MSFC 2004 Procurement Survey

The NASA Headquarters Office of Procurement conducted this procurement management survey at Marshall Space Flight Center (MSFC) under the authority of NASA Handbook 1101.3, The NASA Organization. The survey was conducted from March 8 through March 18, 2004. The report contains the survey strengths, weaknesses, and considerations.

An exit briefing was held at MSFC on March 18, 2004 to discuss the survey findings. 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).

Don Abrams
Survey Program Manager
Lead, Analysis and Assessment Team
Office of Procurement , NASA Headquarters

OVERVIEW

The Procurement Organization at the Marshall Space Flight Center is providing effective 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. Customer satisfaction is apparent from the interviews with the technical community. Additionally, interviews with numerous acquisition professionals at all levels of the MSFC organization regarding the effectiveness of the procurement office were also conducted. The consensus from the procurement staff was also positive.
The interviews of technical and acquisition personnel are given roughly equal survey emphasis with a review of contracting actions focused on compliance with procurement statutes, regulations, and procedures. The thrust of the compliance portion is directed towards systemic procurement processes, as opposed to focusing on individual file anomalies. 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 MSFC processes or initiatives that might benefit other Centers and, likewise, looked to other Centers for suggested approaches that might be exported to MSFC.
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 MSFC Procurement Officer will brief the Associate Administrator for Procurement and the survey team leader on Center achievements in these areas.

The survey could not have been accomplished successfully without the support of the following individuals:

ORGANIZATION - MANAGEMENT

The Marshall Space Flight Center (MSFC) Office of Procurement is providing beneficial support to their program customers. To accomplish this, the Procurement staff is now organized into five departments, four of which mirror their customer organizations. Within each department, the re-organized team structure appears to be functioning well. All of the interviewed procurement employees spoke positively of the team structure. They appreciated being part of a team, and commented on the good interactions and support they had with their team members. Everyone related good access to their Team Leaders and Department Managers, even where the managers were dual hatted. Those teams co-located with their technical customer expressed significant satisfaction arising from their identification with the project/program mission. Moreover, this was achieved without them feeling isolated or neglected by the Procurement Office.

Twenty-nine people have left the Procurement organization over the past three years. Out of a total complement of 132 FTEs, this represents a substantial turnover. Reasons for this exodus include retirements, disciplinary actions, the lure of Army pay banding and promotions, and the desire for career changes. At MSFC, many other Directorates have positions at the same grade level as those in procurement that have less responsibility, more manageable workloads, and substantially less stress. Coupled with frustrations over the lack of promotions and the lack of rotations, several former procurement careerists opted for a same grade position with less stress in another organization at the Center.

Within the current Procurement staff, stress was repeatedly cited as a significant issue. In addition career advancement issues and workload issues, program uncertainties associated with the Agency's new prioritization on space exploration, Return To Flight, and cancelled programs such as the Space Plane represent substantial stressors on procurement employees.

Promotions remain an area of significant concern within the Procurement Office at MSFC. Numerous interviews with Procurement careerists at various grades disclosed that the employees feel they have little understanding of how the management ultimately decides who to promote. There is major uncertainty about how the MSFC Procurement Office management chooses which positions they will apply their allotted MSFC 'Points" towards.

There is also concern regarding promotions involving experienced new hires coming to MSFC from other Government agencies and industry. Some longtime MSFC employees feel that although they have been given experiential criteria that should be met before they can contemplate advancing to the next grade level, the same criteria is not always applied to the recently hired experienced careerists. The perception is that since several of the newly hired personnel, who transfer in at the same grade they were at their previous job, are promoted relatively quickly, a question persists as to whether these new hires are being held to the same experiential criteria as the long time MSFC employees. This issue is symptomatic of a larger concern within the MSFC Office of Procurement. There is a pervading sense that the management's actions do not square with what they espouse. In the area of promotions, although most unsuccessful candidates avail themselves of a debriefing on what they would need to do to be more successful in getting promoted, the feeling remains that when employees then attempt to accomplish their 'deficiency', the results remain the same.

Some of this perception surrounding the disparity between what management says and what they do is also tied to rotational assignments. Although the Procurement management has embarked on a plan to review the Individual Development Plans of all 1102s and is attempting to satisfy the wishes for rotations within procurement, this has yet to take root from the employees' perspective. The prior lack of requested rotations for GS-11s and 12s was cited numerous times in the interviews as 'proof' of the inequity of promotions, and as a leading cause why many had left procurement. While there is recognition that there seems to be few more rotations at these grades recently, uncertainty remains regarding long term change. It should be noted that since the last survey, the Procurement Office has rotated many of the higher graded positions, e.g., senior GS-13s, Team Leads, Department Managers.

The interviews with the procurement staff also disclosed incongruous perceptions about performance awards. The preponderance of the interviewees clearly liked the peer awards that have been instituted since the last Procurement Management survey. These awards are viewed as fair and encouraging, and were routinely cited as a demonstration of tangible results coming out of feedback from an in-house MSFC survey. Nonetheless, there is substantial skepticism regarding how meritorious other performance awards, e.g., achievement, Quality Step Increases, etc., are.

Recently the MSFC Procurement Office has initiated a Formal Coaching Program to clearly define and address the hands-on training needs of its staff. The preponderance of the interviewees are open to this new process, with many volunteering to be either a trainer or a trainee. To date, they have found the role specific training most useful. Additionally, there was no complaining about this being an additional duty or responsibility on top of existing workloads.

Another positive approach undertaken by the Office of Procurement to address a potential vulnerability was the initiation of focused training topic sessions. Presentations, which are prepared in-house and usually run about an hour, are uniformly viewed by the staff as being valuable and pertinent. The handout were repeatedly cited as being a great resource, and most noted that they appreciated that while some sessions are mandatory, many are voluntary.

A large majority of those interviewed appreciated the recently revitalized clause matrices and contract mats. They were repeatedly described as being most useful, since the MSFC Contracting Officers and contract specialists handle the gamut of contract actions. Routinely the procurement staff claimed they used them mainly as memory joggers, since it may be several months between actions on a specific type of contractual vehicle and there may have been policy or guidance changes in the interim. In a related aspect, several interviewees suggested that they thought that simplified acquisitions should be handled by individuals solely responsible for those types of actions. It should be noted that some teams have ostensibly evolved into a structure similar to this suggestion.

Additionally, the Survey Team Program Manager noted that through the interviews and the team's interaction with various MSFC procurement personnel, it became apparent that there is a strong crop of mid-career procurement professionals at MSFC.

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

All the technical representatives interviewed feel they are currently receiving good service, with several remarking that they are well pleased with the change in procurement support over the past 12-18 months. There is the impression that the rotation of the more senior Procurement managers may have helped improve customer service. More than a few of the technical customers expressed that they had previously been frustrated with both the service and the responsiveness of procurement managers to resolve concerns. Almost all of the project interviewees commented on the wide disparity between individual Procurement employees' abilities and work ethic. This lack of consistency with performance from the Procurement organization is extremely distressing to the MSFC technical community, since many are apprehensive who they might end up with next, especially based on their past experiences. Many of their customers cited Procurement Management's inability to address and work to correct problem performers. While recognizing the difficulties inherent in accomplishing this, the consensus is that this issue is past critical mass and needs to be confronted rather than ignored.

Curiously, much more so than in the Procurement staff interviews, almost every customer interviewed cited a concern with workload issues with the Office of Procurement. The technical community's perception is that the good performers in Procurement keep getting more and more work, which ultimately creates major stress and burnout. Accordingly, customers are afraid that their current satisfaction with their assigned Procurement counterparts will eventually be negatively effected.

Uniformly, all of the program and project representatives were extremely positive about the value of the Contracting Officer's Technical Representative (COTR) training and refresher class. The substantial praise for the in-house presentation is noteworthy.

Some customers also expressed some interest in beefing up and highlighting the Procurement Frequently Asked Questions (FAQ) page on the MSFC website. There is a desire to have display more information such as samples and potential lead times for types of actions.

PRE - AWARD

The survey team reviewed five JOFOC documents ranging from $170,000 to $15B for contracts awarded since the last survey. All JOFOCs cited statutory authorities' exception 1 or 2. Each JOFOC reviewed contained the appropriate reviews, concurrences, and approvals. The survey team's review focused primarily on those citing the exception 6.302-2, Unusual and Compelling Circumstances. Only one JOFOC citing exception -1 was available for review. This JOFOC was well written and contained the appropriate rationale to support the exception.

The previous survey indicated the weakness of documentation supporting unusual and compelling circumstances. This review revealed a repeat finding that the -2 exceptions were generally weak to support the cited exception. It is noted that only four JOFOCs citing exception -2 were available for review. The documentation was very general and not supported with details. For example, one JOFOC documentation focused heavily on why the contractor was the only source or uniquely qualified to meet the requirement versus justifying the unusual and compelling circumstances. Market research in certain instances focused on justifying why only one source could do the work versus assessing the capability of the market. Additionally, general statements were made with little to no supporting details. In several instances the JOFOC was based primarily on the expertise and knowledge of the end user. There was no additional documentation or supporting details regarding the market research activities to back up the decision. Also, JOFOCs generally had no plans to remove barriers in the future; it is noted, in some instances the Agency had no future need or an existing competition was already ongoing. However, JOFOCs reviewed should detail plans to break down barriers or a stronger explanation why it would not apply.

For example, a JOFOC for the lease of office space using the -2 exception was reviewed. The award was for a base year and five option years for approximately $8M. The market was assessed and a spreadsheet developed documenting the results. MSFC came to the conclusion that only one source was able to provide the necessary office space. There was no documentation of other sources being contacted to determine their ability to provide the office space and/or make the modifications necessary. MSFC appeared to rely solely on the knowledge and expertise of the Government representative that other sources would be unable to make the modification in time. However, there was little to no support why the agency would be harmed if MSFC waited a couple more months versus allowing the commercial market place and competitive forces to determine if another developer would want to compete for this $8M opportunity. Not only was the use of the -2 weak, but the documentation to support going with a single source was not convincing. There was no discussion of plans to break down barriers to allow for a competition in the future. In this particular situation, based on MSFC's initial research they should have communicated the Government's requirement (size, distance from MSFC, facility requirements, etc.) and allowed the industry to determine if the requirements could be met. Additionally there was no rationale as to why the Government had to limit the office space to a 10-mile radius.

MSFC had limited procurements in process at the time of this survey. Recently awarded procurements were reviewed to assess compliance with current procurement regulations and policies. Overall the procurement files contained the necessary information and were well documented.

Although there was no ongoing SEBs, the survey team reviewed the source selection documentation and processes from recent awards. The overall source selection process is effective and results in timely awards of procurements. Source evaluation teams were appointed and cleared prior to receipt of proposals. Evaluation documentation was thorough and comprehensive. Proposal weaknesses, deficiencies, and questions were adequately communicated with offerors. The use of source selection software (FedSelect) assisted in the compilation of findings and provided an acceptable audit trail from initial proposal though the Final Proposal Revision. The findings were considered in the rationale for award (decision document) and selection decisions were based on the evaluation criteria. The office has an effective approach to pricing support by using the available on-site resources from DCAA. For very busy times, they are able to augment the pricing team with additional support from the local DCAA Field Audit Office.

The Procurement Office used several different approaches to document Market Research. For larger procurements the market research reports reviewed were generally well documented and similar to the Virtual Procurement Office template. Of the files that did use a similar template to the VPO, the research was appropriate for the dollar value and type of procurement. Although there is no required format, some of the files had inadequate documentation of market research activities. For instance, the market research tab may have been limited to just a list of potential sources. The market research "reports" that did not follow the VPO template generally had no discussion regarding the commerciality of the product or service and did not appear to consider the procedures in FAR Part 10.002. For GSA orders, the Office ensured adequate number of sources under GSA, but there was no means to identify if sources were contacted to determine if they are really potential sources (e.g. contacting industry regarding market capabilities to meet requirements). For example two of the GSA orders reviewed had several sources identified, but only one bid was received under each of the procurements. There was no evidence assessing the capabilities of available sources.

In general, recent procurements contained the NPR 7120.5 compliance certification. Only a small number of the purchase orders reviewed used the MSFC 55, which has now been replaced with the SAP form. Approximately 30% of the files reviewed that required a certification did not have a signed certification; however, this appeared to be limited to purchase orders and GSA orders. The lack of the certification was largely associated with older files and MSFC is trending in the right direction in meeting this requirement.

The prior survey contained a consideration to initiate a training seminar for technical and contracting personnel on the monitoring of affirmative procurement programs, and the applicability of FAR 52.223-9 and 52.223-10. The Office conducted a focused training entitled "NASA's Recycling and Affirmative Procurement Programs" in October 2001. The training is available on their web site. The Center also implemented a "Marshall Work Instruction (MWI)" for the Affirmative Procurement Program that is applicable to all MSFC employees, contractors, and subcontractors. The training fully covered the Executive Order and the FAR requirements associated with the Affirmative Procurement Program. It also contained a category list and links to several web sites to gain more information. The Procurement Office has a focal point of contact for the Affirmative Procurement Program that assists with the implementation of Executive Order 13101. The files reviewed required clauses 52.223-9 and 10 incorporated them accordingly.

Four contract files were reviewed in the area of Government property. The files were reviewed for completion of a Determination and Findings (D&F) to provide property under a contract in accordance with NFS 1845.302-71 and coordination of the procurement action with the Center's Supply and Equipment Management Officer (SEMO) per NFS 1845.102-71(b). The SEMO reviews were found in each case. All files contained a D&F documenting the decision to provide property.

7. Review of Logistics Services Contract for MSFC-GS-10F-0038M/H-36049D
H-36051D Dynetics, Inc, Awarded through GSA

The review of this contract focused primarily on the pre-award actions. The Logistics Services Contract for MSFC was awarded to EG&G Technical Services Inc. in April 2003. This contract covers a broad range of logistics services for MSFC. Services are acquired in two basic methods (1) FFP Lump Sum Work for work that can be identified in advance and which a fair and reasonable price can be obtained; the lump sum price is a fully burdened, and (2) IDIQ work issued on a FFP, Pre-Priced Work, or Time and Material basis. The contract has a three-year base period with two one-year options. The contract also includes an Award Term provision for five award-term periods through 3/31/11.

The acquisition approach reflected creative use of contract types and maximize the Center's flexibility to obtain services. The Award Term Plan adequately describes the process to assess performance and the award term procedures. Determinations are based on two successive six-month "interim" evaluations that are averaged to obtain the final score. The objective of the "award term" is to motivate excellent performance and to establish a longer-term relationship with the contractor if they achieve this level of excellence. The first two years allows for the maximum term of seven months for Very Good or Excellent Performance and Years four through six based on Excellent. The award term allows for one year without providing an award term rating allowing time for the contractor to ramp up. The CO verified that an informal assessment is provided to the contractor to give an indication of how performance is going. The CO added that if award term is not awarded in any given period, then the period of performance would have to be modified.

Pre-award documentation was accomplished according to the 1098 and the Procurement Office's checklists. An Acquisition Strategy Meeting (ASM) was conducted at NASA HQ and appeared to follow the FAR, NFS, and the NASA Guide to Conducting ASM Guide. The file contained a Memorandum For Record with resolutions of ASM minutes; although possible, there was no indication that the resolutions were sent to or coordinated with Code HS. A thorough review of all Evaluation Team members was accomplished prior to conducting the evaluation, e.g., checked & cleared by legal, OGE 450 signed, executed certifications, avoiding conflicts of interest. The Evaluation Team did a thorough and comprehensive evaluation process. Proposal weaknesses, deficiencies, and questions were adequately communicated with offerors. The findings were fully documented and the decision document reflected that the findings were considered in the decision. The use of FedSelect assisted in the compilation of findings. The file reflected a clear audit trail and a rationale basis for the award. It should be noted that GAO upheld NASA's award decision based largely on the clearly documented findings.

NOTE: The GAO protest documents indicated that some of the items challenged by the contractor were initial findings contained in the decision statement. Having these issues that actually were previously resolved included in the decision document may have given the appearance that the selection official considered those items.

POST - AWARD

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

In accordance with FAR Part 16 the Contracting Officer is required to determine whether multiple awards are appropriate as part of acquisition planning. Task Order/Delivery Order contracts were reviewed to determine if adequate discussion and acquisition planning to establish the use or nonuse of Multiple award procedures. None of the files reviewed were awarded using multiple award procedures. While the files contained discussion, they were not deemed significant or adequate on the subject. Some files contained the statement of MSFC's intent not to have multiple awards. All of the IDIQ contracts were for onsite support, which historically were single awards. Most awards were follow-on efforts to previous contracts in which single awards were used in the past. This however does not definitively support single awards. While technically sufficient, files should have a quantitative analysis on the subject.

In addition, Task Orders were reviewed for compliance with PIC 00-24 - Performance Based Task and Delivery Order Contracts. The PIC discusses task/delivery order placement and compliance with contract requirements. It is clear that the requirements of PIC 00-24 are not being universally met by all contracts. Task assignments are required to have complete descriptions of the work to be performed, including all performance standards applicable. In many cases, the task orders do not provide a detailed task description; they simply have a generic statement such as, in accordance with certain contract or Statement of Work paragraphs. From the information provided, it is difficult to ascertain if these tasks are performance based. One contract had a provision, which allows the COTR to issue emergency "oral" tasks with written confirmation within 72 hours

CPAF and CPIF Modifications were reviewed for accuracy and timeliness. All actions reviewed were accurate, complete and within the 120 day timeline. MSFC Procurement should be commended for their efforts in administering Award Fee and Incentive Fee contracts.

Several contract files with options were reviewed for compliance with requirements of FAR 17.207. In all cases, the files cited that the exercise of the option was the most advantageous method of meeting the Government's needs. The basis of this determination was market surveys. Most files included printouts of survey data from Internet sites such as salary.com; however, there was no demonstrated analysis in the file to support the finding. Although not evident in the file documentation, it could be reasonably assumed that analysis is being done since there were instances where statements were made in support of such, but again no evidence of any analysis existed.

In most cases, if the determination resulted in the option not being the best alternative, there was not sufficient lead-time to allow for a re-competition as not to result in a gap in service. One option modification cited the Changes Clause as the authority to exercise the option. In addition, there is some question as to the necessity of the options in the contracts.

MSFC continues to reduce the number of closed contract and unliquidated obligations. The BRACE contract which is the NASA-wide contract for closing contracts continues to work well. MSFC has shown a very positive trend to reducing ULOs since the last survey and continues to be within the Agency's acceptable limits for ULOs. ULOs are tracked by buyer code and a monthly report is distributed to Procurement Department Managers.

The survey team reviewed UCAs with a particular emphasis on UCAs associated with Return-To-Flight Activities. MSFC has 6 open UCAs, five of which were issued this year. The largest is $127.9 Million. From the review, it appears that all are within proper guidelines. The latest UCA to Lockheed Contract NAS8-00016 is valued at $44.9M. There is another open UCA dated October 2003 UCA valued at $20M.

NFS 1842.1502 requires that within 60 days of every anniversary of the award of a contract having a term exceeding one year contracting officers must conduct interim evaluations of performance on contracts subject to FAR subpart 42.15 and the corresponding NFS subpart. On such contracts, both an interim evaluation covering the current period of performance and a final evaluation summarizing all performance must be conducted. This evaluation is performed through completion of NF 1680, "Evaluation of Performance".

The survey team reviewed 11 contract files meeting the criteria of FAR 42.15. These 11 contract files encompassed 24 evaluation periods. Eighteen NF 1680s were completed. All contract files reviewed included at least some evidence of a past performance evaluation.

The survey team also evaluated the way Marshall Procurement Managers oversee the completion of past performance evaluations. Marshall Procurement Managers held a training session on the past performance evaluations in February of 2002. COTRs were included in the training, along with series 1102 employees. The survey team reviewed the charts and found them to be very thorough and useful. The information technology "Super User" runs periodic reports of in-process actions, including past performance evaluations. Team leads follow-up with Contracting Officers/Specialists to ensure the reports are completed. Marshall procurement managers are also working with the IFMP Competency Center to develop a monthly report that tracks past performance evaluations.

In addition to the NF 1680 being included in the contract file, Procurement Information Circular (PIC) 01-02, "Contractor Performance Information and Past Performance Data Base (PPDB)" requires that the information on the NF 1680 be entered into NASA's PPDB, effective as of July 3, 2000. While nine of the 11 contract files reviewed included at least one NF 1680 in the PPDB, there was little consistency in the way that NF 1680s were entered into the database. A review of the PPDB indicated that only three of the 11 contract files reviewed entered a NF 1680 for each evaluation period in the database. For the remaining contract files, either a NF1680 was entered into the database for only some of the evaluation periods or the interim NF 1680s in the database consisted of several evaluation periods. The Survey Team interviewed the Contracting Officers assigned to each contract reviewed to find out why there were so many inconsistencies in the processing of past performance evaluations. The majority of the Contracting Officers indicated that they were recently assigned the contract file and noticed that past performance evaluations were not conducted for some evaluation periods. The Contracting Officer would then update the database to the best of their knowledge.

NFS 1842.1501 emphasizes the importance of communications with the contractor. The narratives of the NF 1680 form greatly enhance the usefulness of the contractor performance evaluations for anyone conducting a check of a contractor's past performance evaluations and history. These narratives also provide contractors with feedback about their performance. Therefore, it is important that the narratives be detailed and support the ratings received. Ten of the 18 NF 1680s evaluated included a narrative that was detailed enough to support the ratings received. For one contract, the Contracting Officer held a meeting with the contractor to discuss the areas in which the performance declined from the previous year. Eight evaluation periods included rationale that was either not detailed enough to be useful for evaluating past performance, inconsistent with the rating assigned, or nonexistent. For example, one NF1680 assigned a rating of "Excellent" for the category of "Price/Cost", but the rationale stated that there was an overrun. The contract type was firm-fixed price. A discussion with the Contracting Officer indicated that the contract was recently reassigned. The Contracting Officer volunteered to update the database. Three evaluation periods included no rationale at all. The Contracting Officers assigned to these contracts mentioned difficulty in obtaining the rationale from the COTR.

NFS 1842.1503(b) requires Contracting Officers to ensure that the Government discusses all evaluations with contractors and considers any comments received from the contractor. All the NF 1680s that were evaluated, except one, included a response from the contractor. NFS 1842.1503(b) also requires Contracting Officers to sign and date the past performance evaluation within 30 days after considering any comments received from the contractor. Thirteen of the 18 NF 1680s reviewed met this criterion.

NFS 1842.1502 requires contracting officers to conduct interim evaluations of performance on contracts within 60 days of every anniversary of the award of a contract having a term exceeding one year. Eight of the 18 NF 1680s completed were completed within this 60-day time frame.

Three of the 11 contract files reviewed recently expired. All three files included a final past performance evaluation encompassing all performance periods.

The last survey included the following weakness: "Award Fee contracts were not summarized and entered into the PPDB as required by PIC-002; and MSFC's procedures do not address the requirement or refer to the PIC for further guidance." The Survey Team reviewed two award fee contracts and both contracts included evaluations in the PPDB. Also Marshall modified their Organizational Work Instruction to include procedures related to the evaluation of award fee contracts.

1. Cost and Price Analysis

Twelve contract files were reviewed for adequacy of cost and price analysis. The scope of the review included initial awards and change orders. Dollar values on these files ranged from $800 million to just over $100,000. As a whole, the documentation for initial awards and larger dollar procurements were extremely well documented and complete. Nonetheless, many of the files supporting task order pricing and negotiated contract changes provided minimal documentation and analysis.

In all required situations, cost and pricing data was submitted and the accompanying Certificate of Current Cost or Pricing Data was properly executed and on display in the file. The cost analysis performed by the individual contract specialist in these files was very good. The cost analysis showed a thorough review and evaluation of the separate costs elements of the contractor's/offeror's proposal. This analysis, in conjunction with an application of sound judgment, appears to have given the contract specialist the necessary confidence in determining what is a fair and reasonable price for a particular contract.

STRENGTH:

Four of the (Cost-Plus) files reviewed ($2-$5 million) contained no Pre-Negotiation Position Memorandum (PPM). Only a hybrid PPM and Post-Negotiation Position Memorandum (PNM) or just a PNM were found in these four files. NASA FAR Supplement (NFS) 1815.406-171, "Installation Reviews" states, "Before conducting negotiations requiring installation or Headquarters review, contracting officers or their representatives shall prepare a pre-negotiation position memorandum setting forth the technical, business, contractual, pricing, and other aspects to be negotiated." The hybrid PPM/PNM appeared to be prepared after the conclusion of negotiations, based on the contracting officer's authorization. This is a very risky strategy because there is no documentation which shows that, as stated in the NFS, "the negotiator, or negotiation team, is thoroughly prepared to enter into negotiations with a well-conceived, realistic, and fair plan." In addition, when there was a hybrid PPM/PNM or just a PNM, there was no discussion or justification when there were differences between the contractor's proposal and NASA's position of major elements of cost and profit or fee.

WEAKNESSES:

In support of the MSFC Office of Procurement are two co-located Defense Contract Audit Agency (DCAA) employees. One is a senior level Financial Liaison Advisor in the DCAA Office of Audit Liaison in Ft. Belvoir, Virginia and the other is a Technical Specialist in the local DCAA Field Audit Office. MSFC and Johnson Space Center (JSC) are the only two centers who have co-located service. The services for the co-located DCAA employees are part of a memorandum of agreement between NASA and DCAA. The agreement provides for an allocated amount of audit hours to each center on a yearly basis. MSFC uses the DCAA employees to assist in the cost/price analysis portion of Source Evaluation Boards (SEBs). The MSFC Office of Procurement seems very pleased with the experience and expertise being provided.

STRENGTH:

Twelve files were reviewed considering the adequacy of technical evaluations of cost proposals. The majority of the evaluations were in support of contract changes. All costs, labor hours, materials, etc., appeared to be thoroughly evaluated. File documentation was excellent and ranged from formally written to a series of e-mails.

STRENGTH:

Guidance for determining profit or fee objectives and the required use of NF 634 are provided in NFS 1815.404-470 and 1815.404-471. Five contract files were reviewed for the appropriate use of NF 634. In all cases, the Price Negotiation Memorandum fee percentages were supported by the fee percentage from the NF 634.

MSFC has a single point of contact for the recognition of DCAA and DCMA reportable audits and their tracking in the NASA Contract Audit Tracking System II. NASA Headquarters forwards a list of reports DCAA and DCMA identifies as qualifying as a reportable audit to the MSFC point of contact quarterly. The responsible MSFC CO is notified of the existence of the report and the requirement to provide a written summary of the progress made on the resolution of audit issues. The CO's summary is provided for input into the CATS II system with copies maintained in a central location.

For the reporting period ending March 2004, all seven of the remaining trackable DCAA audit reports have been closed. All report resolution memorandums were well documented and a copy was provided to the NASA Office of Inspector General.

STRENGTH:

6. Compliance with PIC 00-23 Contractor Pension/Insurance Reviews

PIC 00-23 requires NASA contracting officers with major contracts to request from the ACOs for those contractors a copy of any CIPR reports. In cases where issues are found that could have a significant financial impact upon the Agency, NASA should provide input to the ACO to assist in the resolution of the issues.

The survey team reviewed contract files of four of the largest contractors at MSFC: Boeing, Lockheed-Martin, Pratt & Whitney, and ATK Thiokol. Complete contractor system reviews, i.e., purchasing, estimating, accounting, etc., and CIPRs were found in all four. Additionally, copies of written and e-mail communication between the head of MSFC's Engineering Support Department and the ACOs at each of these major contractors appear to be held on a regular basis to determine if there are any issues to be resolved.

STRENGTH:

7. Financial Management Reporting (533)

Guidance for Contractor Financial Management Reporting (NF 533) is found at NFS 1842.72. The survey team reviewed the financial management reporting for four contracts. Variance analysis was performed in all five instances reviewed.

8. Set Fee Initiative

The Set Fee Initiative (SFI) is an approach to establish fee on selected contracts. NASA will pre-establish a fee amount or percentage in the solicitation rather than have contractors propose fee amounts. The contractors are 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.

MSFC's procurement office has been successful in utilizing the Set Fee Initiative on two recent competitions: The Unites contract and the HOSC Support Services contract.

The award of grants and cooperative agreements at the Marshall Office of Procurement are decentralized. Contracting Officers award grants and cooperative agreements throughout the Office of Procurement. In 2003, the MSFC Office of Procurement awarded approximately 380 grants and 75 cooperative agreements. These awards ranged in dollar value from $4,000 to $7.1M, and included awards to universities, non-profits, and commercial firms.

The NASA established goals for grant/cooperative agreement lead-time are: 60 days from purchase request receipt to award; and 29 days from complete package (technical evaluation, Unsolicited Proposals Evaluation Summary, etc.) to award. Nine of the ten files reviewed were awarded in a shorter time frame than the established goals.

NASA's policy is to use competitive procedures to award grants and cooperative agreements whenever possible. In 2003, 74% of Marshall's grant awards and 55% of its cooperative agreement awards were awarded on a competitive basis. Compared with all other NASA Centers, Marshall has the highest competition rate for grant awards and the second highest for cooperative agreement awards.

Since the last procurement survey in 2001, Marshall has conducted training sessions on the following: Grant Handbook Overview; Cooperative Agreements; and Congressional Notification Requirements for Grants. In light of the fact that grant and cooperative agreements awards are decentralized, Marshall is commended for conducting training sessions on grant topics.

On July 27, 2001, the NASA Chief of Staff issued a standard NASA policy for informing Members of Congress about the selection of NASA research proposals. Under this policy, all grant selections, regardless of value, must be reported. Marshall procurement was in compliance with this requirement.

The Handbook requires Grant Officers to ensure that all necessary certifications, disclosures, and assurances have been obtained prior to awarding a grant or cooperative agreement. All ten awards were in compliance with this provision. As certifications were listed as a weakness in the last procurement survey, Marshall is commended for correcting this weakness.

The Handbook sets forth the policy on incremental funding of grants and cooperative agreements. The intent of this policy is to reduce the administrative burden in funding awards. All ten awards complied with this policy.

The Handbook provides guidance on the appropriate choice of award instruments (grants, cooperative agreements, contract, etc.). The Survey Team concluded that the proper type of instrument for one of the ten grants/cooperative agreements is a contract award. This award involved product and hardware development activities. A supplement was issued for the development of flight hardware related to a NASA mission. This award required legal review, but no evidence of legal review was found in the file. The Survey Team recommends that Marshall procurement managers conduct additional training on the proper use of grant and cooperative agreements. The Survey Team did not object to the choice of award instrument for the remaining nine grants and cooperative agreements.

Marshall procedures require a legal review of grants and cooperative agreements valued at or over $2.5 million. This amounts to approximately 1% of all grants and a third of all cooperative agreements. All other grants and cooperative agreements may be reviewed by legal at the discretion of the Contracting Officer. A review of the 10 grants and cooperative agreements indicated that all awards that required legal review included a legal review.

Four of the 10 awards were the result of unsolicited proposals/earmarks. In accordance with the Handbook, all unsolicited proposals recommended for acceptance as grants/cooperative agreements shall be supported by a Justification for Acceptance of an Unsolicited Proposal (JAUP) prepared by the cognizant technical office. The JAUP serves as the technical evaluation for the unsolicited proposal. To streamline the technical review process, Marshall posts its own template for the review of unsolicited proposals on its Metro site. Three of the four technical evaluations evaluated the costs, and documented the uniqueness and merit of each proposal in accordance with FAR 15.6. One of the four awards did not thoroughly evaluate the unsolicited proposal.

The Survey Team reviewed the negotiation memorandums for the 10 grants/cooperative agreements and concluded that seven of the memorandums included a thorough evaluation of the costs i.e., labor, facilities and administrative, other direct costs, travel, etc. The other three memorandums included an evaluation of the direct labor costs based on the technical evaluation, but did not evaluate other types of costs, i.e., other direct costs, travel, materials.

All files reviewed were in compliance with the Handbook provisions on delegation of administration. All files reviewed included a NF 507 for all basic awards and supplements, e.g., modifications to basic awards.

The Handbook requires Grant Officers to complete a NASA Form 1356, "Committee on Academic Science and Engineering (C.A.S.E.) Report on College and University Projects" for awards to nonprofit institutions of higher education and nonprofit institutions that are operationally affiliated or integrated with an educational institution. All awards that met these criteria included a completed NF 1356 in the file.

The Survey Team reviewed one SBIR Phase I, five SBIR Phase II, and one SBIR Phase III awards. The Survey Team concluded that overall, Marshall SBIR awards were well managed.

In 2001, Marshall procurement organized a "SBIR Tiger Team" to reassess the way Marshall manages SBIR awards. This team created templates, checklists, model negotiation memorandums, and model SBIR contracts to assist Contract Specialist/ Officers in awarding SBIR contracts.

All SBIR contracts were awarded on or before the date specified in the electronic SBIR Handbook.

In order to be eligible for a SBIR award, a small business concern must meet the following eligibility criteria: American-owned and independently operated, for-profit; the principal researcher must be employed by the small business, and the company size is limited to 500 employees. All seven SBIR awards reviewed met these criteria.

The Handbook sets dollar and period of performance limitations for SBIR awards. SBIR Phase I awards are for periods of up to six months in amounts up to $70,000. SBIR Phase II awards are for periods of up to two years in amounts up to $600,000. There is no limit on the number, duration, type, or dollar value of SBIR Phase III awards, although these awards are required to use non-SBIR Federal funding. All seven awards reviewed were in compliance with these requirements.

The Handbook also sets limitations on subcontracting. For SBIR Phase I awards, the proposing firm must perform a minimum of two-thirds of the research/analytical work and for Phase II, a minimum of one-half of the work must be performed by the proposing firm. All SBIR awards reviewed complied with these requirements.

All SBIR awards reviewed contained a detailed technical evaluation and the appropriate Representations and Certifications. However, four of the seven technical evaluations did not thoroughly evaluate the proposed budget. There was no indication of any in-depth review or assessment of labor hours, skill-mix, types and quantities of materials, or other direct costs. The technical evaluation template used by the entire agency asks two questions, "Does the overall proposed budget seem to be appropriate for the proposed work"; and "Do individual elements (i.e. labor hours or rates; materials; travel, etc) of the proposed budget appear to be appropriate". For these technical evaluations, the technical evaluator simply stated, "yes" without any further analysis.

The NFS waives the requirement for the submission of cost or pricing data when contracting for SBIR Phase II contracts. Additionally, the dollar value of SBIR awards is capped. The Survey Team evaluated each memorandum of negotiation. Three files included a detailed negotiation memorandum documenting all aspects of the negotiations. Separate pricing reports for rates and factors were evident in these files. Four of the seven negotiation memorandums referenced the technical evaluation; however, the technical evaluations themselves simply stated that the proposed costs were acceptable without any further analysis.

In accordance with NFS 1815.404-4, the NASA structured approach for determining profit or fee objectives shall be used to determine profit or fee objectives in the negotiation of contracts greater than or equal to $100,000 that use cost analysis and are awarded under the SBIR program. All SBIR awards meeting the criteria of NFS 1815.404-4, including a signed NF 634, "Structured Approach Profit/Fee Objective".

The most recent Congressional re-authorization of the SBIR program clarified that the "Rights in Data - SBIR Program" clause at FAR 52.227-20 applies to all three phases of the SBIR program. All SBIR awards included the clause at FAR 52.227-20.

A 507, "Individual Procurement Action Report", was completed for all awards reviewed.

Purchase orders were reviewed for compliance with simplified acquisition procedures. Orders reviewed were placed on GSA schedule or awarded as a result of requests for quotes. Several purchase orders reviewed received only one quote; however a JOFOC or documentation of a contracting officer's determination that only one source was reasonably available were included. However, the determinations to solicit from only one source were weak and contained very little documentation to support the reason for the single source. Those that received more than one quote maintained the quotes and list of sources solicited via a bid abstract sheet; however the file did not contain information to identify who was solicited for a quote or if they did not respond. Only one file documented an offerors response to "not bid". In addition, it could not always be determined if the specialist utilized the CCR database to confirm status or establish a bidders list as required by FAR Part 13.102.

Commercial contracts were reviewed for proper clauses, forms, representations, certifications and market research. All files reviewed contained commercial clauses, proper forms and documentation, which represents an improvement from the previous survey. Although most files included some documentation stating price reasonableness it was difficult to gage how the conclusion was reached. As found in the previous survey, there appeared to be no review of additional schedule contractor catalogs or price lists. Accordingly, it was not apparent if market research is being conducted.

It is also noted that some purchase orders were awarded utilizing MSFC Form 3988 (dtd YR 85). FAR 53.213 Simplified Acquisition Procedures list the following forms required for use: SF's 18, 30, 44, 1165, 1449, and OF's 336, 347, and 348, unless an exception is granted.

There are 411 active cardholders in the MSFC Bank Card Program and 219 approving officials, which equates to a 1.8 ratio of Cardholders to Approving Officials. Potential Cardholders and Approving Officials are receiving training prior to receiving the Procurement Officer Authorization Letters. The PO Delegation letter at MSFC continues to included the single purchase limit and the monthly purchase limit, which is in accordance with PIC 03-20. The Center Purchase Card Program Coordinator (CAPC) does not believe the approving officials are reviewing purchase limitations at a minimum prior to the issuance of another card as detailed in PIC 03-20. Approving officials and cardholders are receiving refresher training based on PIC 03-20 issued 10/31/2003. MSFC now has their refresher training for approving officials and current bankcard holders available on-line which is listed as one of their Procurement Innovations. Through the on-line training the bankcard holder and approving officials receive a certification of completion for completing the refresher training once they have completed the training and passed the test at the end.

Due to the implementation of SAP, the MSFC CAPC does not perform desk audits. However, the CAPC does audit the system through the use of P-Card in order to determine the appropriateness of purchases made. If a purchase seems to be improper the CAPC contacts the cardholder to determine its appropriateness.

The number of purchases is monitored and the MSFC CAPC reviews the system every three to six months to determine who does not use their bankcards. Upon interviewing the CAPC and review of cardholder files, the survey team determined that individuals are not always purged from the system due to inactivity. It is the survey team's recommendation that an individual should be deleted from the system automatically when their card is inactive and should only be added back when there is a true need for them to possess a bankcard.

Construction contracts reviewed were awarded primarily using the sealed bid procedures of FAR Part 14 and for the most part incorporated all of the applicable clauses for construction contracts. Most of the construction work reviewed was awarded under IDIQ Contracts. All of the delivery orders were awarded utilizing sealed bidding and were well documented. One deficiency was that the Delivery Orders did not include the Statement of Work attached to it in the file.

Several A/E Contracts were reviewed as well. The solicitations for these contracts were conducted in accordance with the proper procedures in FAR Part 36.6. For the most part the evaluations and awards were very well documented and had very detailed price analysis included in the file. The proper contract clauses were included in these contracts as well. Supplemental Agreements and Change Orders were well documented. Change Orders were executed with required funds certification and NTE limitation in accordance with FAR 43.105. The deficiency in the 2001 Procurement Management Survey on Change Orders lacking the Contractor's Statement of Release in the SF30 description block, in accordance with FAR 43.204, has been corrected. Post award synopses were not found in numerous contract files as noted in the previous survey.

There were approximately 14 deviations maintained by the procurement officer since the last evaluation period. Most were to "incrementally fund fixed-price contracts or increase the 5 year limitation." All that required NASA Headquarters approvals had received the appropriate approval, with legal concurrence, as required by the NASA FAR Supplement. However, at least one deviation was approved after the procurement action was completed. Although the Procurement Officer was maintaining deviations there was no systematic way to track deviations (incoming/outgoing/approval) or determine how many deviations were actually requested and approved during this survey period. It was also very difficult to determine what procurement files most deviations were associated. Even though the previous survey found that the appropriate documentation was in the contract files, this practice has shifted and only one file reviewed was completely documented. Most other files were partially documented; one had no deviation documentation at all. MSFC is commended for correcting the weakness identified in the previous survey and fulfilling the requirement for Procurement Officers to maintain a record of all deviation requests for contract funding as required by the NFS

The Survey Team reviewed MSFC Master Buy Plan (MBP) submission procedures and processes. MSFC currently submits its MBP electronically through the MBP Database. Each of the five Department Managers is responsible for submitting MBPs for their organization to the Procurement Officer, who is responsible for final approval and submission to the Code HS. After interviewing individuals who utilize the MBP Database, there remains unanswered questions as to the maintenance of the system and data inputted. Although there are only six known users, there are 13 individuals with access rights. There is no "one person" identified for validating the accuracy and completeness of the data in the systems. For example, there are instances of duplication to include plans and item numbers. There is no formal training on the system and users are not aware of why or how certain inconsistencies or duplications occur within the system.

MSFC's continues to maintain and utilize the METRO Online system that houses a host of Agency Procurement Web Applications, Programs (to include primarily IFM and ISO Requirements), Procedures and Procurement Tools along with other helpful information links at a central location.

Interviews with the team lead confirmed that the ISO process to review OWIs and MWIs were being followed accordingly. In November 2003 there was an annual review of MSFC Management Directives, MSFC Charters and OPR Designee Information. Eight MSFC Management Directives that are the responsibility of the Procurement Office were also reviewed during this time. Although some findings indicated revisions were required to various MWIs, the most frequent finding was to ensure documents reflect current processes; a corrective action plan has been established and initiated accordingly.

There are no weaknesses or systemic problems identified. The weakness identified in the previous survey, i.e., to focus resources to alleviate inactive or non-current data on the Metro Online System, was corrected. Currently there is an the initiative to revive the Metro System, which has been successfully and aggressively maintained for the past six months by the new Policy and Review Team Lead. A review of the system clause matrices and mats, interviews with procurement professionals, and the Policy and Review Team Lead confirmed this.

The procurement staff at MSFC utilizes the VPO as a reference tool to provide shell acquisition documents. The Policy Team Lead has dedicated significant effort in updating and maintaining the Clause Matrices & Contract Mats needed for most types of procurement actions processed at MSFC. The Clause Matrices & Contract Mats is the preferred tool by the procurement professionals at MSFC because it provides them with a centralized point of reference for current Federal, Headquarters and local polices and procedures. Reliability of data is an improvement from the previous survey. MSFC is commended for taking action to post current Federal Acquisition Circulars and Procurement Notices through FAC 01-20 and PN 97-92.

In general MSFC has been dealing with the issues presented by the implementation of SAP in a commendable manner. The team-lead for Information Technology in the Office of Policy and Information Management has taken on the lead in dealing with issues related to IFMP/SAP. Upon discussions with this individual the Survey Team ascertained that MSFC Procurement Office has instituted a process called SAP Communications, which are emails issued by the Team Lead in order to apprise the Procurement Offices of solutions to issues that are encountered in the course of using SAP. This concept is an excellent communication and training tool for the procurement workforce in order to better utilize SAP.

MSFC Procurement Office has found it difficult to de-obligate funds in the SAP system.
As detailed in the 2004 LaRC Procurement Management Survey Report, in order to perform de-obligations where cost has been accrued but payment has not been made, coordination in SAP is required between (potentially) three Full-Time Equivalents (FTEs): one employee to reverse cost, one Contract Specialist to effect de-obligation, and one Contracting Officer to approve transaction. When cost has been accrued and payment has been dispersed, it takes five FTEs to perform a de-obligation in the SAP system. The representatives come from the following offices: two FTEs from accounts payable, one FTE from cost management or logistics management, and two FTEs from procurement. This process is exactly the same at MSFC.

This process is much more time consuming compared to the process before the implementation of IFMP/SAP. Under the old process, a memorandum was written by the end-user to justify a de-obligation, the procurement operations would then use the memorandum to produce the modification to de-obligate the funds, upon which procurement operations would send the modification to accounting/finance and it would take care of de-obligating the funds in the MSFC legacy financial system.

Under the MSFC legacy system for processing simplified acquisition most tasks associated with processing a Purchase Order were completed electronically. However, under the new SAP system MSFC Procurement Office is completing many simplified acquisition functions manually. Once the purchase order is completed and awarded outside of SAP the data associated with the purchase order is entered into SAP in order to obligate funds against the purchase order. Also, through discussions with individuals who award simplified acquisitions another problematic issue that arises from resources personnel de-committing money in the SAP system without communicating it with the Procurement Office. An individual from the resources office can de-commit at any time prior to personnel from the office of procurement obligating money. Therefore, a PR can come through SAP to award a Purchase Order and once everything is completed outside the system, the procurement personnel may go into SAP to obligate the money and none is found. This is vulnerability in the procurement system, since procurement's main role with respect to SAP is to obligate money.

The most recent self-assessment compliance review was accomplished in February 2003. The self-assessment prior to that one was performed in April 2002. According to NASA Office of Procurement policy, random compliance reviews are to be accomplished semi-annually. MSFC did not complete two reviews in accordance with the policy in 2002 and 2003. A letter was sent from the Procurement Officer to the Head of the Policy and Information Management Department whose office is responsible for the self-assessments. In the letter the PO gives permission to the manager to use the 2004 Procurement Management Survey as one of the self-assessments, which is in accordance with NASA/HQ Self-Assessment Guide. But the letter also admits that MSFC has not performed two-reviews in the past two years as required by the NASA/HQ Self-Assessment Guide. The letter maintains that in the future effort will be expended to ensure that two reviews are completed each year.

The Policy & Information Management Department maintains the results of the self-assessments in a central file. An inspection of the two most recent self-assessments revealed that at least eight per cent of purchase orders and five per cent of other actions not subjected to "other eyes" scrutiny issued during the periods covered were reviewed. Neither review claimed systemic weaknesses. The review completed in 2003 listed deficiencies from the 2002 review and resolution. The 2002 review did not list the deficiencies and correction from either the previous Procurement Management Survey or from the previous self-assessment. Both reports documented that issues that came up during the self-assessments were detailed in a power point presentation to the procurement staff at MSFC.

MSFC management does not collect metrics at this time. However MSFC does maintain a detailed Procurement Workload Database for each department to track workload and acquisition schedules.

To afford the contracting staff the opportunity to focus on complex acquisition actions and in an effort to provide outstanding customer support MSFC has outsourced what they consider "transactional procurement functions". It is noted that a list of ground-rules for utilizing the Eagle Support Personnel was provided to the survey team, delineating the appropriate roles and responsibilities of the contractor vis-à-vis government personnel.

Thirty percent of NASA's procurement budget is conducted with small businesses, via direct contracting and subcontracting. Of that number, seventeen percent is procured by Marshall Space Flight Center (MSFC), which administers a very large subcontracting program. MSFC has consistently surpassed its assigned socioeconomic goals, an unprecedented accomplishment for which it has been recognized for the past five consecutive years. This section discusses key elements of MSFC's Small Business Program.

The Small and Disadvantaged Business Utilization program is an integral part of the Agency's business activities. At MSFC, operation of the program is located within the Small Business and Industry Assistance Office, which is part of MSFC's Procurement Office. One Small Business Specialist (SBS) is organizationally part of the Procurement Director's Office (PS01) and reports directly to the Procurement Officer. A second Small Business Specialist, who is also the Specialist/Industry Assistance Officer, and the Management Support Assistant (MSA) are organizationally part of the Procurement Policy Department (PS10) and report to a PS01 team lead who reports to the Procurement Department Manager (DM), who in turn reports to the Procurement Officer. All three persons-the two Small Business Specialists and the MSA--are responsible for the day-to-day operation of the small and small disadvantaged business program. They are physically located in the same suite of offices and share and coordinate the office's workload, which includes reviewing and approving purchases, developing subcontracting plans, writing evaluation reports, providing counseling and outreach, implementing NPD procedures, ensuring SF 294 reporting, resolving compliance issues, participating in procurement planning, and enhancing the program to make it more responsive to constituent needs. The full scope of the Center's socioeconomic procurement program is highlighted in MSFC Organization Work Instruction PS-(OWI)-06, titled Socioeconomic Programs.

The MSFC Small Business Office is actively involved in the procurement and operational aspects of the Center's programs. However, reductions in office staff over the past years and the loss of procurement contractor support at a time when the office was expanding its involvement in and implementation of program elements have necessitated shifts in focus and resources to ensure that the office remain responsive to small business requests for assistance. The two Small Business Specialists have a significant workload. Programmatic priorities include (1) administering and enhancing prime contractors' subcontracting programs; (2) counseling small businesses and advising both large and small businesses about teaming relationships; (3) engaging in acquisition planning, analyzing statements of work, and advising on small business participation on work packages; (4) monitoring progress and meeting Center socioeconomic business goals; and (5) engaging in a broad range of outreach activities.

The MSFC Small Business Office has been creative in developing programs oriented toward increasing small business subcontracting opportunities as well as toward ensuring that small businesses seeking to provide quality products to NASA follow accepted procedures. With respect to the first, the Small Business Specialists are actively involved with the MSFC Prime Contractors Supplier Council (MPCSC), a 25-member independent Council who meets twice a year and whose objectives include partnering with small and small disadvantaged business. Both Specialists regularly meet with officers and senior managers of large businesses such as Aerojet General, Thiokol, and Lockheed Martin, in an effort to convince them to involve more small businesses in their strategic planning. With respect to providing procedural assistance to small businesses, the Specialists work closely with MSFC's Outsourcing Team, who conducts ISO 9000 inspections of small manufacturing companies that supply the Center products critical to space flight operations.

	Goal 2001	Actual 2001	Goal 2002	Actual 2002	Goal 2003	Actual 2003
Obligations (in $M)	$1,780.0	$1,830.0	$1,800.0	$1,972.9	$2,100.0	$2,005.0
SB (in $M)	$140.0	$ 183.0	$ 145.0	$ 158.9	$ 117.0	$ 138.7
SB (in %)	8.5%	10.0%	8.1%	8.1%	5.6%	6.9%
SDB - 8(a) (in $M)	$ 35.0	$ 51.2	$ 46.0	$ 51.8	$ 34.0	$ 54.5
SDB - 8(a) (in %)	2.1%	2.8%	2.6%	2.6%	1.7%	2.7%
SDB - Non 8(a)(in $M)	$ 30.0	$ 33.0	$ 30.0	$ 26.5	$ 16.0	$ 21.1
SDB - Non 8(a) (in %)	1.6%	1.8%	1.7%	1.3%	.8%	1.1%
WOSB(in $M)	$ 19.0	$ 34.8	$ 25.0	$ 33.8	$ 28.0	$ 43.2
WOSB (in %)	1.2%	1.9%	1.4%	1.7%	1.3%	2.2%

5. Center Subcontractor Socioeconomic Business Goals

	Goal 2001	Actual 2001	Goal 2002	Actual 2002	Goal 2003	Actual 2003
Total Sub (in $M)	$495.0M	$845.0M	$520.0M	$503.3M	$550.0M	$505.0M
SB (in $M)	$ 235.0	$ 454.6	$ 222.0	$ 273.7	$ 240.0	$ 267.3
SB (in %)	47.5%	10.0%	42.7%	54.3%	43.6%	52.8%
SDB (in $M)	$ 75.0	$ 124.2	$ 82.0	$ 119.0	$ 85.0	$ 86.5
SDB(in %)	15.2%	14.7%	15.8%	23.6%	15.5%	17.1%
WOSB(in $M)	$ 45.0M	$ 74.6	$ 48.0	$ 98.8	$ 48.2	$ 80.5
WOSB (in %)	9.1%	8.4%	9.0%	19.6%	8.0%	15.9%

As can be seen in the table above, MSFC has exceeded--in some cases substantially so--its subcontracting goals in each small business category in FY 2001, FY 2002, and FY 2003, despite the fact that those subcontracting goals have increased each Fiscal Year. The significant FY 2001 subcontracting achievements were a direct result of a major windfall increase in subcontracting under the Lockheed Martin External Tank (ET) 6th Buy contract (NAS8-00016), under which flight-related hardware purchases for each new buy were procured prior to award of the new contract. Consequently, all related subcontracting is not reported until the first SF 294 reporting period following award of the new contract.

Subcontracting goals are required on all procurements over $500K and over $1M for construction procurements. The Industry Assistance 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 SDVB. 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.

PROCUREMENT MANAGEMENT

1. Procurement Planning

MSFC Small Business Office is actively involved in reviewing solicitations before they are released, which, given the volume of procurement actions, consumes a significant amount of the Small Business Specialists' time. However, the Specialists are not always involved, or are involved too close to deadlines, on 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.

2. Uniform Methodology for Determining Small Disadvantaged Business Goals

NASA Policy Directive 5000.2 is used to establish a uniform method for determining the Small Disadvantaged Business (SDB) goals to be included in solicitations of more than $50M. Reports that contain information pertinent to the NPD 5000.2 activity, such as the number of times the NPD was used in each reporting period, are due to the OSDBU twice yearly.

The goals MSFC establishes for its solicitations are locked in and when the procurement is let, tracked every six months as well as cumulatively. MSFC reports that it has used the NPD 5000.2 on the following thirteen different solicitations over the past three Fiscal Years, indicating that procurement and contracting personnel and Small Business Specialists are familiar with the policy and its use:

3. SBA Procurement Center Representative

The SBA Procurement Center Representative (PCR) has been at MSFC for the past ten years. Her office is physically located at the Center, although she serves as PCR for a wide three-state area. The PCR works closely with the MSFC Small Business Office. Her primary function is to obtain more business opportunities for small businesses, to which end she reviews RFPs that are being developed and makes recommendations on competition type (e.g., 8(a) Set-Aside) and subcontracting goals. All RFPs must be approved by the facility's Small Business Office, the PCR, and the Contracting Officer, before release. If the PCR objects to the final decision of the Center's procurement strategy, he/she can register that objection by submitting a Form 70, which is an appeal from the SBA Administrator to the NASA Administrator. No Form 70 has been issued at MFSC in the past three fiscal years.

4. Center Small Business Technical Advisor

The Small Business Technical Advisor (SBTA) plays a critical role in the SB/SDB program and 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 process. The MFSC SBTA provides the Small Business Specialists invaluable support in assessing subcontracting opportunities for upcoming procurements--for example, in implementing NPD 5000.2 for the procurements listed above. In addition, the MSFC SBTA assists in the Acquisition Strategy Meeting (ASM) reviews and serves as a mediator when differences arise between the Small Business Office and Program Offices.

5. 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. Most of the major contracts at MSFC are very large, ranging in the hundreds of million dollars and more. The Small Business and Industry Assistance Office has been meticulous about applying NPD 5000.2A to large solicitations, and a broad review of major MFSC prime contracts revealed that the proper documentation was in place. An illustration is the recently awarded $823.6M UNITES contract, which contained a significant 34.6% goal for all categories of small business.

MSFC also 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. The prime contractor on the above-mentioned UNITES contract has included its protégé, a woman-owned small business, as one of its subcontractors.

6. 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. MSFC conducts semi-annual contract reviews, the findings of which are documented in the MFSC Performance Evaluation Board (PEB) Report. A prime contractor's meeting its SB and SDB goals is considered"strength" on the PEB; failure to meet the SB and SDB goals, a "weakness," generally results in a reduction in award fee.

7. Set-Asides

MSFC 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 size of these Set-Asides contracts vary, with some being of significant in contract value

8. Small Business Set-Asides

Small Business Set-Asides are used when there are two or more small businesses that can perform the work required in a contract. MSFC has awarded 273 Small Business Set-Aside contracts in the last three Fiscal Years:

Fiscal Year	SB Set-Asides Awarded	Total Value ofSB Set-Asides
2001	102	$22.259M
2002	117	$43.673M
2003	54	$4.245M

All contracts between $100 K and $2M are automatically set aside for small businesses if it can be determined that at least two small businesses can fulfill the contract work requirements. A review of mid-range contracts at MSFC revealed that the Center awarded a total of 264 mid-range contracts over the past three fiscal years.

Fiscal Year	Mid-Range Awards	Total Value ofMid-Range Awards
2001	91	$21.710M
2002	113	$24.851M
2003	60	$17.849M

9. SBA Section 8(a) Program Set-Asides

MSFC 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	Total Value ofSBA 8(a) Set-Asides
2001	31	$ 7.327M
2002	39	$14.337M
2003	25	$ 6.845M

10. Reporting

Using SF 294, prime contractors are required to submit to the Contracting Officer semi-annual reports of subcontracting achievements. The data is then reviewed at the Center and put into a database, and an annual summarization report is forwarded to Headquarters. This reporting process has recently been simplified: it can now be done online, with the subcontracting data submitted directly to Headquarters.

MSFC has had its own electronic system to track the Center's subcontracts, a system that developed into the Center's Subcontract Review System (SRS). The SRS has enabled the Small Business Specialists to generate master checklists of all SF 294 submissions. MSFC is responsible for inputting approximately 75 SF 294 reports each reporting period. As of the 30 September 2003 reporting period, 71 of the 75 required reports were entered.

OUTREACH

1. Programs

MSFC 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. In the past fiscal year alone, the MSFC Small Business Specialists have supported outreach activities in a wide geographical area, such as the Annual NASA/JPL High Tech Small Business Conference in Los Angeles, CA; the Small Business In The Sunshine Expo in San Destin, FL; the AMTI Business Opportunities Trade Show in Arlington, VA; the Boeing Technology Forum in Huntington Beach, CA; the Jacksonville State University Business Opportunity Trade Fair in Jacksonville, AL; and two SBA-sponsored Matchmaking Events in Birmingham and Huntsville, AL. With respect to MSFC events, in FY 2001, MSFC sponsored its Industry Showcase in Florence, AL, and in both FY 2001 and 2002, the Center sponsored its Minority Owned Business / Women Owned Business Expo. In FY 2003, MSFC sponsored its MSFC Small Business Manufacturing/Engineering Showcase in Guntersville, AL.

In addition, the MSFC Small Business Specialists have made more than 20 off-site visits during the past three fiscal years to large and small businesses, to discuss the Center's socio-economic contracting program. These companies include major MFSC prime contractors such as Lockheed Martin, The Boeing Company, ATK Thiokol, Northrop Grumman, and Orbital Sciences, as well as small and small disadvantaged businesses such as Campbell Engineering (WOSB), Reynolds Industries (SB), Neal Industries (HUBZone SDB/8(a)), CarMin Industries (WOSB/VOSB/8(a)/HUBZone), and Oakwood College (HBCU).

The creation of the Marshall Prime Contractor Supplier Council (MPCSC) is another instance of MSFC's outreach activities. The MPCSC, which provides its membership a productive environment for networking, focuses on strengthening diversity within MSFC's subcontracting program and on developing a forum for exchange of information that will ultimately result in the creation of a model subcontracting program and a Best Practices manual to be shared with all prime contractors supporting NASA. Sponsored events held in FY 2003 include the ATK Thiokol-sponsored MPCSC meeting, held in Ogden, UT, in April, and the Computer Sciences Corporation / Lockheed Martin / Jacob-Sverdrup / Boeing Company / Teledyne Brown jointly-sponsored meeting in Guntersville AL, in August.

MSFC's outsourcing initiative involves an Outsourcing Team that has visited more than 50 local machine shops during FY 2002 and FY 2003, to assist those shops in achieving ISO compliance. Each business interested in participating in this program is added to the limited vendor list (LVL) for non-flight hardware development requirements and to the audited vendor list (AVL) for light-critical hardware development requirements. MSFC management utilizes both the LVL and AVL for outsourcing activities.

STRENGTH:

DON ABRAMS (HQ - Code HC)	Survey Team Manager, Interviews (Legal, Customer and COTRS)
RICH CANELLA (LaRC)	Pre-Award (JFOCs, Acquisitions in Process, Market Research, NPR 7120.5 Certification, Affirmative Action Program, and Logistic Services Contract Review)
PATRICK LOGAN (GSFC)	Post Award (Task Order-Competition under Multiple Award and Delivery Order Contracts, Cost Plus Award and/or Incentive Fee, Exercise of Options, Unliquidated Obligations, Undefinitized Contract Action) and Contract Safety
REGINALD WALKER (HQ - Code HC)	Pricing-Financial-Audits (Cost/Price Analysis, Pre-Negotiation and Post Negotiation Documentation, Technical Evaluations, Use of Structured Approach in Profit/Fee Determination-NF634, Audit Follow-Up, Contractor Pension/Insurance Reviews, Financial Management Reporting-NF533), Government Furnished Property and Set Fee Initiative
SUZAN MOODY (HQ - Code HK)	Contractor Performance NF1680 Evaluation, Grants, Cooperative Agreements and SBIR Program
MONICA MANNING (HQ - Code HC)	Simplified Acquisition Procedures, Deviations, Master Buy Plan Process, Internal Policies and Procedures, Deviations, Virtual Procurement Office, Metrics and Administrative Support
JERRY EDMOND (HQ - Code HC)	Bankcard Program, Construction Contracts, IFMP/SAP Issues and Self-Assessments
LAMONT HAMES (HQ - Code K)	Small and Disadvantaged Business Utilization
ELEANOR CHIOGIOJI (HQ - Code K)	Small and disadvantaged business utilization

DONNA SPRINKLE	Procurement Data Support
BRIDGET BOND	Headquarters Administrative Support
JERRY WILLIAMS	MSFC Point of Contact

Procurement
Management
Survey Report

Marshall Space Flight 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