NASA OIG: Senate Testimony on NASA’s Small Business Innovation Research (SBIR) Program
Hearing of the Senate Committee on Commerce, Science, and Transportation on the National Aeronautics and Space Administration’s Small Business Innovation Research (SBIR) Program
Statement by: Thomas J. Howard Acting Inspector General
Chairman Rockefeller and Members of the Committee:
Thank you for the opportunity to discuss the Office of Inspector General’s work addressing fraud, waste, and abuse in the Small Business Innovation Research (SBIR) Program of the National Aeronautics and Space Administration (NASA).
Over the last 5 years, with an average of more than $105 million in annual awards, NASA’s SBIR Program is one of the largest in the Federal Government, providing substantial support for small business participation in research and development activities. A recent assessment by the National Research Council of the National Academies concluded, “The NASA SBIR Program is making significant progress in achieving the congressional goals for the Program.”
While SBIR plays an important role in NASA’s research activities, our work has identified instances of fraud, waste, and abuse by Program participants that bring into question the effectiveness of the Program’s internal controls. Specifically, of the SBIR 46 investigations we have closed since 2001, eight or 17 percent have resulted in criminal convictions, civil judgments, or administrative corrective action. Currently, we have five open investigations involving allegations of potential fraud, waste, or abuse in the SBIR Program. Our investigative and audit work has shown that some SBIR contractors
* submitted duplicate proposals to different Federal agencies and received multiple awards for essentially the same work,
* submitted different proposals to multiple Federal agencies but provided duplicate deliverables based on the same research,
* failed to comply with subcontracting limitations, and
* identified principal investigators who were not primarily employed by the small business concern or who failed to perform a substantial portion of the research work contracted by NASA.
We identified many of these violations as early as 1992, and while NASA has taken corrective action to improve internal controls in the SBIR Program, we continue to identify the same violations in recent and ongoing investigations. Accordingly, we are initiating a comprehensive audit of NASA’s management of the SBIR Program. We will focus specifically on assessing the adequacy and implementation of the Program’s internal controls and the extent of fraud, waste, and abuse by Program participants.
We anticipate that our work will identify opportunities to improve SBIR policies and enhance the Program’s internal control structure. We will also continue to work with the Department of Justice to hold accountable those SBIR Program participants who attempt to harm NASA through fraud, waste, and abuse.
