From: NASA Office of Inspector General
Posted: Wednesday, December 11, 2013
NASA Inspector General Paul Martin today released a review examining allegations of improper leasing of a hangar and aircraft fuel purchases between NASA's Ames Research Center and H211, a private company that manages aircraft owned or leased by Google executives.
In 2007, Ames entered into an Enhanced Use Lease and an associated Space Act Agreement with H211. Under the lease, the company pays NASA $1.4 million annually to rent 70,000 square feet of hangar space where it stores up to nine aircraft, including two helicopters and seven airplanes ranging in size from a Boeing 767 to a two-seat military aircraft known as an Alpha Jet. The hangar is located adjacent to Moffett Federal Airfield, a former U.S. Navy base managed by Ames, less than 4 miles from Google's Mountain View, California, headquarters. The Space Act Agreement allows NASA to use H211 aircraft - primarily the Alpha Jet - to conduct Earth science research.
H211 fuels its planes for both its private and NASA-related flights with aviation fuel supplied by the Defense Logistics Agency-Energy (DLA-Energy), an arm of the Department of Defense (DOD). DLA-Energy is the sole provider of aviation fuel at Moffett and charges DOD entities one rate and non-DOD entities such as NASA or NASA contractors a higher rate. However, because this NASA rate does not include state and local taxes or other fees H211 would have been charged at local airports, the price-per-gallon is lower than comparable aviation fuel prices at nearby commercial venues.
Hangar Lease: The OIG found that consistent with NASA policy Ames based the price of its lease with H211 on the fair market value of comparable hangar space and that, as required, the lease and companion Space Act Agreement supported NASA's mission. Specifically, since 2009 H211 has flown more than 200 flights to collect climate data at no cost to NASA - science missions Ames officials estimate would have cost the Agency between $1,800 and $6,500 per flight hour to operate depending on the type of aircraft used. Accordingly, we determined that NASA benefitted from both its lease and Space Act Agreement with H211.
Aviation Fuel: We found that from September 2007 until August 2013, H211 purchased fuel at Moffett from DLA-Energy either directly or through NASA for both its personal flights and NASA science flights at a rate intended only for government agencies and their contractors.1 We found that a misunderstanding between Ames and DLA-Energy personnel rather than intentional misconduct led to H211 receiving the discounted fuel rate for flights that had no NASA-related mission. Even though Ames officials accurately reported to DLA-Energy the nature of the Center's agreement with H211, DLA-Energy misunderstood that H211 was drawing fuel for both personal and NASA-related missions. While this arrangement did not cause a financial loss to NASA or DLA-Energy, it resulted in considerable savings for H211. Specifically, we calculated that since inception of its lease H211 paid approximately $3.3 million to $5.3 million less in fuel costs that it would have paid to buy fuel at market rates compared to the amount it paid DLA-Energy.
Even though we concluded that the fuel arrangement did not result in an economic loss to NASA or DLA-Energy, H211 nevertheless received a monetary benefit to which it was not entitled. Accordingly, we recommend that NASA explore with the company possible options to remedy this situation.
The full review can be found on the OIG's website at http://oig.nasa.gov/ under "Reading Room" or at the following link: http://oig.nasa.gov/Special-Review/NASA_H211.pdf
Please contact Renee Juhans at (202) 358-1220 if you have questions.
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