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A REVIEW OF RECOMMENDATIONS FOR 

NSF PROJECT MANAGEMENT REFORM 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY 

& 

SUBCOMMITTEE ON OVERSIGHT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

February 4, 2016 

Serial No. 114–59 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

FRANK D. LUCAS, Oklahoma 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

DANA ROHRABACHER, California 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

MO BROOKS, Alabama 

RANDY HULTGREN, Illinois 

BILL POSEY, Florida 

THOMAS MASSIE, Kentucky 

JIM BRIDENSTINE, Oklahoma 

RANDY K. WEBER, Texas 

BILL JOHNSON, Ohio 

JOHN R. MOOLENAAR, Michigan 

STEPHEN KNIGHT, California 

BRIAN BABIN, Texas 

BRUCE WESTERMAN, Arkansas 

BARBARA COMSTOCK, Virginia 

GARY PALMER, Alabama 

BARRY LOUDERMILK, Georgia 

RALPH LEE ABRAHAM, Louisiana 

DRAIN LAHOOD, Illinois 

EDDIE BERNICE JOHNSON, Texas 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

ALAN GRAYSON, Florida 

AMI BERA, California 

ELIZABETH H. ESTY, Connecticut 

MARC A. VEASEY, Texas 

KATHERINE M. CLARK, Massachusetts 

DONALD S. BEYER, JR., Virginia 

ED PERLMUTTER, Colorado 

PAUL TONKO, New York 

MARK TAKANO, California 

BILL FOSTER, Illinois 

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

HON. BARBARA COMSTOCK, Virginia, Chair 

FRANK D. LUCAS, Oklahoma 

MICHAEL T. MCCAUL, Texas 

RANDY HULTGREN, Illinois 

JOHN R. MOOLENAAR, Michigan 

BRUCE WESTERMAN, Arkansas 

DAN NEWHOUSE, Washington 

GARY PALMER, Alabama 

RALPH LEE ABRAHAM, Louisiana 

LAMAR S. SMITH, Texas 

DANIEL LIPINSKI, Illinois 

ELIZABETH H. ESTY, Connecticut 

KATHERINE M. CLARK, Massachusetts 

PAUL TONKO, New York 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

EDDIE BERNICE JOHNSON, Texas 

SUBCOMMITTEE ON OVERSIGHT

HON. BARRY LOUDERMILK, Georgia, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

BILL POSEY, Florida 

THOMAS MASSIE, Kentucky 

BILL JOHNSON, Ohio 

DAN NEWHOUSE, Washington 

LAMAR S. SMITH, Texas 

DON BEYER, Virginia 

ALAN GRAYSON, Florida 

ZOE LOFGREN, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

February 4, 2016 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Barbara Comstock, Chairwoman, Subcommittee 

on Research and Technology, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 7 

Written Statement ............................................................................................ 8 

Statement by Representative Daniel Lipinski, Ranking Minority Member, 

Subcommittee on Research and Technology, Committee on Science, Space, 

and Technology, U.S. House of Representatives ............................................... 11 

Written Statement ............................................................................................ 13 

Witnesses: 

Ms. Cynthia Heckmann, Project Director, National Academy of Public Administration 

Oral Statement ................................................................................................. 16 

Written Statement ............................................................................................ 20 

Dr. Richard Buckius, Chief Operating Officer, National Science Foundation 

Oral Statement ................................................................................................. 31 

Written Statement ............................................................................................ 33 

Ms. Allison Lerner, Inspector General, National Science Foundation 

Oral Statement ................................................................................................. 38 

Written Statement ............................................................................................ 40 

Discussion ................................................................................................................. 50 

Appendix I: Answers to Post-Hearing Questions 

Ms. Cynthia Heckmann, Project Director, National Academy of Public Administration ................................................................................................................. 58 

Dr. Richard Buckius, Chief Operating Officer, National Science Foundation .... 62 

Ms. Allison Lerner, Inspector General, National Science Foundation ................ 66 

Appendix II: Additional Material for the Record 

Statement submitted by Representative Barry Loudermilk, Chairman, Subcommittee on Oversight, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 74 

Statement submitted by Representative Donald S. Beyer, Jr., Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, 

and Technology, U.S. House of Representatives ............................................... 75 

Statement submitted by Representative Lamar S. Smith, Chairman, Committee on Science, Space, and Technology, U.S. House of Representatives .... 77 

Statement submitted by Representative Eddie Bernice Johnson, Ranking 

Member, Committee on Science, Space, and Technology, U.S. House of 

Representatives .................................................................................................... 80 

(1) 

A REVIEW OF RECOMMENDATIONS 

FOR NSF PROJECT MANAGEMENT REFORM 

THURSDAY, FEBRUARY 4, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY & 

SUBCOMMITTEE ON OVERSIGHT, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, D.C. 

The Subcommittees met, pursuant to call, at 9:41 a.m., in Room 

2318, Rayburn House Office Building, Hon. Barbara Comstock 

[Chairwoman of the Subcommittee on Research and Technology] 

presiding. 
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Chairwoman COMSTOCK. The Committee on Science, Space, and 

Technology will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Committee at any time. 

Welcome to today’s hearing entitled ‘‘A Review of Recommendations for NSF Project Management Reform.’’ I now recognize myself 

for five minutes for an opening statement. 

Today, we will be reviewing recommendations made by the National Academy of Public Administration (NAPA) on how to improve the National Science Foundation’s management of cooperative agreements to support the development and construction of 

large-scale research projects. 

NSF and the National Science Board commissioned the study in 

response to concerns raised by this committee, the NSF Inspector 

General, and others regarding NSF’s management and oversight of 

cooperative agreements and proper stewardship of federal funds. 

NAPA assembled a committee that conducted an eightmonth review of NSF’s practices and looked at how other science funding 

agencies like NASA and the Department of Energy Office of 

Science manage similar projects. 

One of our committee’s most important responsibilities is to ensure that federal science agencies spend taxpayer dollars as effectively and efficiently as possible. Every dollar wasted on mismanagement is a dollar that could be spent on groundbreaking 

basic research or training future scientists. 

Our committee has held two hearings over the last year on NSF’s 

management of major projects like the National Ecological Observatory Network (NEON) and the LSST telescope. These hearings 

have revealed that NSF needs to do more to ensure that taxpayer 

funding is not wasted on mismanagement and abuse. 

The NAPA study committee has provided 13 thoughtful recommendations for NSF. I look forward to hearing testimony on 

those ideas. I also look forward to hearing from NSF on how the 

Foundation plans to respond, and from the Inspector General on 

her thoughts about how some of these changes could prevent problems found in past audits of cooperative agreements. 

Together, I hope we can work towards ensuring taxpayer dollars 

are well-managed. American leadership in science and innovation 

is the key to our nation’s future economic prosperity, as well as our 

security. We want to be strong advocates for federal support of 

basic research that advances science in the national interest, but 

we can only invest more in research when taxpayers have faith and 

confidence that their money is being spent wisely. 

[The prepared statement of Chairwoman Comstock follows:] 
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Chairwoman COMSTOCK. I thank you. And I now recognize the 

Ranking Member of the Research and Technology Subcommittee, 

the gentleman from Illinois, Mr. Lipinski, for an opening statement. 

Mr. LIPINSKI. Thank you, Chairwoman Comstock. I want to 

thank you and Chairman Loudermilk for holding this hearing to 

review the recommendations for the National Science Foundation’s 

project management reform. 

In 1995, the NSF created an agency-wide budgetary account to 

promote effective planning and management in the Foundation’s 

support for major research equipment and facilities construction, or 

MREFC. This account supports the acquisition, construction, and 

commissioning of major multiuser research facilities, which typically cost between $100-$500 million and may take a decade to 

complete from planning to the start of full operations. 

In the early 2000s, this committee and the scientific community 

raised concerns over management and oversight of the MREFC account. In response, the NSF took a number of steps to strengthen 

their processes and cost controls. Over the next decade, the agency 

shepherded through many successful projects, which today remain 

important cutting-edge research facilities for the scientific committee. 

In 2010, the NSF Office of Inspector General began raising new 

concerns about policies and practices for awarding and managing 

large construction projects. Since then, this committee has held a 

number of oversight hearings related to the MREFC account and 

specific projects. During this period, disagreement arose between 

NSF and the OIG over what constitutes appropriate and/or necessary policies and practices with no apparent resolution in sight. 

This committee proposed draft legislation, some of it on a bipartisan basis, in an effort to forge a path forward. 

Then, as now, I feel that while this committee’s prerogative is to 

exercise its oversight and legislative authority—this is very important—we must also be aware of the unintended consequences of 

micromanagement. 

Afterwards, serious structural problems were discovered with the 

management of the National Ecological Observatory Network, or 

NEON. Since December of 2014, and largely in response to the failures with NEON, NSF has taken a number of additional steps to 

strengthen its business practices. But the OIG has continued to 

raise red flags. 

Early last year, the National Science Board and NSF leadership 

commissioned a third-party independent review of the Foundation’s 

use of cooperative agreements to support large projects, which 

would include benchmarking NSF’s practices against those of other 

agencies with large scientific facilities. 

The result was a report by the National Association of Public Administration that is the subject of today’s hearing. By all accounts, 

the NAPA review is thorough, thoughtful, and balanced. The experts on the NAPA panel came down solidly in support of NSF continuing to use cooperative agreements rather than contracts to support MREFC projects. So in my view, we can probably dispense 

with that debate. 
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With respect to specific cost control policies and practices, NAPA 

largely agreed with NSF that their policies are not inconsistent 

with OMB guidelines but still urged them to implement stronger 

preventative cost controls. 

NAPA also offered several recommendations for NSF to strengthen its project management procedures across the agency and to 

rethink roles and responsibilities for planning, management, and 

oversight of MREFC projects. 

I understand that the IG supports the NAPA recommendations 

overall but would still urge NSF to take steps above and beyond 

those recommended in a NAPA report. I hope we will have a 

chance to discuss all this during the hearing. 

Before I conclude, I want to make two points: First, I’m hopeful 

that this report will serve not just to strengthen NSF’s businesses 

practices for large projects but also to smooth the way towards 

greater trust between OIG and NSF management, both of whom, 

I’m sure, have the best interest of the scientific community and 

taxpayers in mind. 

Second, I want to highlight the very last section of the NAPA report entitled ‘‘The Cost of Increased Oversight.’’ It would be irresponsible for us to ignore the reality that it will not be possible for 

NSF to implement NAPA’s recommendations, let alone the IG’s, 

without increased funding to support such oversight. I hope that 

the NSF requests enough funding in their budget to implement the 

NAPA recommendations. 

In addition, I hope that all my colleagues would join me this 

spring in urging our appropriators to fully fund the agency’s request for its management account. 

With that, I thank the witnesses for being here this morning, 

and I yield back. 

[The prepared statement of Mr. Lipinski follows:] 
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Chairwoman COMSTOCK. Thank you, Mr. Lipinski. 

And since this morning we had the National Prayer Breakfast, 

we have a number of our colleagues who are late or unavailable, 

so my apologies for, first, the delay on all of our parts, but that’s 

what’s going on. The traffic was pretty bad out there, too, as you 

probably experienced. 

But now, let me introduce our witnesses. Our first witness today 

is Ms. Cynthia Heckmann, Project Director of the National Academy of Public Administration’s review on the NSF’s use of cooperative agreements to support the development, construction, and operations of state-of-the-art, large-scale, multiuser research facilities. 

Prior to joining NAPA, Ms. Heckmann had an extensive career 

at the Government Accountability Office, as well as career experience about the executive branch and in state government. Ms. 

Heckmann received her master’s of public administration from 

Northeastern University and her bachelor of arts from Simmons 

College. 

Our second witness today is Dr. Richard Buckius. Dr. Buckius is 

the Chief Operating Officer for the National Science Foundation. 

He assumed the position of COO in October 2014, having previously been a Senior Policy Advisor for NSF. He is an author and 

coauthor of numerous publications on the topics of radiation heat 

transfer, numerical fluid mechanics, and combustion. He received 

his bachelor’s, master’s, and Ph.D. in mechanical engineering at 

the University of California Berkeley. 

Our last witness today is Ms. Allison Lerner. Ms. Lerner is the 

Inspector General for the National Science Foundation. Before joining NSF in April 2009, Ms. Lerner served in many leadership positions at the Department of Commerce, including Counsel to the Inspector General. She has received several national awards for excellence and was selected to be a member of the Government Accountability and Transparency Board by the President in June 

2011. Ms. Lerner received her law and undergraduate degrees from 

the University of Texas. 

I now recognize Ms. Heckmann for five minutes to present her 

testimony. 

TESTIMONY OF MS. CYNTHIA HECKMANN, 

PROJECT DIRECTOR, 

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION 

Ms. HECKMANN. Good morning, Chairwoman Comstock, Ranking 

Member Lipinski, and Members of the Subcommittee. Thank you 

for the invitation to discuss recommendations from the Academy’s 

report on NSF’s use of cooperative agreements to support the development, construction, and operations of state-of-the-art, large-scale, 

multiuser research facilities. 

The NSF Director and National Science Board jointly requested 

this review with a focus on the agency’s largest cooperative agreements of 100 million or more under the MREFC account. The Academy’s panel and study team’s review focused on agency’s policies 

and practices governing the lifecycle of these projects, including 

issues raised by the Inspector General and Congressional concerns. 

We also looked at comparable agencies with large capital invest-
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ment projects most analogous to NSF’s for promising practices that 

might be transferable. 

Overall, we found that the cooperative agreements are the appropriate mechanism to support these efforts. We also acknowledge 

the many recent efforts by NSF has undertaken to implement new 

policies and practices to address Inspector General and Congressional concerns. 

Our recommendations are intended to support NSF and the 

board’s commitment to improving core business practices and the 

agency’s key performance goal of ensuring program integrity and 

responsible stewardship of major research facilities. We’ve included 

suggested implementation steps for each recommendation, and 

where appropriate in our text, highlighted other agencies’ promising practices. Our recommendations provide a number of actions 

and options to strengthen oversight and enhance agency governance, practices, and processes. 

For today, we are grouping the recommendations as follows: One, 

policies on cost estimating and cost analysis. NSF has a strengthened its methodological approach to cost estimating and analysis 

and updated its policies in the Large Facilities Manual to reflect 

these efforts. This includes a tightened control environment and 

improved cost surveillance strategies. 

However, we identified some additional opportunities to bolster 

cost analysis requirements for award recipients and improve internal agency processes for detecting potential issues in proposals. In 

terms of cost estimating, we recommend that NSF change current 

language in the manual, making it clear that award recipients are 

expected, not just encouraged, to follow guidance in the GAO’s Cost 

Estimating and Assessment Guide and Schedule Assessment Guide 

when developing those cost and schedule estimates. 

In terms of cost analysis, we recommend that NSF require that 

decisions not to act on recommendations from the pre-award cost 

analyses conducted by their cost analysis and audit resolution 

branch be reviewed by the Large Facilities Office and forwarded to 

the Chief Financial Officer for a final determination. These decisions should be documented in writing and shared with the 

MREFC panel prior to the release of any award funds. 

Two, managing budgeting contingency: The use of contingency is 

a commonly accepted business and project management risk mitigation practice for construction projects. NSF’s position is that contingency funds should be retained and managed by the award recipients. However, the common federal agency practice is for the 

agency to hold either all or a majority percentage of the contingency funds. By holding at least a percentage of these funds, NSF 

could further strengthen internal controls and accountability. 

Therefore, we recommend NSF adopt the practice of retaining control of a portion of the award recipient’s contingency funds and distributing them with other incremental funds as needed. 

Three, management fee policies and processes: NSF includes a 

management fee in several of its cooperative agreements to cover 

business expenses related to construction or operations that would 

otherwise be non-reimbursable under governing cost principles. 

However, most of the examples provided to us appeared to be costs 

that would either be covered under indirect costs or contingency. 
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Despite recent changes NSF has made, it’s been its policy to provide clearer guidance on appropriate and inappropriate uses of 

management fee. The IG continues to have concerns. Furthermore, 

OMB’s efforts in the uniform guidance have not resulted in greater 

clarity on some of the most controversial aspects of management 

fee. We recommend NSF eliminate the practice of including management fee in cooperative agreements on future projects. 

Four, governing for effective stewardship: Governing bodies, 

agency internal coordinating committees, and advisory review panels play important roles in governance, development, and execution 

of MREFC projects. We’ve offered recommendations for each of 

these groups to address ambiguity and further build on the agency’s capacity to effectively manage these projects. 

NSF and NSB roles and responsibilities, starting with them, the 

statutory joint leadership model of an appointed director and board 

is quite unique among federal agencies. The current working relationship appears to be working well. It’s not always been the case, 

and we’ve recommended that they establish and publish a joint duties and responsibilities document to institutionalize the role. 

The MREFC panel is only engaged right now in design review 

phases of an MREFC project. For more consistent and informed 

oversight, the panel should be involved throughout the lifecycle of 

a project’s development and implementation, really reviewing 

project status on a set schedule. 

In terms of advisory committees and review panels, the panels 

need to include experts with requisite project and financial management knowledge and experience, and we are recommending that 

NSF explicitly identify the requirements and add them to the selection criteria for those external reviewers. We also recommend that 

NSF establish a FACA committee for the director to use as a 

sounding board. 

Large Facilities Office, the role and the placement of this office 

has been subject to debate. We concluded that the organizational 

placement is not as important as project management roles and responsibilities. Its current placement is also logical within the office 

of the CFO, as its focus is on strengthening project management 

assistance. We did make recommendations in terms of hiring two 

additional FTEs and directing the MREFC charter be revised to 

change the status of the LFO head from nonvoting to a full voting 

member. 

In terms of planning and portfolio management process, we have 

a recommendation in terms of the annual facilities plan where 

there’s some confusion over what its role is and ask that NSF 

evaluate it in terms of its agency’s current planning and strategic 

planning processes. 

Finally, project management skills are needed for effective oversight. NSF has strong—the folks have strong scientific credentials, 

not as likely to have the same corollary skills and experience in 

project management. 

We have three recommendations for project management. First is 

to identify skill requirements for internal staff and develop corollary project management training for the staff; second, to require 

award recipient project managers be certified in project management and specified minimum project experience requirement 
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threshold in the actual terms and conditions; and lastly, establish 

formal communities of practice to share best practices and lessons 

learned, a requirement for all MREFC projects. 

In closing, let me just reiterate NSF has undertaken a wide 

range of actions to improve the oversight of these MREFC projects. 

The efforts are a work in progress. They appear headed in the right 

direction. Given the initiatives underway and the culture change 

needed to socialize these changes, time will be needed. And from 

a continuous improvement perspective, time will be needed to see 

what is working and what requires further adjustments. 

Thank you for the opportunity to share these views. 

[The prepared statement of Ms. Heckmann follows:] 
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Chairwoman COMSTOCK. Okay. Thank you, Ms. Heckmann. 

And now, Dr. Buckius. 

TESTIMONY OF DR. RICHARD BUCKIUS, 

CHIEF OPERATING OFFICER, 

NATIONAL SCIENCE FOUNDATION 

Dr. BUCKIUS. Madam Chairwoman, Members of the Committee, 

thank you for the opportunity to discuss NSF’s oversight of major 

research facility infrastructure projects and NSF’s response to the 

recent NAPA report. 

The National Science Foundation supports fundamental research 

in frontiers of knowledge across all fields of science and engineering. As part of that mission, NSF supports a broad array of 28 

major transformative research facilities that are geographically distributed observatories, telescopes, mobile platforms such as research vessels and aircraft. In a total, the operational cost of NSF’s 

entire portfolio of research infrastructure requires approximately 

1.2 billion per year. 

I’d like to start by thanking NAPA for its rigorous review of 

NSF’s use of cooperative agreements to support large-scale investments in science and technology. The members of this committee, 

the Inspector General, and the experts at NAPA have all been exceptionally helpful to the Foundation in identifying areas where 

NSF can improve and make our oversight of critical facilities even 

stronger. 

We appreciate the panel’s overall conclusion that cooperative 

agreements are the appropriate mechanism for the agency to use 

for construction and operations of large facilities. In using this 

funding mechanism, the Foundation is committed to improving the 

rigor and oversight of its processes and deploying appropriate levels of internal projects, programmatic, and financial management 

expertise. 

In order to respond to the report, the Director has created an implementation team to address each of the recommendations. And I 

will divide this conversation into two broad areas: first, business 

practices; and second, oversight, accountability, and stewardship. 

Let me start by saying that NSF will implement all 13 recommendations in some form. In the case of the business practices, 

NSF will provide stronger requirements of cost estimating and adjudication of cost analysis findings, as recommended by the panel, 

and will revamp the processes of obligating and allocating contingency based on the project’s level of risk. The panel’s comparison 

with other agencies is extremely useful, and we will follow up with 

these agencies for more information detailing the process of partial 

withholding of contingency, while also ensuring NSF’s continued 

compliance with uniform guidance. 

With regard to management fee, the Foundation is continuing to 

implement the stringent policy we put in place last year, and we 

are currently considering the alternatives set forth in the panel’s 

report. As I’ve previously testified before this committee, NSF acknowledges that some awardees should have shown better judgment in the use of their management fee even if they were not in 

violation of any law or regulation governing the use of these funds. 

The Foundation has learned a number of lessons about manage-
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ment fees, and we have designed the policy around the lessons 

learned. 

While many of the panel’s recommendations are implementable 

within a relatively short time, I would note that we believe the 

management fee topic will likely take a more thorough analysis on 

the part of NSF and some of the other recommendations. 

The panel’s holistic view of NSF’s oversight, accountability, and 

stewardship of large research facilities is welcomed by the Foundation. We are considering all the recommendations on the roles and 

responsibilities of the National Science Board, MREFC Panel, and 

the Office of the Director as a single endeavor. We plan to enhance 

the role of independent expertise in project and financial management, as well as the cross-agency sharing of best practices. 

The National Science Board examined the panel’s recommendations over the course of the last few days, and this is our first NSB 

meeting since the release of the report. We look forward to working 

together with the board to strengthen our oversight, accountability, 

and stewardship, as recommended by the panel. 

NSF is committed to developing project management skills, experience, and training for both foundation staff and MREFC project 

managers. 

I’d like to clarify for the Committee that any changes NSF undertakes can and will apply to existing—not just new—cooperative 

agreements. As the Foundation improves its processes, we can revise, as appropriate, existing agreements to strengthen oversight. 

In closing, I’d like to reiterate how much NSF welcomes the 

NAPA report and its recommendations. It is only with strong support from the inspector general, external experts like NAPA, and 

Congress that complete oversight of taxpayer resources can be 

achieved, and we appreciate all these efforts. 

Thank you again for the opportunity to testify, and I will be 

pleased to answer any of your questions. 

[The prepared statement of Dr. Buckius follows:] 
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Chairwoman COMSTOCK. I now recognize Ms. Lerner for five minutes. 

TESTIMONY OF MS. ALLISON LERNER, 

INSPECTOR GENERAL, 

NATIONAL SCIENCE FOUNDATION 

Ms. LERNER. Thank you, Madam Chairwoman, and Members of 

the Subcommittee. I appreciate the opportunity to discuss my office’s views on the National Academy of Public Administration’s report on NSF’s use of cooperative agreements to support large-scale 

investment in research. 

Since 2010, my office has issued 28 reports containing more than 

80 recommendations that relate to NSF’s management of cooperative agreements for large-facility projects. Beginning with our audits of over $1.1 billion in proposal costs for three construction 

projects, the issues we identified have occurred at multiple facilities and ultimately contributed to the decision to procure the NAPA 

report. I commend Drs. Cordova and David for their vision in commissioning this effort, as well as the NAPA panel and staff who 

conducted the review and prepared the outstanding final product. 

The report sets forth practical recommendations that, if implemented by the agency in a timely fashion, will significantly improve NSF’s ability to ensure accountability over these high-risk, 

high-dollar projects, and thus go a long way toward addressing 

many of the issues my office has raised. 

Our office supports all of the NAPA report’s recommendations, 

and I’ll briefly discuss six of them. First, the report recommended 

that NSF require review of exceptions to recommendations from 

pre-award cost analyses conducted by the Foundation’s in-house 

analyst, or CAAR. Because our work has identified instances in 

which CAAR’s important concerns have not been addressed in a 

timely fashion, we share NAPA’s belief that actions necessary to 

ensure that the critical issues CAAR identifies are brought to the 

attention of senior officials and panelists and resolved. A similar 

process should be followed for other important internal analyses 

and for the findings of the incurred cost audits NSF will soon be 

procuring. 

We wholeheartedly agree with, NAPA’s recommendation that 

NSF should retain control over a portion of awardees’ contingency 

funds. Our previous audits have found that construction budgets 

for NSF’s large-facility projects contained tens of millions of dollars 

in unsupported contingency costs. The risk of misuse of these funds 

is heightened because NSF does not require awardees to track expenditure of funds in their accounting systems, which makes it all 

but impossible for us to audit these significant expenditures. 

With respect to the panel’s recommendation to eliminate the use 

of management fee, our September 2015 Alert Memo documented 

positive steps NSF has taken to strengthen its fee policy and noted 

improvements that are needed to determine if management fee is 

necessary for an awardee’s financial viability. If NSF decides to 

continue providing such fees, it should consider and address the 

issues noted in our Alert Memo. 

OIG also agrees with three recommendations that focus on the 

need for NSF to strengthen business and project management 
39 

skills within the agency and at its awardees. The culture change 

needed to implement these recommendations is clearly warranted 

because, as the NEON project has illustrated, deficiencies in a 

project’s business processes have the potential to undermine its scientific goals if the project must be de-scoped due to cost or schedule 

overruns. 

Finally, I’d like to note three areas that were not covered by the 

NAPA recommendations but which are still critical to NSF’s ability 

to manage large-facility projects. First, our recent work has found 

that NSF does not require the earned value management systems 

for its large-facility projects to be certified or the data they contain 

to be verified. The poor quality of the information in these reports 

for the NEON project was one of the reasons why the cost overrun 

for that project was undetected for so long. NSF is currently evaluating what actions it should take to ensure the quality of EVM 

data. 

Second, our office has repeatedly recommended that NSF require annual incurred cost submissions for projects over $50 million. 

Such submissions provide critical information about how an awardee has spent federal funds and are essential tools for both NSF and 

the OIG. In two very recent reviews, however, auditors found the 

submissions for two large construction projects were not adequate 

to initiate an audit because so much important information was 

missing from them. NSF is currently seeking OMB clearance related to such submissions. 

Finally, many of our reports have stressed the need for annual 

incurred cost audits of large-facility recipients. Such audits provide 

NSF with the best evidence of how awardees are actually expending federal funds. While we commend NSF for deciding to require 

incurred cost audits at project completion, by waiting until the end 

to obtain an audit, NSF will miss opportunities to identify and correct problematic expenditures in the project’s early days. Given the 

level of risk we’ve identified with these projects, annual or at least 

biannual audits are clearly warranted. 

In closing, NSF’s swift and decisive implementation of the NAPA 

report’s recommendation will have a significant positive impact on 

the Foundation’s ability to manage high-dollar, high-risk, large-facility projects. I look forward to continuing to work with Congress, 

the Foundation, and the National Science Board toward this goal. 

And I’d be happy to answer any questions. 

[The prepared statement of Ms. Lerner follows:] 
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Chairwoman COMSTOCK. Thank you. I now recognize myself for 

five minutes for questions. I thank the witnesses. 

And I did want to let you know we got word that our colleagues 

are stuck on a bus trying to get back from the prayer breakfast, 

so again, our apologies for our other colleagues who aren’t here this 

morning. I guess no good deed goes unpunished, right? 

Okay, Ms. Lerner, do you believe that the recommendations 

made by NAPA on how NSF should handle cost proposal analyses 

and audits goes far enough to fix cost problems that you have 

found in your audit work of large-scale projects? 

Ms. LERNER. Thank you. We are pleased that NSF is committed 

to undertaking one of the eight actions noted in GAO’s cost estimating guide. We’re concerned, however, that for the large, highdollar, high-risk projects, that some of those options, as a GAO 

notes in the guide itself—are not rigorous enough to provide the information that’s necessary. And we would recommend that, for the 

high-dollar, high-risk construction projects, that either a pre-award 

audit be done or an independent cost estimate be obtained and that 

some of the less rigorous options like a sufficiency review, which 

was used for the LSST project, not be pursued. 

Chairwoman COMSTOCK. Thank you. And, Ms. Heckmann, the IG 

testified that one issue the NAPA report did not make a recommendation on that she considers critical—she was talking about 

in her testimony is the use of an earned value management system 

for tracking and measuring project cost and schedule performance. 

The NAPA report did note the Department of Energy and NASA 

have well-developed EVM policies in place. Why did this study 

panel stop short of making a recommendation on using a certified 

EVM system for projects? 

Ms. HECKMANN. At the time of our review, we understood that 

the National Science Foundation was in the midst of reviewing its 

EVM policies and processes and working to standardize the processes and be sure to adopt the standards that are federal standards. So what we did in terms of looking at other agencies’ practices was point out the promising practices that we felt were transferable rather than really focusing a great deal of time on the 

EVM. It was clear to us that they were committed to using EVM. 

What we also felt was important was that their staff—again, getting back to the project management perspective—needed to understand what EVM really is and how to read EVM charts, et cetera, 

and how to really do the oversight that’s necessary for an EVM. So 

the bottom line there is that we saw it as kind of a work in 

progress, and we were not at a point to really make a recommendation further. We would really need to see what in fact they have 

done. 

Chairwoman COMSTOCK. Okay. Thank you. 

And, Doctor, would you like to address that also? 

Dr. BUCKIUS. Ms. Heckmann is exactly right. We are in the 

midst of evaluating all aspects of EVM. I’d go so far to say, though, 

that it’s important, I think, to look at the validation. That certification is one aspect, and we’re going to consider that, but the validation is the key because that’s where you get the answers. And 

so, I think the recommendation is well-placed and we’re taking it 

very seriously. 
51 

Chairwoman COMSTOCK. All right. Thank you. 

Ms. Lerner, did you want to add anything to that or—— 

Ms. LERNER. [Nonverbal response.] 

Chairwoman COMSTOCK. Okay. Thank you. 

And I will now yield to my colleague, Mr. Lipinski. 

Mr. LIPINSKI. Thank you. As they sometimes say, you need to 

spend money to make money. You also have to spend some money 

in order to save money when we’re talking about making some of 

these changes and having the proper oversight when it comes to 

MREFC. 

There are a lot of good recommendations in the NAPA report, 

and we know some of them will cost more than others to implement. And the Inspector General would like to see the NSF go 

much further on some fronts than NAPA recommended. So I just 

want to ask all three of you, given the cost of implementing some 

of the recommended reforms, how do you think NSF should 

prioritize the various recommendations and ensure that the enhanced oversight does not impede NSF’s scientific mission? We 

sure would like to see them all done as, you know, quickly as possible, but we know that there’s probably going to have to be some 

prioritization done in terms of which ones are done first. So I’ll 

start with Ms. Heckmann. 

Ms. HECKMANN. Thank you. I—we think it’s really critical that 

they develop the project management expertise internally to be 

able to really perform the stewardship responsibilities that are necessary. So in terms of the role of the LFO and what it is doing to 

ensure that there’s consistency across the organization and the 

practices, as well as providing the support and the assurance that’s 

necessary for stewardship, we feel that those are very critical. 

Obviously, in the area of contingency and management fees, 

management fee—I agree with Dr. Buckius—will take longer. It’s 

a more complicated issue and there’s no great guidance out there 

that’s really—kind of sets the stage for where to go in the future. 

I mean, that will take some time. And in fact we made a recommendation—we—in the text of our report, we decide that if 

there’s some specific requirements that NSF projects have that do 

not really fit the current definitions, it may make sense to really 

identify those and seek special legislative authority there. 

Bottom line, in terms of balance, it is a balancing act. Budgets 

are tight. There’s been a lot of initiatives underway. NSF will need 

to really step back and do detailed workload and workforce analyses to determine what the next steps are. But, you know, dealing 

with contingency issues, dealing with the—how they manage—the 

MREFC panel I think is one that’s a very easy fix, wouldn’t require 

a lot of time, effort, or cost, and would really help them in terms 

of ensuring that they have processes in place as well for monitoring 

and really shoring up their oversight processes. 

Mr. LIPINSKI. Okay. Let me go to Ms. Lerner, and then we’ll go 

to Dr. Buckius. 

Ms. LERNER. I certainly agree that there are—the human capital 

investment that needs to be made in ensuring that NSF and its 

awardees have necessary program management expertise is critical. In terms of financial investments, I do believe that investments in strong pre-award and post-award audits will pay divi-
52 

dends in the information that they provide NSF managers about 

how the funds plan to be used and are actually being used. When 

you look at the cost of some of these projects which are, you know, 

350 to almost $500 million, investing a couple hundred thousand 

dollars in an audit seems a very appropriate thing to do because, 

especially since it’s one of the only ways NSF post-award can actually see how its funds are being used. 

Mr. LIPINSKI. Thank you. Dr. Buckius? 

Dr. BUCKIUS. Well, thank you for this question. It is a balance. 

So we’ve got 13 recommendations here. A number of them can be 

implemented with relatively low cost. Modifying text and ensuring 

that our awardees are responding, I think, you know—I would 

argue that’s moderate. 

Regarding the expertise, I think we’ve already made some steps 

in that direction by our most recent hires under the existing LFO 

allocation—Large Facility Office, excuse me—we are allocating two 

more positions to that. It’s already been done. They’re going to be 

posted. 

Our attitude is, in the case of LFO, they’ve been understaffed, I 

would argue, for a number of years, and so it’s time for us to actually make that happen. This comes out of our AOAM, administration operations account, and I think you’ll read in the ’16 and ’17 

budget it’s a strained account already, but this is necessary. 

The comments on the MREFC and—are interesting because they 

also don’t require a lot of cost from the point of view of people. 

They’re going to require a lot of cost in terms of time, though, because we now believe—and I think the NAPA report clearly 

showed—we need to do complete lifecycle analysis. We’ve been 

doing gate analysis and we’ve been focusing on when things move 

from one gate to another. We need to ensure continuous oversight. 

So that’ll be time, time is money, and so that’ll cost us in the long 

run, but I think it’s absolutely necessary. 

So as you’ve noted, it’s going to be a balance to ensure that we 

actually get the right oversight, right care, and obviously to balance our budgets that we have to do. Thank you for the question. 

Mr. LIPINSKI. Thank you. I’m out of time so I’ll yield back. 

Chairwoman COMSTOCK. We are short of members if you’d like 

a second round. 

Mr. LIPINSKI. Well, let me very quickly—Dr. Buckius, I don’t 

know if you’ll be able to answer this, you know, five days before 

the budget request is released, but can we expect to see an increased request for the NSF management account in order to pay 

for some of this reform? 

Dr. BUCKIUS. The request we got in front of you will help us a 

lot in order to make sure that we’re making progress. I’m thinking 

long-term ’18, ’19, I think that those are the areas that we’re going 

to have to spend a lot more care regarding these kinds of people 

issues. ’Seventeen is on the mark. 

Mr. LIPINSKI. Thank you. One other thing if I could ask you, Dr. 

Buckius, I understand NSF is taking under consideration the 

NAPA recommendation to eliminate management fee and is initiating an evaluation of alternatives. Is there any kind of preview 

you can give us at this early date? Do you have any time frame 

in mind, including the analysis? 
53 

Dr. BUCKIUS. Sure. Let me—this is the issue that we talked 

about in my last testimony. So we implemented what I would call 

an extremely strict policy on management fees. We write—or we 

ask now for the positive; that is, what are you going to do with it, 

and we also indicate what you can’t do with it. We implemented 

this in June of ’15. We’re in the midst of now assessing what the 

impact has been by that strict policy. Our deadline there is May, 

and we’re going to work towards May in order to make the assessment of how that particular policy that was implemented in June 

has impacted the folks that actually are using it. 

The NAPA report also makes a number of recommendations, as 

you just heard from Ms. Heckmann. Some of those I think we really need to consider and see how we can actually use other mechanisms in order to be able to get these kinds of resources in the 

hands of the folks that we—so remember the whole goal here. The 

whole goal is to provide agencies, organizations the opportunity to 

compete for these awards. We need competing proposals if we’re 

going to fund these kinds of entities. And so the management fee 

permits them to do certain things that they need to do. 

So we need to assess, as the NAPA report has indicated, how we 

can figure—how—what other mechanisms we can possibly use 

other than management fee. So our goal is to try to do that over 

the—so we’ve got these two issues. Our goal is to try to do that 

over the next months. We have to work with our National Science 

Board, though, to ensure that they’re on board. 

Mr. LIPINSKI. Very good. Thank you. I yield back again. 

Chairwoman COMSTOCK. Okay. And I now recognize Ms. 

Bonamici. 

Ms. BONAMICI. Thank you very much, Madam Chair. 

I want to start—even though Chairman Smith isn’t here yet, I 

just wanted to start by thanking him on the record for organizing 

a trip with Dr. Cordova a little more than a year ago to Antarctica 

and some of the—with some of the NSF staff and Dr. Cordova. And 

I come to this discussion with that background because—going on 

that trip, which was really an enlightening experience and fascinating—understanding not only the importance of NSF investments and facilities but also the challenges. And if you want to go 

to a place where there are challenges with NSF facilities, it’s a 

place like Antarctica. So that brought to the other committee members who went on that trip, I think, a perspective of appreciation 

of some of the challenges but also the importance. 

So Ms. Heckmann described in her testimony NSF will need to 

make some hard funding decisions that address the demand for 

more rigorous accountability systems balanced against the mission 

to advance science. Obviously, there are many good recommendations in the NAPA report, and some will cost more than others to 

implement, as we’ve heard, and the IG would like to see NSF go 

farther in some areas than NAPA recommends. I don’t think anyone would argue that it’s important to have appropriate oversight, 

but obviously, there need to be priorities set. 

So I want to ask you, Dr. Buckius—are we saying your name 

right? Close? 

Dr. BUCKIUS. You can call me Richard. It’s Buckius. 
54 

Ms. BONAMICI. Buckius, thank you. To expand a little bit, we’ve 

had some discussion about this already, but given the cost of implementing some of the recommended reforms, how should NSF go 

through the prioritization process of all the various recommendations while you’re also trying to ensure that the enhanced oversight 

does not impede NSF scientific missions? So could you talk a little 

bit about that process and how you’re making the decisions, the 

priority decisions? 

Dr. BUCKIUS. Yes, so let me try—first of all, your trip to Antarctica probably demonstrated a lot of the facility issues that we deal 

with—— 

Ms. BONAMICI. Right. 

Dr. BUCKIUS. —on a regular basis. I mean it’s—that particular 

facility has almost everything exaggerated from the point of view 

of difficulties. 

Ms. BONAMICI. Right. 

Dr. BUCKIUS. And yet the science that we’re doing there and the 

leadership for this country in Antarctica is tremendous. So our approach has been on a number of these audit recommendations is 

to look at the risk and try to balance the audits related to risk so 

that we aren’t going in and proposing to audit, say, incurred cost 

audits on every single proposal. I mean, that just isn’t—it won’t 

ever happen. It’s impossible. So what we do is we try to assess the 

level of risk in a project, and then we try to look at those that have 

the largest dollar value. So we’ve set limits in the case of incurred 

costs at 100 million, and then assess the risk of those, and then 

go and take a look at what we need to do. We propose to do them 

at the end of the award. 

If necessary, though, if we see a risky issue, we can jump in and 

audit those earlier. So that’s the approach we want to take so that 

we don’t burden ourselves overly with an audit process that might 

not give us the necessary information that we need. 

So remember, though, we are—say in the comment that Ms. 

Lerner made regarding EVM, we annually look at this, okay? We 

look at them monthly, so it’s not like we’re not paying attention to 

it. Her recommendation, which is the one we have to look at, on 

certification and validation, we probably can do some better in the 

validation setting. And so that’s kind of our goal. Our goal is to try 

to go in and look at the most risky issues, try to look at the biggest 

projects, and invest in those areas. So that’s our objective. 

Ms. BONAMICI. Thank you. And could you also expand a little bit 

on the timeline and that process of developing the comprehensive 

organizational chart to incorporate the recommendations? You 

mentioned LFO and additional investment needed there. But what 

is the process of going through that timeline? Give us a little more 

details about that and what if any outside expertise will help you 

through this process of the timeline and developing the recommendations? 

Dr. BUCKIUS. I would argue we meet on this subject every week 

as a group with the Director, maybe every other week, depending 

upon travel. So this is an urgent issue. We are going to implement 

as many of these recommendations as we can as soon as we can. 

Now, let’s talk a little bit about the FACA committee. We think 

that’s an excellent recommendation. We are trying to figure out 
55 

how to do that in a stepwise process. So we’re at this point talking 

about trying to use a subcommittee of one of our current ACs so 

that we can get that moving ASAP with the idea in the long run 

of creating a separate committee. 

So again, the idea—we want to implement these as fast as we 

possibly can because we realize this is going to be helpful to all of 

us. At the same time, in order to set up a FACA committee, it 

takes a fair amount of work, okay, in order to be able to get that 

all constructed. And so we want to do that, but we’ve got to figure 

out ways to get there first. 

The LFO issue—Matt Hawkins is our LFO head, and I’m sure 

he would tell you the same thing—we were understaffed, I would 

argue, 3, four years ago in that area, okay? And so, like you’ve 

heard, I was here in the last year-and-a-half or so, and we’re staffing that up, okay? It has to be a priority, and so we’re going to do 

it. And so, like I said, we’ve already got two more postings coming 

on in that. And these are the kind of investments that the agency 

has to make. And so the cost is one thing. Implementation is as 

fast as we can. 

Now, the management fee is the one that’s probably going to be 

the slowest because we’ve got to take a look at how we’re going to 

ensure that we have competitors. And we just don’t want to have 

some unintended consequences by implementation of a policy that 

would actually alienate or give us the inability to have proposers 

in these areas. 

Ms. BONAMICI. Terrific. Well, thank you. And I see that I’m out 

of time, but I just want to say that we appreciate the progress 

made to date and appreciate the Director’s and your willingness to 

come back and report to us, so thank you. 

I yield back. Thank you, Madam Chair. 

Chairwoman COMSTOCK. Thank you. And I’m just going to ask 

an additional question. 

Ms. Lerner, in Dr. Buckius’s testimony, he notes that NSF manages 28 major research facilities, and that NEON is only one facility within this portfolio that NSF needs to consider when looking 

at its policies and procedures related to proper oversight. This implies that many of the oversight management issues identified are 

isolated to NEON. In your audits and reviews of all the major research facilities in NSF’s portfolio, have you found similar issues 

in the oversight and management of other projects? 

Ms. LERNER. As I noted at the start of my remarks, you know, 

we’ve done 28 reports with 80 recommendations, and those findings 

are not limited to NEON. We’ve also found issues and concerns at 

the LSST project, at the DKIST project when it was called ATST, 

and with the OOI project, and most recently, with incurred cost 

submissions for the AUI project. So the issues and the challenges 

that we’ve identified are not limited. 

Chairwoman COMSTOCK. Okay. Well,the bus apparently is still 

en route, so again, my apologies. If my colleagues have any additional question, I’d be happy to yield to them. 

But we’ll keep the record open for additional questions. I appreciate your testimony here this morning and helping us in moving 

forward on these issues. And we look forward to continuing to work 

with you. 
56 

And, yes, the record will remain open for two weeks for additional written comments and written questions from our Members 

who both are here and those who weren’t able to join us. So thank 

you. And the meeting is now adjourned. 

Dr. BUCKIUS. Thank you. 

[Whereupon, at 10:30 a.m., the Subcommittees were adjourned.] 
(57) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
58 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Ms. Cynthia Heckmann 
59 
60 
61 
62 

Responses by Dr. Richard Buckius 
63 
64 
65 
66 

Responses by Ms. Allison Lerner 
67 
68 
69 
70 
71 

(73) 

Appendix II 

ADDITIONAL MATERIAL FOR THE RECORD
74 

STATEMENT SUBMITTED BY SUBCOMMITTEE ON OVERSIGHT

CHAIRMAN BARRY LOUDERMILK
75 

STATEMENT SUBMITTED BY SUBCOMMITTEE ON OVERSIGHT

RANKING MINORITY MEMBER DON BEYER
76 
77 

STATEMENT SUBMITTED BY COMMITTEE

CHAIRMAN LAMAR SMITH
78 
79 
80 

STATEMENT SUBMITTED BY COMMITTEE RANKING MEMBER

EDDIE BERNICE JOHSNON

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