NASA

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made, and rel­e­vant man­age­ment in­for­ma­tion for in­formed de­ci­sion-mak­ing was not gath­ered.”

The dis­pute cen­ters on so-called “award-fee con­tracts,” which are meant to be pro­vide an in­cen­tive for busi­nesses that com­plete jobs by meet­ing spe­cific ob­jec­tives or do­ing them un­der bud­get and ahead of sched­ule.

The agency has been crit­i­cized for sim­i­lar waste­ful spend­ing be­fore, but in­ves­ti­ga­tors found that even sup­posed fixes are still wast­ing money. The IG said that in re­sponse to bad press and scru­tiny from watch­dogs, NASA im­ple­mented a sys­tem of step-by-step pay­ments to in­cre­men­tally re­ward busi­nesses along the course of a con­tract, fol­lowed by a fi­nal pay­ment if the prod­uct is ac­cept­able.

But any money the con­trac­tor didn’t earn along the way is in­stead be­ing lumped into the pay­ment at the end, in­ves­ti­ga­tors said, un­der­cut­ting any ef­forts to pro­vide in­cen­tives to con­trac­tors since they know they’ll get the full sum even­tu­ally.

The prac­tice “pro­motes a phi­los­o­phy that as long as a mis­sion pro­vides good sci­ence data, the agency will over­look cost and sched­ule over­ages,” the IG said.

“NASA con­tract­ing of­fi­cers in­cor­rectly cal­cu­lated pro­vi­sional and in­terim award-fee pay­ments in more than half of the con­tracts we re­viewed,” in­ves­ti­ga­tors said. “This oc­curred be­cause the math­e­mat­i­cal for­mu­las they are re­quired to use to cal­cu­late the pay­ments are overly com­plex.”

But the agency it­self says that the IG has mis­un­der­stood the process, and that no money is be­ing paid out dur­ing th­ese pe­ri­od­i­cal eval­u­a­tions.

“The con­trac­tor does not ‘ earn’ award fee dur­ing an in­terim eval­u­a­tion,” a re­sponse from NASA said. “In­terim eval­u­a­tions al­low the gov­ern­ment to as­sess the con­trac­tor’s per­for­mance prior to fi­nal de­liv­ery of the end-item. The in­terim eval­u­a­tions pro­vide valu­able feed­back to the con­trac­tor on their per­for­mance.”

Of­fi­cials pointed to a sep­a­rate eval­u­a­tion in March by the Gov­ern­ment Ac­count­abil­ity Of­fice that found no prob­lem’s with NASA’s award-fee spend­ing.

“The [IG] re­port mis­tak­enly cre­ates the im­pres­sion that NASA over­paid con­trac­tors by ap­prox­i­mately $66.4 mil­lion, which is not the case,” the agency said.

In­ves­ti­ga­tors, how­ever, said NASA is vi­o­lat­ing fed­eral reg­u­la­tions that pre­vent “rollover” of un­earned funds into fu­ture pay­ments for busi­nesses.

“NASA’s cur­rent prac­tice for en­ditem con­tracts per­mits ex­actly that be­cause it gives con­trac­tors a sec­ond chance to re­ceive money the agency ini­tially de­ter­mined their in­terim per­for­mance did not war­rant,” the IG said.

And in­spec­tors are con­cerned prob­lems could per­sist in the fu­ture. The agency hasn’t been track­ing data on the award fees to see if they’re ac­tu­ally mo­ti­vat­ing con­trac­tors, they said.

“NASA’s fail­ure to en­sure the qual­ity of data en­tered has im­paired its abil­ity to mea­sure the ef­fec­tive­ness of cur­rent award-fee con­tracts and re­duced its abil­ity to cor­rect de­fi­cien­cies thereby ad­versely af­fect­ing the qual­ity of fu­ture con­tract sourc­ing de­ci­sions,” in­ves­ti­ga­tors said.

That didn’t stop of­fi­cials from spend­ing $7.2 mil­lion on eval­u­a­tions that “did not gather rel­e­vant man­age­ment in­for­ma­tion,” the IG said.

The dis­pute has left both sides pars­ing the ex­act mean­ings of “earned” and “un­earned” award money, with likely lit­tle agree­ment in sight un­less an out­side group — like Congress — gets in­volved.

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