“NASA Takes Wasteful Spending to New Heights” | Citizens Against Government Waste

“NASA Takes Wasteful Spending to New Heights”

The WasteWatcher

Numbers certainly rule The National Aeronautic Space Association’s (NASA) universe. When it comes to solving complex formulas to calculate the orbit of a Jet Propulsion Laboratory, the exact second when space particles disappear into a black hole, or the amount of oxygen needed for human life to orbit the moon, they have it down to a tee.  NASA has developed some of the worlds’ most complex tools and mathematical formulas that have helped the agency lead the world in space-related technological innovation.

In light of such accomplishments, though, it is surprising that the space agency has not been able to create a much simpler mathematical formula to calculate disbursement payments to even its own agency contractors.  The space agency uses "award-fee" contracts meant to reward contractors for meeting cost, schedule and performance goals throughout a project period, or at least that was how it was designed to operate.

On November 19, 2013, NASA’s Office of the Inspector General (IG) released an audit report  that stated NASA’s use of an overly complex and disorganized calculation method had led to $66.4 million in potential overpayments to its contractors.  

The IG report also found that the agency spent $7.4 million to administer performance evaluations that lacked defined objectives and determinations. Additionally, the agency watchdog found that bonus money was awarded to the contractors without verification that they had completed their work satisfactorily.

NASA officials have pointedly disputed the report, stating that the IG misunderstood the calculation process and that no money has been paid to contractors during performance evaluations.

In the aftermath of continuous criticism from the media and agency watchdogs, NASA attempted to implement a payment system that was meant to reward businesses along the course of a contract, followed by a final payment only if the contractors’ performance evaluation was deemed acceptable. 

This system may have worked if headquarter personnel had an efficient calculation process, and if agency officials had actually reviewed the payments to begin with.  Instead, at the end of a contract, contractors collected money that was not verified, deeming the payment “unearned”.

According to the IG, not only does this practice undermine efforts to ensure contractors meet objectives under budget and ahead of schedule, it “promotes a philosophy that as long as a mission provides good science data, the agency will overlook costs and schedule overages.”

As long as NASA fails to ensure the quality of work completed by its contractors before providing payment, its ability to measure effectiveness and correct and identify deficiencies will be severely impaired.

Until the space agency deciphers the confusion behind the meanings of “earned” and “unearned” award money, or an outside source, Congress, gets involved to help implement and enforce a defined system, it looks as if the fiscal factors within this complex equation are far from being elucidated.

  -- Alexandra Booze

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