Friday, March 20, 2015

GAO's High-Risk List - NASA Acquisition Management

We are continuing our series on GAO's list of high-risk agencies and program areas that are so-named because of their vulnerabilities to fraud, waste, abuse and mismanagement, or are most in need of transformation. There are 32 programs on the list and as you might guess, programs dealing with medicare, medicaid, improving VA care, and tax law enforcement are well represented. In this series however, we are limiting our discussion to just those areas that pertain to Government contracting. Yesterday, we discussed DoD's Contract Management (click here if you missed it). Today we focus on GAO's coverage of NASA's acquisition practices.

According to GAO, NASA plans to invest billions of dollars in the coming years to explore space, understand earth's environment, and conduct aeronautics research. GAO designated NASA's acquisition management as high risk in 1990 because of its persistent cost growth and schedule slippage in the majority of its major projects. GAO identified a number of factors that contributed to this; antiquated financial management systems, poor cost estimating, and underestimating risks associated with the development of its major systems.

GAO is particularly critical of management risks when it comes to estimating what resources are needed to complete a project, assessing whether projects are ready to move forward, and enabling sound management and oversight. According to GAO, NASA must make improvements in forecasting costs for its largest projects. And, as we well know, forecasting costs for projects is based heavily on information and data provided by contractors.

If anything, contractors are not always forthcoming with bad news, be it cost growth or schedule slippage. Most of what NASA (and other agencies) pass on to Congress is based on data supplied by contractors. Contractors are symptomatically optimistic when it comes to contract performance or they just don't want to pass on bad news. NASA needs to better understand the risks and improve acquisition policies to obtain better insight into performance on its major programs.

Next Week, DoD support infrastructure management.

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