NASA's System for Tracking Foreign Contracts and Subcontracts
(09-NOV-06, GAO-07-142R).
The National Aeronautics and Space Administration (NASA) is the
nation's leading research and development organization in the
fields of space and aeronautics. Each year, NASA spends almost 90
percent of its annual budget on the acquisition of supplies and
services in order to fulfill the agency's mission to pioneer the
future in space exploration, scientific discovery, and
aeronautics research. NASA purchases these supplies and services
from both U.S. and foreign contractors. Although most contracts
were awarded to U.S. contractors, NASA, in fiscal year 2004, also
awarded contracts to vendors in 23 countries. The National
Aeronautics and Space Administration Authorization Act of 2005
requires the NASA Administrator to annually report to Congress on
NASA's contracts and subcontracts performed overseas and
purchases from foreign entities. The report should also indicate
contracts and subcontracts and their dollar values for goods and
services that are only available from foreign sources as well as
items and their dollar values for which the Buy American Act was
waived pursuant to obligations of the United States under
international agreements. According to the reporting requirement,
the first annual report is due no later than January 2007. Based
on Congressional interest in ensuring that NASA will have the
data to meet the new reporting requirements, we examined how NASA
will track contracts and subcontracts performed overseas, foreign
purchases, and the use of Buy American Act exceptions. We also
determined whether NASA collects and analyzes data to assess its
supplier base.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-142R
ACCNO: A63184
TITLE: NASA's System for Tracking Foreign Contracts and
Subcontracts
DATE: 11/09/2006
SUBJECT: Aerospace research
Contract administration
Data collection
Federal procurement
Reporting requirements
Subcontracts
Procurement policy
Policy evaluation
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GAO-07-142R
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November 9, 2006
The Honorable Mark Udall
Ranking Minority Member
Subcommittee on Space and Aeronautics
Committee on Science
House of Representatives
The Honorable Jerry F. Costello
House of Representatives
Subject: NASA's System for Tracking Foreign Contracts and Subcontracts
The National Aeronautics and Space Administration (NASA) is the nation's
leading research and development organization in the fields of space and
aeronautics. Each year, NASA spends almost 90 percent of its annual budget
on the acquisition of supplies and services in order to fulfill the
agency's mission to pioneer the future in space exploration, scientific
discovery, and aeronautics research. NASA purchases these supplies and
services from both U.S. and foreign contractors. Although most contracts
were awarded to U.S. contractors, NASA, in fiscal year 2004, also awarded
contracts to vendors in 23 countries.
The National Aeronautics and Space Administration Authorization Act of
2005^1 requires the NASA Administrator to annually report to Congress on
NASA's contracts and subcontracts performed overseas and purchases from
foreign entities. The report should also indicate contracts and
subcontracts and their dollar values for goods and services that are only
available from foreign sources as well as items and their dollar values
for which the Buy American Act was waived pursuant to obligations of the
United States under international agreements. According to the reporting
requirement, the first annual report is due no later than January 2007.
Based on your interest in ensuring that NASA will have the data to meet
the new reporting requirements, we examined how NASA will track contracts
and subcontracts performed overseas, foreign purchases, and the use of Buy
American Act exceptions. We also determined whether NASA collects and
analyzes data to assess its supplier base.
^1 Pub. L. No. 109-155, S 709.
Summary
NASA will not fully meet congressional reporting requirements on fiscal
year 2006 foreign purchases by January 2007 because it is not collecting
all the data needed to do so. Currently, NASA can track its contracts
performed overseas and purchases of foreign goods and services through
information contained in the Federal Procurement Data System-Next
Generation (FPDS-NG)--an upgrade to the governmentwide information system
on federal procurement contracts. As NASA relies on FPDS-NG, which
currently does not track information on subcontracts or Buy American Act
exceptions used in foreign purchases, NASA officials stated that they
cannot report on this information at this time. A recent change made to
the FPDS-NG will allow NASA to start collecting Buy American Act data for
its fiscal year 2007 purchases, and NASA plans to work with the Office of
Management and Budget (OMB) to collect subcontract information under a
pilot program to be implemented by July 2007. However, NASA will not have
this information available to meet the January 2007 reporting date.
In addition, although NASA has collected supplier base data for its Space
Shuttle program, it does not collect or analyze agencywide data on its
suppliers.
In view of NASA's ongoing actions intended to address congressional
reporting requirements, we are not making recommendations in this report.
NASA Relies on FPDS-NG to Meet Reporting Requirements
NASA officials told us that NASA relies on the FPDS-NG to meet its
reporting requirements. Therefore, what NASA can report depends on whether
the needed data are part of the data fields included in the FPDS-NG. If
needed data are not included in the FPDS-NG, NASA could amend its FAR
Supplement to collect the data.
NASA Can Track Foreign Purchases through FPDS-NG
FPDS was established in 1978 to collect governmentwide information on
federal procurement contracts. Executive agencies, including NASA, are
required to submit data into the FPDS-NG on their procurements exceeding
$3,000. The information includes contract types, dollar values and dates,
purchaser information, product or service information, competition
information, and contractor information. Federal agencies can query the
data system to generate reports needed to meet reporting requirements,
based on the data included in the system.
Through the FPDS-NG's advanced search capability, NASA can create its own
custom reports using the following three data elements currently in the
system that would allow it to meet part of the congressional reporting
requirements
o Principal Place of Performance--the place where the work is
being performed;
o Vendor Country Code--the country code of the contractor's
address; and
o Extent Competed--a code that represents the competitive nature
of the contract.
NASA plans to query the Principal Place of Performance data field to
compile a list of contracts performed overseas and then further query the
Vendor Country Code for contracts performed by foreign vendors in order to
compile a list of foreign purchases. In addition, within the list of
foreign purchases, NASA plans to use the Extent Competed data for a list
of sole source contracts that would indicate that the items purchased were
available only from a source outside the United States. While these data
fields will enable NASA to report part of the information required by
congressional requirements, we believe that the accuracy and consistency
of the data will depend on NASA's contracting office staff inputting
accurate data into the system and contractors providing correct
information.
While FPDS-NG is intended to provide more timely and accurate data, enable
users to generate their own reports, and provide easier user access to
data, we recently found that the upgrade may have some limitations.
Specifically, in September 2005, we reported that the FPDS-NG may not
achieve its intended improvements. We recommended that the Office of
Management and Budget (OMB) work with agencies that have not moved to an
electronic data submission environment to connect to FPDS-NG via contract
writing systems as soon as possible and develop a plan to improve the ease
of use and access to data.^2 OMB concurred with the recommendations and is
in the process of implementing them.
NASA Unable to Track Foreign Subcontracts or Buy American Act Exceptions
until Changes Made
Because not all the data needed to satisfy the congressional reporting
requirements are currently included in the FPDS-NG, NASA has to either
collect its own data or wait for changes to be made to the FPDS-NG. The
following data are not being tracked by NASA but are needed to satisfy the
congressional reporting requirements
o subcontracts performed overseas,
o subcontracts that are purchases from foreign entities,
o subcontracts for which the goods or services are available only
from a source outside the United States, and
o foreign purchases for which the Buy American Act did not apply
due to U.S. obligations under international trade agreements.
The Federal Funding Accountability and Transparency Act of 2006^3 enacted
on September 26, 2006, requires OMB to establish a database containing,
among other things, contract and subcontract data. The act requires OMB to
commence a pilot program to collect subcontract data no later than July
2007. NASA plans to work with OMB to determine if the new system will
satisfy NASA's subcontract reporting requirements. If not, NASA will
consider development of a supplemental subcontract database.
^2 GAO, Improvements Needed to the Federal Procurement Data System-Next
Generation, GAO-05-960R (Washington, D.C.: Sept. 27, 2005)
^3 Pub. L. No. 109-282.
In addition, in October 2006, a change was made to the FPDS-NG that will
allow NASA to start collecting Buy American Act exception information for
its fiscal year 2007 purchases, in response to a fiscal year 2006
appropriations act^4 governmentwide reporting requirement. Also, in
response to this reporting requirement, the Federal Acquisition Regulation
(FAR) was changed on September 28, 2006, requiring offerors to provide
"Place of Manufacture" data. According to agency officials, along with
this information, contracting officers will be required to enter into the
FPDS-NG the appropriate Buy American Act exception category for
procurements of items that are manufactured outside of the United
States--one of these categories being U.S. obligations under trade
agreements. On October 6, 2006, NASA issued guidance to its contracting
officers on how to enter Buy American Act exceptions data into the
FPDS-NG. This information will enable NASA to collect the data needed to
meet its reporting requirements.
NASA procurement officials told us that contracting officers will need
additional training to properly input new data elements, such as
information on the Buy American Act exceptions, into the FPDS-NG. The FAR
Acquisition Law Team, that participated in preparing the FAR changes,
recommended that an on-line training module would be appropriate to assist
contracting officers to understand how to determine the applicable
exceptions to the Buy American Act. NASA plans to include training on Buy
American Act exceptions as a part of its training planned for its
contracting personnel when its new contract management system becomes
operational in November 2006.
NASA Supplier Base Assessment
With the exception of the Space Shuttle program, NASA is not collecting or
analyzing data for its agencywide supplier base. For the Space Shuttle
program, NASA has identified its active supplier base and made analyses
for planning purposes. Such information collected agencywide could allow
NASA to make an assessment of its total supplier base.
NASA officials told us that they do not track agencywide data on its
suppliers, but that some individual NASA program offices may collect such
data as needed. For example, NASA conducted a transition planning study^5
in 2005 for the phasing out of the Space Shuttle. As a part of the study,
NASA collected supplier base data. The study, for example, identified
1,542 active suppliers spread across 43 states and analyzed a list of
critical vendors on their capabilities and alternative sources. While a
follow-on study was requested by the Space Shuttle Program supply chain
manager to study the viability of some of the suppliers, the official told
us that the study was cancelled due to a lack of funding.
^4 Transportation, Treasury, Housing and Urban Development, the Judiciary,
the District of Columbia, and Independent Agencies Appropriations Act,
2006, Pub. L. No. 109-115, S 837 (2005). The Act requires each federal
agency to report to Congress on the amount of acquisitions from entities
that manufacture the articles, materials, or supplies outside of the
United States. The report should include the dollar value of any articles,
materials, or supplies purchased that were manufactured outside of the
United States, an itemized list of Buy American Act exceptions for these
procurements, and a summary of the total procurement funds spent on goods
manufactured in the United States versus funds spent on goods manufactured
outside the United States.
^5 NASA, Integrated Space Operations Summit III, Enabling Exploration,
ISOS Space Shuttle Program Transition Panel Final Report (Apr. 15, 2005).
Agency Comments
We provided a draft of this letter to NASA for comment. NASA concurred
with our report and had no comments.
Scope and Methodology
To assess how NASA will track contracts and subcontracts performed
overseas, foreign purchases, and the use of Buy American Act exceptions,
we met with NASA officials to obtain information on NASA's FPDS-NG data
tracking system; interviewed NASA officials on current tracking of foreign
purchases and plans to collect data needed to meet reporting requirements;
and met with other federal agency officials on proposed changes to the FAR
and the FPDS-NG that would allow for the collection of foreign purchase
and Buy American Act data. In addition, we analyzed contract files at
NASA's Goddard Space Flight Center to determine how Buy American Act
exceptions are documented.
To determine whether NASA collects and analyzes data to assess its
supplier base, we interviewed NASA officials to determine what studies
NASA has done to collect supplier base data and what type of data analysis
has been conducted.
We conducted our work from May 2006 to October 2006 in accordance with
generally accepted government auditing standards.
- - - - - - - -
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this report, we plan no further distribution of it until 30 days from the
date of this letter. At that time, we will send copies to NASA's
Administrator and interested congressional committees. We will also
provide copies to others upon request. In addition, this letter will be
available at no cost on the GAO Website at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this
report, please contact me at (202) 512-4841 or at [email protected] .
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Principal
contributors to this report were John Neumann, Assistant Director; John
Ting; and Kathryn Smith.
Cristina Chaplain
Acting Director, Acquisition and Sourcing Management
(120536)
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