NASA OIG: NASA'S Reduction of Undefinitized Contract Actions

Press Release From: NASA Office of Inspector General
Posted: Tuesday, March 11, 2003

The audit report "NASA's Reduction of Undefinitized Contract Actions" (IG-03-008) has been posted to the NASA Office of Inspector General Web site at

In the past, NASA has relied heavily on undefinitized contract actions (UCAs) to modify work or initiate new work on existing contracts for major programs such as the International Space Station and the Space Shuttle. As of March 31, 2000, NASA had about 186 UCAs totaling more than $2 billion. UCAs are a financially risky way of doing business because contractors perform work before they have reached agreement with the Government on what the work will cost. NASA management acknowledged that beginning work on contract changes before the cost is negotiated is not the preferred way of doing business because it increases the risk of cost growth.

Results of Audit

We found that NASA had significantly reduced both the number and dollar amount of UCAs since the General Accounting Office highlighted them as one reason for identifying contract management as a major management challenge for NASA. By November 30, 2002, NASA had reduced the number of UCAs to 19 with a total estimated value of $61 million, representing reductions of about 90 percent in the number of UCAs and 97 percent in estimated dollar value. We also found that three Centers reviewed had inconsistent policies, which could cause inaccurate UCA reporting on certain relatively low-value contracts.


We recommended that the Assistant Administrator for Procurement establish guidelines for consistent treatment of all undefinitized contract changes NASA-wide.

Management's Response

Management concurred with the recommendation and implemented measures to ensure the consistent treatment and reporting of UCAs. The Assistant Administrator for Procurement will notify NASA Procurement Officers of this policy by March 31, 2003.

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