NASA Office of Inspector General: Assessment of Dreamtime Holdings, Inc. Activities at the Johnson Space Center, G-01-016

Note: The full report is online at http://www.hq.nasa.gov/office/oig/hq/inspections/g-01-016.pdf

National Aeronautics and

Space Administration

Office of Inspector General

Headquarters

Washington, D.C. 20546-0001

Reply to Attn of: W May 18, 2001

TO: A/Administrator

FROM: W/Inspector General

SUBJECT: Assessment of Dreamtime Holdings, Inc. Activities at the Johnson Space Center, G-01-016

The NASA Office of Inspector General (OIG) reviewed NASA’s management of Dreamtime
Holdings, Inc. (Dreamtime) activities being conducted at NASA’s Johnson Space Center
(Johnson) under an established Space Act Agreement (Agreement) for collaboration on multi-media
activities.¹ This Agreement constitutes the Agency’s first major commercialization
initiative relating to the International Space Station (ISS) and includes several unique
provisions and features. Effective management of the Agreement is vital to ensure that
NASA’s rights and interests under the Agreement are protected.

The collaboration is intended to create new business opportunities based on potential public
demand for high quality, live, and recorded still and video images of space scenes and
activities, including those related to the assembly and operation of the ISS. Other stated
objectives of the collaboration include: mutual promotion of space activities; generation of
educational Web, documentary, and TV content; digitization of currently underutilized NASA
archives; implementation of a Web-searchable multi-media database; shared use of state-of-the-
art high definition television (HDTV) equipment placed on the ISS, Space Shuttles, and at
NASA Centers and Jet Propulsion Laboratory (JPL) provided by Dreamtime; and shared use
of state-of-the-art high definition editing stations provided by Dreamtime. In addition, NASA
and Dreamtime will collaborate on the development of educational products and documentary
programming with the goal of increasing the public awareness of the ISS and its related
programs.

We identified several Agreement administration issues, especially pertaining to accountability
and oversight, that should be addressed to ensure that the Government’s rights and interests
under the Agreement are protected. As a result, the report included nine recommendations
aimed at facilitating effective management of the Agreement, addressing the need for
increased emphasis on Agreement administration issues, especially pertaining to oversight
and accountability matters. We believe the recommendations made in this report will increase
NASA oversight and accountability of the Dreamtime Agreement. Management concurred
with all nine recommendations contained in our report and indicated completed, initiated, or
planned actions in response to our recommendations. We consider management’s indicated
actions to be responsive to 7 of 9 of our recommendations. However, we requested that
management reconsider its response to recommendation 2, regarding relief of Agreement
requirements and the negotiation of appropriate consideration, and recommendation 7
regarding oversight.

In response to recommendation 2, management emphasizes the collaborative nature of the
Agreement and states that “collaborative relationships must necessarily be flexible” and that
“Centers have the discretion to allow non-reimbursable use of its facilities and equipment if
such use advances the interest of the Agency.” However, while we recognize the
collaborative nature of the Agreement, we continue to be concerned that NASA may be
setting an inappropriate precedent by relieving Dreamtime of its Agreement responsibilities
without negotiating adequate consideration. Therefore, we reiterated our recommendation
that the Agency ensure that appropriate consideration is negotiated for any substantive
changes to the terms of the Agreement and that the Agency consider negotiating a separate
Agreement with Dreamtime on a reimbursable basis for use of any NASA-furnished property
beyond what is provided for in the existing Agreement. We believe that these actions are
necessary in order to maintain the integrity of the Agreement and to ensure that the
Government’s rights and interests are protected.

In response to recommendation 7 regarding periodic oversight of Dreamtime’s on-site
activities, NASA management again stresses the collaborative nature of the Agreement, but
does not clearly indicate whether or not our specific recommendation will be implemented.
Although we fully understand and recognize the unique nature of the Agreement (i.e.,
Dreamtime is considered a partner as opposed to a contractor), Dreamtime is not a
governmental entity and should not be treated as such. Therefore, as a prudent practice and to
meet its fiduciary responsibilities to U.S. taxpayers, we reiterated our recommendation that
the Agency conduct periodic oversight of Dreamtime’s on-site activities, including those
conducted within its designated on-site office space. We believe that such regular, structured
oversight is essential to ensure that Dreamtime’s on-site activities are consistent with the
terms of the Agreement and that Dreamtime’s on-site personnel comply with all applicable
NASA regulations and directives (as required by the Agreement), especially those pertaining
to security and safety.

Roberta L. Gross

Enclosure

Assessment of Dreamtime Holdings, Inc. Activities at the Johnson Space Center, G-01-016

¹ The Agency’s authority to enter into Space Act Agreements is derived from paragraphs 203(c)(5) and 203(c)(6)
of the National Aeronautics and Space Act of 1958 (Space Act), as amended.

Note: The full report is online at http://www.hq.nasa.gov/office/oig/hq/inspections/g-01-016.pdf