November 6, 2008
TO: Executive Director, NASA Shared Services Center
NASA Chief Information Officer
Assistant Administrator for Procurement
FROM: Assistant Inspector General for Auditing
SUBJECT: Final Memorandum on Review of NASA's Consolidation of Information Technology Purchases under the Outsourcing Desktop Initiative
(Report No. IG-09-001; Assignment No. S-08-005-00)
The Office of Inspector General received allegations that the implementation of Mission Focus Review (MFR) Recommendations to consolidate information technology (IT) purchases through NASA's two Outsourcing Desktop Initiative (ODIN) contracts would result in (1) NASA paying higher prices for IT purchases, (2) inappropriately expanding the scope of the ODIN contracts without required recompeting, (3) insufficient personnel and equipment to absorb the workload, and (4) noncompliance with Federal Acquisition Regulation (FAR) and NASA guidance for simplified acquisition, small business set- asides, or micro-purchases. During the course of our review to assess this allegation, we received additional, related allegations, which we incorporated into our review. The ODIN contracts comprise three categories of IT equipment and service purchases. Category 1 IT purchases include ODIN-supplied desktop services for general-purpose computing. Category 2 IT purchases comprise non-ODIN supported hardware and software systems. Category 3 IT purchases include peripherals and software as well as stand-alone IT systems. We reviewed category 1 and 3 IT purchases. We did not review category 2 IT purchases. We performed our review from November 2007 through August 2008. (See Enclosure 1 for details on the Review's scope and methodology.)
We found that by consolidating category 1 IT purchases, NASA could achieve efficiencies and associated benefits including cost effectiveness, through value-added services included in the cost of an IT purchase made through ODIN. We determined that for category 3 IT purchases, in some instances, ODIN's prices for specific items were higher than prices advertised by IT suppliers dealing through the Internet. During our review, we also found that NASA does not have formalized procedures for negotiating price modifications from ODIN and does not provide instructions for employees on how to seek and identify lower costs than ODIN's for category 3 IT purchases. Providing price negotiation procedures and instructions could provide NASA cost savings for category 3 IT purchases in the future.
We found that the increased use of ODIN was within the contracts' statements of work and also complied with all provisions of FAR or NASA guidance for simplified acquisition, small business set-asides, or micro-purchases. Additionally, ODIN's performance ratings through the first quarter of FY 2008 continued to exceed the contract requirement ratings. This would indicate that ODIN had sufficient resources in place to service their customer base.
We recommended that the Executive Director, NASA Shared Services Center (NSSC), working in conjunction with the Assistant Administrator for Procurement and the NASA Chief Information Officer,1 (1) institute formalized procedures for seeking price modifications from ODIN; (2) develop instructions for employees on how to seek and identify lower costs for IT peripherals that do not require installation and maintenance support; and (3) monitor prices in the ODIN electronic catalog (eCatalog), and compare them to offerings from alternative sources.
Management's comments on the draft of this memorandum are responsive (see Enclosure 2). In a consolidated response, NASA management concurred with all three of our recommendations. The recommendations are, therefore, considered to be resolved but will remain open for reporting purposes until all corrective actions have been completed and we have verified completion of those actions.