NASA Consolidation Effort Saving Less than Hoped

by

SAN FRANCISCO — NASA’s effort to trim expenses and make more efficient use of its work force by consolidating institutional activities at the NASA Shared Services Center (NSSC) has produced savings. However, those gains fall short of the space agency’s previous estimates, according to a Feb. 1 report by the NASA Office of the Inspector General.

In 2006, the space agency established NSSC at the Stennis Space Center near Bay St. Louis, Miss., to bring institutional activities being performed at NASA headquarters and the 10 NASA field centers to a single site. NSSC is a partnership formed by NASA, Computer Sciences Corp. of Fort Worth, Texas, and the states of Mississippi and Louisiana. Computer Sciences employees working at NSSC provide support services with oversight and guidance by NASA civil service personnel.

NASA officials estimated that moving financial management, human resources, information technology and procurement services to one location would save the space agency $121 million from 2006 to 2015. That estimate was based on flawed data, however, according to the inspector general’s report, “Status of Services Transferred from NASA Centers and Headquarters to the NASA Shared Services Center.”

In fact, it is difficult to determine the precise level of savings achieved by NASA’s creation of NSSC because the cost data supplied by the NASA centers and included in a 2009 space agency report on the project was “not reliable or verifiable,” according to the inspector general’s report. “For example, some Centers’ salary calculations did not match applicable Office of Personnel Management pay scales and Center personnel told us that some time estimates were ‘guesstimates’ based on tasks that were not clearly defined,” the report added.

In addition, NASA’s 2009 review of the project that reported that the space agency reached the break-even point on its NSSC investment in December 2008 failed to take into account $15.2 million in agency funding used to supplement NSSC startup costs. When NSSC was established, NASA contributed $26 million while the state of Mississippi contributed $23.7 million in facility construction and training costs. The state of Louisiana provided $1 million in additional funding for training and facilities.

NASA’s cost to establish NSSC was higher than expected due, in part, to a decision by space agency financial managers not to move accounts payable and accounts receivable work to the new center immediately, but to provide additional time to ensure that employees were trained and systems were in place to handle the work, according to the NASA inspector general’s report. Although most institutional services were moved to NSSC on time as planned, the decision to delay the transfer of those financial services resulted in $3.75 million in additional expenses, the report added.

Another one of NASA’s primary goals in creating NSSC was to free 200 civil servants to focus on “critical mission-related activities” instead of providing support services. The NASA inspector general’s report said the space agency’s success in reaching that goal was difficult to measure since the term “critical mission-related activities” was never defined. Still, an evaluation of five NASA centers visited in the wake of NSSC’s creation found that 77 people were assigned to new jobs and 50 positions were eliminated through attrition.

To improve the overall effectiveness of NSSC, the NASA inspector general called on the space agency to conduct a thorough cost-benefit analysis before transferring additional services to the Stennis site and to offer clear guidance to NASA personnel on what data should be used to measure future cost savings. In addition, the report recommends that NASA officials conduct periodic evaluations of NSSC services to ensure that work being performed by NSSC is done in a cost-efficient manner.

NASA officials concurred with the recommendations included in the report and have taken steps to refine the process for transferring services to NSSC and to evaluate resulting savings, according to a Jan. 14 letter to the NASA inspector general from Woodrow Whitlow, associate administrator for NASA’s mission support directorate.

However, Whitlow told the NASA inspector general that it would be difficult for space agency officials to create a precise definition for the “critical mission-related activities” that agency personnel should perform once their previous work was transferred to NSSC. “While we agree that having a consistent definition is important … the definition of critical mission-related activities may vary slightly depending on the technical or business complexities associated with the effort,” Whitlow wrote. As a result, NASA officials created a generic definition. “Critical mission related activities” include critical technical, operational or business support services or product-related activities that enable an organization to achieve its objectives, Whitlow wrote.