procurement Officer should apply additional resources to reinstating the regular and systemic tracking of relevant procurement metrics to ensure the efficiency and effectiveness of the organization as a whole. Metrics used to track contracting activities provide the Procurement Officer with a helpful tool to understanding and managing the overall health of the organization.

12. FPDS-NG Process Implementation

FPDS-NG (Federal Procurement Data System-Next Generation) is a collaborative effort implemented between NASA and other federal agencies with the purpose of gathering procurement data, including grants. This system is a central repository on federal contracting and contains detailed information on contract actions in excess of $2,500 with the purpose of making this data available to Congress, the Administration and the public.

Each center is responsible for timely and accurate data input. This survey team ensured awareness of PIC 05-03 "Federal Procurement Data System Reporting" dated March 23, 2005. PICs relative to FPDS-NG reporting had required constant re-issuance as the result of minor administrative changes. To avoid confusion and to provide detailed and current guidance, PIC 05-03 was issued to furnish the FPDS-NG website http://ec.msfc.nasa.gov/hq/library/FPDS-NG/index.html.

Although there are no current ARC procurement policies or procedures relative to FPDS-NG in place, users are relying on the FPDS-NG website for guidance and direction.

CONSIDEDRATION:

It is recommended that the Procurement Officer contact other centers regarding written internal controls, process and procedures relative to the collection and submission of data to FPDS-NG.

13. Internal Policies and Procedures

The ARC procurement organization maintains all of its policies on its homepage, which offers an array of helpful information links, agency procurement web applications (VPO), programs, and procurement tools at a central location. The web site includes links to all ARC-specific guidance named Acquisition Requirements (ARs, previously called PONs) and to Acquisition Alerts (previously called Snowflake Advisories). The ARC procurement policy team is continuously updating their website to reflect the current policy and regulatory requirements. The ARC organization of policies and procedures on the website is effective and user-friendly.

Code JAB in the ARC procurement Division is responsible for the development and maintenance of policy for the directorate. Previously, there had been a three-person team committed to this effort, but as a result of two retirements and one transfer out of procurement this past Spring, the work is being handled on an ad-hoc basis. Various individuals support the policy function for the group as a collateral duty to their principal responsibilities. For example, the JAB (Acting) Branch Chief also acts as the Policy Officer. The Division is extremely short handed in this area as there is currently only one person that writes policy, and one person that approves it. There is a single point of failure at several points within the policy cycle.

Upon reviewing the documents on the website, the survey team noticed that many of the ARs and other reference documents for use by the Contract Specialists (CSs) and the Contracting Officers (COs) had been posted onto the web site with the "track changes" feature turned on. This gives the appearance that the documents posted onto the website are not the final version for use by the procurement community. In speaking with the Policy Officer about this issue, it was clarified that only the final versions of policy and regulations are posted on the website. The "track changes" feature are left on at the request of personnel within the procurement group, so that employees could quickly scan documents for changes without having the need to read the entire document.

The survey team interviewed several procurement employees, and learned that many of the CSs and COs found having the "track changes" feature turned on made the documents difficult to read and not relevant for their work. Most felt that they needed to read the entire document despite the option of looking at just the highlighted changes to be able to accomplish their work. However, one person indicated that although they found the information useless 80% of the time, 20% of the time the information was extremely helpful since most of the policy institutional knowledge has left within the past few months. This individual stated that often reviewing the "tracked" changes on the document is the only source of insight into the history of modifications to the files.

JAB also manages its center-unique clause listing on the website. The ARC Procurement Division is continuously updating clauses to reflect the current regulatory requirements. NASA is in the midst of reviewing all Center-Unique Clauses to assess their continued need as a result of the Integrated Financial Management Program (IFMP) and Contract Management Module (CMM) teams preparing for the new software. There may be a significant reduction to the number of these clauses as a result of this review.

Throughout the survey team's review of contract files, there was a systemic lack of adherence to the ARC policy requiring the use of Form JA 022, which is to be the official record of review and approval in the contract file. As a result, it was often difficult to ascertain whether the correct levels of review and approval had been achieved prior to award actions. In some files there was evidence that routing for review and approval had taken place, but this could only be determined by reading different memos or e-mail print-outs located under various tabs in the contract file. By consistently using the Coordination/Approval Document for all applicable actions, and filing this form consistently in the contract file, the record will be clear and concise as to whether all required reviews and approvals had been completed.

In addition, it was noted throughout the survey team's review of files that the most recent version of the NASA FORM 1098 (Checklist for Contract Award File Content) was not always being used. This created confusion when searching for specific documentation, as the tab numbering varied widely among different contract files. The Procurement Officer and the JAB team should work to establish the standard that only the most recent version of the form should be used in contract files. This will create uniformity and consistency in the maintenance of the files within the organization.

It was noted throughout the survey team's review of files that not all COs and CSs are maintaining contract modification log sheets in the files. As this procurement division is experiencing many changes to its organization and level of staffing, it would be helpful to establish a policy that all COs and CSs maintain contract modification logs within the file. Since logs provide a consolidated picture of all actions that have occurred to date on a contract, they are a helpful tool for transitioning summary information when contract files are being re-assigned between employees. Such logs could include columns with items such as the modification number, the effective date, a brief summary of the action, and the associated change to the contract value.

STRENGTH:

Despite extreme challenges for the policy branch as a result of significant personnel losses within the group, the team continues to keep information current and available to use for all within the Division on the website. In particular, the Joanne Comstock, the Contract Specialist responsible for managing the web site and actually posting all policy and guidance for the Division merits special recognition for performing efforts considerably outside her principal areas of responsibility.

WEAKNESS:

Acquisition Division Acquisition Requirement (AR) No. 02, ARC Review Procedures, paragraph 5.5 states that: "Form JA 022, Coordination/Approval Document, shall be used as the official record of approval unless there is a designated format for the particular action." Throughout the review of files during this survey effort, the JA 022 was inconsistently used and maintained in the files. While this is not a noncompliance issue with either the FAR or the NFS, it is a case where ARC is not complying with their internal procedures.

CONSIDERATIONS:

1. JAB should consider establishing two links on the website for policy documentation. One link could provide the final, approved version of all Acquisition Requirements and Alerts. Another link could provide a version of the same documents that show all "tracked changes", so that the history of modifications to the files will be available for review to those that are interested.

2. The Procurement Officer should ensure that all Contract Specialists and Contracting Officers are consistent in using the most recent version of the NASA FORM 1098, Checklist for Contract Award File Content.

3. The Procurement Officer and JAB may consider establishing a policy that all Contract Specialists and Contracting Officers maintain contract modification logs within the file.

14. Self-Assessment

The ARC Office of Procurement has performed semi-annual self-assessments under the authority of, and using the procedures outlined in, the current NASA Self-Assessment Guide. For the last several years, the ARC has developed an ARC Acquisition Self-Assessment Program Plan. This plan documents the objectives of the Self-Assessment Program, individual responsibilities, review periods and topics, and self-assessment review sheets/checklists to be utilized during the review.

Review topics for the self-assessment are generated by the self-assessment coordinator with the input of the Branch Chiefs based upon Agency-wide PMR findings, GAO findings and other issues of concern. This list is provided to the Procurement Officer for review and concurrence. Participants in the self-assessment include junior-level and senior-level employees from all four branches within the procurement organization. This activity is viewed as a training opportunity within the organization.

The self-assessment reports as a whole were thorough and well organized. The reports included an executive summary; strengths, weaknesses, considerations, and recommended corrective actions for each area reviewed. The latest report published also included fairly detailed checklists for each of the files reviewed during the self-assessment. It should be noted that there is no evidence in the file that ARC reviewed eight percent of new simplified acquisitions and five percent of all other actions, as required by the Self Assessment Guide. When asked about this situation, a lack of resources to dedicate to this activity was cited as the reason for this.

Once the self-assessment has been published by the Business and Policy Office, JAB Acquisition Alerts (formally called snowflakes) and office staff meetings are typically utilized to ensure that corrective actions are initiated to resolve issues identified by the self-assessment.

STRENGTH:

The ARC procurement office should be commended for developing the ARC Acquisition Self-Assessment Program Plan.

CONSIDERATION:

The Procurement Officer should consider providing the Branch Chief with the contract file and review checklist once the self-assessment has been completed. This process will provide management insight into strengths and problem areas within the branch and training opportunities/coaching needed to increase the skill level of individual employees within the branch.

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