NASA OIG: Contracting Issues Associated With the NASA Safety Reporting System

The audit report ‘Contracting Issues Associated With the NASA Safety
Reporting System’ (IG-02-021) has been posted to the NASA Office of
Inspector General Web site at:
http://www.hq.nasa.gov/office/oig/hq/ig-02-021.pdf

The NSRS is a confidential, voluntary, and responsive reporting system
for NASA employees and contractors to notify the Office of Safety and
Mission Assurance (OSMA) of safety hazards affecting NASA-related
activities. The NSRS is intended to supplement safety-reporting
channels by allowing employees to confidentially report safety concerns
using a standardized form. Once completed, the form is sent to the
NSRS contractor for an analysis and then forwarded to the OSMA for a
response. Although NASA and contractor employees are encouraged to
initially report safety concerns using local reporting mechanisms
available at their work sites, the NSRS is available to report safety
concerns (1) if an individual believes that no action was taken on the
initially reported concern; (2) an individual is dissatisfied with the
action taken; or (3) extenuating circumstances, such as fear of
reprisals, prevent an individual from using standard reporting
channels.

Under the Small Business Administration’s 8(a) Business Development
Program for small and disadvantaged businesses, a company was awarded a
contract to perform certain NSRS activities.

Results of Audit

The NASA contracting officer did not terminate the contract with the
company when it was acquired by a non-8(a) program company, even though
the Small Business Act regulations and Agency guidance require contract
termination in this case. As a result, NASA will have to take action
to avoid a break in NSRS coverage until a new contract can be
established. Further, NASA’s actions were not in compliance with the
Small Business Act and the Federal Acquisition Regulation because the
lack of contract termination denied opportunities to eligible,
disadvantaged small businesses under the Small Business
Administration’s 8(a) Business Development Program. We also found that
NASA’s use of a cost-reimbursement contract for the initial and follow-
on 8(a) contracts was not cost-effective. Consequently, NASA paid more
than $9,500 a month to process one to two NSRS safety hazard reports
each month for the last 35 months and assumed risks that could have
been either shared or transferred to the contractor to lower NSRS
costs.

Recommendations

NASA should take immediate action to ensure it has coverage for the
NSRS until a new NSRS contract or other reporting system can be
established. In the interim, NASA should coordinate with the current
NSRS contractor to complete a transition plan that addresses how the
documents and equipment, including any software, databases, and the
NSRS Web site will transition to NASA or a new NSRS contractor. In
addition, NASA should emphasize the requirements of the Small Business
Act, the Federal Acquisition Regulation, and Agency Procurement
Information Circulars relating to the 8(a) program to ensure that
contracting officers and contracting officer’s technical
representatives are aware of the requirements for establishing and
administering contracts with 8(a) businesses. Finally, NASA should
award a fixed-price contract for the NSRS or consider potentially more
cost-effective alternatives, such as the Aviation Safety Reporting
System or an Agency Hotline office to administer the NSRS program.

Management’s Response

NASA either concurred or partially concurred with the recommendations
and has taken responsive actions for three recommendations. Although
we recommended a fixed-price contract for the NSRS reporting
requirement, NASA has awarded a time and materials contract using the
General Services Administration Federal Supply Schedules.
Notwithstanding our concerns with this approach, since NASA has already
awarded the contract, we consider all the recommendations closed.

To comment on this report, please send e-mail to
igrelease@hq.nasa.gov