NASA OIG: Final Memorandum on the Standing Review Board for the Orion Crew Exploration Vehicle Project
National Aeronautics and
Space Administration
Office of Inspector General
Washington, DC 20546-0001
April 28, 2008
TO: Associate Administrator for Program Analysis and Evaluation
Chief Engineer
General Counsel
Assistant Administrator for External Relations
FROM: Assistant Inspector General for Auditing
SUBJECT: Final Memorandum on the Standing Review Board for the Orion Crew Exploration Vehicle Project (Report No. IG-08-018; Assignment No. A-07-011-00)
During the Office of Inspector General (OIG) audit of the Orion Crew Exploration Vehicle (Orion) Project, we identified an issue concerning the establishment of the Orion Standing Review Board (SRB), which was tasked to provide independent assessments of the Project during its life cycle. (See Enclosure 1 for details on this report’s scope and methodology.)
Executive Summary
NASA did not establish the Orion SRB in accordance with Federal law or NASA guidance. The Orion SRB meets the Federal Advisory Committee Act1 (FACA) definition of an advisory committee. Although FACA committees must be established in accordance with FACA and NASA Policy Directive (NPD) 1150.11, “Federal Advisory Committee Act Committees,” September 22, 2004, the Orion SRB was not. Had NASA initially recognized the Orion SRB as an advisory committee subject to FACA, NASA’s ethics process associated with advisory committee participation would have been triggered, resulting in a focus on board member independence and conflict of interest resolution. Aside from these considerations, independence is a requirement for SRB participation; however, of the 19 members of the Orion SRB, 6 (32 percent) were not independent of the Orion Project as required by NASA Procedural Requirements (NPR) 7120.5D, “NASA Space Flight Program and Project Management Requirements,” March 6, 2007.
The Orion SRB’s purpose, responsibilities, and membership met the definition and characteristics of a committee that should be established under FACA. FACA generally applies to committees that (1) are established by a Federal official, (2) include at least one non-Federal Government employee, and (3) are responsible for providing advice and recommendations to the agency. Because the Orion SRB established by NASA included 15 non-Federal Government employees, and its primary responsibility was to provide NASA management an advisory opinion of the Orion Project’s success in meeting technical, schedule, and cost-related milestones, we conducted further analysis of FACA and FACA-related case law to consider FACA’s applicability to the Orion SRB. Based on that analysis, we believe that FACA did apply to the Orion SRB; therefore, the SRB should have been established and operated in accordance with FACA. NPD 1150.11 requires that NASA employees coordinate with the Office of the General Counsel (OGC) when committees or teams involving non-NASA personnel are established to ensure that the Agency complies with FACA if it is applicable. There was no coordination with the OGC when the Orion SRB was established.
We determined that six of the Orion SRB members, including the Chair, were not independent of the Orion Project, as required by NPR 7120.5D. The NPR requires independence to ensure that the SRB can provide an impartial, unbiased opinion of the Project’s success. Those six Orion SRB members were employees (and in four cases were also stockholders) of companies having contracts for Orion work. Because of the employee/stockholder status, those members had a vested interest in the Project’s success, making them unsuited to serve on an advisory board that emphasizes “objectivity and independence.” In addition, the employee/stockholder status created an organizational conflict of interest (as defined in the Federal Acquisition Regulation [FAR]) between the members’ employers and NASA.
The issue of independence and conflict of interest is key to our concerns. Had the OGC been coordinated with, as required by NPD 1150.11, we believe that the Orion SRB would have been initially recognized as an advisory committee subject to FACA. For the SRB to proceed consistent with requirements, NASA’s ethics process, as associated with advisory committee participation, would have been triggered with a focus on board member independence and conflict of interest resolution. The SRB members, pursuant to NASA practice, would likely have been deemed to be Special Government Employees (SGEs). As such, the Orion SRB members would have been subject to more robust financial disclosure and the criminal conflict of interest provisions of Title 18, United States Code, Section 208 (18 U.S.C. 208).
Under the ethics regime for Federal employees, conflicts of interest are identified and resolved, sometimes through waivers that examine the extent of the conflicts and, in the case of SGEs, by weighing the conflict against the Government’s need for the services of the particular SGE. Without the rigorous and definitive conflict of interest resolution process provided under the ethics regime for Federal employees, the Agency examined the conflicts of interests of the SRB members in the context of NPR 7120.5D and without the advice of Agency counsel.
Our February 29, 2008, draft of this memorandum recommended that the Associate Administrator for Program Analysis and Evaluation (PA&E), in coordination with the OGC and the Office of the Chief Engineer, suspend the involvement of the six SRB members that we found to be not independent of the Project from further SRB activities until an evaluation of the legality and propriety of the participation of these individuals in the SRB is concluded. That evaluation should include an analysis of whether the Orion SRB should be reorganized under FACA and whether the ethical rules for SGEs are implicated. To ensure that the lessons from the issues associated with the establishment of the Orion SRB are incorporated into NASA practice more generally, we recommended that the Agency evaluate the purpose, roles, responsibilities, and membership of SRBs to determine the optimum approach for accomplishing the SRB mission while ensuring compliance with all applicable Federal laws and NASA guidance. Based on the evaluation results, the Agency should revise NPR 7120.5D and NASA’s draft SRB Handbook to reflect any revised SRB roles, responsibilities, and membership requirements. Lastly, to ensure that the Agency is aware of committees that may be required to comply with FACA, we recommended that the Assistant Administrator for External Relations have NASA organizations annually identify any new committees that include non-NASA personnel and ensure that, if FACA applies, those committees comply with its requirements.
Management’s Comments and OIG Response. Management submitted two sets of comments in response to the draft of this memorandum. In the first set of comments (see Enclosure 4), the Associate Administrator for PA&E requested that we revise several statements concerning the participation of the Independent Program Assessment Office (IPAO) in nominating the SRB members, IPAO’s authority to revise SRB reports, and the IPAO Director’s position on NPD 1150.11 applicability. Although we did not specifically state in the draft memorandum that IPAO had the authority to revise an SRB report, we deleted our statement concerning IPAO involvement in the SRB reporting process because it did not affect our finding. We made no additional revisions as we had significant support for our statements.
In the second set of comments (see Enclosure 5), the Associate Administrator for PA&E did not find it necessary to suspend the six SRB members in response to our recommen-dation, given that steps had been taken to ensure the legality and propriety of the SRB membership. In response to our recommendation that the Agency analyze whether the SRB should be reorganized under FACA and its members subject to the ethical rules for SGEs, the Associate Administrator stated that the analysis was complete and that the Orion SRB would not be subject to FACA nor would its members be subject to SGE ethical rules because the members had been advised to render individual as opposed to consensus advice. Regarding our recommendation to conduct a rigorous analysis of the SRB members’ independence, the Associate Administrator stated that analysis is ongoing and that SRB activities are being redirected in order to follow the new Agency plan for conducting independent assessments. The Agency will reevaluate the independence status of each Orion SRB member once the Office of PA&E completes its revision of the SRB independence standards.
We consider management’s comments on these recommendations to be nonresponsive. We understand that the SRB independence standards are under revision and that the Orion SRB members will be subject to those revised standards; however, the Associate Administrator for PA&E did not provide specific information concerning the six Orion SRB members and the efforts taken to ensure the “legality and propriety of their membership.” Until such information is provided and organizational conflicts of interest are adequately mitigated, the six Orion SRB members should be suspended from participating in SRB activities. Regarding FACA applicability to the Orion SRB, while rendering individual rather than consensus advice is an important factor, it is not the only factor considered in determining FACA applicability. The formality and structure of the SRB, the interaction of its members, and the political legitimacy of the advice are all factors in that determination. To ensure that the Agency is FACA-compliant, management needs to provide additional information as to how the Orion SRB will be structured, organized, and managed. The comments should also address the potential impact of not having the SRB provide a consensus opinion. We request that the Associate Administrator for PA&E provide additional comments in response to our final memorandum by May 28, 2008.
The Associate Administrator concurred with our recommendations to conduct an evaluation to determine the optimum approach for accomplishing the SRB mission while ensuring compliance with all applicable Federal laws and NASA guidance and, based on the evaluation results, to update NPR 7120.5D and the SRB Handbook to reflect any revised SRB roles, responsibilities, and membership requirements. The Associate Administrator stated that the Agency is defining SRB implementation approaches to ensure compliance with Federal and NASA guidance and that NPR 7120.5D and the SRB Handbook would be revised to reflect any changes concerning the SRB. He also stated that the Orion SRB would be operated in compliance with that revised guidance. The Assistant Administrator for External Relations concurred with our recommendation to identify NASA committees that may meet the definition of a FACA advisory committee, stating that he will work with Agency officials to identify NASA-sponsored committees and ensure that the committees comply with FACA, if required.
We consider management’s comments responsive to these recommendations. The recommendations are resolved and will be closed upon completion and verification of management’s corrective action.
In response to the draft of this report, the Associate Administrator for PA&E stated that the memorandum and management comments were predecisional and, therefore, should be subject to exemption (b)(5) of the Freedom of Information Act. However, our audit report is a final document representing a final decision of this office. Management’s response, in our view, reflects firm commitments (decisions) toward future action. Specific options and positions for how the future action will be executed are not specified in these documents. We declined to invoke the deliberate process privilege and, therefore, under the authority of Title 14, Code of Federal Regulations, Section 1206.504, “Inspector General,” this report, and management’s response, is publicly available in its entirety.
1 Title 5 of the United States Code (5 U.S.C.), Sections 1-16, the Federal Advisory Committee Act (1972), as amended.
