From: NASA Office of Inspector General
Posted: Wednesday, January 12, 2011
NASA Inspector General Paul K. Martin today released a report that found significant weaknesses in NASA's oversight and monitoring of awards made under its Small Business Innovation Research (SBIR) program. In particular, the audit found that SBIR awards made by NASA in 2008 contained an estimated $2.7 million in unallowable and unsupportable costs.
Congress created the SBIR program in 1982 to stimulate technological innovation, increase participation by small businesses and disadvantaged persons in federally funded research and development, and increase private sector commercialization of innovations derived from federally funded research efforts. NASA's SBIR Program is the third largest of the 11 Federal agencies participating in the program and awards an average of $112 million annually to small businesses.
The Office of Inspector General (OIG) initiated this audit because investigations by its Office of Investigations have identified cases of fraud, waste, and abuse in NASA's SBIR Program that raised questions about the overall effectiveness of the Program's internal controls. The scope of the audit released today included all SBIR technical proposals submitted to and contracts awarded by NASA for program year 2008. As part of the review, the OIG examined a statistical sample of 67 of these SBIR awards.
Our review found that while NASA's initial choice of SBIR award recipients appeared objective and merit-based, its oversight and monitoring of awards was deficient. In addition to the estimated $2.7 million in unallowable and unsupportable costs that included travel and equipment expenses, we found that NASA officials lacked adequate procedures to ensure SBIR applicants' past performance had been considered when selecting recipients of approximately $85.7 million in "Phase 2" SBIR funds. Federal acquisition rules require consideration of past performance information in awards of more than $100,000 to ensure the selected proposal represents the best value.
Finally, NASA has not implemented appropriate internal controls to prevent fraud and abuse in contract awards. Consequently, some SBIR award recipients may have received multiple SBIR awards from different Federal agencies for the same research or NASA may have received highly questionable research products for its money.
The full report can be found on the OIG's website at http://oig.nasa.gov/ under "Reading Room" or at the following link: http://oig.nasa.gov/audits/reports/FY11/IG-11-010-R.pdf
Please contact Renee Juhans at (202) 358-1220 if you have questions.
Renee N. Juhans
NASA Office of Inspector General
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