Procurement
Management
Survey Report

Glenn Research Center

August 2 through August 13, 2004

OFFICE OF PROCUREMENT
HEADQUARTERS
WASHINGTON, D.C.

PREFACE

The NASA Headquarters Office of Procurement conducted this procurement management survey at Glenn Research Center (GRC) under the authority of NASA Handbook 1101.3, The NASA Organization. The survey was conducted from August 2 through August 13, 2004. The report contains the survey strengths, weaknesses, and considerations.

An exit briefing was held at GRC on August 13, 2004 to discuss the survey findings. The Center Director, Julian Earls; Director of Center Operations, Charles Scales; Procurement Officer, Bradley Baker and Deputy Procurement Officer, Paivi Tripp represented GRC. Tom Luedtke, Deputy Chief Acquisition Officer/Director for Procurement Headquarters and Monica Manning, GRC Survey Manager, represented Headquarters.

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
GRC Survey Program Manager
Analysis and Assessment Team
Office of Procurement, NASA Headquarters

**Please note that many of the URLs in this document are only available from within the Glenn Research Center.**

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 VII    SMALL AND DISADVANTAGED BUSINESS (SDB) UTILIZATION 

SECTION I

OVERVIEW

The Procurement Organization at the Glenn 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. Excellent customer relationships have been established and 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 GRC organization regarding the effectiveness of the procurement office were conducted. The preponderance of the personnel interviewed indicated that the GRC procurement organization is a good place to work. However, there is a consensus from the procurement staff that, although they enjoy their work, areas and opportunities for improvement exist.

The interviews of technical and acquisition personnel are given roughly equal survey emphasis with a review of contracting actions 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. The results of the compliance reviews and the interviews are detailed as strengths, weaknesses, and areas of consideration.

Attention was also directed to current procurement innovations, both Agency-wide and Center specific. To promote the exchange of successful lessons learned and innovative procurement methodologies between Centers, the team sought to identify GRC processes or initiatives that might benefit other Centers and, likewise, looked to other Centers for suggested approaches that might be exported to GRC.

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 GRC Procurement Officer will brief the Deputy Chief Acquisition Officer/Director for Procurement Headquarters and the survey team leader on Center achievements in these areas.

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

The survey could not have been accomplished successfully without the support from Goddard Space Flight Center, Marshall Space Flight Center, Johnson Space Center, Langley Research Center and the following individuals:

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SECTION II

ORGANIZATION - MANAGEMENT

1. Organization -- Management

The basic structure of the GRC Procurement Division has not changed since 1997; however, with the Center reorganization the Procurement Division is proposing to restructure its procurement organization by aligning branches with project offices. The three R&D operations branches will likely support the proposed projects offices as follows: Space Systems and Grants Branch (Space Flight and Exploration Systems Projects Office and the Biological and Physical Research Projects Office), Technology Support Branch (Earth and Space Sciences Projects Office), and the Aeropropulsion and Technology Branch (Aeronautics Projects Office). In addition, the GRC Procurement Division continues to provide significant agency-wide support for the Small Business Innovation Research (SBIR) program and continues to process grants for other NASA Centers.

Although there is no indication how the Center reorganization will affect workload, to date the workload and procurement staffing has remained relatively constant since the 2001 procurement survey. There remain a total of seventy full-time employees in the procurement division, fifty-five of which are GS-1102 procurement professionals. The procurement staffing plan, developed by the procurement manager, indicates that three of six branch chiefs are eligible to retire by December 2005 while fifty percent of all purchasing agents and twenty-five percent of contract specialists are eligible for retirement by FY06.

Based on this assessment, the procurement director has established a vision to manage the gradual reduction in personnel through retirement and/or resignations to ensure the level of service its customers are accustomed to. Also, to prepare for the affects of natural attrition, which has escalated due to the number of individuals eligible for retirement, the procurement director is committed to hiring workers that are at various stages of their careers (i.e. interns, co-ops and direct graduate hires to those at the mid and senior levels established in the procurement profession). In addition the procurement mangers are planning to retrain and transition 4 of the 5 grant officers from the grants division into procurement operations and designate one FTE to support the institutional grants while all other functions will be transferred to the NSSC.

Since the last survey, GRC has lost 2 FTEs to other governmental agencies/facilities. And, although there is still an expressed concern related to the grade structure and promotion opportunities it is noted that since the last survey 4 individuals (internal) have been competitively promoted to grade 13; 1 individual has been temporarily promoted to grade 13 (due to a rotational assignment at HQ) and 2 desk audits which validated the accretion of duties increased two FTEs to the grade 13 level. Additionally, GRC filled 2 competitive promotions (internal) to grade 14 one of which is non-supervisory, hired 1 individual from GSFC and one from Financial Management Division. GRC also utilizes support from 2 co-ops and 4 headquarters interns with approval to advertise for 1 additional co-op.

.STRENGTH:

The management of the GRC Procurement Division is commended for competitively promoting individuals internally.

GRC management is commended for establishing a staffing plan that will ensure a valuable workforce.

CONSIDERATION:

It is noted that due to the lack of promotion opportunities at the journeyman and senior levels in the Procurement Division there is a risk of the Procurement Office losing journeyman and senior personnel to the Project, Budget or Finance Offices internal to NASA or other Federal Agencies.

The GRC Procurement Management Division should consider ways to enhance and increase the growth and promotional opportunities of the junior and senior level procurement professionals.

2. Procurement Management Interviews:

The Center Director at GRC has set forth to implement the NASA Culture Change Initiative at GRC. In addition, he has set forth his priorities as Center Director to "foster and maintain trust throughout the organization and is committed to providing opportunities for "improved communication and cooperation". All employees at GRC are participating in the GRC Culture Change Work Shops and to began the process of trust and communication "Actions to Achieve Improved Viability, Culture, and Cohesiveness"; "Can We Talk" notes; BST Culture Change Workshop Notes (Word;) BST Leadership Strategy for Culture Change (PDF); and BST Survey Results (PowerPoint) are posted on the GRC website.

As with the Center as a whole; there are changes and improvements that are necessary to "achieve more respect for individuals, increase interpersonal trust, and engender a safer more productive and satisfying place to work."

To assess the Procurement Office at GRC, interviews were conducted with the procurement workforce ranging from relatively new hires to employees with more than twenty years of service at GRC. The preponderance of the personnel interviewed indicated that the GRC procurement organization is a good place to work. However a large preponderance also addressed some individual and divisional concerns that align with the culture change that senior management has initiated.

To better assist the management in the Procurement Division to "implement and fulfill the Center's initiatives toward achieving a more viable, open, trusting, and respectful culture, with improved cohesiveness" an effort was made to discuss the procurement professionals concerns by aligning them with applicable categories listed in "Actions to Achieve Improved Viability, Culture, and Cohesiveness" Report.

Leadership/Management Prospective
Most employees expressed genuine happiness to work for NASA and more specifically the procurement office at GRC. It was consistently noted that management has a general interest in its procurement professional's personal lives and that they have endorsed a "family friendly" work environment. Nearly every employee feels that if they have personal problems they will be supported in the work environment. However, there is a perception that this type of support is not always extended in the work environment. For example, it is employees perception that "poor performers" and sensitive issues are not address and if so not consistently. And, although employees are committed to getting the job done, there is a concern that "poor performer workloads are shifted to high performers" and that the levels of accountability for actions that adversely affect the organization appear to be relatively low.

There is also apprehension and concern that the Procurement Managers have not clearly identified and communicated its vision for the procurement professionals at GRC; particularly those that will be directly impacted by the implementation of the NASA Shared Service Center (NSSC) or any Federally Funded Research and Development Center (FFRDC) initiatives.

WEAKNESS:

The Procurement Management should assure that all employees are performing at their grade level expectations and take the requisite actions to rectify situations when warranted.

CONSIDERATION:

The Procurement Management should clearly define and communicate its vision to the procurement staff, particularly individuals directly affected by the NSSC initiatives.

Learning/Training (i.e. Workforce cultivation)
Interviews suggest that each individual understands they should actively seek developmental growth opportunities; however most of the procurement professionals interviewed believed they were too specialized and did not have a depth of procurement experiences. In addition, Procurement professionals have suggested that the Procurement Division employ a mechanism for active learning that will foster knowledge sharing, retention and improved cohesiveness across and intra Branches.

Discussions with the Procurement Officer revealed that in response to this concern and the organizational need for greater depth in many of the specialized functions of the Division, management recently implemented a program both meeting the needs of the Division and providing reassignment opportunities and collateral assignments to several of its personnel. This effort is appropriate and is encouraged.

STRENGTH:

The Procurement Officer is commended for establishing a program that meets the needs of the Division and its personnel.

CONSIDERATION:

The Procurement Office should consider implementing an internal training program that fosters continued learning and growth and fosters knowledge sharing and retention. It is recommended that the Procurement Office seek advice from other centers that are excelling in this area (i.e. MSFC).

Staffing
The procurement professionals have expressed several concerns as to the division's ability to manage workload as the affects of natural attrition begin to take whole. In addition, individuals are concerned about the impact of the NSSC and FFRDC. And, although it's understood that there is limited control in some instances, individuals believe that there are internal controls that could be put in place, for example transition plans be established, communicated and implemented for those who manage grants etc.

CONSIDERATION:

GRC procurement management should consider establishing internal plans that can be shared and clearly identify how it intends to maintain or increase its FTEs, transition/train personnel and accommodate new and "possible" future visions of the organization.

Promotions
The procurement staff has acknowledged that there has been movement in the area of promotions for those at the GS-12 grade level and a couple at the GS-13 grade level. And most feel that entry-level employees have the opportunity to be promoted to journeyman positions; however, a concern has been expressed that there will be little or no movement from the journeyman position upward.

In addition, it is was also noted by "Grade Structure Team" and has been observed by the Survey team that Procurement Offices at other Centers comparable to GRC have a higher grade structure from top to bottom.

CONSIDERATION:

The GRC Procurement Management Division should consider ways to enhance and increase the grade structure, growth and promotional opportunities of the junior and senior level procurement professionals.

3. Customer/COTR Interviews:

The survey team interviewed technical customers at all levels of the organizational structure. The Customers were uniformly positive and satisfied with the procurement organization based on personnel constraints. The technical customers were genuinely pleased that the procurement officer supports their needs and the staff is mostly responsive.

Customers are aware and concerned that several procurement professionals will or are eligible to retire and expressed the concern; will their needs be met in a timely manner by an experienced and or well-trained staff. Several interviewees shared experiences where they identified instances that some employees are not as knowledgeable as others. It is their opinion that the procurement office is very specialized and that there is not a lot of varied experiences in the procurement organization.

Even though a depth of experience concern was expressed, there maintained a consistent spirit of appreciation for the procurement office, the work they do and the effort put forth. It was recommended, with hesitation, that the procurement professionals receive cross training to add depth to the organization, and improve or develop some consistency in the skill level of people amongst branches in the procurement division.

As with the procurement officers, the customers spoke very highly of the Branch Chiefs and were appreciative of their efforts when intervention was required.

Several customers expressed a desire to receive additional COTR training for Source Evaluation Committees (SEC) and Source Evaluation Boards (SEB). It was suggested that the desired training be tiered or consist of two levels; a refresher course for those who have participated on a committee or board and a more involved course for those who have not conducted a SEB or desire to be retrained. It was also recommended that technical representatives receive the same required training that certifies COTRs.

STRENGTH:

The GRC Office of Procurement is commended for establishing excellent customer relationships.

CONSIDERATION:

The Procurement Office should consider addressing the need for on-going in-house training by establishing focused training topics.

4. 1102's Career Development Training:

The GRC Acquisition Training Coordinator (ATC) continues to provide outstanding support to the Career Acquisition Training Program in support of GRC's Acquisition Workforce. An examination of the training files as well as interviews with procurement personnel, the ATC, and the Deputy Procurement Officer were included in this review.

The ATC maintains a database which tracks grade level, warrant status, CON courses completed, and certification levels for all of the GS1102s at GRC. This database indicates that approximately 96 percent of their employees received the appropriate amount of training and the vast majority of employees have achieved the appropriate certification levels for their grade and length of service at the Center. For individuals who have not obtained the necessary certifications, the GRC procurement management has reassessed the warrant level of these individuals to ensure that their warrant level is commensurate with their certification level. The procurement workforce completes Individual Development Plans, which are reviewed by management on an annual basis.

GRC 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 GRC utilizing outside training professionals, and internal workshops utilized to address areas of concern within the procurement organization. GRC is commended for its implementation of a structured training program for new employees and interns. This program addresses topics such as:

• Basic orientation to the procurement organization
• Small purchase/GSA schedule/bankcard training
• Overview of the FAR/NFS and GRC work instructions
• Computer Training (NAIS, EPS, PPDB, and IDGS)
• Commercial Item Acquisition
• Small Business Program
• SBIR Program & Electronic Handbook
• Protests
• Cost, Pricing, and Technical Evaluations

STRENGTHS:

1. GRC is commended for having a detailed tracking database to mange required and completed training, certifications and warrants.

2. GRC is commended for the training it provides new employees.

5. 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 is encouraged once every five years at the Glen Research Center. Glenn provides two comprehensive training courses and two refresher-training courses per year. The review of contract file documentation indicates that COTR delegations are being made on the required NASA Form 1634 and that these individuals have received the necessary training to perform their delegated duties. The acquisition training coordinator is responsible for keeping records on COTR training and maintains a detailed database that tracks all individuals trained for COTR responsibilities, the date of last training, refresher training and upcoming training opportunities.

STRENGTHS:

1. GRC is commended for COTR delegations being accomplished in a timely manner with the appropriate file documentation.

2. GRC is commended for maintaining detailed records of COTR training and COTR refresher training.

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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. The NASA Virtual Procurement Office (VPO) also provides a template for documenting and completing this research. 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 thoroughly documented the market research performed, considering the dollar values and complexities of those procurements. In addition, GRC's use of the template continues as does their additional meaningful narrative comments. These findings are consistent with the previous survey, which allow GRC's strength in this area to continue. Although GRC is following FAR and NASA HQ requirements, no market research report was contained in the file, as required by GRC internal procedures.

STRENGTH:

Based on the above, it is clear that Glenn continues to not only consistently perform market research, but also continues to provide additional comments that clearly document accomplishments of the research, exceeding the requirements in FAR Part 10.

CONSIDERATION:

GRC-P3.9.1.1, Section 4.4 states the Contracting Officer (C.O.) shall document the results of the Market Research on a Market Research Report. This did not always occur. While this is not a noncompliance issue with either the NASA, FAR or the NFS, it is a case where GRC is not complying with their internal procedures. GRC should consider removing this requirement or ensuring that the procurement staff is aware of this requirement.

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

Subpart 6.3 of the FAR prescribes the policies and procedures, and identifies the statutory authorities, for contracting without providing for full and open competition. The NASA Virtual Procurement Office (VPO) also provides a template for documenting this justification.

Numerous JOFOC's were reviewed. The majority of these were strong and almost all cited only one responsible source capable of fulfilling the agency's needs as the justification for the sole source, with a few citing unusual and compelling urgency in addition to the one responsible source. One of the JOFOC's reviewed contained options, but the citation used was not "unusual and compelling urgency". Each of the JOFOC's reviewed appeared to be tailored to the specific requirements of that particular acquisition. The JOFOC's citing one responsible source in accordance with FAR 6.302-1 appeared to comply with both the content requirements and approval requirements cited in FAR 6.303 -2 and 6.304.

The JOFOC's citing unusual and compelling urgency in accordance with FAR 6.302-2 appeared to comply with both the content requirements and approval requirements cited in FAR 6.303-2 and 6.304.

Although not systemic, one JOFOC reviewed was currently in the review process, although the contract was already awarded and the necessity of another JOFOC was questionable, as the selection of the contractor was the result of an NRA.

WEAKNESS:

The award of a contract without a JOFOC that has been through the complete review and approval process and properly executed is considered a weakness.

CONSIDERATION:

It is unclear why a JOFOC was written for a contract resulting from an NRA. GRC should consider documenting the file in accordance with the requirements for "Sole Source Awards Using Competitive Procedures"

3. Sole Source Awards Using Competitive Procedures:

Of the files reviewed in this area, compliance with FAR 7.105(b)(2) was confirmed. However, although there initially appeared to be adequate competition (based on market research results, etc.) only one bid was received in several instances. For those where only one bid was received, documentation in accordance with the requirements of FAR 1815.305-71 was not in the file.

CONSIDERATION:

FAR 1815.305-71 requires the CO to determine if the solicitation was flawed or unduly restrictive. This could be obtained very easily by documentation of conversations where the CO phoned a suggested source that failed to submit a bid and inquired as to why no bid was submitted. Consider requiring COs to follow-up with potential offerors when only one bid is received in a competitive environment.

4. Acquisitions In-process:

The GRC procurement division performs reviews of in-process procurements on a quarterly basis. In accordance with the work instruction for in-process reviews, each Branch Chief selects five actions from the Branch's workload. As part of this survey, files were selected from GRC's list of solicitations over $100K. The files reviewed ranged in value from $3M to $293M. The files were well documented, and all but one of the files included a funding PR. Since one of the selected files was in legal counsel for review, instead of disrupting that process, a copy of the Center-level Acquisition Plan was reviewed. The Acquisition Plan accurately followed the requirements of FAR 7.105 and NFS 1807.105 (including the required discussion on risk management). Another of the selected files indicated that a $293M planned award was approved by a HQ ASM. Based on the review this award file was also well organized and documented. However, it was noticed that the file did not contain documentation of any correspondence or coordination between GRC and HQ to closeout action items.

CONSIDERATION:

The GRC Procurement Officer should consider implementing a procedure to require permanent documentation of the coordination and resolution of action items that result from the HQ level ASMs.

5. Consolidated Contracting Initiative (CCI):

GRC currently has four CCI awards listed on the NAIS Contract Resource List (CRL). Two of the contracts are listed as available to all federal agencies, one contract is limited to certain NASA Centers, and one is listed as limited to NASA installations. Based on the review it is apparent that GRC has implemented improvements to its CCI process since the last survey. The postings on the CRL are in accordance with the required format, relevant information such as contract descriptions, and points of contact are provided. GRC has a work instruction in place for CCI, and it appears the instruction is well used by its procurement personnel.

6. Government Furnished Property:

Several contract files were reviewed for Government Property Clauses, 1018 Reporting, and for compliance with procedures for providing government furnished property (GFP) to contractors. All contracts contained the appropriate clauses and although no systemic problems were identified, two contracts reviewed had significant documentation deficiencies. One contract that was awarded July 1, 2003, the clause 1852.245-73 Financial Reporting of NASA Property in the Custody of Contractors (Oct 2003) was subsequently added August 2, 2004. It is also noted in this contract file that there was no pre-negotiation objectives or cost/price analysis in file (Tabs 72 and 73) although the file checklist was checked that the documents were in the file. The PNM under Tab 75 was not the document for this contract and there were no documents under Tabs 83 thru 86 although the checklist was checked. Another contract that provided GFP to the contractor did not contain a Determination and Findings (D&F) and Supply and Equipment Officer (SEMO) review in accordance with FAR45.302-1(a)(4) and NFS 1845.302-1(a)(4). It was also noted that there was no PNM in the file.

Property Administrative functions were delegated to DCMA on all contracts reviewed. In accordance with PIC 03-18 Financial Reporting of NASA Property in the Custody of Contractors (August 2001) (Deviation), the Contractor shall mail the original signed NF 1018 directly to the cognizant NASA Center Deputy Chief Financial Officer, Finance, unless the Contractor uses the NF 1018 Electronic Submission System (NESS) for report preparation and submission and submit one copy through the Department of Defense (DOD) Property Administrator if contract administration has been delegated to DOD. GRC's SEMO and Financial Management Division have access to the 1018 reporting system. The GRC SEMO routinely monitors the information, and in the event of non-receipt, advises the Contracting Officer for appropriate action with the delinquent contractor.

The Office of Procurement sent out letters to contractors announcing the dates and location of the NASA HQ Financial Mgt training courses, Contractor Held Government Property. Training topics are NASA FAR supplement refresher; Contractor-held Asset Tracking System (CHATS) training; Validation Procedures to ensure accurate reporting, and discussion on current issues relating to Contractor-held property.

STRENGTH:

GRC is commended for their pro-active measures to ensure that the 1018 reporting is being accomplished and that contractors are made aware of the available training.

CONSIDERATION:

GRC appears to be managing the Government Property requirements as a whole; however, the Office of Procurement should ensure that contract specialists include the appropriate documentation in file.

7. Pre and Post Negotiation Documentation:

The survey team reviewed several Pre-Negotiation and Post-Negotiation Memorandums to determine if they met the requirements set forth at FAR Part 15.406 and NASA FAR Supplement Part 1815.406. All contracts reviewed in this area had estimated values of $1,000,000 or more. Several competitive and non-competitive procurements were reviewed.

GRC has developed a work instruction, which tries to summarize the requirements of FAR Part 15.406 and NASA FAR Supplement Part 1815.406. The work instruction gives the impression that if the contract action is within the contracting officer's procurement authority, the requirements identified in NFS 1815.406-170 do not need to be addressed. The work instruction goes on to state that if a urgent situation occurs, a contracting officer may obtain verbal approval of an action above the CO's procurement authority and informally document the file and finalize the PPM as soon as feasible. It is believed that this approach can lead to circumstances when the contract file would not be properly documented to address pertinent issues to establish the pre-negotiation objectives before the negotiation of any pricing action.

NFS 1815.406-3 (ii) states that a PNM is not required for a contract awarded under competitive negotiated procedures, however, the information required by FAR 15.406-3 shall be reflected in the evaluation and selection documentation to the extent applicable.

Some of the evaluation and selection documentation reviewed for competitive procurements did not address all of the information required by FAR 15.406-3. Examples of missing documentation include EEO compliance, current status of contractor systems, contract option requirements, and Government property to be furnished.

For non-competitive procurements, there were instances in which there was no documentation in the contract file that established the pre-negotiation objectives before the negotiation of this action in accordance with FAR 15.406-1 and NFS 1815.406-1. In other instances, the pre-negotiation position memorandum did not address all of the requirements called out in NFS 1815.406-170.

WEAKNESS:

The GRC Procurement Organization should take steps to ensure all required elements are addressed in Pre-Negotiation and Post-Negotiation Memorandums.

8. Synopsis of Contract Awards:

FAR Part 5.301 requires Contracting Officers to synopsize awards exceeding $25,000 unless certain conditions apply. Work instruction number GRC-W0610.007 Revision F paragraph 6.3.2 states that a support contractor is responsible for synopsizing contract awards utilizing the information obtained from the NASA Form 507. Notice of contract awards are performed by the support service contractor. Thirty percent of the files reviewed did not include documentation that a synopsis of contract award had been performed when required.

CONSIDERATION:

Procurement personnel should ensure that synopsis of contract awards exceeding $25,000, unless certain conditions apply, are documented accordingly in contract files. If an exception does apply pursuant to FAR 5.301(b), the file should be documented citing the exception.

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SECTION IV

POST - AWARD

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

The team reviewed multiple award contracts where 6 firms were awarded contracts and the solicitation and or the resultant contracts stated that the tasks issued would be competed among a minimum of 3 of the awardees. A review of 12 tasks issued to date under this effort has confirmed that this occurred.

Task orders under another multiple award set of contracts were also reviewed. Although these contracts were awarded in June 2001, prior to the last survey, the review of the task orders under these contracts was still appropriate, as their effective date was after the last survey. More than a dozen task orders reviewed verified that competition was being performed as required by the contracts prior to the award of each task order.

Task orders supporting the Revolutionary Aerospace Engine Research (RASER) contracts were reviewed. The RASER contracts consist of 11 contracts spanning 8 disciplines. Although these contracts were awarded in the fall of 2001, which was the same time the last survey was completed, review of the task orders was still deemed appropriate. The review of these task orders identified two areas of concern.

The first area of concern was that the task orders reviewed were not competed. These RASER contracts use a Task Order Form, which allows the task initiator to check a box for the reason behind the sole source. All but one of the task order reviewed had checked a box for their sole source.

Not competing task orders over $2,500 conflicts with FASA and FAR 16.505. FAR 16.505 (b) states: The contracting officer must provide each awardee a fair opportunity to be considered for each order exceeding $2,500 issued under multiple delivery-order contracts or multiple task-order contracts, unless one of four exemptions apply. However, a clause (G.6) contained in the RASER solicitation and resultant contracts states that each awardee shall be provided a fair opportunity to be considered for each order in excess of $100K. GRC's authority to increase the fair opportunity threshold from $2,500 to $100K could not be identified.

The second area on concern was that all tasks reviewed were awarded as a CPFF task, although the contract terms and conditions are CPIF or CNF. The survey team reviewed task order proposals submitted with an estimated costs and a target fee, but awarded as an estimated cost with a fixed fee.

WEAKNESSES:

1. The GRC Procurement Officer should ensure that all awardees are provided a fair opportunity to be considered for each order exceeding $2,500 issued under multiple delivery-order contracts or multiple task-order contracts, unless an exception applies.

2. If an exception applies, the CO should clearly document not only that an exception applies but also why exception applies.

3. The GRC Procurement Officer should require that the contracts be revised to add the necessary/appropriate fee provisions, to be consistent with the way the tasks are being awarded.

4. GRC should document the file why the contract type change is required.

2. Cost Plus Award/Incentive Fees:

Several files were reviewed which consisted of CPAF and various combinations of hybrid (CPAF/CPIF/FPIF) contracts. All files reflected the appropriate pre-award review of the contractor's accounting, estimating and purchasing systems. Determinations for the CPAF and hybrid contracts were documented in the files. The CPAF contracts were in compliance with NFS 1816.405-274, which had cost factor greater than 25% of total weighted evaluation. The incentive fee (including the hybrids) contracts adequately identified the allocations of fees, contractor and Government share ratios, minimum fees, maximum fees and target fees.

Two of the CPIF contracts reviewed are not being administered in a CPIF fashion. To date, all of the task orders under this contract have been issued as CPFF orders. In addition, for both contracts, documentations were not under the appropriate tabs and the contracts were not well organized.

CONSIDERATION:

Currently, the contracts only contemplate the issuance of CPIF and CNF task orders It is recommended that the Contracting Officer reconsider an appropriate contract type and if necessary incorporate appropriate clauses to allow issuance of CPFF task orders. In addition, the Contracting Officer should ensure the files are tabbed in accordance with NASA Form 1098 or the relevant GRC checklist.

3. Subcontract Consents:

FAR 44.202-2 has 13 specific considerations that the Contracting Officer must address prior to granting subcontract consent.

Based on the consent packages and letters reviewed, more than half of these letters specifically stated that the items requiring consideration at FAR 44.202-2 had been met/addressed. While other letters did not specifically state that these items had been addressed, the backup to the files submitted for consent did show that the items were addressed.

Some letters withheld consent based on the fact that certain items in FAR 44.202-2 were not adequately addressed and the letter stated those specific items. One letter, while providing consent, informed the contractor that although one FAR item was not adequately addressed, the CO provided the verification of the missing item himself.

These findings show improvement over the last survey, which found a consideration that the files were not addressing the considerations at FAR 44.202-2 had been met or addressed.

Another consideration from the previous survey that is not duplicated is that the GRC refrain from the use of the term "approval" in the consent letter. All letters reviewed during this survey used the term consent.

In reviewing these letters, it was interesting to note that while the majority of the letters identified the prime contractor under which the consent was being consented and granted, several letters failed to identify the prime contract number.

CONSIDERATION:

Procurement personnel should ensure that every subcontract consent letter identifies the prime contract number under which consent is being provided.

4. Undefinitized Contract Actions (UCAs):

The purpose of this review was to determine if undefinitized contract actions were issued and documented in accordance with the Federal Acquisition Regulation and NFS Subpart 1843.70 "Undefinitized Contract Actions". However, it should be noted that GRC typically reports no UCAs in its monthly reporting.

GRC has a history of very low number and no UCAs. In the formal statistical reporting for the month of June 2004 (the latest available prior to the survey), GRC reported one UCA.
The survey team selected and reviewed the only two undefinitized contract actions (UCAs) that existed at GRC at the time of the review. Both were low values measuring $50,000 and $29,457. The total of these UCAs measured as a function against outstanding contract value, computes to a very low 3/1000ths of 1%. That is well below the Agency's target of "less than 1%" and is in fact, so low, that control of UCAs is deemed strength. Neither of the two UCAs exceeded the 180-day requirement.

Many of the provisions of NFS Subpart 1843.70 apply only to UCAs over $100,000. Thus the two UCAs sited are not subject to such provisions as they are below the stated threshold. Based on this review it was determined that both UCAs reviewed contained documentation that justified issuance of the UCAs and included required signatures and other requirements.

STRENGTH:

Based on the tracking report GRC had only 2 UCAs at the time files were requested for review. Neither of the UCAs was over the 180-day mark for definitization. GRC monthly reports typically report UCAs at zero.

5. Performance Based Contracting:

NASA's PBC policy GRC-P3.91.2, Performance Based Contracting (PBC), identifies numerous guidelines for awarding a PBC contract. It emphasizes the need for close coordination between the requisitioner, the contracting officer, and other GRC representatives to structure the entire acquisition around performance versus instructions or specifications.

Contracting Officer and Contracting Officer's Technical Officers (COTRs) follow the NASA FAR requirement for PBC in their solicitations, evaluations, award documents and contract surveillance activities. Compliance with these requirements is measured through both pre and post award reviews conducted in accordance with the Procurement Division's Work Instruction Nos. GRC-W0610.002, Document Review and Distribution, and GRC-W0610.005, Post -Award File Review.

All contract files reviewed contained NASA Form 507, "Individual Procurement Action Reports". The range of PBC was from 50% - 100%. Contract types for two files were inappropriately coded as PBC. The contracts were awarded as cost plus incentive fee contracts; however, to date, all task orders reviewed under these contracts have been awarded on a cost plus fixed fee basis.

STRENGTH:

As of February 29, 2004, eight-five percent of GRC Contract Obligations were PBC.

CONSIDERATION:

It is recommended that the Contracting Officer ensures that the Contract Specialist check the correct contract type and performance base level that is appropriate to the contract requirement. Ensures that the RASER contract task orders are appropriately coded as performance base considering the manner in which the contracts are being administered.

6. Performance Base Payments:

The survey team reviewed contract files to determine the types of performance base payments granted. All reviewed files contained financing that was appropriate for the procurement actions. Files were reviewed for the method of payment for cost-plus award fee contracts. In accordance with NFS 1816.405-276, the contractors were provided the Fee Determination within 45 days of the evaluation period. Scores of the evaluation periods were 90% and above. The interim and final award fee payments were processed before 60 days of the evaluation period.

In accordance with Procurement Information Circular (PIC) 00-11, the GRC-unique clauses were incorporated into the contracts as full text. GRC-unique clauses were listed on GRC Procurement Website (Quick Current Clause List); however, the individual clauses were not accessible. The GRC unique clauses may be accessible on the Interim Document Generation System (IDGS). However, the GRC unique clauses are not accessible from the NASA Procurement Library for center unique clauses.

CONSIDERATION:

GRC-unique clauses should be accessible from the NASA Procurement website. (Repeat Finding)

7. Contractor Performance NF 1680 Evaluation:

NFS 1842.1502 requires that within 60 days of every anniversary of the award of a contract having a term exceeding one year contracting officers must conduct interim evaluations of performance on contracts subject to FAR subpart 42.15 and the corresponding NFS subpart. On such contracts, both an interim evaluation covering the current period of performance and a final evaluation summarizing all performance must be conducted. This evaluation is performed through completion of NF 1680, "Evaluation of Performance". The survey team reviewed several contract files meeting the criteria of FAR 42.15 to determine compliance with the above requirements. The survey team also reviewed the GRC Past Performance Database to monitor compliance with PIC 01-12 and the corresponding FAR and NFS subparts.

GRC has developed a work instruction, which delineates the roles and responsibilities for contracting officers and the 1680 center staff to ensure that contractor performance evaluations are performed in compliance with the FAR and the NFS. The contracting officer is responsible for ensuring that a complete and accurate evaluation is performed, the evaluation is signed and placed in the centrally located mailbox. The GRC 1680 center staff is responsible for generating a notice to the contracting officers on a monthly basis that a NF 1680 report is due within the next 30 days, populating the PPDB when an evaluation has been received from the contracting officer, and providing the evaluation to the contractor.

The work instruction requires contracting officers to provide narrative explanations for ratings of excellent or poor/unsatisfactory. A random evaluation of 11 active contracts was performed. Five of the eleven active contracts selected for review were not present in the past performance database. A review of the database indicates that there were several instances where contracting officers did not provide narrative explanations for excellent or poor/unsatisfactory ratings. The review also indicates that interim evaluations are not being processed within the 60-day period prescribed by NFS 1842.1502

STRENGTH:

The GRC is commended for the work it has done documenting a comprehensive work instruction to fulfill the requirements of 42.15 of the FAR and the NFS.

WEAKNESS:

The GRC Procurement Officer should take the necessary steps to ensure that contractor performance evaluation are performed in a timely fashion and provide narrative explanations for all rating of excellent or poor/unsatisfactory in accordance with GRC work instruction.

CONSIDERATION:

GRC should consider providing a narrative explanation for all adjectival ratings to ensure adequate relevant information exist for future source selection purposes and option exercise determinations.

8. Option Exercises:

Options exercised between November 2001 through August 2004; valued over $100K were reviewed. The review focused on the presence of required option exercise determinations and evidence of the Center's implementation of option exercise improvements (which became effective on March 3, 2004). The option exercise files included the required determinations that supported exercise of the options as the best method to fulfill a requirement. In addition, the files reflected implementation of the NFS revisions addressing the option improvements (e.g., utilization of the revised option determination format available on the VPO). While the files reflect GRC's implementation of the option exercise improvements to an extent, the files do not reflect other aspects of the improvements like evidence of early planning to determine whether the option continues to fulfill programmatic needs, and assurances that analyses will be performed early enough to pursue alternative sources. In addition, there are no annotations regarding NF 1680 contractor performance or the presence of market research activity to support upcoming options as the best programmatic direction (i.e., as opposed to alternative technical or scientific solutions that may have surfaced during market research activities, or indications of unsatisfactory contractor performance). It may not be until the next procurement management survey that the files reflect full implementation of the recent NFS changes that implemented the option exercise process improvements.

One of the main reasons the Enterprises were involved in the option exercise assessment activities at HQ (which led to the NFS changes), was because it was recognized that the option exercise process is heavily dependent upon decisions and processes controlled by Program Management. As such, it may be beneficial to the procurement staff that the option exercise improvement processes be addressed in Center level work instructions. Examples of these processes are the performance of market research activities, and acting upon results of the analyses should they indicate technical, engineering or scientific advances that dictate a change in program/project direction or evaluation and documentation of contactor performance results on the NF 1680s. These Program controlled activities carry significant weight and greatly influence the option exercise decision.

CONSIDERATION:

The Procurement Officer should consider implementing a process (e.g., suggest a Center procedure or development of a Center level option exercise work instruction) to help ensure that program/project managers supply the necessary information required by the procurement staff to fully implement the option exercise process improvements set forth by NFS 1817.207-70.

9. Closeout and Unliquidated Obligations (ULOs):

The purpose of this review was to determine if ULO value levels are below, at, or above Agency targets and to determine if efficiency approach to lowering ULO values could be utilized. GRC has historically maintained ULO's at a level well below the Agency's maximum target (lower is better). The target is established at 25% of ULO dollars that are "over age." "Over age" is used to describe contracts in closeout that are beyond the period of time established as the norm or target time to administratively close a contract. Such time standards vary by contract type. GRC's last four quarterly ULO values ranged from a low of 15% to a high of 22% (approximately) with the latest value at 15% for April 2004.

GRC has approximately 980 physically completed contracts, which are not administratively closed where obligated monies are not yet liquidated. The total value of unliquidated obligation is approximately $65 million. The Center continues to close contracts and liquidate obligations in an expeditious manner with statistics better than the Agency's average. However there are a number of contracts well beyond the closeout/liquidation standard that that are not yet administratively closed.

Forty-four of those instruments have been physically complete for four years or more (the associated ULO value is not significant but does exist). Nine have been physically complete for ten years or more (here too, the associated ULO value is not significant but does exist). Note that the source of statistics on the 980 cited contracts is from the monthly reported information downloaded from the Agency-wide database (as opposed to being sourced by individual files).

STRENGTH:

GRC's last four quarterly ULO values ranged from a low of 15% to a high of 22% (approximately) with the latest value at 15% for April 2004. GRC has historically maintained ULO's at a level well below the Agency's maximum target (lower is better).

CONSIDERATIONS:

It is recommended that some emphasis be placed on older physically complete contracts with intent to administratively close such contracts preventing associated ULO values from continuing for extended periods of years and to free up obligated values for other efforts.

 

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PRICING - FINANCIAL - AUDITS

1. Costs and Price Analysis:

A cost and price analysis review of competitive and noncompetitive procurements for firm-fixed-price, cost reimbursement, and IDIQ contracts was performed. The cost analyses performed by the GRC contract specialists generally considered supporting information from DCAA and technical evaluators and supported the reasonableness of the negotiated price.

In three instances, cost or pricing data were submitted when required by FAR 15.403-4, however, a certificate of cost or pricing data was not obtained from the contractor pursuant to the requirements established in FAR 15.406-2.

FAR 16.504(a)(1) states "The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis." Furthermore, FAR 16.504(a)(2) goes on to state that "to ensure that the contract is binding, the minimum quantity must be more than a nominal quantity, but it should not exceed the amount that the Government is fairly certain to order." The IDIQ files that were reviewed did not provide rationale in the pre-negotiation position memorandum or the negotiation summary on how the minimum quantity and maximum quantity for goods and services were established by the Government.

WEAKNESS:

The GRC Procurement Organization should take steps to ensure all procurement personnel obtain certificates of current cost or pricing data when required by FAR 15.406-2.

CONSIDERATION:

The GRC Procurement Organization should ensure that documentation is incorporated into contract files that provided the rationale for how the Government arrived at the IDIQ minimum and maximum dollar amounts established in the contract as prescribed by FAR 16.504.

2. Use of Structured Approach in Profit/Fee Determination:

In accordance with NFS 1815.404-4 and 1815.404-470, files were reviewed to determine the application of NASA Structured Approach in Profit/Fee Determination. Contract files were reviewed for the appropriate usage and implementation of NF 634. The profit/fee factors were appropriately applied for the selected contract type, the Contracting Officer performed independent profit/fee analysis and the price negotiation memorandum provided appropriate rationale to support the profit/fee determinations.

3. Technical Evaluations:

In the last procurement survey that was conducted in October of 2001, it was noted that technical evaluations lacked sufficient detail and supporting rationale. In this review, several competitive and non-competitive technical evaluations were evaluated to ensure that the documentation complied with the requirements established in FAR and NFS 15.404.

A review of the technical evaluations for competitive procurements indicates that the technical organization has well documented strengths and weaknesses associated with an offerors technical proposal.

Many requests for technical evaluations of non-competitive proposals were initiated on a form NASA C-266. Instructions on the form are comprehensive and include specific instructions to provide the rationale for the evaluator's position on the various cost elements. In some instances, the technical evaluation did not document the rationale behind why the technical organization believes that the proposed labor hours, skill mix, materials, travel, and subcontracts were fair and reasonable.

STRENGTH:

GRC personnel are commended for their well-documented technical evaluations of competitive proposals.

WEAKNESS:

The GRC Procurement Organization should take steps to ensure non-competitive technical evaluations document the rationale supporting the recommended negotiation objective that the various cost elements are fair and reasonable.

CONSIDERATION:

The Procurement Organization should consider providing technical evaluators a sample of a good technical evaluation, when requesting them to provide a technical evaluation, of a non-competitive procurement.

4. Financial Management Reporting (533):

Guidance for Contractor Financial Management Reporting (NF 533) is found in NFS 1842.72. The reports were reviewed to assess if monitoring was being performed in accordance with NFS 1842.7201. All of the reviewed files contained the necessary NFS supplement clause 1852.242-73 and good instructions for preparation of the NF 533 reports.

In some cases, the file documentation does not demonstrate that 533 reports are being reviewed on a regular basis to ensure that the data reported is accurate, timely and adverse trends or discrepancies are discovered in cost reports. In at least one instance, a brief review of the most recent NF 533 submitted by the contractor indicates that the contractor is not properly filling out the form. The contract value is not reflected properly on the form and the monthly actuals and planned dollars are not reported at the total contract level. Conversely, in another instance, the contract file contains a "NF 533 Report Review" form, which allows contracting officers to monitor contractor cost performance on a regular basis to ensure cost reports are accurate and timely. The reports are also used to identify adverse trends or discrepancies discovered in 533 reports and provide recommendation for follow up with the contractor and affected Government individuals.

STRENGTH:

GRC is commended for developing and implementing the "NF 533 Report Review" form, which allows contracting officers to monitor contractor cost performance on a regular basis and identify adverse trends or discrepancies discovered in 533 reports.

CONSIDERATION:

The Procurement officer should ensure the procurement personnel utilize the "NF 533 Report Review" form or similar documentation to verify that Financial Management Reports (NF 533) are accurate and timely and adverse trends or discrepancies are discovered so they can be addressed by the appropriate Government individuals.

5. Compensation on Service Contracts:

NFS 1831.205-670 states that contracting officers must evaluate the reasonableness of compensation for service contracts prior to the award of a cost reimbursement or non-competitive fixed-price type contract, which has a total potential value in excess of $500,000. In order to conduct this evaluation, the provision at 1852.231-71 "Determination of Compensation Reasonableness" should be inserted in solicitations for service contracts, which meet the criteria described above. A review of several solicitations indicates that GRC is complying with the requirements established in the NFS.

6. Contractor Insurance Pension Review (CIPR); PIC 00-23:

Procurement Information Circular (PIC) 00-23, "Contractor Insurance/Pension Reviews" (cancelled on March 22, 2004 by PIC 04-07) was in effect for the contracts reviewed and provided guidance on Contractor Insurance and Pension Reviews (CIPRs) and 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 (CAO)."

PIC 00-23 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. In accordance with PIC 00-23, NASA contracting officers with major contracts should request that ACOs for those contracts provide them with a copy of any CIPR reports. Two contract files omitted any reference to the requirements of PIC 00-23 and did not indicate that a CIPR was available, performed, or requested.

In accordance with PIC 00-23, the DCMA's guidelines state that a CIPR is normally conducted only when a contractor has $40 million of qualifying sales to the Government during the contractor's preceding fiscal year, and the ACO, with advice from the DCMA insurance/pension specialists and DCAA auditors, determines if a CIPR is needed based on a risk assessment of the contractor's past experience and current vulnerability.

The survey team reviewed five major cost-reimbursable contract files to determine whether the contracting officers were following the requirements of PIC 00-23. The dollar values of these contracts ranged from $154,000,000 to $341,000,000. Two files reviewed had no indication that a CIPR review had been requested (either an existing review or a request that one be initiated). Based on the reviews it is determined that CIPR reviews are not being consistently requested.

WEAKNESS:

Indications are that CIPR reviews are not being emphasized, obtained or requested.

CONSIDERATION:

PIC 00-23 was cancelled on March 22, 2004 by PIC 04-07. However, prior to March 22, 2004, at the time of award or during administration, the requirement was in place. Thus the review assessed GRC's action in following what was then required.

It is recommended that (1) CIPRs be noted in the contract file as received, requested, not requested or not performed, (2) CIPR reviews be addressed in GRC's self-assessment, (3) GRC internal guidance be issued and or (4) CIPR audits be tracked with other "reportable audits."

Note: GRC should consider the impact of public news media information that possibly some contracts reviewed may have under funded pensions where NASA GRC should be aware of any ongoing reviews to assess related costs:

NAS 3-01138: United Technologies: In a business news article posted on the CNBC website in October 2002, United Technologies was listed with an approximate $2.3 billion under funded pension liability. (A CIPR review has been requested and is in progress for this contractor).

NAS3-99155: Northrup Grumman: Information sourced to DCMA and posted to the web in a May 2003 article indicates a study of increasing pension cost for Government contractors including Northrup Grumman.

7. Audit Follow-up:

The survey team interviewed GRC's Audit Liaison Representative and Defense Contract Audit Agency (DCAA) Liaison, and reviewed the open DCAA and Office of the Inspector General (OIG) reportable audits. The purpose of the interviews and audit reviews was to ensure the following: DCAA, OIG, and General Accounting Office (GAO) audits were effectively tracked and reported; recommendations were resolved in a timely manner; and audits were closed when complete.

GRC's Audit Liaison Representative tracks DCAA audits and audit recommendations in the online Contract Audit Tracking System (CATSII). Each DCAA audit and audit recommendation is entered into CATSII with target resolution and closure date and is updated at least quarterly. Currently there are no outstanding OIG or GAO audits or audit recommendations. However, when such audits and recommendations exist, they are tracked by the procurement division secretary (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.

GRC currently has two open DCAA audits. These audits remain open due to litigation and disputes over the allowability of costs. While these DCAA audits and recommendations are over-age, the audits and recommendations are being tracked and the parties involved are actively seeking a resolution to the recommendations. GRC has no open OIG or GAO audits.

STRENGTHS:

1. GRC has a solid audit follow-up process that effectively tracks, resolves, and closes DCAA audit recommendations.

2. GRC audit liaisons effectively conduct audit follow-up activities.

CONSIDERATION:

1. GRC procurement should consider consolidating the tracking of audit follow-up to one liaison and tracking system to create one point of contact and source of information for tracking and resolution. This would include DCAA and audits from other sources as well such as GAO, the OIG, private sources (where applicable) etc. Such a database and the status of audits could be available to all GRC procurement personnel.

2. Guidance by NASA Headquarters could be improved: Two reference documents guide Centers on audit follow-up: (a) PIC 00-06 which addresses DCAA "reportable" audit follow-up and (b) OMB Circular A-50 which addresses IG, "other executive branch audit organizations," GAO, and "non-Federal auditors where follow-up is necessary." Thus there is some ambiguity within PIC 00-06 concerning non-DCAA procurement-related audit follow-up responsibilities as non-DCAA audits are not addressed by PIC 00-06.

8. Set Fee Initiative:

The Set Fee Initiative (SFI) is an approach to pre-establish fee on selected contracts. NASA will pre-establish a fee amount or percentage in the solicitation rather than have contractors propose fee amounts. The contractors are thus able to focus full attention on the technical merits of the proposal while NASA ensures that the fee amount is adequate to motivate contractor performance.

The goal of the imitative is to improve product/service quality and attract new companies competing for NASA work. The SFI will provide a reasonable fee on NASA contracts and ensure NASA gets excellent performance at a reasonable price.

As no distinct database exists identifying contracts utilizing Set Fee, the review consisted of discussions with procurement management to determine if the Set Fee Initiative was or had been utilized and to what extend it was used. In addition, discussions were held with the Contracting Officer utilizing Set Fee, and the Competition Contracting Officer to attempt to make a determination as to the effective or ineffectiveness of the Set Fee approach.

Discussions indicate that Set Fee, under the definition set forth in the "At a Glance Procurement Innovations" document, is not being correctly utilized in the multiple award contract through the process of competing task orders. Rather than fee being pre-established and thus removing fee as a pricing factor, GRC is stating and presenting to potential bidders, a percentage fee rate that it "deems appropriate" for the task. Such wording is considered less than pre-setting or pre-establishing a fee rate or amount. GRC practices have been to continue to be flexible in negotiating such fee rates regardless of the fee rate stated as "deemed appropriate."

Guidance by NASA Headquarters could be improved: The primary reference document: "At a Glance: Procurement Innovations" is not extensive or detailed. The survey findings indicate that Set Fee is not well understood or correctly utilized.

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GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS, AND OTHER ISSUES

1. Grants and Cooperative Agreements:

GRC currently awards grants and cooperative agreements for Kennedy, Stennis, and Dryden Space Centers. Space Systems and Grant Branch includes: 8 Contract Specialists, 5 Grant Officers, 3 Purchasing Agents, and 1 intern. Due to NASA Headquarter processing all unsolicited proposals and the transitioning of Grants to NSSC GRC is planning to retrain and transition 4 of the 5 grant officers from the grants division into procurement operations and designate one FTE to support the institutional.

GRC implemented the Grants Database Program, which enables GRC Grant Technical Monitors to evaluate proposals on-line and submit other information required for technical evaluation. It also provides dissemination of additional information for reviews and approval prior to submittal to the Space Systems and Grant Branch. The system also generates procurement documents, reports, and grant correspondence utilizing the data submitted by the Technical Monitor; and the program reduces the lead-time of grants and cooperative agreements and increase production of accurate and complete documentation.

In fiscal year 2003 the GRC Procurement Division Office, Space Systems and Grant Branch, awarded approximately 221 grants and cooperative agreements. The Survey Team reviewed ten grants, 4 cooperative agreements, and 6 grants with supplements. Awards range in dollar value from $2,000 to $5 million and consist of awards to universities, non-profits and commercial firms.

All files reviewed were in compliance with Provision §1260.70 entitled, "Delegation of Administration". This provision requires the administration of grants and cooperative agreement to the Office of Naval Research (or other appropriated office). The Space Systems and Grant Office electronically forward NASA Form 1674, "Letter of Delegation for Administration of Grants and Cooperative Agreements" to the administration officer for fast processing.

All reviewed files included the Individual Procurement Action Report (IPAR) (NF 507) for basic awards and supplements. In addition, all the files were in compliance with Provision §1260.75, which requires completion of Form 1356, "Committee on Academic Science and Engineering" (CASE) Report (NF 1356), for grants and cooperative agreements awarded to educational institutions.

Technical Monitors issued electronic notifications to the GRC Liaison Officer. All of the awards issued indicated evidence of Congressional notification. Congressional notification of reviewed grants and cooperative agreements are provided on the GRC Procurement Website.

Three of the 10 grants and cooperative agreements were awarded as a result of NASA Research Announcement (NRA) and each included technical evaluations and the selection statements the award documentation. However, it was noted that some files failed to include a copy of the NRA or documentation of the waiver from the Grant Officer.

CONSIDERATION:

It is recommended that the files include a copy of the NRA or documentation of waiver from the Grant Officer.

Space Systems and Grant Branch utilizes the Memorandum of Negotiation form. The use of this form is a good practice that streamlines the grants and cooperative agreements process. Some the files reviewed did not contain a thorough cost analysis and rate agreement in connection with the grants and cooperative agreements.

CONSIDERATION:

It is recommended that the Space Systems and Grant Branch ensure the contract specialist provide documentation with supporting rationale addressing all issues in connection with the grants and cooperative agreements. It is also recommended that the contract specialist provide detailed cost analysis and documentation of the variances of the proposed, recommended, and negotiated budget amounts.

The previous survey recommended that Provision §1260.26 entitled, "Financial Management" in the Grants and Cooperative Agreement Handbook should be included in full text. Eight of the ten grants and cooperative agreements included Provision §1260.26 as a reference in lieu of full text. The full text serves as a reminder to the recipients of their financial reporting requirements.

CONSIDERATION:

It is recommended that the Financial Management provision be included in the grants and cooperative agreements as full text (Repeat Finding).

The Grants and Cooperative Agreement Handbook requires that the Grant Officer ensures all necessary certifications, disclosures, and assurances were obtained prior to award. Few of the reviewed files included the debarment and suspension, lobbying, and nondiscrimination certifications.

CONSIDERATION:

It is recommended that grants and cooperative agreements contain applicable certifications and rate agreements in the files.

The Justification for Acceptance of an Unsolicited Proposal (JAUP) serves as the technical evaluation for the unsolicited proposal prepared by the technical office. As noted in the last survey, there was no clear evidence in all the files that the Technical Monitor obtained concurrence from a division level in the GRC organization. In accordance with Grant Notice dated June 13, 2003, review and concurrence is required for technical officers at a level above the technical officer.

WEAKNESS:

It is recommended that the Grant Officers ensure the Technical Monitor obtain review and concurrence at a level above the technical officer if required. (Note: Reviews and concurrences are not required for technical officers at a division chief level.)

2. Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) Programs:

GRC SBIR/STTR Team consist of contract specialists from three branches: Technology
Support Branch, Space Systems and Grants Branch and Aeropropulsion and Information Technology Branch. Technology Support Branch provided the team with model contracts, checklists, tab files and templates to streamline the SBIR/STTR process. In 2003, the team awarded 66 SBIR Phase I, 28 SBIR Phase II, and 7 STTR Phase I contracts. All contracts were awarded within the date specified in the electronic SBIR/STTR Handbook.

All SBIR/STTR files reviewed included FAR Clause 52.227-20, "Rights in Data" for Phases I and II, NASA Form 507, "Individual Procurement Action Reports", and detailed technical evaluation and appropriate certifications were included in the files.

In accordance with Work Instruction GRC0610.019 dated February 13, 2004, procurement actions valued over $100,000 should include pre-negotiation position memorandum and price negotiation memorandums. For actions under $100,000, the files should contain a memorandum with supporting rationale. However, several files reviewed did not included price negotiation memorandum for SBIR Phase II actions that exceed the $100,000 threshold.

GRC also awards SBIR/STTR for JPL. All the necessary safety and assurance reviews and the pertinent recommendations are performed by JPL as part of the proposal packages. Results of the safety and assurance review, technical evaluation, price analysis and audit are incorporated into negotiation memorandum. All the files were in compliance with Work Instruction GRC W0610.018, Revision A.

STRENGTH:

GRC utilizes various checklists to streamline the award process, which may be useful for other NASA centers. Checklists are:

1. GRC Technology Support Branch utilization of SOW Requirement Review and Concurrence (NASA C-8095),
2. Contract Negotiation, Technical Analysis of Cost Proposal (NASA C-266),
3. Pre-negotiation Issue, Contract Administration Information (NASA C-175), and
4. SBIR/STTR Proposal Fact Checklists

CONSIDERATION:

It is recommended that the SBIR Phase II awarded after February 13, 2004 include the price negotiation memorandum in the files as required by FAR 15.406-3.

3. Simplified Acquisition Procedures:

Simplified acquisition procedures are authorized for commercial items up to $5M and non-commercial items up to $100K. GRC has a contract checklist, which they use to aid their procurement personnel in these types of acquisitions.

Several simplified acquisitions were reviewed all over the $100K threshold. The files as a whole were adequately put together and documented. However, none of the files reviewed contained a post award synopsis (in accordance with FAR 5.301(a)).

One file documented small business considerations. In discussing the policy of small business considerations with GRC's Small Business representative, he stated that under $2M these acquisitions do not require review or documentation if awarded to small business. But, the contract specialists should be documenting the file in the event award is made to other than small business.

Another award, that should not have been executed using simplified acquisition procedures, was noted and brought to the attention of the GRC Senior Procurement Analyst for corrective action and or awareness.

CONSIDERATION:

1. Procurement personnel should be reminded that an acquisition cannot be acquired using the simplified acquisition procedures if it is over $100K and not commercial.

2. GRC should remind personnel that each file must contain a post award synopsis.

4. Commercial Acquisition:

Part 12 of the FAR prescribes policies and procedures for the acquisition of commercial items.

Several contracts reviewed demonstrated that GRC's effective use of market research has provided them the ability to make effective use of commercial acquisitions.

In addition, those competitive acquisitions that resulted in a single offeror were properly documented in accordance with FAR 13.106(2)(iii). Specifically, the contracts person obtained copies of the published prices of the items being procured.

It is noted that one file reviewed posted an RFP, which stated that the acquisition was being conducted using the simplified acquisition procedures and that it was commercial. However, the resultant contract contains no commercial clauses, was awarded as a CPFF, which is prohibited by FAR Part 12, and does not appear to be commercial.

STRENGTH:

In concert with GRC's effective use of the market research procedures, they are able to more effectively use commercial procedures for their acquisitions and provided detailed documentation when an award resulted from a single offeror.

CONSIDERATION:

It is recommended that contract specialist be reminded to ensure all applicable commercial clauses are included in contracts.

5. Bankcard Program:

There are 483 bankcard holders and 124 approving officials at GRC, which equates to a 3.9 ratio of cardholders to approving officials. This number is down significantly from the last number of 700 cardholders in the GRC 2001 Survey report. Quarterly audits are performed to identify accounts that can be cancelled or dollar limits reduced because of little or no activity. The Simplified Acquisition Strategic Analysis (SASA) Team, who also assists cardholders, performs a weekly audit of bankcard purchase requests to monitor bankcard usage to ensure items purchased meet the requirements and are within the limits of the bankcard program.

GRC has established an on-line version of the Purchase Card Program User Manual that provides non-Procurement personnel with the procedures on how to make bankcard purchases within an authorized dollar limit for supplies that ordinarily do not require concurrence of other NASA Glenn organizations. The manual covers the entire bankcard process from obtaining a purchase card to reconciling monthly statements. The manual also includes examples of what can and cannot be purchased using the bankcard.

Cardholders and Approving Officials are receiving training prior to receiving their delegation letters.

STRENGTH:

GRC is commended on their bankcard management program. GRC's on line User's Manual provides cardholders comprehensive instructions on the bankcard program.
The Program Coordinator and SASA Team continue to provide exemplary assistance to cardholders.

6. Contracts for Administrative Support:

The GRC 2001 Survey Report addressed concerns identified in an Office of Inspector General (OIG) report issued in January 2001 regarding the use of support service contractors at GRC. As a result of this report, Glenn Policy Directive 5137.1 entitled "Use of Support Service Contracts, Personal Services, and Inherently Government Functions" was issued on September 10, 2001, and the Center Director issued a letter on February 26, 2001, identifying policy guidelines for all GRC employees in the proper use of support service contracts. The Center Director requested that each organization provide a plan regarding implementation of the new policies. At that time most of the organizations had either implemented an approved plan or were in the process of implementing a plan.

Glen Policy Directive GLPD 5137.1A, entitled "Use of Support Service Contracts, Personal Services, and Inherently Government Functions" was revised on April 30, 2004. It stated that in compliance with the Federal Acquisition Regulation (FAR) and the NASA/FAR Supplement (NFS), NASA Glenn Research Center (GRC) would not enter into contracts for "personal services" or contracts for "inherently governmental functions." The directive applies to all organizational elements of GRC and the Plum Brook Station. The directive provides guidance for developing statements of work for services contracts and the responsibilities of government personnel when using contractor support.

The contracts reviewed clearly sets forth the working relationship between government and contractor employees. The Statements of Work were also written to avoid contractor performance of inherently governmental functions.

It was noted that the Procurement Division and other offices visited at GRC, were complying with the directive by clearly identifying contractor administrative support employees. Contractor employees were not performing inherently government functions in the areas visited. There was also a clear distinction between Government and contractor employees' supervision channels.

STRENGTH:

GRC is commended for the continued diligence in complying with the OIG recommendations.

7. Construction Contracts:

Construction contract files were reviewed for proper clauses, inclusion of wage determinations, bonding and insurance and file documentation. All documentation was in file, and proper clauses were being used with the exception of four instances as follows:

1852.204-74 (Deleted from NFS 1/24/04, PN 97-91) replaced by FAR Clause 52.204-7)

52.219-8 Utilization of Small Business Concerns (Oct 2000) revised (May 2004)

52.249-2 Termination for the Convenience of the Government (Fixed Price) (Sep 1996) revised (May 2004)

52.222-3 Convict Labor (Aug 96) revised (June 2003)

An interview with the Project Management and Quality Assurance Branch Facilities Division representative and construction COTR was held to discuss their role in the administration of the construction contracts. The files that were reviewed included comprehensive documentation that covered their contract administration areas of responsibility. These files will become part of the official contract file after the contracts are complete.

One area that is not receiving oversight is review of Certified Payrolls to determine compliance by the contractor and subcontractors that they are paying the appropriate wages as listed on the Wage Determination Tables (FAR 22.406-1(a)(2))

CONSIDERATION:

Office of Procurement must ensure that payrolls are reviewed in accordance with FAR 22.406-1(a)(2).

8. Environmental Clauses:

Purchase orders and contracts were reviewed for environmental clauses. The purchase orders and contracts had the appropriate clauses. The construction contract specifications did not recommend use of recovered materials. Therefore, clauses 52.223-4 and 52.223-9 were not included in the contracts (PIC 01-27). During an interview with the Project Management and Quality Assurance Branch Facilities Division representative, it was indicated that GRC is just starting to include this requirement to use Environmental Protection Agency (EPA) recycled products in their construction specifications.

CONSIDERATION:

The Office of Procurement should provide guidance and facilitate acquisition planning with respect to environmentally preferable goods and services, and ensure that solicitations and contracts contain the appropriate provisions and FAR clauses to implement Affirmative Procurement (FAR Part 23).

9. Progress Payments for Construction Contracts (PIC 00-10):

Among the construction contracts containing progress payments reviewed, all complied with FAR 52.232-5, "Progress Payments under Fixed-Price Construction Contracts." The information contained on vouchers for payment was sufficiently detailed for an analysis of the reasonableness and accuracy of requested payments.

10. Architect & Engineering:

The A&E contracts reviewed were awarded prior to the last GRC Management Survey. Therefore, only documentation issued after October, 2001 was reviewed.

One contract awarded May 1, 2000 with period of performance May 1, 2000 through December 31, 2000 had eight no cost extension modifications, the last modification extended the contract to April 2003. There was no documentation in file to explain why contract was extended.

A Cost Plus Fixed Fee (CPFF) contract awarded with two base years, and three option years was awarded Feb 1, 2000. Modification 6 dated Jan 31, 2002 extended the contract to January 31, 2003. Notice to Contractor referenced the wrong Option Clause. There was no Determination to Exercise Option period in file (FAR 17.207). This modification also converted the CPFF to a Total Fixed Price Draw Contract. The terms and conditions of the contract were not changed from CPFF to Fixed Price. There is no documentation in file to justify this change. Mod 7 dated January 27, 2003 extended the contract to January 31, 2004. No Determination to exercise option in file. Mod 8 dated January 26, 2004 extended the contract to January 31, 2005. No Determination to exercise option included in file. GFP list on contract. No D&F in file to justify providing GFP to the contractor.

WEAKNESS:

Office of Procurement should ensure that contract specialists include the required administrative documentation in file. Also if the contract type is changed the contract specialist must document rationale for the change and make any corrections required to the terms and conditions of the contract.

11. Contract Safety Requirements:

Several contract files were reviewed to verify compliance with NASA FAR Supplement Subpart 1823.70 entitled Safety and Health. 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. Of the twelve files reviewed, there were two instances where this clause was not incorporated into the contract. 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. Of the twelve files reviewed, there were two instances when neither of these clauses was incorporated into the contract.

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 after receiving the concurrence of the center safety and occupational health official(s). During the review, there were two instances when the contract contained clause 1852.223-70 Safety and Health but the contractor's approved Safety and Health Plan was not incorporated into the contract.

WEAKNESS:

The Procurement Officer should ensure that GRC procurement personnel comply with the requirements established in NFS Subpart 1823.70 entitled Safety and Health.

12. Purchase Request Process:

GRC Procurement Division has developed a GRC Center Procedure for the purchase requisition process. The Procurement Division is the purchase request (PR) process owner, based on the fact that they were the process owner on the legacy system, APRS. The Center procedure delineates responsibilities of individuals involved, and the PR process actions.

Two contract specialists review all PRs received in the Division to ensure that complete packages are forwarded to the COs. Each PR is checked for required information and attachments. If the PR and attachments are acceptable, it is forwarded to cognizant Team Lead, who in turn forwards it to the contract specialist assigned to process the requirement. If the PR package is not complete, the requisitioner is contacted to provide the necessary information. The PR is not forwarded until a complete PR package is received.

The Procurement Division also utilizes contractor support to assist in the PR process. Assistance includes providing on-going phone and in-person support; maintaining a website for requisitioners; providing basic and refresher training for all requisitioners; and maintaining GRC purchase request release strategies.

GRC has established an IFM website that center personnel can go to get information for the SAP PR process. The website provides phone numbers for purchase requisition and bankcard support, power requisitioners and super-users. There is also a webpage that provides instructions for entering requisitions and extracting reports from SAP and the Business Warehouse (BW). A link is available on the webpage to announce information and instructions on scheduled briefing sessions, for those interested in becoming Purchase Requisitioners or individuals requiring refresher training. GRC has established a block of time, which they call "The SAP R/3 Requisitioner Open House" where requisition experts are available for one-on-one assistance. For assistance at other times, the Purchasing Support line is available.

Additional links are available for information on the following:

NASA Form 1707 for all New Requisitions
Sole Source Justifications
Contractor Cage Code Registration
PR Checklist
Basic information required to Enter and Process a SAP PR
Purchasing Group (Pgrp) Crosswalk
Power Requisitioners List
Power Requisitioners Available for Assistance
Release Strategy Helper
PR Approvers List with SAP Codes
3 Steps to Print a PR
Material Group Detailed Listing
How to do a ODIN PR
How to do a NASA IT PR
How to do a SEWP PR

STRENGTH:

The Procurement Division is commended for stepping up to be the PR process owner, and providing the assistance and training required to make this process as smooth as possible. The IFM website GRC established provides an excellent tool for individuals who need assistance in submitting purchase requisitions.

13. IFMP Issues:

GRC went "live" with IFM two years ago. GRC, just as with all the other Centers, has developed external work-arounds to make the SAP/R3 system work for them. An example is the Requisition Planning Memo (RPM). SAP does not allow funding organizations to approve and control funds prior to funds commitment. Within SAP funds commitment takes place when you save the requisition, prior to requisition approval. Projects do not have visibility into purchases by performing organizations prior to purchase requisition commitment and release and report capability in SAP captures information after the funds have been committed. Therefore, it required communication between the funding organization and the performing organization external to SAP in order to efficiently control spending.

For purchases where funding is managed by another organization, an up-front messaging process is in place. This front-end messaging process, enabled by a form (Requisition Planning Memo, RPM) that can be completed electronically, allows project managers to review and approve project-spending requests before they are entered into SAP. This form must be completed whenever someone is spending another organization's money.

The purpose of the RPM form is to communicate an external spending request to the funds manager. The funds manager can then respond indicating whether or not the spending request is allowed and whether or not they will input the purchase requisition into SAP.

A Core Financial Focus Group Workshop was held recently to hear current concerns of individuals using the SAP/R3 and BW systems. The majority of the concerns addressed were based upon how to extract management reports from SAP/R3 and BW. General consensus was that it is not easy to extract information, and it takes too long to run reports. There is a lack of ability to share information between users, and to get comprehensive reports. Some individuals did not like having to dump SAP/BW reports into Excel and then having to manipulate the data to get information needed. Key reports are not available to manage budgets.

Plans are to have SAP/R3 and BW working sessions to learn how use the system more effectively and efficiently.

14. Metrics:

GRC Procurement Division collects a wide range of management data to ensure that the organization is functioning well. Procurement Division metrics include Workload and Procurement Lead-times, Customer Satisfaction, Award Fee and Socio Economic Goals. Workload and procurement lead-time data is obtained from AMS. Customer satisfaction data is extracted from the GRC Corrective and Preventive Action Reports (CPARS) database. CPARS is a center-wide database used to document and track the status of customer complaints. Since GRC has only two contracts with Award Fee, this data is maintained manually. Socio Economic Goals data is obtained from the 507 reporting data. Metrics are kept current on a monthly basis.

The Procurement Division briefs GRC Center Management on a monthly basis on procurement workload, administrative lead-times and socio-economic goals. Customer service, socio-economic goals, and performance based contracting is briefed at the GRC quarterly ISO 9000 briefing.

STRENGTH:

The Procurement Division is doing an excellent job collecting metrics, and providing the information to the Center and Headquarters level.

15. Deviations/Waivers:

The GRC procurement files included no processed deviations for this survey period. In addition, the GRC Procurement Policy Analyst was questioned on the existence of any deviations. No deviations have been processed by GRC since the previous survey. Based on the knowledge that GRC will soon be adjusting its procedures for implementing contract extensions (i.e., deviations to NFS 1817.204) it is noted that GRC should consider implementing a deviation tracking system to ensure deviations are processed in an efficient manner.

Since the last survey GRC has processed one waiver, which was an incremental funding waiver. The waiver was processed in accordance with NFS 1832.702-70.

CONSIDERATION:

The Procurement should consider implementing a deviation tracking system for possible future deviation requests.

16. Interagency Agreements:

The Interagency Agreements (IA) awards reviewed for this survey ranged in dollar value from $230K to $1.9M. The focus of the survey was to observe proper application of the statutory authority (the Economy Act as implemented by NASA's Space Act). All of the files cited one or the other as the authority for award, although according to NFS 1817.7201 and 1817.7202, the proper authority for IA awards is the Space Act. The survey was also seeking evidence that files included required determination and findings (D&Fs) that supported the IA as the best procurement decision.

In two of the files D&Fs were included but were not needed because the awards resulted from competitive NRAs. While all of the files included D&Fs, none of the D&Fs contained the cost/price analyses required by NFS 1817.7202(b). All of the IAs included the necessary work statements (which are particularly important when services are involved). However, it was noted that several of the IA's did not delineate details such as the terms and conditions, and roles and responsibilities of the agencies in performance of the agreement. When documenting details of the agreement it should also be noted that FAR 17.504(c) advises (i.e., this is not a "shall statement") that requesting and servicing agencies should agree on procedures for handling disagreements or disputes.

CONSIDERATION:

The GRC procurement staff has made strides to address the previously identified weakness of the missing D&Fs. It is recommended that further steps be taken to ensure D&Fs adequately address NFS 1817.7202(b) cost/price analysis requirements, and the details of the agreement between the agencies during the performance period of the IA.

17. Internal Policies and Procedures:

GRC has been successful in its effort to become ISO 9001 Certified. The Procurement Organization's work instructions reflect a common format, and identify the appropriate organizational levels and responsibilities. The team notes that GRC has numerous work instructions and the instructions that reference the FAR or NFS requirements appear to work well for the procurement staff. The work instructions that offer shortcut procedures (e.g., the work instruction for pre and post negotiation memorandums) appear to cause problems because they establish procedures that may not necessarily be adhered to by the procurement staff reduce/eliminate FAR/NFS requirements.

During the survey, several of the Center-unique clauses were accessed through the Interim Document Generation System (IDGS). Though numerous, the clauses did not appear to be out of line with the FAR or NFS. However, the team noted that several of the internal clauses appear to be redundant.

GRC's "Speedy Document Generation System (SDGS)" which is used to track and quickly identify previously used clauses that have been changed or deleted also appears to be of great benefit to the procurement staff.

STRENGTH

In the absence of a contract management module GRC developed and implemented the SDGS, which allows procurement professionals to utilize an automate process to develop contracts.

CONSIDERATION:

1. GRC should consider an effort to further review its internal clauses for those that may be redundant in nature.

2. GRC should simplify its work instructions by referencing existing FAR/NFS regulations and/or other widely used and accepted procurement guidelines whenever possible (i.e., less reliance on the work instructions that offer shortcut procedures).

3. GRCs Center unique clauses are available on the IDGS; GRC should consider linking its Center-unique clauses to the Procurement Library.

18. Virtual Procurement Office (VPO):

The GRC procurement site map is linked to the HQ VPO, and it appears that GRC is utilizing the VPO, and has in fact eliminated use of GRC-unique templates and forms.

19. Self-Assessment:

The procedures used in the GRC self-assessment process as well as the self-assessment results were deemed acceptable by the survey team. GRC performs self-assessments twice within a twelve-month period. The two most recent self-assessments (including the back-up documentation for reports) were reviewed during this survey. These two GRC self-assessments were conducted between November 2003 and December 2003, and between February 2004 and May 2004. The Procurement Policy Analyst is responsible for coordinating the reviews, establishing the areas of emphasis, retaining a central file of back-up documentation, and maintaining a database of problem areas discovered during the reviews. The areas that will be emphasized during the self-assessment reviews are chosen from the collected data and any issues that surface during the procurement management surveys. Recently, as a result of data collected for the self-assessment process, GRC discovered that several contracts were missing clauses and/or contained clauses that were outdated. The discovery also indicated that a problem existed with GRC's in-process reviews. At the time of this survey, the Procurement Officer had suspended the in-process reviews and plans to implement a process that will require Branch Chiefs to review all award files at or over $100K.

Based on issues identified during the previous procurement management survey, the GRC self-assessment process focused added attention on the problem of missing D&Fs. However, it appears there may be a need to adjust the self-assessment process in the area of addressing the IA D&F issue. For example, information in the self-assessment files indicated that one of the two IA D&Fs reviewed, and counted as evidence of improvement was a D&F that should not have been in the file because the award was the result of a competitive NRA. It is noted that based on the number of IA actions processed, two files represented five percent of the total IA actions processed within the self-assessment period. Since missing D&Fs had been identified as a weakness, it may have helped strengthen the results of the self-assessment had a few more IA files been reviewed for the presence of required D&Fs or at least one more substitute file selected.

Given that none of D&Fs were compliant with NFS 1817.7202(b), this may be an area that should be added to the self-assessment reviews of IA D&Fs.

STRENGTH:

GRC is commended for performing the self-assessments in a timely manner, and its efforts to continually improve and effectively utilize the self-assessment process.

CONSIDERATION:

The Procurement Officer has taken steps to implement appropriate corrective actions that result from the self-assessments. In the area of D&F compliance with NFS, for an interim period the Procurement Officer should consider selecting a slightly higher percentage (i.e., slightly above the minimum of 5%) of the IA files. In addition, the scope of the D&F reviews should be broadened to include compliance with NFS 1817.7202(b).

Return to Contents

The SBS and senior management is very supportive of the Small Business program. The SBS is dedicated to the Small Business Program with exception of developing the Master Buy Plan and the Acquisition Forecast Reports.

Discussion is currently underway to consider the possibility of the Small Business Specialists being a direct report to the NASA Office of Small and Disadvantaged Business Utilization. The Chief, Financial Office (CFO) will conduct dialogues where all of the Small Business Specialists are included to discuss the logic behind this implementation. Should the outcome of those discussions result in the current arrangement remaining in place, consideration should be given to establishing a separate line item for the operation of the GRC SBO. Once the SBS travel plan has been approved, there should be some certainty that funding to cover travel for the entire fiscal year is available. Last, as evident by the fact that the FOIA Officer is working part-time to assist the SBS with his duties by performing the review and reconciliation of the SF294 Reporting, and considering the fact that the SBS is out of the office for periods throughout the year representing the Agency in small business activities, consideration should be given to assigning a second FTE or an intern to this function.

The National Contract Management Association (NCMA) is very active at GRC. Many contract officers, including the deputy head of Procurement, are or have been members of this Association. Its purpose is educational, and provides networking between Government contract officers and contractors. The GRC SBS was invited to speak at one of the meetings.

NASA Form (NF) 1680, Evaluation of Performance is an agency-wide form that is maintained in NASA's Past Performance Database. There currently is a box on the form labeled "Other" where small business goals can be address. The recommendation is to consider revising the form to make small business goals a separate box. This will show both the contractors and the contract officers that the Agency is serious about reaching its small business goals. All of the Contract Officers and the SBS thought this was an excellent idea.

Since this is a required procedure for procurements at $50M or above, all contracting officers should become knowledgeable of this process.

Both the NASA SBS and the SBA PCR spoke very highly of one another. There appears to be a balance and an effective working arrangement between the two organizations. They believe their arrangement is effective. GRC appears to be meeting their small business goals. The problem of not having a SBA PCR at or near the Center is a SBA matter, one that NASA does not appear to have influence. Therefore, since the current arrangement seems to be working for both, the recommendation is that we maintain the current arrangement.