KSC 2005 Procurement Survey

The NASA Headquarters Office of Procurement conducted this Procurement Management Survey at Kennedy Space Center (KSC) under the authority of NASA Handbook 1101.3, The NASA Organization. The survey was conducted from January 24 through February 04, 2005. The report contains the survey strengths, weaknesses, and considerations.

An exit briefing was held at KSC on February 04, 2005 to discuss the survey findings. Dr. Woodrow Whitlow, Jr. Deputy Director; Mr. James E. Hattaway, Jr., Associate Director; Mr. Dudley R. Cannon, Procurement Officer and Ms. Cheryl Hurst, Deputy Procurement Officer represented KSC. Mr. Tom Luedtke, Deputy Chief Acquisition Officer/Director for Procurement Headquarters, Ms. Monica Manning, KSC Survey Manager and Mr. John Trahan, Co-Lead 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
KSC Survey Program Manager
Analysis and Assessment Team
Office of Procurement, NASA Headquarters

OVERVIEW

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

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

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

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

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

ORGANIZATION - MANAGEMENT

1. Organization -- Management

The KSC Office of Procurement January 2005 Organizational Chart reflects an organizational realignment since the previous survey period. There are now five (rather than four) offices; policy and four operations groups responsible for planning, awarding, and managing acquisitions and associated activities for customers at KSC. The Launch Support Office was originally part of the Operations Support Office. The size and scope of responsibilities associated with the Expendable Launch Vehicles and ELVIS -ELV Services required the creation of an independent office. The five offices respectively are the Acquisition Management Office, Engineering Support Office, Mission Support Office, Operations Support Office and Launch Support Office.

In addition to operational offices providing direct support to KSC customers, the Acquisition Management Office continues to provide pricing, policy, training and industry assistance to KSC personnel. Expanded responsibilities also include a wide range of acquisition initiatives to include the Contract Management Module acquisition support, the implementation of IFMP/SAP and FPDS NexGen data systems.

Recently there have been substantial changes in the management of the Office of Procurement as well. The previous Procurement Officer was elevated in the Center senior management structure to become the KSC Associate Director, the former Deputy Procurement Officer is now the Procurement Officer and the former Mission Support Chief is the newly appointed Deputy Procurement Officer. In addition, the number of procurement personnel has increased from 66 to 75 contracting personnel in the 1102 classification series (including 1 individual classified as an 1106) and has achieved an overall increase from 76 to 85 current full-time employees (FTEs) not yet reaching its ceiling of 92 FTEs. The 85 FTE positions does not include four NASA Contracting Interns, one assigned to each respective operational group; however four Federal Career Interns are included in the FTE count along with two positions converted from the 1105 series to the 1102 series.

The staffing level of the KSC Procurement Office has continued to increase since the last survey period. The recently hired individuals' experience level ranges from interns (entry-level grades) to journeyman and many have previous experience in Government contracting, providing an opportunity to bring new experiences and ideas to the organization. It is apparent that the KSC Procurement Office's ability to provide high quality support for its customers has continued by the increase in hiring individuals with diverse experiences and by realigning the organization to meet the customer needs.

Interviews were conducted with the KSC 1102 workforce. The Survey Team Program Managers interviewed a broad cross section of employees throughout the various grade levels and branches in the Office of Procurement to gain insight into their perspectives on the effectiveness of the organization. While interview candidates were selected randomly, to get a more representative picture of the organizational health, an effort was made to assure that both long time employees and newer hires were in the sample.

Overall morale of the workforce is good and the preponderance of the individuals interviewed indicated that the KSC Procurement Office is a good place to work. In general, employees expressed positive opinions regarding management and the recent selections of the relatively newly appointed Procurement Officer and Deputy Procurement Officer. Most feel that the organization will continue to experience positive impacts from these appointments. While the preponderance of feedback from those interviewed feel things are working reasonably well for them, there were concerns raised in the areas of training, communication, and professional growth and development.

Most interviewees cited training opportunities as limited and sporadic; further interviews with the Training Coordinator revealed that CON, college courses, on-site forums and team training sessions occur on a regular basis. In fact, 96% of 1102 personnel are certified at the appropriate levels.

During the interviews and in the previous survey period communication throughout the organization was cited frequently as an area in need of improvement. Some individuals indicated that actions or decisions concerning the procurement organization or perhaps the entire Center were not disseminated in a timely fashion. It was noted that communications appear to breakdown at the team lead level, that staff meetings are not held on a regular basis and information is not shared consistently. It was suggested, as in the previous survey, that management should make dispersal and sharing of information regarding things of interest to the entire work force a priority. Although, management visibility was not stated as an area of concern during this survey cycle; employees do desire regular all-hands or other forums where communications are provided directly from the procurement front-office.

Another area of concern frequently mentioned during the interviews was with regard to the expectations for promotions, professional growth and development. A significant number of employees indicated opportunities for promotion are likely. All interviewees expressed a like for the programs they support and the level of responsibility associated with required task. However, some of the employees interviewed admitted that they were not receiving a wide range of experiences in their current assignments yet seemed reluctant to make a change due to job satisfaction. These same employees expressed some frustration with not being promoted in their current position even though they appeared to lack a wide range of procurement experience. Other employees have begun to realize the importance that KSC management places on vast and diverse experiences in promoting individuals and have begun taking the necessary steps to obtain these types of experiences. Individuals indicated that if they requested an internal or external rotational assignment or re-assignment, to broaden their experience, KSC management will do its best to accommodate their request.

However, an undercurrent of frustration was disclosed from new hires within the KSC procurement office in the area of knowledge transfer. Employees hired outside of NASA expressed a concern that their previous experience does not appear to be valued by those who are career NASA employees. Several employees feel their creativity is being stifled and their ability to share what they perceive as best practices or lessons learned from past experiences is not valued or well received within the procurement office. These individuals feel that the priority of the office is to maintain the status quo by doing things the "NASA way," rather than focus on process improvements. There is also the perception by career NASA employees that new NASA employees should not be eligible for promotions because they have not "paid their dues" (i.e. inside NASA experiences to SEBs etc.) and new NASA employees again feel past experiences may not be valued as much when it comes to being promoted within the NASA system

The Survey Team interviewed numerous customers to obtain their input regarding satisfaction with the service provided by the Procurement Office. Individuals chosen for the interviews were selected from the current COTR database and management personnel representing various organizations at KSC.

The technical community appears very satisfied with the level of acquisition support being provided by the procurement personnel, with comments being uniformly positive. Individuals interviewed, co-located and not, expressed a high degree of satisfaction with the accessibility of procurement personnel and the communications and interfaces between themselves and procurement personnel. As with the previous survey: "There was an overall consensus among the individuals interviewed that they received good procurement support and generally they were highly satisfied as customers. The procurement workforce was described, in general, as being very knowledgeable, proactive, and eager to do the best job possible. Responsiveness and the quality of work were consistently described as excellent. A number of customers felt that procurement personnel work actively to find the best solution for a given requirement, by presenting alternative ways of meeting a customer's needs and attempting to limit the "red-tape" involved. Procurement was described as "knowing the rules and how to use them" in the best interest of the customer. Several customers expressed the opinion that the strong leadership skills of the KSC Procurement Officer greatly contribute to the effectiveness of the Procurement Office."

In the previous survey, one customer suggested the best value approach be considered for use in construction contracting, KSC has been employing this approach when appropriate and it appears to be working well.

The Legal Office and the Procurement Office appear to have a true partnership in identifying effective ways to reviewing and awarding requirements in a timely fashion.

An interview was conducted with KSC's Chief Counsel regarding interaction between the Legal Office and the Procurement Office. Again, the results of this interview indicated that overall there is a good functional relationship between the two organizations with no substantial barriers to communication back and forth. The Chief Counsel expressed a high degree of confidence in the ability of both the Procurement Officer and Deputy Procurement Officer to conduct business on behalf of the Center.

It was further noted, as in the previous survey "that the procurement organization willingness to fix problems is excellent and that members of the procurement staff often work jointly with Legal Office personnel to determine appropriate corrective action when needed."

The Chief Counsel also identified the alignment of attorneys with major contracts; this simple concept appears to be very effective in providing consistent legal advice to procurement professionals by an attorney who understands and has historical contract knowledge.

The KSC Administrative Specialist/Training Coordinator continues to provide outstanding support to the Career Acquisition Training Program in support of KSC's Acquisition Workforce. An examination of the training files as well as interviews with procurement personnel, the training coordinator, and the Chief of the Acquisition Management Office were included in this review.

The training coordinator maintains a database which tracks grade level, warrant status, CON courses completed, and certification levels for all of the 1102s at KSC. 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 CON certifications, the KSC procurement management has assessed the warrant level of these individuals to ensure that their warrant level is commensurate with their certification level.

KSC career or career-conditional employees do not complete Individual Development Plans (IDP's). In lieu of IDP's the center has established the use of an Annual Training and Development Survey (ATDS) system to identify center training needs. The completion of the ATDS is mandatory for all KSC personnel and is tracked by the center human resources office. It is the opinion of the training coordinator that this survey serves the same purpose as the IDP so the need for the acquisition workforce to complete this document would be repetitive and unnecessary. IDP's are generated for KSC acquisition employees who are enrolled in the Federal Career Intern Program (FCIP). The FCIP is a hiring authority which provides entry level training under an initial exceptional appointment and non-competitive conversion to career or career-conditional appointment upon successful completion of a 2-year internship.

KSC 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 KSC utilizing outside training professionals, and internal workshops utilized to address areas of concern within the procurement organization.

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 required once every five years at the Kennedy Space Center. KSC provides four comprehensive training courses and four 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 Management office maintains a detailed database which tracks COTR comprehensive training, COTR refresher training, COTR assigned to specific contracts. KSC has also implemented a process to inform COTR's six months prior to when there delegation will expire to give them the opportunity to take the necessary refresher training.

PRE - AWARD

The Survey Team reviewed MSFC Master Buy Plan (MBP) submission procedures and processes. The MBP applies to each negotiated acquisition, including supplemental agreements and acquisitions where the dollar value, including the aggregate amount of options, is equal or exceeds $50M per NFS 1807.7101. For initial annual MBP submission only, each installation shall submit its three largest acquisitions regardless of dollar value and all acquisitions over $50M.

Master Buy Plan information is provided on the KSC Homepage, KSC Business World, and VPO. KSC provides excellent flowcharts depicting all areas of the procurement process, to include source evaluation boards and master buy plans.

Each Directorate at KSC is required to identify all requirements over $100K anticipated for the upcoming fiscal year. This information is provided to the KSC Office of Procurement (OP) Acquisition Management (AM). This office is responsible for gathering the information, validating the accuracy and completeness of the data in the MBP database and submission of the MBPs to the Procurement Officer. KSC rarely has requirements over $50M to submit into the MBP, therefore submits the top three requirements identified as required. The Procurement Officer is responsible for final approval and submission to HQ. KSC generally requests delegation to the center for ASM, RFP and selection. KSC has received delegation on two of the submissions and at the time of the survey was awaiting response from HQ on the third.

In accordance with FAR Part 10, agencies are responsible for conducting and documenting market research in a manner appropriate to the size and complexity of the acquisition to determine if commercial capabilities can satisfy NASA's requirements. Eleven contracts were reviewed for market research. Seven of these contracts prepared Market Research Analysis Reports that were filed under "Market Research" on NASA Form 1098. Two addressed market research only in the JOFOC and one addressed market research in the ASM. There was one file that indicated that market research would not be done due to the fact that the requirement was well publicized; industry capabilities were well known; and it was highly unlikely that a new provider could be developed in time to supply this capability. Overall, market research was very thorough and comprehensive. Specific methods included, review of NAIS, SBA Pro-Net, CCI database, GSA Schedule, customer interviews, sources sought synopses, Industry Day, and one-on-one discussions with industry. While it was apparent that good market research was being performed, a Market Research Analysis Report was not always utilized.

JOFOCs were reviewed for acquisitions valued or greater than $100,000 utilizing simplified acquisition procedures, as well as traditional methods. All of the JOFOCs reviewed cited FAR 6.302-1(a)(2)(ii) - Only one responsible source and no other supplies or services will satisfy agency requirements. These JOFOCs addressed all requirements of FAR.603-2, including the proposed contractor's unique qualifications, description of market research conducted, cost, and a statement of actions to overcome barriers to competition, if possible. The JOFOCs reviewed contained the necessary approvals from KSC management. No systematic problems were identified with respect to JOFOCS.

Files were reviewed to determine if they addressed the requirements at NFS 1815.406-170 for a pre-negotiation position memorandum and NSF 1815-406-3 for a negotiation memorandum. Generally, the pre-negotiation position memorandums thoroughly documented the Government's position and addressed the requirements of NFS 1815.406-170. However, one file based price reasonableness solely on the fact that it was lower than the Government estimate. The CO should have performed a more detailed price analysis pursuant to FAR 15.402 to establish price reasonableness in the file documentation. The negotiation memorandums reviewed thoroughly summarized the procurements and indicated the results of negotiation in accordance with FAR 15.406-3. The price negotiation memorandums reviewed summarized the technical, business, contractual, pricing, and price reasonableness.

All six files reviewed had the necessary GFP clauses. All files contained GFP Property Lists that included ECN numbers, item descriptions, locations, dates, and item costs. Property Administration was almost always delegated to DCMA. In some instances, DCMA delegations were not found under the "Delegations" tab on the NASA Form 1098. All files indicated they were reviewed by the Supply and Equipment Management Officer (SEMO), utilizing KSC Form 8-61V2 NS "Procurement/Legal Review in Accordance with KDP-P-2055." None of the files reviewed contained a D&F documenting the decision to provide facility items to the contractor pursuant to NFS 1845.302-1.

Fifteen contract files were reviewed for compliance with FAR 5.301 for synopsis of contract awards. Most files contained the post award synopsis. Those that did not contain a synopsis appeared to meet one of the FAR exceptions, however, one file indicated on the NASA Form 1098 that a post award synopsis was in the file, but no synopsis was found under the corresponding tab. KSC appears to be complying with the FAR requirements in this area.

POST - AWARD

The review of exercise of options focused on the presence of required option exercise determination documents. While a determination was included in each file, the documents do not always include all of the requirements for exercising options that are found in FAR 17.207 Exercise of Options, or NASA FAR Supplement 1817.207 Exercise of Options. Specifically, only two of the files reviewed (Contract NAS 10-01040, Modification 3, and Contract NAS 10-99001, Modification 228) contained a determination document that addressed all of the requirements found in the FAR and NFS. Although the determination documents included in two other files did include the required statement that the exercise of the option was the most advantageous method of fulfilling the Government's need, they based that on a statement that said "A new solicitation would fail to produce better prices or prove to be more advantageous that the offer of Option 1," with no evidence of an analysis to back up the statement. This does not meet the FAR requirement that a solicitation be issued, or an informal analysis of prices or an examination of the market be performed, or that the time between award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the best price. In addition, only two files (again Contracts NAS 10-01040 and NAS 10-99001) had evidence that they met the NFS requirement at 1817.207-70(a) that the analysis supporting the determination to exercise the option be performed in advance of providing notice to the contractor.

It should be noted that the file documentation, particularly the market research, in support of the option exercised on Contract NAS 10-99001 was excellent. This file documentation would be an excellent example for others to use when exercising an option.

FAR 44.202-2 has 13 specific considerations that the Contracting Officer must address prior to granting subcontract consent. The majority of the consent files reviewed specifically documented that the items requiring consideration at FAR 44.202-2 had been met/addressed. While two of the consent files reviewed did not specifically address each item, there was evidence that the CO had performed a thorough review of the files, as specific items were questioned, and the contractor was asked to provide additional information and directed to make improvements on documentation prior to granting consent.

Of particular note were the consent files for contract NAS 10-02007, Checkout, Assembly, and Payload Processing Services. The CO's use a consent review form for each of their reviews. It includes a statement at the top concerning applicability and states when subcontract consent is required on the contract. The form then has an introductory section that lists basic information regarding the subcontract, such as the PO number, the subcontractor, the value, etc. Below that is a checklist of each of the considerations found at FAR 44.202-2. This appears to be a very effective and efficient method of performing subcontract reviews.

Some of the letters granting consent, but not all, contained Consent Limitation language similar to that found at FAR 44.203(a). While the FAR does not require inclusion of this language, it is prudent to do so.

The Survey Team representative reviewed Undefinitized Contract Action (UCA) files and the supplemental agreements definitizing these UCA's to determine if UCA's were issued and documented in accordance with the FAR and the NFS 1843-70, and to determine if they were definitized appropriately. All of the files reviewed contained the appropriate documentation and approvals for both the initial UCA and the supplemental agreements definitizing the UCA's. The CAPPS contract in particular has a very efficient partnering process which allows them to definitize many of their UCA's in well under 180 days, as required by the NFS.

The Survey Team representative also reviewed the most current listing of KSC's open Undefinitized Contract Actions. There are currently only five open changes, with one of them being over age (the most recent report shows five open changes with two over age, but discussions with the CO's revealed that one of these has now been definitized and a new UCA has just been issued). The total number of UCA's is very low, which is commendable given the high level of Return to Flight activities on-going across KSC.

The Procurement Officer reviews the status of open UCA's monthly with the Procurement Office division chiefs. This appears to be a very effective way of highlighting issues and bringing management attention to problem areas.

KSC had between 1 and 4 over age changes each month for the past year, with the total number of UCA's ranging from a low of 5, to a high of 9. The current over age change is approaching 8 months old. It is on the same contract (NAS 10-02026) that has had 4 other UCA's over the past year which were definitized in well over 180 days. It appears that the reasons these changes went over age were not within the control of the KSC Procurement Office, but rather caused by problems with the contractor's proposals, late DCAA audits, and technical issues.

The 2002 KSC Procurement Survey included a weakness which stated "The Procurement Officer should ensure that the work authorizations under Article B-12 in NAS 10-99001 are subject to the same management controls and tracking requirements mandated for undefinitized contract actions or a deviation form the NFS requirements for approval of UCA's should be requested." This weakness has been corrected and all work authorizations under Article B-12 are now subject to the same management controls and tracking requirements as UCA's.

The survey team reviewed the metrics and trends of physically completed contracts ready for closeouts.

KSC has a well documented guidance on closeout procedures located in their KSC Business World website. The site has very good closeout process instructions including quick-closeout procedures as set forth in NFS 1842, along with documentation samples. The contract closeout function is de-centralized where contract specialists utilize the contract completion forms 1611 and the contract closeout checklist 1612 in support of the closeout activities. The contract specialists are responsible for closing out all open items such as definitization of modifications, final audits, unliquidated obligations, warranty issues etc. Upon completion of this activity, the closeout files are forwarded to the Procurement Records Control Officer who assures that all documentation is complete including performance evaluations per FAR 42-15 and NFS 1842-15. If not complete, the file is returned to the contract specialist. If complete, the file data is inputted into SAP/AMS with an ascension number to show the contract is closed. The files are then boxed and forwarded to record storage. The area where the files are boxed to be picked up for storage is well organized, clean, and obstruction free.

Currently, KSC does not have any metrics relating to overage closeouts even though such data was kept in the past. Since the implementation of SAP, more emphasis has been placed on the Unliquidated Obligations (ULO). KSC has recognized the need for such data during their last self assessment and ran a listing of contracts in September 04. Approximately 20 contracts have been closed out since September 04. They have stated that once they become more familiar with FPDS-NG, they will be developing reports to be used as a tool for their contract specialists to use in working closeouts.

KSC has a systematic approach in maintaining and monitoring their ULOs. On a monthly basis, the OP-AM office issues a monthly "Delinquent ULO Report" to the Procurement Officer, Office Chiefs, and Office Leads. The report reflects the number of delinquent ULOs and the dollars associated under each of the various contract vehicles (purchase orders, NDPRs, fixed price contracts, cost contracts, grants) in each of the four operational procurement offices. The report shows the data at the summary level for all offices and is further detailed out in an attachment under each separate office identifying the contract specialist, contract number, and the ULO amount. Based on this report, specific emphasis can be applied to any particular office to identify the oldest and largest ULO dollar amounts.

In addition to the above, a "Procurement Statistics/Metrics for Over Age ULO" is provided to the KSC Center Director on a monthly basis. The goal of the metric is to ensure that the total dollar level of overage ULOs does not exceed 25% of the total dollar level of all ULOs which is the same goal HQ has for each center. The oldest and largest ULO's are reported in narrative form under the assessment block along with the status on areas of concerns associated with reducing the ULOs. The latest data available reported in December 04 shows overage ULOs fewer than 25%.

During the last HQ survey team review, it was noted that the financial management organization rather than the procurement organization was responsible for overage NDPRs. A consideration was noted by the survey team, recommending that this function be transfer to the procurement organization. KSC accepted and complied with this recommendation.

Files were reviewed to determine whether performance-based contracting methods were utilized. NASA Form 507s indicated that these procurements are 100% performance based. The SOWs were written in a completion form nature utilizing clear, specific, and objective terms for contract completion. There was evidence of measurable performance standards in some SOWs. Performance incentives were included through an award fee structure and met the requirements of FAR 37.601. No files were found to be inappropriately coded as PBC. The surveillance plans document how the Government will monitor contractor performance against the established contract performance requirements and standards. KSC is in compliance with this requirement.

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

The survey team reviewed a sample of contracts where multiple awards were made in accordance with FAR Part 16 and in compliance with PIC 00-24. Contracts reviewed included construction, architect and engineering (A&E), launch services, and supplies of which two were awarded under a GSA Multiple Award Schedule (MAS) Contract. Individual delivery orders placed against these contracts were competed. Most of the contracts reviewed where delivery order competition existed among the selected multiple awardees were in the area of construction and one contract for the NASA Launch Services (NLS). Delivery Orders issued under these multiple-award contracts were awarded under a Best Value Selection among the awarded contractors. The documentation associated with these awards is well documented in determining the best value for the Government. The IDIQ multiple-award contracts meet the requirements of FAR 16.503, 52.216-21 and 22. Per FAR 16.504, 16.505 and 52.216-18 and 19, the ordering and delivery order minimum and maximum limitations are stated in each of the contracts.

KSC has a well documented guidance on Expendable Launch Vehicle (ELV) Launch Services Task Order (LSTO) process, KDP-P-2403, Rev A, located in their KSC Business World website.

It is should be noted that over the past 18 months, Boeing, one of two NLS contractor is under sanction by the Air Force and any awards to Boeing must be approved by HQ. Therefore, competition has been limited over the past 18 months. However, this is at no fault by the procurement office not to compete. The NLS contract allows for two on-ramps per year to allow other aerospace competitors to submit their proposals for award consideration. This allows for the opportunity to increase competition among the selected multiple awardees.

Determinations to make delivery order placements without competition were limited to existing A&E contractors in which delivery orders are placed in accordance with FAR Part 36. All requirements of the solicitation were in accordance with 36.602-3, 36.602-4, and NFS 18-36.602-4. These files were organized and well documented.

Orders placed against the GSA MAS contracts were competed and followed the procedures under FAR Part 8.4 and FAR Part 13.

Four contract files were reviewed for compliance with FAR 16.4 and NFS 1816.405-2 regarding CPAF contracts. This included files for 8 performance evaluation periods. KSC is following FAR and NFS requirements that apply to CPAF contracts. The files reviewed included comprehensive award fee plans that addressed technical, cost and schedule considerations in accordance with the guidelines set forth in the NFS. All of the award fee evaluations reviewed followed their corresponding award fee plans and were very comprehensive and provided a well-documented analysis of the evaluation for each award fee period that was reviewed. Several of the files included minutes of the performance evaluation board meeting which provided further insight into the deliberations and the justification for the ratings. Some of the files contained letters identifying areas of emphasis which were provided to the contractors prior to the start of the evaluation periods.

The NFS requires that the Fee Determination Official's (FDO) rating for both interim and final evaluations be provided to the contractor within 45 days of the end of the period being evaluated, and that any fee payments be made no later than 60 calendar days after the end of the period being evaluated. Out of the 8 performance evaluation periods reviewed, 6 went beyond the 45-day period by several days. The contracting officers interviewed stated they strived to provide the FDO letter for signature in a timely manner, but that the FDO's were not always timely in signing the letters. The delays appear to be a function of the review process for the FDO letters. However, even in those instances that went beyond the 45-day period, payment was made well within the 60-day limit, with the exception of one instance which was one day late.

Eight contract files were reviewed for compliance with FAR 42.15 and NFS 1842.15, including 15 evaluation periods. All files contained the required NF 1680 forms.

NFS 1842.1502 requires that within 60 days of every anniversary of the award date of a contract having a term exceeding one year, contracting officers must conduct interim evaluations of performance on contracts subject to FAR 42.15. With two exceptions, all annual performance evaluations were started within the 60-day time period. In the case of the one exception, no evaluation was completed for the first year of contract performance. The first evaluation covered the first two years of performance, and was commenced within the 60-day time period. Due to conflicting dates in this specific file, it was difficult to determine when the 60-day period actually started. Specifically, the cover page of the contract stated the effective date as 9/20/01; the period of performance clause (F.3) stated that the contract base period started 10/1/01; and the NF 1680 covered a period commencing 9/12/01.

Although most of the performance evaluations began within the 60-day period, most were not completed within that period. In many instances, the delays resulted from delayed responses from the COTR's or from the contractors. In some instances the evaluation forms lacked or provided minimal narrative justification for the ratings. In some instances the evaluation forms in the files were not signed or dated by the contracting officers, and there was no evidence in the file that the results had been posted to the Past Performance Data Base (PPDB). However, a review of the PPDB reveals that when evaluations are completed, the data has been entered into the PPDB. It was noted that 3 out of the 4 award fee contracts reviewed in the CPAF contract area had current evaluation data posted in the PPDB.

PRICING - FINANCIAL - AUDITS

Several competitive and non-competitive technical evaluations were reviewed to ensure that the documentation complied with the requirements established in FAR and NFS 15.404. These files were reviewed considering the adequacy of technical evaluation of cost proposals. These files included contracts and contract changes.

In the 2002 KSC Survey Report, KSC received a consideration recommending that the contracting officer's request for technical evaluation to provide instructions to the evaluator are specific enough to ensure that an evaluation addresses the necessary requirements; and a contract modification was provided as a potential model.

Based on the current files reviewed, it appears improvements are still necessary. The simplified acquisition files reviewed provided adequate detail stating the quote was technically acceptable. A review of technical evaluations for large competitive procurements, SEB/SEC, indicated that the technical organization has well documented strengths and weaknesses associated with an offeror's technical proposal. However, those files in between, in general, provided a limited technical evaluation with inadequate supporting cost analyses and insufficient detail. The costs, labor hours and materials were stated as being acceptable without providing the basis for acceptance.

The Survey Team reviewed ten contract files for adequacy of cost and price analysis. Overall, those files requiring price analysis, simplified acquisitions specifically, were adequately documented and supported the price reasonableness of negotiated prices (see survey regarding Simplified Acquisitions).

Those files requiring cost analysis under the SEB/SEC procedures provided very good documentation and rationale. All files requiring cost analysis provided support documentation for rates based on DCAA audits as well as providing the structured fee approach Form 634 for the basis for profit. However, these elements as they supported cost rationale were not always discussed in sufficient detail in the negotiation memorandum as required by FAR 15.406-3. Of those files reviewed requiring cost analysis, which were not utilizing SEB/SEC procedures, the supporting documentation provided was insufficient and inadequate.

Detailed cost analysis was not always provided as required for subcontracting costs, travel costs and material costs. Other direct costs were generally accepted based on technical evaluation acceptance and cost analysis was not always performed.

Files were reviewed to ensure that Contracting Officers were utilizing the Structured Approach in Profit/Fee Objectives as required in 1815.404-4, when applicable. One file, which did not cite an exception, did not have an NASA Form 634. Three files used NASA Form 634 to appropriately determine profit or fee objectives; however, there was no explanation offered to justify assignment of other than the normal value in accordance with 1815.404-471-1.

The Set Fee Initiative (SFI) is an approach to establishing fee on selected contracts. NASA pre-establishes a fee amount or percentage in the solicitation rather than having contractors propose fee amounts. The contractors are 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 KSC Procurement Office has correctly implemented the Set Fee Initiative. KSC's procurement office utilized the Set Fee Initiative on two competitions: The Life Science Services Contract, awarded in 2001, and the University-affiliated Spaceport Technology Development Contract, awarded in 2003. In both cases they appear to have correctly followed the current guidance on the initiative. Both of the previous contracts had very low fees, one was 3% and the other was 4%. The set fee initiative has given the current contractors the opportunity to earn a more reasonable fee, 7.75% in the first case and 7.5% in the second case. The set fee percentages contained in the RFP's were established using the structured fee approach, as well as consideration of other factors specifically related to the requirements of the procurements. In both cases the offerors were cautioned against proposing less than the set fee amount, but not precluded from doing so if they provided appropriate rationale. On the Life Science Services contract, the winning offeror actually proposed slightly higher than the set fee specified in the RFP.

In interviews with the KSC CO's who worked the Set Fee Initiative contracts; their reactions to the initiative were mixed. In both cases the CO's felt it was useful from the standpoint of making the contracts more profitable for the contractors. However, it was difficult to determine if the increased profitability translated into better performance, since in both cases the contractors performed in an excellent manner on the predecessor contracts as well as the current contracts. One of the CO's did believe that the use of the set fee did increase competition, although, again, this is difficult to measure.

The Set Fee Initiative Guidance from NASA Headquarters is very limited and the FAR is silent on this subject. The primary reference document: "At a Glance: Procurement Innovations" is not extensive and does not provide any detail on the process.

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

NFS 1842.7201(a)(1) requires contracting officers to monitor contractor cost reports on a regular basis to ensure cost data reported is accurate and timely, and to pursue adverse trends and discrepancies discovered in cost reports through discussions with financial and project team members. All but one of the files were documented to show contracting officer review and/or analysis. Documentation ranged from simply a signature on the face of the 533 noting it was reviewed, to spreadsheets showing the cost data was being analyzed, to a form showing 533 due dates, dates received, accuracy data, and any discussions with the project, resources, and/or contractor personnel. There was no standard practice being used, just whatever the contracting officer considered necessary due to lack of any specific guidance. Interviews with most of the contracting officers did disclose that they were aware of the NFS requirements, were diligent about complying with the requirements, but were not sure what was necessary to document the file.

Follow-up on KSC DCAA reportable audits is being effectively managed. KSC's Acquisition Management Office is responsible for tracking DCAA audits in the online Contract Audit Tracking System (CATS). Each DCAA audit is entered into CATS with a target resolution and target disposition date and is updated quarterly. This process is documented in a KSC Documented Procedure, KDP-P-2079, Revision C.

The Survey Team representative reviewed the most recent KSC Quarterly Contract Audit Status to NASA Headquarters, for the first quarter of FY 05. As of 12/2004, KSC had 7 open reportable DCAA audits, and had closed 3 others within the first quarter of FY05. All 10 of these audits were delegated to DCMA for disposition. Up-to-date Reportable Contract Audit Follow-up forms containing the current status of the 7 open audits were provided to the Procurement Survey Team, as well as for the three that were dispositioned that quarter. Only one of the reportable audits was over age as far as its target resolution date. However, issues precluding resolution were documented in the Reportable Contract Audit Follow-up form for that audit.

The Survey Team representative also discussed follow-up on Office of Inspector General (OIG) and General Accounting Office (GAO) audits with a representative of the Acquisition Management Office. KSC has a KSC Audit Liaison Representative in the Safety and Mission Assurance Office who is responsible for tracking OIG and GAO audits. When there are OIG or GAO audits that affect the procurement office, the Audit Liaison Representative notifies the Procurement Office Point of Contact, who then disseminates the information and coordinates any necessary actions within the Procurement Office.

The 2002 KSC Procurement Survey Review contained a Consideration that CO's should comply with the requirements of NFS 1842.73 for insight into DCMA reportable audits affecting NASA contracts. Half of the CO's queried regarding this subject stated that they meet periodically with the ACO's with delegated responsibilities under their contracts, and that at these meetings the ACO keeps them apprised of any open audit issues that might affect their contracts. The CO's who do not get this information stated that they have tried to get the information, but that the DCMA ACO's have not been very responsive to their inquiries or have minimized the importance of providing this type of information on smaller value contracts.

Of the Contracting Officers interviewed, all but one had requested a copy of the contractor's CIPR, as evidenced either by file documentation or stated during the interview. However, none of the CO's had a copy of a CIPR in their files. In one instance the CO had a copy of a draft CAS finding regarding a CAS non-compliance which was discovered during the CIPR. In that case, the CO fully understood the issue, which had to do with under-funding of the contractor's pension fund, fully understood the impact to the contract, and tracked the status of the issue via monthly meetings with the DCMA ACO and DCAA. The ACO for this contract also gives the NASA CO a status of the CIPR during monthly status meetings.

The review of cost reimbursable service contracts indicates that offerors' proposed compensation plans are evaluated in accordance with NFS 1831.205-670. The plans are being evaluated to determine the reasonableness of all categories of labor and the compensation plans of appropriate subcontracts are also being reviewed, during the proposal review phase of non-competitive and competitive procurements. However, KSC is not in compliance with the requirement at NFS 1831.205-670 to evaluate contractor compensation on cost reimbursement service contracts at least every 3 years after award. Of the contracts reviewed by the Survey Team representative, no reviews had been performed on any of the service contracts in place for 3 years or more.

WEAKNESS:

GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS,
AND OTHER ISSUES

The Glenn Research Center (GRC) is responsible for award, administration and closeout of grants and cooperative agreements in support of KSC requirements. Documents are reviewed by KSC personnel to insure all required documentation is provided and are correct prior to release to GRC.

KSC currently has three open cooperative agreements. Two awards were made to commercial organizations, one by NRA selection and one non-competitive (Section D of the Grant Handbook). One award was made to a University (Section A of the Grant Handbook) and was an unsolicited proposal (l1260.17 Evaluation and selection of unsolicited proposals). These grants were awarded and administered in accordance with the current NASA Grants and Cooperative Agreement Handbook.

All three files were multiple-year awards. One file added special conditions outside of the Grant Handbook without providing approval of this change in the file. This file added paragraphs under special conditions regarding Multiple Year Grant/Option to Extend the Term of the Grant, Authorized Changes, Invoices and Payment and Certification for Services and/or Receipt of Supplies. The change or addition of special conditions of the Grant Handbook requires documented approval.

Congressional notification was not provided in two of the three files. Headquarters may have provided the congressional notification for the NRA award; if so, a statement to that effect should have been provided in the file.

All three awards were made using a KSC form and not the official NF1687 as required by Section § 1260.15, Format and Numbering of the Grant Handbook. The required Publications and Reports form (Exhibit G of the Grant Handbook) was not made a part of any of the cooperative agreements. Disbarred report, CCR, Vets100 reporting was not provided in all files.

Detailed cost analysis was not performed on any of the three files. The technical evaluations were not in sufficient detail to provide a basis for acceptance (§1260.11 Evaluation and Selection). The Justification for Acceptance of an Unsolicited Proposal (JAUP) was not provided for the non-competitive award.

KSC will no longer be administering grants and cooperative agreements upon the closeout of the remaining three.

The Survey Team reviewed four Phase I and two Phase II SBIR awards. KSC awarded 27 SBIRs in 2004. KSC currently administers 22 awards.

All SBIR contracts are awarded through the SBIR Electronic Handbook. All contracts reviewed were awarded on or before the date specified in the electronic SBIR Handbook. All SBIR contracts awarded met the eligibility criteria. All awards reviewed were in compliance with the requirements and limitations set forth for the program. A payment summary sheet, developed by KSC, is an excellent tool for tracking progress payments. All files were well organized.

All SBIR awards reviewed contained a technical evaluation and the appropriate representations and certifications. The technical evaluation is a part of the SBIR electronic handbook. However, the 2002 KSC Survey indicated that this form was not in adequate detail to provide the basis of acceptance.

The NFS waives the requirement for the submission of cost or pricing data when awarding SBIR contracts. Additionally, the dollar value of SBIR awards is capped. KSC does an outstanding job with providing DCAA audit information and the structured profit form 634 for cost analysis purposes. SBIR Phase I awards are selected competitively and Phase II awards are based on technical review and acceptance of the Phase I effort. All Phase I negotiation memorandums stated that the contractor's price was evaluated and accepted competitively; and thus, acceptance of cost was based on competition and no detailed cost analysis was performed providing the basis for acceptance. The files reviewed had no cost analysis to provide basis for acceptance for cost items such as research partners, subcontractors, consultant services or high-dollar material items, some of which might be evaluated with a more detailed technical evaluation.

The Survey Team evaluated each memorandum for negotiation, price negotiation memorandum and pre-negotiation memorandum. KSC does an outstanding job of providing detailed background information including the authority to contract, the purpose of the Phase I or detailing the relationship of a Phase II to a Phase I, and that the procurement is being handled using the electronic handbook process. All necessary CCR, IPAR and Excluded Parties reporting was made in all files.

Many of the items on the required checklist provided by the handbook are only available in the handbook and are not available hard copy in the file. Therefore, the checklist should indicate which tabbed items are available in the file (indicated by a checkmark) and those items available only in the Handbook (indicated by EH for electronic handbook). Three of the files reviewed did not indicate the electronic handbook items.

The survey team reviewed 17 acquisition files ranging from $8K to $1.6M focusing on the various areas of the acquisition cycle. Approximately 70 percent of the files reviewed were under the commercial acquisition procedures in accordance with FAR Part 12. The files reviewed reflected the provisions/clauses found per FAR 12.302. Overall the files were well organized and properly documented. Sixty-five percent of the files were awarded within 30 days. Files greater than $25K were properly publicized in the Commerce Business Daily. One file was reviewed which waived the synopsis requirement (FAR 5.202(a)(2)) under the authority of 6.302-2 Urgent and Compelling. The justification under this authority was well justified and appropriately documented. At least half the files reviewed were tabbed and contained a file checklist making it easy to find the required documentation. Over seventy percent of the files contained NASA form 1707 certifying the NPG 7120.5, Electronic and Information Technology Accessibility (EIT), and Affirmative Procurement (AP). More than 85 percent of the files contained an abstract. Over 80 percent of the files contained a pricing memorandum. Purchase Orders reviewed over $100K showed evidence of Market Research in accordance with FAR Part 10 requirements with the exception of one which was awarded under a GSA schedule. Of the 17 files reviewed, 3 files contained a set-aside consideration waiver per 19.502-2(a) signed by the Contracting Officer and the Small Business Specialist and 1 file contained no documentation.

The survey team reviewed various aspects of contract administration on JBOSC, including follow-up on the issues raised by the last survey in May of 2002. In performing the review of JBOSC, the survey team looked at recent contract modifications, undefinitized contract actions, and award fee evaluations in addition to other contract management issues. In general, contract modification files were found to be thorough and well organized and contained the necessary documentation to support the particular modification.

The survey team reviewed modification 135 of the contract which provided the contractor equitable adjustments to the contract in response to four Cost Impact Proposals (CIP's) submitted by the contractor. This modification also converted the 5-year option which was on the contract into one one-year option and two two-year options. The pre-negotiation position memorandum and the negotiation memorandum were very well documented by the contract management team. It was evident that the contract management team kept KSC senior management and NASA Headquarters apprised of the progress of these negotiations. The negotiation team employed innovative solutions and strategies to arrive at a mutually beneficial settlement to these very complex negotiations.

Pursuant to FAR 19.702(a)(1) submission of a revised subcontracting plan is required for modifications exceeding $500K. Adherence to this requirement for each JBOSC change exceeding $500K would necessitate nearly continuous updates to the plan, given the large volume of high dollar change traffic on that contract. In March of 2003 the CO requested a deviation from FAR 19.702 to allow plan revisions on an annual basis to address changes that have occurred during the previous year. The response from the NASA Office of Procurement dated September 25, 2003 allowed the contract management team to utilize a revised update procedure for semi-annual updates to the subcontracting plan with some limitations.

The contract management team is also commended for the innovative approach they utilized to resolve complex cost evaluation problems during award fee period 7 of the contract. This solution they devised protected the Government's interests while allowing the contractor to be fairly evaluated during the period in question.

During the last procurement survey, KSC was given a consideration that stated "the current level of procurement staffing does not appear to be adequate to support the workload related to this complex contract that consolidated seventeen separate support contracts." In response to this consideration, additional experienced procurement personnel have been assigned to work on the JBOSC. The team lead for this activity feels that the necessary resources are there to support and effectively manage the contract.

KSC has two contracts for administrative or office support. The contract files were reviewed for compliance with FAR Part 37 regarding personal/non-personal services. In the first contract file, sensitivity to the issue was evidenced in the legal comments on the solicitation and the resolution provided by the procurement office. The statement of work (SOW) was revised, to some extent, to adequately describe the work in order to avoid the appearance of personal services. A copy of the write-up from the 2002 KSC Procurement Survey was included in the file. This write-up included the steps that had been taken to ensure there was no appearance of personal services in a previous contract. The write-up included a strength for the proactive approach taken by KSC to avoid personal services contracting, and the measures in place to avoid even the appearance of personal services. This write-up was included in the file as a reminder to continue to follow the same practices in the follow-on contract.

The contractor personnel for this contract are located in various offices depending on the workload. In instances where several contractor personnel are in a separate office, their areas are specifically marked. In instances where personnel are located in offices with their government counterparts, they are physically separated by cubicles, however, the only way to tell a contractor from a civil servant is via the individual's badge. There is a contractor program manager and deputy program manager located onsite, as well as contractor office leads to oversee employees and performance of work in the various areas. A discussion with the COTR and the contractor managers provided evidence of continued sensitivity to the issue of personal services.

The contract file contained a Quality Assurance Surveillance Plan developed and implemented by the COTR as a part of the contract administration and monitoring activities. Section 5 - Risk Management addresses avoidance of the appearance of personal services and the measures that have been put in place. This includes minimizing direct interaction between government and contractor personnel; continuous monitoring to ensure direct contractor management only derives from the onsite contractor leads; providing non-routine work requirements to the onsite contractor leads specifying outcomes vs. direction of how to accomplish the work; identifying the contractor name in the heading of all contractor emails; and requiring display of contractor badges at all times.

For the second contract, a legal review was not required due to the small dollar value. It was noted that the revisions made by legal to the SOW for the first contract included removal of the term "including but not limited to" when describing the specific tasks to be accomplished under the firm fixed price contract. This term was also included in the second SOW, but was not removed even though the CO was the same and had the benefit of the results of the prior legal review.

For the second contract, two contractor personnel provide the required services. The contractor program manager is located onsite. The contractor personnel are located in a building separate from the contractor's onsite manager. Their work area is marked as a contractor area. Their general day-to-day assignments are provided through their NASA counterparts where they are located. Their emails contain a heading with their company name. A discussion with the COTR and the contractor manager provided evidence of sensitivity to the issue of personal services.

Seven interagency agreement files were reviewed for compliance with FAR 17.5 - Interagency Acquisitions Under the Economy Act; NFS 1817.70 - Acquisitions with Military Departments; and NFS 1817.72 - Interagency Transactions. The review was to ensure compliance with the FAR and NFS requirements for a Determinations and Findings (D&F), including content (see FAR 17.503 and NFS 1817.7202); use of the Space Act as authority (see NFS 1817.7201); use of a NASA-Defense Purchase Request (NDPR) (NASA Form 523) (see NFS 1817.7002); inclusion of a payment provision (see FAR 17.505 and NFS 1817.7203); and inclusion of the Property Administration and Reporting clause where applicable (see NFS 1817.7002-4).

All files reviewed contained the required D&F, but only three D&F's contained all of the information required by the FAR and the NFS. Missing information included identification of the period of performance and whether the acquisition was a non-competitive follow-on for the same services from the same servicing agency. Only three files cited the Space Act as the authority in the D&F. All others cited the Economy Act, however, three of the files did not cite any authority on the NDPR itself.

All of the files used the NDPR form. Only one of the files contained a payment provision requiring the servicing agency or department to submit a final voucher, invoice, or other appropriate payment document within six months after the completion date of the order. Only one of the two files requiring property contained the Property Administration and Reporting clause.

It was noted in one file that the period of performance was extended several times for one year increments. On two occasions the extension amendment was issued more than two months after the period of performance had expired. In addition, the latest extension extended the period of performance to six years, but no deviation request/approval to exceed the five-year period of performance limitation was evident in the file (see NFS 1817.7201(b) and (c)). Two of the files stated in the D&F that they were non-competitive follow-ons for the same services from the same servicing agency, but did not provide any additional details about the period(s) of performance of the previous order(s) so that a determination could be made whether period of performance deviation requests were necessary.

The survey team reviewed three A&E service IDIQ contracts and four delivery orders covering the various acquisition cycles. All the files reviewed were well organized and documented. The appropriate clauses including safety and environment were included in the contracts. The files reviewed were in accordance with FAR Part 36 and NFS 18-36.

The contract price and estimated fee for producing and delivering the designs drawings and specifications were within the six percent limitation of the estimated cost of construction in accordance with FAR 15.404-4(c)(4)(I) and clause 52.232-22, "Design Within Funding limitations." The IDIQ A&E contracts meet the requirements of FAR 16.503, 52.216-21 and 22. Per FAR 16.504 and 52.216-19, the delivery order minimum and maximum limitations are stated in the contracts.

KSC has an established A&E evaluation board to receive and maintain data on all interested A&E firms per FAR 36.603. There are current files of the SF 254s and 255s qualification data files that are maintained and updated annually per FAR 36.603(d). These files are located in a secured area in the Facilities Engineering Directorate. A procurement official is a member of the board per NFS 1836.602-2. Contractor performance evaluation reports are prepared on the SF 1421 and are filed with the company's SF 254 for each contract/delivery order in accordance with FAR 36.604.

The survey team reviewed six active construction contracts, including several issued under a general construction multiple-award IDIQ contracts. The review included all areas of the acquisition cycle. In general, the files reviewed contained all the required documentations with the exception of the NASA Form 1707 (see reviewer's comments under Environmental Clauses write-up). The files reviewed were all extremely well organized and appropriately placed in the official contract file folder. All the required and applicable clauses including environmental clauses for construction were contained in the contracts reviewed.

Delivery Orders issued under the general construction multiple-award contracts were awarded under a Best Value Selection among the eight multiple award contractors.

The IDIQ multiple-award contracts meet the requirements of FAR 16.503, 52.216-21 and 22. Per FAR 16.504 and 52.216-19, the delivery order minimum and maximum limitations are stated in each of the contracts.

Three modifications on three different construction contracts were reviewed. The files reviewed contained all the appropriate information to support the reasons for the change. The back-up files contained a cost analysis, technical evaluation and a detailed negotiation memorandum supporting a fair and reasonable price including the appropriate justifications to support any time extensions for the construction project. However, the organization of the files is somewhat confusing, since tabs are not used to separate the different documents, which took time to weed through the file to find the appropriate documentation.

The survey team examined a number of construction files to determine if the contracts contained the clause FAR 52.232-5, "Payments under Fixed Price Construction Contracts," and if the requests for progress payments submitted were in accordance with the clause. The files reviewed did contain the current version of the clause. During the last survey team review it was noted that some of the requests for progress payments did not meet all of the requirements of the clause (specifically, information regarding for each subcontractor). The files reviewed during this survey showed evidence that all the required information was contained in the requests for progress payments. One of the files reviewed contained letters from the Contracting Officer denying several requests for progress payments for not having the required information pursuant to the clause.

The survey team reviewed a number of purchase orders and contracts for the inclusion of required environmental clauses. In general, all of the purchase orders and contracts included the appropriate clauses pursuant to FAR Part 23.4, "Use of Recovered Materials."

It was noted during the last survey team review that none of the construction contracts reviewed contained the clause at FAR 52.223-10, "Waste Reduction Program," which is required for the operation of Government owned or leased facilities or for support services at Government owned or leased facilities. This clause is not specifically required for construction contracts, unless NASA requires insight into the contractor's waste reduction program in accordance NPR 8530.1A, "Affirmative Procurement Program and Plan for Environmentally Preferable Products," paragraph 3.2.2.4. However, it was recommended that KSC consider including this clause in all of their construction contracts thereby placing the responsibility for compliance with the EPA's Comprehensive Procurement Guidelines (CPG) on the contractor. Since this last review, KSC has updated their Construction RFO Checklist of required environmental clauses to include FAR 52.223-10, "Waste Reduction Program." All of the construction files reviewed contained this clause with the exception of the eight general construction multiple-awards for general construction files. A modification is currently out for signature to include this clause in the general construction multiple-award contracts.

In addition to the above, KSC's Construction of Facilities (CoF) Project Manager has issued a Blanket NASA Form 1707 for CoF project purchase requisitions. NASA Form 1707 covers the three required certifications for all new acquisitions; NPR 7120.5, "NASA Program and Project Management Progress and Requirements, "Electronic and Information Technology (EIT) Accessibility Compliance," and "Affirmative Procurement". The intent of this form is to cover the required certification requirements in an efficient manner for all CoF projects during the current fiscal year, since all three certifications will be filled out the same way for every CoF project. Specifically, all CoF projects are exempt from NPG 7120.5 requirements; CoF projects do not have any EIT items; and CoF projects meet EPA requirements which include items on the EPA's

Comprehensive Procurement Guideline Lists and will meet the minimum recycled/recovered content. This blanket form was reviewed by the policy office and is currently located on the KSC's website. The form will be updated annually. This is an excellent approach to efficiently cover the required certifications that do not change for CoF Projects. It also insures that KSC's CoF projects require that the design comply with EO 13101, Greening of the Government policy that addresses Affirmative Procurement.
However, the files reviewed did not contain a copy of this blanket form.

Several contract files were reviewed to verify compliance with NASA FAR Supplement Subpart 1823.70 entitled Safety and Health. For clarification purposes, it should be noted that all contracts reviewed in this area had estimated values of $500,000 or more. In accordance with NFS 1823.7001(d), the contracting officer shall insert the clause at 1852.223-75, Major Breach of Safety or Security, in all solicitations and contracts with estimated values of $500,000 or more. All of the files that were reviewed contained this required clause. All of the contracts reviewed should have contained either clause 1852.223-70 Safety and Health or 1852.223-72 Safety and Health (Short Form) depending upon the input received from the technical organization and the safety organization. All of the files that were reviewed contained one of the required safety and health clauses. However, in some instances it appears that the wrong clause 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 into the contract after receiving the concurrence of the center safety and occupational health official(s). There were several 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.

The construction contracts that were reviewed appeared to contain the appropriate safety and health clauses and the contractor had submitted a safety and health plan which had been reviewed by the cognizant safety office. The only deficiency noted was that the approved safety and health plans were not incorporated into the subject contract as required by NFS 1823.7001(c).

KSC has developed a KDP to try to ensure that the procurement of hazardous products and services are reviewed by the Directorate Safety Office to ensure that the appropriate safety and health clauses and provisions are included in the resultant contracts. (KDP-KSC-P-2119) It appears that in some instances, the requisitioners are not identifying in SAP the requirement as hazardous in nature which means the requirement is not routed through the Directorate Safety Office for their review. When Contracting Officers are unsure of the safety and health requirements that should be levied on a contract, they should contact the cognizant safety representative for advice on the matter. There is no evidence that this is being done. These process failures lead to communication breakdowns in the procurement cycle which result in inappropriate safety and health clauses being incorporated into KSC contracts.

Deviation requests were reviewed for compliance with FAR 1.4 and NFS 1801.4. According to the assigned procurement analyst in the HQ Procurement Operations Division, it was noted that KSC has submitted very few requests for deviations or waivers over the past several years. According to the analyst, all submittals have met the requirements of the FAR and NFS and were well documented. Rarely was additional data or clarification needed. All were reviewed and approved at HQ with no issues. Several files were checked to ensure the resultant HQ approval was included in the file. All files included the appropriate approval documentation. It was noted that one contract was awarded with a 10-year period of performance one day prior to the period of performance deviation being approved. It was also noted that the deviation request took approximately six weeks to be approved at HQ, based on the KSC signature date on the initial request.

As of May 2002, KSC had approximately 23 cardholders in the KSC Procurement Office, 133 cardholders outside of the Procurement Office, and 86 approving officials. At the time of this survey KSC has 12 cardholders in the Procurement Office, 111 outside of the Procurement Office and 65 approving officials. KSC annually reviews the justifications in order to provide an effective level of users and approvers. The survey team reviewed all of the current policies, procedures, and records regarding the KSC bankcard program and found it to be extremely well managed, well documented and well reported. The metrics collected and format of reporting are impressive. KSC provides an outstanding website providing extensive information such as the user's guide, instructions on specific bankcard issues, responsibilities and many other areas. It is detailed and offers a team approach to the Program.

The KSC bankcard manager plays a key role in the training, auditing and day-to-day communication that takes place with cardholders and is readily available to users to discuss problems or issues. The bankcard manager maintains a record of each cardholder's designation, credit and purchase limitations, purchase card training; justifications and any changes to the cardholder's limitations.

Refresher training is to be taken every three years as required by NASA HQ. The bankcard manager is also responsible for initial training and refresher training of users and approving officials and updating their records appropriately. KSC has excellent reporting and metrics involving required training. Training is provided both in-house and on-line for both users and approvers.

In 1997, the KSC Procurement Officer put in place a policy that bankcards must be used for purchases of $2500 or less. This mandatory policy has been effective decreasing the micro-purchase workload within the Office of Procurement.

The bankcard manager performs monthly audits as well as the mandatory annual audits. KSC utilizes a KSC specific audit checklist. The bankcard audits have been conducted in a very methodical, thorough manner and the results of each audit, along with the necessary corrective actions, are documented in a report to the KSC Procurement Officer. The 2002 Survey Report recommended a team approach to audits. KSC now has a team in place to conduct audits.

The Survey Team interviewed ten Bankcard holders, one individual from the office of procurement and nine from various technical directorates, as well as a sample of five approving officials. All respondents indicated a general level of satisfaction. All respondents believe the training and audit process are adequate. The infrequent bankcard users find the process unyielding and difficult. Those who use the card frequently fall into two groups, those who believe the system is adequate and those who continue to find issues that cannot be resolved. During the random interviews one individual had not used their bankcard for three years and their corresponding approving official had not taken the required training.

KSC is doing an excellent job communicating issues and updating users across the center. The Procurement office has established Process Leads to support end users in their efforts. KSC also provides training sessions quarterly on IFMP/SAP issues, has a specific IFMP/SAP website available to help end users find solutions and has established a newsletter strictly to pass along IFMP/SAP issues. IFMP/SAP aids are provided on the Office of Procurement Homepage to further support the resolution process. KSC has a limited number of problems due to excellent communication established with end users, as well as cross-functional communication with Procurement, Resources and the Financial Office. The Procurement Process Lead provides one-on-one coaching and problem resolution, and thus maintains communication.

KSC has weekly telecoms with the Competency Center and the other centers to discuss issues and find solutions. They also work with other centers to establish policies to resolve IFMP/SAP systemic problems.

As with any system, infrequent users find the system to be substantially more difficult than frequent users. Data is being gathered to show the correlation between infrequent use of the system and problems with purchase requisitions. This data will be provided to the center in order to make a determination as to the appropriate number of requisitions in order to significantly reduce the errors with purchase requisitions. The reduction of infrequent users may correlate to fewer errors.

KSC Procurement Office is finding ways to manage the difficulty in de-obligating funds in the IFMP/SAP system. They have set up a tracking and reporting system for all de-obligations. The majority of issues are resolved during business hours and only a few issues must be resolved after hours due to the system. The Process Lead is responsible for de-obligations requiring an MR11. This process involves submitting a proper MR11 through the Service Request (SR) function of IFMP/SAP. KSC has established policies in order to deal with the cumbersome process of de-obligating funds.

Simplified Acquisitions are primarily processed outside of the IFMP/SAP system and only the obligation/cost information is provided in IFMP/SAP.

Data Consistency between AMS and SAP was an area reviewed during the September 30, 2004 KSC OP Self Assessment. Fourteen files were found to be missing from AMS. All the files reviewed had AMS input sheets with distribution sheets. Approximately two-thirds had been initialed for input by OP-AM, and the remaining one-third had not been initialed for processing through OP-AM. It is likely that the implementation of FPDS-NG will limit the recurrent of this error. In the meantime, OP-AM will ensure entry into the system

The survey team interviewed 15 contract specialists. In general, the level of understanding of the system has increased. Problems still exist and the system is dynamic. Unfortunately, the reputation of the system as unforgiving remains.

In order to ensure that the organization as a whole is functioning well, the KSC Procurement Office compiles the following metrics reports: Purchase Request Line Items (monthly), New Awards (monthly), Socioeconomic Goals (monthly), Customer Satisfaction (semi-annual), Over Age Unliquidated Obligations (ULO's) (monthly), Grievances and Arbitrations (quarterly), Undefinitized Contract Actions (UCA's) (monthly), and Bankcard Transactions (monthly). The organization grades itself on the reported data using red, yellow, and green arrows to define how the organization is performing in each area. The arrows either point up to indicate improved performance, down to indicate degraded performance, or horizontal to indicate static performance. These metrics are reviewed monthly with the Procurement Officer and then input in the NASA Management Information System (NMIS). The metrics charts for ULO's, PR's, and New Awards, as well as the raw data behind them, are sent out to the Procurement Office Chiefs and Leads on a monthly basis for their use in managing workload and so that they are aware of any issues with any of the metrics. The UCA data is reviewed monthly at the Procurement Staff meeting in order to highlight issues and focus management attention on problem areas.

The majority of the metrics data is collected using SAP. The KSC SAP Subprocess Lead stated that it is easy to pull the necessary data from SAP and that the SAP system facilitates building the necessary Excel spreadsheets.

The metrics are validated on an annual basis, in accordance with KDP-KSC-P-2137, Metric Data Validation Procedure.

NASA Headquarters and the Centers have worked a collaborative effort with other agencies to implement the Federal Procurement Data System-Next Generation (FPDS-NG). On January 1, 2005 NASA's was required to have all of its procurement data, including grants, cooperative agreements, etc., loaded into FPDS-NG for the availability of Congress, the Administration, and the public.

In the past, HQ reviewed data before it was made externally available and made adjustments in concert with the Centers before the data were released. With the stand-up of FPDS-NG this quality assurance function is no longer part of the data flow. The Centers are now totally accountable for the timeliness and accuracy of their data submission to FPDS-NG.

The survey team reviewed the KSC FPDS-NG Processing Procedures to identify the internal controls pertaining to the collection and submission of data to FPDS-NG.

The Application Administrator provided the KSC written internal controls process and procedures, which were documented and developed through their informal practices. These process and procedures are a work-in-process that will be strengthened where necessary.

The Acquisition Management (AM) Office of Procurement (OP) maintains the OP Internal Policies and Guidelines, the Kennedy Documented Procedures (KDPs) and the KSC unique clauses. These are available electronically on the OP homepage as all as through Business World and VPO. The KSC Procurement Office is continuously updating procedures to reflect the current regulatory requirements.

Since the 2002 Procurement Management Survey, KSC OP has reduced their documented policies from 31 to 17 and their KDPs from 52 to 40. The procurement policies and procedures are a fully integrated part of the KSC system of ISO documented work instructions, and consist primarily of process flow charts, which make reference to a higher level documents such as the FAR, NASA FAR Supplement and other KSC Directives. Unique clauses are another area the acquisition management office maintains. The number of unique clauses was not reduced in 2004 and stands at 144. The Contract Management Module (CMM) team is currently reviewing all unique clauses for determination of need.

The KSC OP homepage offers a host of agency procurement web applications, programs, procurement tools and other helpful information links at a central location.

The reviewer considers the KSC organization of policies and procedures to be a very effective approach. The procedure flowcharts in the KDPs are also a very effective means of clearly communicating procurement procedures.

The Office of Procurement trains employees to utilize VPO. VPO is linked from the OP Homepage and contains links to all KDPs. The KSC Procurement Office is continuously updating VPO to reflect the current regulatory requirements and requests input from procurement personnel on templates, links or any issues that would enhance VPO capability. Generally, the procurement staff utilizes the VPO as a primary referenced tool when their need requires. The OP homepage and Business World are secondary tools. For the most part, it was found that the matrices and mats are updated and maintained well and the data is reliable. Of the contract specialists contacted, sixty percent indicated that they used VPO as their primary procurement reference tool. The remaining forty percent surveyed indicated that they were aware of VPO but it was not utilized as a primary tool because their current position did not require it. Half of those who did not use VPO as a primary tool utilize VPO as a secondary reference tool.

The KSC Office of Procurement has performed semi-annual self-assessments under the authority of, and using the procedures outlined in, the current NASA Self-Assessment Guide. The last three self-assessments have also incorporated references to the KSC Documented Procedures (KDPs) into the checklists in accordance with direction from the KSC Procurement Officer dated June 26, 2000. There is evidence in the file that KSC reviewed eight percent of new simplified acquisitions and five percent of all other actions, as required.

Review topics for the self-assessment are generated by the Acquisition Management Office utilizing items identified from previous self-assessments, issues identified during procurement reviews, and other various sources. This list is provided to the Procurement Officer and the Chiefs of the offices within the procurement organization for their review and concurrence. From this approved list, a master checklist is developed by the Acquisition Management Office to aid the review team in performing a consistent and structured approach in reviewing the selected contracts.

The self-assessment files as a whole were exceptionally thorough and well organized. The results of the self-assessments were conveniently located in a summary report to the KSC Procurement Officer, easily located at the front of the file. The self-assessments also contain individual office findings reports which provide each office within the procurement organization a listing of the findings identified within their organization by contract number. The self-assessment folder also contains individual contract review sheets. These review sheets were very well documented.

Once the self-assessment has been published by the Acquisition Management Office, office staff meetings are typically utilized to ensure that corrective actions are initiated to resolve issues identified by the self-assessment.

1. Scope of Review

NASA's John F. Kennedy Space Center (KSC) has purview over the Agency's launch and payload processing systems. Approximately 40% of its FY 2004 procurement budget was awarded to small and small disadvantaged businesses, $170M in direct awards and $168M in subcontract awards. The Center's Small Business Specialists (SBS) and its prime contractor community are committed to providing small businesses maximum opportunity to compete for and participate in the Agency's business initiatives. This section discusses key elements of KSC's Small Business Program and the factors associated with its assigned socioeconomic goals.

2. Organizational Structure and Staffing

The Small and Disadvantaged Business Utilization Program is an integral part of the Agency's business activities. At KSC, operation of the program resides in the Central Industry Assistance Office (CIAO), which is located outside the Center's main gate to facilitate visitor access. The CIAO is organizationally a part of KSC's Procurement Office, with one Small Business Specialist reporting directly to the Procurement Director and the second Small Business Specialist (a Procurement Analyst) reporting to the Chief, Acquisition Management Office, who in turn reports to the Procurement Director. The Small Business Specialists are responsible for the day-to-day operation of the small and small disadvantaged business program. They share and coordinate the office's workload, which includes reviewing purchase requirements for placement into the small business program, evaluating subcontracting plans, providing counseling and outreach, implementing NPD 5000.2A procedures, ensuring SF 294 and SF 295 reporting, resolving compliance issues, participating in procurement planning, and enhancing the program to make it more responsive to constituent needs.

CONSIDERATION:

3. Industry Assistance Priorities

The KSC Small Business Specialists are charged with conducting all aspects of the Socioeconomic Program, as directed by regulation and the Assistant Administrator for NASA's Office of Small and Disadvantaged Business Utilization. Programmatic priorities include (1) providing oversight of prime contractors' subcontracting programs, to ensure compliance; (2) counseling both large and small firms interested in doing business with KSC and advising them on the importance of teaming relationships; (3) engaging in acquisition planning, analyzing statements of work, and providing guidance on small business participation on work packages; (4) monitoring periodic progress and annual results of NASA and prime contractors' meeting negotiated socioeconomic business goals; and (5) participating in a broad range of outreach activities.

In 1995, in its effort to promote closer relationships and better communication among NASA-KSC, the KSC prime contractors, and the small business community, the CIAO established biweekly Joint Counseling sessions. The sessions are forums for exchanging ideas, discussing issues and concerns, and disseminating general information relative to the mandated socioeconomic programs. The sessions also provide counseling and support to small businesses seeking to market NASA, by introducing new vendors to KSC's prime contractors. Four small businesses are individually scheduled to present their capabilities to the prime contractors' Small Business Liaison Officers (SBLO) and KSC Small Business Specialists at each session, and each small business receives advice and information specific for the product/service it offers.

The CIAO's working relationship with the SBLOs of its large prime contractors focuses on building a strong supplier diversity program. Boeing Corporation and Space Gateway Support (SGS) are regular participants in the Joint Counseling sessions, as is United Space Alliance (USA), which, although a Johnson Space Center prime contractor, has a large presence at KSC ($802.63 M in FY 2004). The Small Business Specialists participate in and support the meetings and procurement expos for small businesses sponsored by these large companies as well as those sponsored by regional and local organizations. In addition, the CIAO sponsors a Business Opportunities Expo every October, attendance at the October 2004 event exceeded 1,200 participants.

STRENGTH:

4. Center Prime Contractor Socioeconomic Business Goals

	Goal 2002	Actual 2002	Goal 2003	Actual 2003	Goal 2004	Actual 2004
Obligations (in $M)	$ 800.0M	$ 842.1M	$ 750.0M	$ 803.4M	$ 840.0M	$ 851.7M
SB (in $M)	$ 88.0M	$ 102.7M	$ 90.0M	$ 127.2M	$ 150.0M	$ 170.0M
SB (in %)	11.0%	12.2%	12.0%	15.8%	17.9%	20.0%
SDB - 8(a) (in $M)	$ 38.0M	$ 39.1M	$ 39.0M	$ 28.2M	$ 30.0M	$ 34.6M
SDB - 8(a) (in %)	4.8%	4.6%	5.2%	3.5%	3.6%	4.1%
SDB - Non 8(a)(in $M)	$ 3.2M	$ 1.1M	$ 1.0M	$ 3.5M	$ 3.5M	$ 1.9M
SDB - Non 8(a) (in %)	0.4%	0.1%	0.1%	0.4%	0.4%	0.2%
WOSB(in $M)	$ 20.0M	$ 14.1M	$ 13.0M	$ 20.8M	$ 21.0M	$ 36.8M
WOSB (in %)	2.5%	1.7%	1.7%	2.6%	2.5%	4.3%

KSC exceeded its small business prime contractor socioeconomic goals for FY 2002, FY 2003, and FY 2004 but has had mixed success in meeting its 8(a), SDB, and WOSB goals for those years. The table above notes shortfalls in the following categories: 8(a) in FY 2002 (although actual achievement in dollar amount is greater than the goal) and FY 2003, SDB in FY 2002 and FY 2004, and WOSB in FY 2002.

Of note is KSC's implementation of SBA's Small Business Competitiveness Demonstration Program, which requires unrestricted competition in four industry groups, two of which are construction and architectural & engineering (A&E) services. Procurements over $3M are designated full-and-open, and procurements under $3M Set-asides, generally for 8(a) companies. KSC has no Small Business Set-asides in construction or A&E. However, since most of the Center's construction projects are with local firms, many of the full-and-open solicitations are prime contracts awarded to local small businesses.

KSC reports no bundling of contracts in FY 2002, FY 2003, and FY 2004.

5. Center Subcontractor Socioeconomic Business Goals

	Goal 2002	Actual 2002	Goal 2003	Actual 2003	Goal 2004	Actual 2004
Total Sub (in $M)	$ 400.0M	$ 425.0M	$ 390.0M	$ 220.0M	$ 208.0M	$ 234.0M
SB	$ 188.0M	$ 330.0M	$ 165.0M	$ 136.0M	$ 134.0M	$ 168.0M
SB (in %)	47.0%	77.6%	42.3%	61.8%	64.4%	71.8%
SDB	$ 46.0M	$ 202.0M	$ 52.0M	$ 72.0M	$ 72.0M	$ 77.0M
SDB (in %)	11.5%	47.5%	13.3%	32.7%	34.6%	32.9%
WOSB	$ 68.0M	$ 95.0M	$ 63.0M	$ 31.0M	$ 33.0M	$ 41.0M
WOSB (in %)	17.0%	22.0%	16.2%	14.0%	15.9%	17.5%

As can be seen in the table above, KSC has exceeded--in some cases substantially so it's subcontracting goals in each small business category in FY 2002, FY 2003, and FY 2004. The exceptions are the WOSB goal for FY 2003 and the SDB goal for FY 2004, which the Center missed by 2.0% in both cases. However, with respect to the latter, the total dollar amount achieved is $5M more than the dollar amount projected as the SDB goal. Also made obvious in the table above, is the considerable difference between the total subcontracting goal and total actual dollars spent in FY 2003. The Columbia Shuttle accident, in early 2003, and an aftermath during which contracted work may have declined while a broad investigation was launched is a possible contributing factor

Subcontracting goals are required on all procurements over $500K and over $1M for construction procurements. The CIAO Team reviews all procurement requests, conducts a review of the proposed RFP, and recommends goals for Small Businesses (SB), Small Disadvantaged Businesses (SDB), Women-Owned Small Businesses (WOSB), HUBZone businesses, HBCU and other Minority Institutions (MI), and Service-Disabled/Veteran-Owned Small Businesses (SD/VOSB). Determining appropriate goals is not always easy, as it involves comprehensive market research, consultations with the technical staff, review of SB databases, review by the SBA Procurement Center Representative (PCR), and coordination with the Center's Small Business Technical Advisor (SBTA). The single most daunting task is breaking down the technical aspects of the work requirements to ascertain what the SB and SDB market can provide.

PROGRAM MANAGEMENT

1. Procurement Planning

The CIAO's objective is to be actively involved in reviewing solicitations before they are released, working closely with contracting representatives to determine the status--e.g., Small Business Set-aside or Full-and-Open Competition of upcoming procurements. However, the SBO Specialists are not always involved, or may sometimes be involved too late, in decisions that have to be made regarding new procurement issues. That involvement must occur at the earliest possible date to enable the Specialists to make effective contributions.

The SBA Procurement Center Representative (PCR) for KSC has purview of the SBA's Area 3 (Southeast USA), which is based in Atlanta and which includes a large part of the state of Florida; Mobile, AL; and Egland AFB in Georgia. The PCR office is located in Orlando, which relegates most communication with KSC's Small Business Specialists via email or telephone. The PCR indicates that visits at the CIAO are at least once every six months and that the frequency is unlikely to change in the near future. However, the PCR concedes that a resident PCR would benefit the Center's Small Business Program by making it more visible and giving the staff more "clout."

The PCR's primary function is to obtain more business opportunities for small businesses, to which end the PCR serves as the Commercial Marketing Representative (CMR), working directly with KSC's prime contractors to provide assistance with respect to their subcontracting plans and the Forms 294 and 295 that must be submitted in compliance with contractual requirements. Prior to that, when large solicitations (value over $50M) are being developed, the PCR and the Small Business Specialists, applies NPD 5000.2A procedures to assist the Procurement Office in establishing subcontracting goals. No Form 70 (appeal from the SBA Administrator to the NASA Administrator) was filed during this three-fiscal-year reporting period, to register the PCR's objection to any of the Center's procurement strategies.

The PCR speaks highly of the KSC Small Business Specialists and praises their relationship with the various KSC prime contractor SBLOs. The PCR deems the location of the CIAO outside the Center gates a "plus," despite the CIAO's isolation from Center Headquarters. Issues cited as needing improvement include (1) an organizational structure that requires the Specialists to report progress to a Procurement manager (which constitutes a conflict in responsibilities) rather than directly to the Center Director (who is responsible for the Center's meeting its small business goals); (2) organizational priorities that require the Specialists to perform duties not directly related to their CIAO responsibilities; and (3) the need for training for KSC procurement staff as well as for the Specialists, on new small business regulations. With respect to the surveillance review of the KSC Central Industry Assistance Office, which was conducted by the SBA in FY 2003, the PCR indicated that the report has not yet been issued.

CONSIDEERATION:

The Small Business Technical Advisor (SBTA) plays a critical role in the SB/SDB program. The SBTA is the primary consultant to the SBA PCR and Small Business Specialists in determining the extent to which a small or small disadvantaged business can perform the technical requirements of an RFP. The SBTA also plays a critical role in implementing the Uniform Methodology for Determining Small Disadvantaged Business Goals (NPD 5000.2A) process.

The KSC SBTA is also the Program Manager for the Center's SBIR/STTR Program and the Contracting Officer's Technical Representative (COTR) for the South East Region Technology Transfer Center (RTTC), one of six RTTCs in the country. The SBTA provides the KSC Small Business Specialists invaluable support in helping to evaluate the technical aspects of small business Capability Statements and reports and, by participating in the semi-annual SBS meetings, also provides the Agency's Small Business Specialists much-needed insight into technical issues relative to small business procurement.

STRENGTH:

2. Subcontracting Plans

Subcontracting Plans are required for all contracts exceeding $500,000 in value and for construction contracts exceeding $1Million. In addition, for contracts exceeding $50M in value, NASA requires that the Uniform Methodology for Determining Small Disadvantaged Business Goals (NPD 5000.2A) be used to determine the percentage of work to be subcontracted to small disadvantaged businesses. As stated above, although the CIAO is meticulous about applying NPD 5000.2A to large solicitations, no contract requiring a subcontracting plan was awarded during the three years of this reporting period.

KSC utilizes such value-added programs as the NASA Mentor-Protégé Program to encourage prime contractors to include small businesses in the execution of large contracts. The added benefit to the protégé small business is the guidance and experience that the mentor company provides. Boeing, the prime contractor on the large Check-out, Assembly, and Payload Processing Services (CAPPS) contract, for example, has included its protégé, All Points Logistics, as one of its subcontractors.

3. Award Fee / Incentive Fee Contracts

Utilizing performance on socioeconomic subcontracting goals as an evaluation factor for contract award and for award fee and incentive fee determinations has proven an effective method for keeping prime contractors "committed" to their relationships with their SB and SDB subcontractors. KSC conducts semi-annual contract reviews, the findings of which are documented in the KSC Performance Evaluation Board (PEB) Report. A prime contractor's meeting its SB and SDB goals is considered a "strength" on the PEB; failure to meet the SB and SDB goals, a "weakness," generally results in a reduction in award fee. The KSC Small Business Specialists are not involved in the process of withholding award fee, as the actual function of assessing contract performance on meeting socioeconomic goals resides with the Contracting Officer.

4. Set-Asides

KSC considers setting aside contracts as Small Business Set-Asides or 8(a) Set-Asides whenever possible, a major determinant for that decision being the competing companies' capabilities to execute the requirements of the contract. The sizes of these set-aside contracts vary, with some being of significant contract value.

Fiscal Year	SB Set-Asides Awarded	FY Obligations	Total Value of SB Set-Asides*
2002	45	$ 26.312M	$ 499.728M
2003	51	$ 21.465M	$ 427.180M
2004	76	$13.722M**	$ 474.750M

Fiscal Year	Mid-Range Awards	FY Obligations	Total Value of Mid-Range Awards
2002	49	$ 9.420M	$ 519.084M
2003	26	$ 9.781M	$ 1,437.399M

KSC makes awards to 8(a) firms whenever possible. The number and total contract value of 8(a) awards for each of the last three fiscal years are provided in the following table:

Fiscal Year	SBA 8(a) Set-Asides Awarded	FY Obligations	Total Value of SBA 8(a) Set-Asides
2002	13	$ 5.047M	$ 195.607M
2003	5	$ 18.461M	$ 185.220M
2004	18	$ 6.433M	$ 6.853M

5. Reporting

Using SF 294, prime contractors are required to submit to the Contracting Officer semi-annual reports of subcontracting achievements. In the past, the SF 294s were submitted in hard copy to the Center's Contracting Officer, who passed the data to the Small Business Specialists, who, in turn, keyed the data into the Center's electronic system to create a spreadsheet that allowed comparisons between years. The data were reviewed at the Center and put into a database, and an annual summarization report was then forwarded to Headquarters. This reporting process has recently been simplified: it can now be done online, with the subcontracting data submitted directly to Headquarters. The KSC Specialists strongly encourage their contractors to input their SF 294 and SF 295 data directly into NASA's electronic system and request that they be sent a copy for their files. To facilitate the process, the CIAO has drafted a letter that the Center's Contracting Officers may send to contractors.

OUTREACH

1. Programs

The CIAO engages in numerous outreach activities throughout each year, supporting conferences and business expos sponsored by other agencies and organizations as well as holding its own outreach events. Over the three fiscal years in this reporting period, the KSC Small Business Specialists have supported outreach activities that include the Annual NASA/JPL High Tech Small Business Conference in Los Angeles, CA; the Veterans Conference, hosted by the regional Small Business Development Center, in Melbourne, FL; the SBA Matchmaking Conference in Orlando, FL; the Space Shuttle Supplier Symposium in Cocoa Beach, FL; the Woman-Owned Small Business Conference in Melbourne, Fl; the GSA Training and Expo in San Antonio, TX; and the Florida/NASA Incubation Center Introduction of Small Business to Brevard in Titusville, FL.

KSC's annual Business Opportunities Expo, which is supported by the Center's Procurement Office and which provides a forum for small businesses to network with other small businesses as well as with large businesses, is among the larger of NASA's procurement conferences. Jointly sponsored by the KSC Small Business Council, the 45th Space Wing of Patrick Air Force Base, and the Canaveral Port Authority, the 2004 Expo boasted more than 1,200 attendees and 182 exhibitors. The KSC Small Business Council, comprised of NASA, Boeing, Space Gateway Support (SGS), and United Space Alliance (USA), did much of the event planning and raised the money to fund the Expo.

The KSC Small Business Specialists also provide outreach by participating on panels (such as the panel for the Veterans Conference noted above) and giving presentations on the Center's socioeconomic program to special groups and the local Chamber of Commerce. In addition, one of the Specialists is a member of the Alliance of Supplier Diversity Professionals, whose immediate objective is to develop and implement a training program that will professionalize and provide certification for the position of Small Business Liaison Officer.

STRENGTH:

2. Counseling

KSC's counseling sessions for small businesses are comprehensive in covering pertinent information and address the major items that comprise the OSDBU Uniform Counseling Form. In addition to providing an overview of KSC's organizational structure, the Small Business Specialists discuss the procurement process, marketable areas, and the Center's business development programs and provide information about upcoming procurement opportunities and procurement points-of-contacts. Counseling is provided individually or jointly, as described under "Industry Assistance Priorities," above. Individual counseling or one-on-one counseling, sometimes called "Meet and Greet," is provided in person or by telephone, as the occasion requires, and generally focuses on doing business with NASA. The CIAO also counsels large businesses, though in these cases, the discussion centers on the involvement of small businesses in KSC initiatives.

SUMMARY

The KSC Central Industry Assistance Office's pro-active outreach activities and its working relationship with the Center's prime contractors are important elements of its effort to increase the utilization of small and small disadvantaged businesses in the Center's procurement actions. Particularly innovative and effective is its Joint Counseling Program, which provides small businesses the opportunity to interface with the SBLOs of KSC's major primes as well as receive counseling from the CIAO's Small Business Specialists. However, Center has had mixed success in meeting its socioeconomic goals for direct awards therefore, goal performance in these areas needs to be re-assessed. Also needing re-assessment is an organizational structure that pulls the Small Business Specialists in different directions. A more efficient infrastructure could facilitate the CIAO's meeting its programmatic objectives.

Return to Contents

MONICA MANNING (HQ)	KSC Survey Team Manager (Organizational Management, FPDS Initiatives, Interviews- Procurement Professionals, Customers and Chief Counsel)
JOHN TRAHAN (JSC- HQ Detail)	Co-Lead Contract Safety Requirements, 1102s Career Development Training, COTR Delegations and Training, Joint Base Operations Support Contract, Self-Assessments
JEAN ROGERS (GRC- LDP Detail)	Market Research, Justification For Other Than Full and Open Competition, Pre-Negotiation and Post Negotiation Documentation, Use of Structured Approach in Profit/Fee Determination, Government Furnished Property, Performance Based Contracting
LAURA PEPPER (JSC)	Exercise of Options, Subcontract Consents, Undefinitized Contract Actions, Contractor Pension/Insurance Reviews, Audit Follow-Up, Set Fee Initiative, Compensation on Service Contracts
BERNARD PAGLIANO (GSFC)	Simplified/Commercial Acquisition Procedures, Task Order (Competition under Multiple Award and Delivery Order Contracts), A-E Services Contracts, Construction Contracts, Environmental Clauses, Progress Payments on Construction Contracts, Closeouts and Unliquidated Obligations
SHERRY DAVIDSON (MSFC)	Cost/Price Analysis, Technical Evaluations, Grants and Cooperative Agreements, SBIR Program, Bankcard Program, Internal Policies and Procedures, Virtual Procurement Office, IFMP/SAP Issues, Master Buy Plan/Acquisitions in Process
TOM RUSSELL (HQ)	Cost Plus Award Fee Contracts, Contracts for Administrative or Office Support, Synopsis of Contract Award, Contractor Performance Evaluation (NF-1680), Financial Management Reporting (NF 533), Interagency Agreements, Deviations and Waivers
ELEANOR CHIOGIOJI (HQ - SB Office)	Small and Disadvantage Business Utilization

DONNA SPRINKLE	Headquarters Procurement Data Support
REBEKAH BREWER SUSIE MARUCCI	Headquarters Administrative Support
MIKE MCCARTY	Kennedy Space Center Point of Contact

Procurement
Management
Survey Report

Kennedy Space Center

OFFICE OF PROCUREMENT
HEADQUARTERS
WASHINGTON, D.C.

OVERVIEW

ORGANIZATION - MANAGEMENT

PRE - AWARD

POST - AWARD

PRICING - FINANCIAL - AUDITS

GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS,
AND OTHER ISSUES

SMALL AND DISADVANTAGED BUSINESS (SDB) UTILIZATION

Procurement Management Survey Report

Kennedy Space Center

OFFICE OF PROCUREMENT HEADQUARTERS WASHINGTON, D.C.

OVERVIEW

ORGANIZATION - MANAGEMENT

PRE - AWARD

POST - AWARD

PRICING - FINANCIAL - AUDITS

GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS, AND OTHER ISSUES

SMALL AND DISADVANTAGED BUSINESS (SDB) UTILIZATION

Procurement
Management
Survey Report

OFFICE OF PROCUREMENT
HEADQUARTERS
WASHINGTON, D.C.

GRANTS, COOPERATIVE AGREEMENTS, SIMPLIFIED ACQUISITIONS,
AND OTHER ISSUES