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NASA OIG: Lockheed Martin Space Operations' Use of Professional and Consultant Services

Press Release From: NASA Office of Inspector General
Posted: Wednesday, April 3, 2002

The audit report "Lockheed Martin Space Operations' Use of Professional and Consultant Services" (IG-02-013, March 26, 2002) has been posted to the NASA Office of Inspector General Web site at:
http://www.hq.nasa.gov/office/oig/hq/ig-02-013.pdf

Lockheed Martin Space Operations (LMSO) manages and performs two major contracts with NASA's Johnson Space Center: the Consolidated Space Operations Contract and the Science, Engineering, Analysis, and Test contract. The Defense Contract Management Agency (DCMA) provides the Government's oversight of LMSO's purchasing system, and the Defense Contract Audit Agency (DCAA) reviews LMSO's incurred costs for allowability.

Both contracts require LMSO to comply with Federal Acquisition Regulation (FAR) requirements pertaining to professional and consultant services. The contracts require LMSO to competitively award subcontracts to the maximum extent practical and to maintain documented evidence on the nature and scope of the furnished professional and consultant services. This includes documenting efforts to identify potential sources for the services and documenting the nature of the actual services performed. Costs for professional and consultant services must be supported by documented evidence to be allowable costs on the contracts.

We found that LMSO officials had not prepared written justifications for noncompetitive procurements of services and did not maintain evidence on the nature and scope of the furnished services. As a result, NASA had reduced assurance that LMSO obtained the best available source or price for professional and consultant services and that the work performed was proper and did not violate the law or regulations related to competing procurements and conflicts of interest. We also found that $383,777 LMSO charged to NASA for services may include unallowable costs.

We recommended that NASA coordinate with the DCMA to require LMSO to prepare written justifications for future noncompetitive selections of professional and consultant services and to maintain documentation on the details of actual services performed by the professionals or consultants including deliverable items such as required analyses and reports. We also recommended that NASA ask the DMCA to include professional and consultant service subcontracts in future risk assessments and reviews of LMSO's purchasing system and that the DCAA review LMSO costs for professional and consultant services in future incurred cost audits.

NASA concurred with the findings and recommendations and asked the DCMA and DCAA to initiate actions to ensure compliance with the FAR requirements

To comment on this report, please send e-mail to: igrelease@hq.nasa.gov

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