Status Report

OIG Report: NASA’s Use of Space Act Agreements

By SpaceRef Editor
June 5, 2014
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OIG Report: NASA’s Use of Space Act Agreements

NASA Inspector General Paul Martin today released a report examining NASA’s use of Space Act Agreements – the broad authority authorized under the National Aeronautics and Space Act of 1958 that enables the Agency to enter into agreements other than traditional contracts, grants, and cooperative agreements with individuals and organizations to advance its mission. NASA has entered into thousands of Space Act Agreements over the years to promote scientific research and new technology, stimulate industry to undertake new endeavors, and encourage companies that have not pursued more traditional agreements with the Agency because of regulatory requirements and costs.

Space Act Agreements establish a set of legally enforceable promises requiring a commitment of NASA resources, such as personnel, funding, equipment, expertise, information, or facilities. The agreements may be reimbursable (the partner reimburses NASA’s costs in full or in part); nonreimbursable; or funded (NASA transfers appropriated funds to the partner).

NASA’s use of Space Act Agreements has increased more than 29 percent between fiscal years (FY) 2008 and 2012, with reimbursable agreements showing the largest growth at 41 percent. In addition, during this 5-year period NASA entered into 13 funded agreements worth $1.8 billion to support the development of commercial cargo and crew spaceflight capabilities.

The Office of Inspector General (OIG) audit released today found that NASA cannot identify the cost incurred or effectively measure the benefits derived from nonreimbursable Space Act Agreements because it lacks a close-out process or similar mechanism to document results. Although these agreements involve no exchange of funds, NASA nevertheless bears the expense associated with any personnel, facilities, expertise, or equipment it contributes. Consequently, objectively assessing the value these agreements bring to the Agency and to the broader aeronautical, scientific, and space exploration communities is difficult.

In addition, the OIG concluded that NASA could better ensure equal access to its facilities and capabilities and increase interest in Space Act opportunities by expanding its efforts to solicit a broader number of potentially interested parties.

The OIG also found that NASA has unclear guidance regarding when it is appropriate to use Space Act Agreements as opposed to leases and how the agreements must align with the Agency’s mission. Most Centers have interpreted NASA’s policy to mean the covered activity must directly relate to a NASA mission, while others have taken the position that the actual activity performed need not directly relate to a NASA mission as long as the proceeds from an agreement help maintain a needed facility or capability. Under the latter interpretation, the Kennedy Space Center received $392,000 from NASCAR and other organizations for use of its Shuttle Landing Facility for aerodynamics testing and the Michoud Assembly Facility an estimated $2.9 million from movie production studios, engineering firms, and manufacturing companies that utilized excess office and warehouse space at the facility.

The OIG also found that while there are no indications that NASA has failed to collect fees associated with reimbursable agreements, the Agency cannot readily separate amounts billed and collected for these agreements because its accounting system does not have a common identifier to separate Space Act Agreements from other types of reimbursable activity.

Finally, the OIG questioned NASA’s decision to refrain from including more specific information about Agency objectives and key safety elements in funded Space Act Agreements and believes it should consider being more prescriptive in the future when using funded agreements.

To address these issues, the OIG recommended that NASA establish policy and procedures to increase awareness of Space Act opportunities, clarify when it is appropriate to use Space Act Agreements, better account for costs expended supporting nonreimbursable agreements, establish a close-out process to track the costs and benefits of nonreimbursable agreements, and complete its ongoing effort to improve the reimbursable process and correct NASA’s current inability to combine financial and nonfinancial information in the Agency’s accounting system. We also recommended NASA consider including high-level program objectives and key safety elements in funded Space Act Agreements to develop spaceflight capabilities.

NASA agreed to take actions to address each of our recommendations.

The full report can be found on the OIG’s website at under “Reading Room” or at the following link:

Please contact Renee Juhans at (202) 358-1220 if you have questions.

SpaceRef staff editor.