The following audit report has been posted to the NASA Office of
Inspector General web site: Audit of United Space Alliance’s Use of
Professional & Consultant (IG-01-012, March 16, 2001)

To access the entire report, please go to:

Synopsis: The NASA Office of Inspector General has completed an audit
of United Space Alliance’s (USA’s) use of professional and consultant
services. Professional and consultant services are services performed
by persons who are members of a particular profession or possess a
special skill and who are not officers or employees of the contractor.
We determined that controls over USA’s use of professional and
consultant service subcontracts need improvement. Weaknesses in the
procurement and contract administration processes exist in this
sensitive cost area that, taken in combination, pose a risk of abuse to
NASA. We found professional and consultant service costs charged to
NASA that did not meet Federal Acquisition Regulation (FAR)
requirements for allowability and inadequate and untimely
justifications for noncompetitive procurements of the professional and
consultant services. Specifically, we found that USA officials did not
maintain evidence on the nature and scope of the furnished services;
maintain adequate support for decisions to noncompetitively award the
service subcontracts; and prepare written justifications for the
noncompetitive awards prior to initiation of the work. As a result,
the $468,673 USA charged to NASA for the services may include
unallowable costs and the Agency has reduced assurance that USA
obtained the best available source or price for professional and
consultant services.

Management’s Response: NASA concurred with the findings and
recommendations. The NASA administrative contracting officer, in
conjunction with the DCMA, requested USA to maintain documentation
identifying the nature and scope of furnished professional and
consultant services. NASA also instructed USA to ensure that
noncompetitive justifications (1) address efforts to identify other
sources and the reasons other sources could not perform the subcontract
requirements and (2) be submitted and approved prior to initiation of
work. The DCAA will include professional and consultant service costs
as part of the incurred cost audit for calendar year 1999. Further,
the DCMA established a process to ensure that it includes these service
subcontracts in reviews of USA’s purchasing system.

Details on the status of the recommendations are in the recommendations
section of the report (pages 3-11).

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