The following audit report has been posted to the NASA Office of
Inspector General web site: Audit of Thiokol’s Use of Professional and
Consultant Services (IG-01-019, March 30, 2001)

To access the entire report, please go to:

Synopsis: The NASA Office of Inspector General has completed an audit
of Thiokol Propulsion’s (Thiokol) 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.
NASA’s controls over Thiokol’s use of professional and consultant
services can be improved. We found cases in which justifications for
noncompetitive procurements of professional and consultant services
were inadequate and untimely. Specifically, we found that Thiokol
officials did not maintain adequate support for decisions to
noncompetitively award the service subcontracts and did not prepare
written justifications for the noncompetitive awards prior to
initiation of the work. As a result, NASA has reduced assurance that
Thiokol obtained the best available source or price for consultant
services costing $1.4 million under seven subcontracts and may not have
benefited from about $87,500 in professional and consultant service
costs charged to NASA.

Management’s Response: NASA concurred with the recommendations. The
NASA contracting officer will issue guidance to Thiokol to ensure that
the contractor’s buyers have required and completed written
justifications prior to awarding noncompetitive procurements. The NASA
contracting officer will (1) request that the Defense Contract Audit
Agency include professional and consultant services costs in future
incurred cost audits and that the Defense Contract Management Agency
(DCMA) include the services subcontracts as part of purchasing system
and surveillance reviews and (2) coordinate with the DCMA to ensure
that Thiokol’s allocations of service costs charged as indirect costs
result in NASA receiving reasonable benefits in relation to cost.

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