IG-02-014

AUDIT 

REPORT NASA ACQUISITION OF SERVICES USING 

THE FEDERAL SUPPLY SCHEDULES 

March 27, 2002

 National Aeronautics and 

Space Administration

 OFFICE OF INSPECTOR GENERAL
Additional Copies 

To obtain additional copies of this report, contact the Assistant Inspector General for 

Audits at (202) 358-1232, or visit www.hq.nasa.gov/office/oig/hq/issuedaudits.html.

Suggestions for Future Audits

To suggest ideas for or to request future audits, contact the Assistant Inspector General for 

Audits. Ideas and requests can also be mailed to: 

 Assistant Inspector General for Audits 

 Code W 

 NASA Headquarters 

 Washington, DC 20546-0001 

NASA Hotline

To report fraud, waste, abuse, or mismanagement contact the NASA Hotline at (800) 

424-9183, (800) 535-8134 (TDD), or at www.hq.nasa.gov/office/oig/hq/hotline.html#form

or write to the NASA Inspector General, P.O. Box 23089, L’Enfant Plaza Station, 

Washington, DC 20026. The identity of each writer and caller can be kept confidential, 

upon request, to the extent permitted by law. 

Reader Survey 

Please complete the reader survey at the end of this report or at 

www.hq.nasa.gov/office/oig/hq/audits.html.

Acronyms 

CO Contracting Officer 

FAR Federal Acquisition Regulation 

FSS Federal Supply Schedules 

FY Fiscal Year 

GSA General Services Administration 

OFPP Office of Federal Procurement Policy 

PIC Procurement Information Circular 

RFQ Request for Quotation 

SBA Small Business Administration 

SOW Statement of Work
March 27, 2002 

W 

TO: A/Administrator 

FROM: W/Counsel to the Inspector General 

SUBJECT: INFORMATION: NASA Acquisition of Services Using the Federal Supply 

Schedules 

 Report Number IG-02-014 

The NASA Office of Inspector General has completed an audit of NASA Acquisition of 

Services Using the Federal Supply Schedules (FSS). We found that NASA contracting 

officers (CO’s) at three Centers1

 could have more effectively used the FSS to acquire 

services, and CO’s at the five Centers2

 reviewed were not consistent in their use of the FSS 

to procure similar services. Specifically, for three of the five NASA Centers, CO’s did not 

consider the FSS as a source for 12 (37 percent) of 32 acquisitions of services that were 

available. The 12 services, costing NASA $7.8 million, were available on the FSS. Also, 

CO’s did not properly follow General Services Administration (GSA) procedures in 

obtaining multiple price quotes or providing information in the Request for Quotation 

(RFQ)3 or Statement of Work (SOW)4 when acquiring services through the FSS. 

Specifically, for 20 FSS services acquired at the five Centers, Ames, Goddard, and 

Marshall did not follow the GSA Ordering Procedures for Services for 8 (40 percent) 

acquired services. The eight acquisitions were valued at $2.9 million. 

Background 

In fiscal year (FY) 2000, NASA awarded $9.1 billion in contracts to business firms for the 

acquisition of services, supplies, and equipment, and research and development. NASA 

awarded $5.1 billion (56 percent) of the $9.1 billion for services. Federal Acquisition 

Regulation (FAR) Part 8, Section 8.001, establishes the “Priorities for use of Government 

supply sources,” the second of which is the FSS for obtaining services. 

 

1

 The three Centers that had not maximized use of the FSS were Johnson Space Center (Johnson), Langley Research 

Center (Langley), and Marshall Space Flight Center (Marshall). 

2

 During the audit, we reviewed acquisitions of services at Ames Research Center (Ames), Goddard Space Flight 

Center (Goddard), Johnson, Langley, and Marshall. 

3

 A request for quotation communicates Government requirements to prospective contractors and solicits proposals 

or quotations from them. 

4

 A statement of work is a specific description to contractors, suppliers, or vendors of the goods, services, research, 

products, and other items that an agency needs to acquire.
2 

The FSS provide sources for a wide variety of services including, but not limited to, 

document management, engineering, energy management, environmental advisory, 

financial management, mail management, marketing and media, personal property 

management, science, information technology, and travel. The GSA administers the FSS, 

negotiates pricing, and maintains the FSS, which incorporate sources from both large and 

small contractors. The GSA Ordering Procedures for Services require ordering agencies to 

seek competitive quotes for services priced at an hourly rate. Further, the office ordering 

the service is responsible for determining that the total price is fair and reasonable. 

Additionally, GSA trains personnel, upon request, to encourage the acquisition of services 

through the FSS. 

Recommendations 

We recommended that the Assistant Administrator for Procurement (1) direct NASA CO’s 

to properly follow the FAR requirements for sources when acquiring services or to 

complete a waiver in accordance with the NASA FAR Supplement when using a non-FSS 

source for services that are available through the FSS, (2) require NASA Centers to obtain 

training directly from GSA on the efficient and economical use of the FSS, and (3) issue a 

Procurement Information Circular (PIC)5 directing NASA CO’s to follow the terms of the 

GSA ordering procedures when ordering services through the FSS. 

Management’s Response and OIG Evaluation

The NASA Office of Procurement concurred with the recommendations and stated that 

corrective action should be completed by June 30, 2002. The Assistant Administrator did 

not see the need for or relevance of the waiver-related portion of the first recommendation. 

We agree that waivers relate only to mandatory sources,6

 and waivers are not needed for 

the acquisition of nonmandatory services from a vendor not on the FSS. We believe, 

however, that NASA should encourage all CO’s to consider the FSS as a source for 

services to save both time and money. 

Details on the status of the recommendations are in the recommendations section of the 

report. 

[originial signed by] 

Francis P. LaRocca

 

5

 A Procurement Information Circular (PIC) is used for internal dissemination of procurement-related information 

and directives not suitable for inclusion in the NASA FAR Supplement. 

6

 The GSA negotiates contracts for services that are used by multiple Federal agencies and identifies some of these 

contracts as mandatory sources. The contracts presently identified as mandatory relate to paired city airline service, 

Federal Express delivery service, and the acquisition of business cards. Those sources not identified as mandatory 

are considered to be nonmandatory.
3 

Enclosure 

Final Report on Audit of NASA Acquisition of Services Using the Federal Supply 

Schedules 
NASA ACQUISITION OF SERVICES USING THE FEDERAL 

SUPPLY SCHEDULES
March 27, 2002 

W 

TO: H/Assistant Administrator for Procurement 

 

FROM: W/Assistant Inspector General for Audits 

SUBJECT: Final Report on the Audit of NASA Acquisition of Services Using the 

Federal Supply Schedules 

 Assignment Number A-01-027-00 

 Report Number IG-02-014 

The subject final report is provided for your information and use. Please refer to the 

Executive Summary for the overall audit results. Our evaluation of your response is 

incorporated into the body of the report. The corrective actions taken or planned for all 

recommendations were responsive. All recommendations will remain open for reporting 

purposes until agreed-to corrective actions are completed. Please notify us when 

agreed-to actions have been completed, including the extent of testing performed to 

ensure corrective actions are effective. 

If you have questions concerning the report, please contact Mr. Lorne A. Dear, Program 

Director, Procurement Audits, at (818) 354-5634; Mr. Tony A. Lawson, Program 

Manager, at (301) 286-6524; or Mr. Walter K. Curtis, Auditor-in-Charge, at (818) 354-

9746. We appreciate the courtesies extended to the audit staff. The final report 

distribution is in Appendix E. 

[original signed by] 

Alan J. Lamoreaux 

Enclosure
2 

cc: 

AI/Associate Deputy Administrator 

B/Acting Chief Financial Officer 

B/Comptroller 

BF/Director, Financial Management Division 

G/General Counsel 

JM/Director, Management Assessment Division 

ARC/Director, Ames Research Center 

GSFC/Director, Goddard Space Flight Center 

JSC/Acting Director, Johnson Space Center 

LaRC/Director, Langley Research Center 

MSFC/Director, Marshall Space Flight Center
Contents 

Executive Summary, i 

Introduction, 1 

Findings and Recommendations, 2

Finding A. Use of the Federal Supply Schedules, 2

Finding B. Following GSA Ordering Procedures for Services, 7

Appendix A – Objectives, Scope, and Methodology, 11

Appendix B – Service Contracts Acquired Outside the FSS, 13 

Appendix C – Service Contracts Acquired Through the FSS, 14 

Appendix D – Management’s Response, 15 

Appendix E – Report Distribution, 18
NASA Office of Inspector General 

IG-02-014 March 27, 2002 

 A-01-027-00 

NASA Acquisition of Services Using 

the Federal Supply Schedules 

Executive Summary 

Background. In FY 2000, NASA awarded $9.1 billion in contracts to business firms for 

the acquisition of services, supplies, and equipment, and research and development. 

NASA awarded $5.1 billion (56 percent) of the $9.1 billion for services. FAR Part 8, 

Section 8.001, establishes the “Priorities for use of Government supply sources,”7

 the 

second of which is the FSS for obtaining services. 

The FSS provide sources for a wide variety of services including, but not limited to, 

document management, engineering, energy management, environmental advisory, 

financial management, mail management, marketing and media, personal property 

management, science, information technology, and travel. The GSA administers the 

FSS, negotiates pricing, and maintains the FSS, which incorporate sources from both 

large and small contractors. The FSS are available to other Government agencies, 

including NASA. A GSA-contracted study8

 found that it takes an average of 49 days to 

place an order under an FSS contract in comparison to an average of 268 days to award a 

contract using the traditional method,9

 a time savings of 81 percent. Upon request, GSA 

trains agency personnel as part of its effort to encourage the acquisition of services 

through the FSS. 

The GSA established procedures that require ordering agencies to seek competitive 

quotes for services priced at an hourly rate. Also, the procedures state that the office 

ordering the services is responsible for considering the level of effort and mix of labor 

proposed to perform specific tasks and for making a determination that the total price is 

fair and reasonable. 

 

7 Although the title of this section addresses "Government supply sources," the section describes the acquisition of 

supplies and services. 8

 In November 1998, Johnson & Johnson Associates, Inc., completed a study entitled “Impact of FAR 8.4” for the 

GSA. 

9

 The traditional method of contracting requires that an agency identify a need, prepare and issue a request for 

quotations and supporting documentation, receive and evaluate quotations from multiple vendors, negotiate with 

the vendors, and award a contract to the vendor offering the best value.
Objectives. The overall objective was to determine whether NASA had effectively used 

the FSS for acquiring services. Specifically, we determined whether: 

• NASA’s procurement practices adequately considered acquisitions of services 

from the FSS as required by FAR Part 8 and 

• the Agency achieved maximum benefits by acquiring services from the required 

sources. 

Details on our audit scope and methodology are in Appendix A.

Results of Audit. NASA can more effectively use the FSS to acquire services. As part 

of the audit, we randomly reviewed 119 acquisitions of services at 5 NASA Centers with 

total obligations of about $1.5 billion in FY 2000 and $1.7 billion in FY 2001. Of the 

119 sampled acquisitions, NASA CO’s used the FSS to acquire 20 (63 percent) of the 32 

acquisitions for services that were available through the FSS. However, we found that 

CO’s had not considered the FSS as a source for the remaining 12 (37 percent) 

acquisitions (Finding A). Further, for 8 (40 percent) of the 20 services that were acquired 

through the FSS, the CO’s did not follow GSA’s ordering procedures with regard to 

obtaining multiple price quotes or providing sufficient information on the RFQ or SOW

(Finding B). As a result, NASA had reduced assurance that it received the best value for 

its contracting dollars, and additional savings may have been possible.

Recommendations. We recommended that the Assistant Administrator for Procurement 

(1) direct NASA CO’s to properly follow the FAR requirements for sources when 

acquiring services or to complete a waiver in accordance with the NASA FAR 

Supplement when using a non-FSS source for services that are available through the FSS, 

(2) require NASA Centers to obtain training directly from GSA on the efficient and 

economical use of the FSS, and (3) issue a PIC directing NASA CO’s to follow the terms 

of the GSA ordering procedures when ordering services through the FSS. 

Management’s Response. Management concurred with all the recommendations. The 

Office of Procurement will issue a PIC by June 30, 2002, that will (1) remind CO’s to 

follow the FAR requirements for sources when acquiring services, (2) advise the Centers 

of the availability for the GSA training, and (3) direct CO’s to follow the terms of the 

GSA Ordering Procedures for Services when ordering services through the FSS. The 

complete text of the response is in Appendix D. We consider management’s comments 

responsive. The Assistant Administrator did not see the need for or relevance of the 

waiver-related portion of the first recommendation. We agree that waivers relate only to 

mandatory sources, and waivers are not needed for the acquisition of nonmandatory 

services from a vendor not on the FSS. We believe, however, that NASA should 

encourage all CO’s to consider the FSS as a source for services to save both time and 

money. 

ii 
Introduction 

The GSA directs and manages the FSS program that provides Federal agencies with a 

simplified process for obtaining commonly used commercial supplies and services at 

prices associated with volume buying. In the past, the FSS covered only products, such 

as office equipment; however, in 1998, GSA added services to the schedules. GSA 

establishes contracts with commercial firms to provide supplies and services at stated 

prices for specific periods. The FSS contain the information necessary for placing 

delivery orders with schedule contractors. 

To provide guidance to agencies seeking supplies and services, the GSA issued Ordering 

Procedures for Services, which are a set of FSS acquisition guidelines based on dollar 

thresholds. For acquisitions under the $2,500 micro-purchase threshold,10 orders are 

placed directly with the contractors for the services that best meet the agency’s need. For 

acquisitions over the $2,500 micro-purchase threshold and below the maximum order 

threshold,11 the agency must: (1) prepare a SOW, (2) send an RFQ and the SOW to three 

FSS contractors, and (3) evaluate the contractors’ quotes for the services to make a best 

value selection. For acquisitions over the maximum order threshold, the agency should 

seek quotes from additional contractors as well as price reductions from the FSS 

contractors. 

The GSA stated “The Federal Supply Schedules Program ... provides continuous 

competition and real time market pricing and technology. It shortens lead-times and 

lowers administrative cost.” In April 1999, GSA hosted a Best Practices Conference at 

which agency representatives12 cited cost savings of 10 to 60 percent (depending on the 

services being acquired) by using the FSS. 

 

10 FAR Part 2.101, “Definitions,” defines the micro-purchase threshold as $2,500. 11 FAR Subpart 8.404 (b)(3), “Orders exceeding the maximum order threshold” states that each FSS contract has 

an established maximum order threshold. This threshold represents the point at which it is advantageous for the 

ordering office to seek a price reduction by obtaining quotes from additional contractors. 12 The representatives were from the Social Security Administration, Department of State, and Department of 

Defense, as well as other agencies. 
Findings and Recommendations 

Finding A. Use of the Federal Supply Schedules 

NASA CO’s at three Centers could have more effectively used the FSS to acquire 

services, and CO’s at the five Centers reviewed were not consistent in their use of the 

FSS to procure similar services. Specifically, for 3 of the 5 NASA Centers, CO’s did not 

consider the FSS as a source for 12 (37 percent) of the 32 acquisitions of services that we 

reviewed. The 12 services, costing NASA $7.8 million, were available on the FSS. 

CO’s did not consider the FSS as a source because the CO’s had not researched the 

availability of services on the FSS, believed that the nature of the services was too 

sensitive, or used alternative acquisition methods.13 Further, CO’s had not been 

consistently trained in the proper use of the FSS. As a result, NASA had reduced 

assurance that it (1) received the best value for the services acquired or (2) completed the 

acquisitions in the least amount of time. Previous studies and historical data have shown 

that significant cost and time savings are achievable through use of the FSS. 

FAR and NASA FAR Supplement Guidance 

FAR Subpart 8.001 (a), “Priorities for use of Government supply sources,” states that 

agencies shall satisfy requirements for services from or through specific sources in a 

descending order of priority, the second of which is the FSS.14

FAR Subpart 8.404-3 (a), “Requests for waivers,” states: 

 

When an ordering office15 that is a mandatory user16 under a schedule 

determines that items available from the schedule will not meet its 

specific needs, but similar items from another source will, it shall 

submit a request for waiver to the Commissioner [of the] Federal 

Supply Service.17 

The NASA FAR Supplement Subpart 1808.404-3(a), “Requests for waivers,” states: 

The head of the NASA office initiating the procurement request or a 

designated representative shall furnish the NASA contracting office a 

 

13 Alternative acquisition methods used by CO’s included (1) competing the award, (2) incrementally funding 

earlier contracts, and (3) awarding sole-source contracts. 14 The FAR identifies the first source for services as the Committee for Purchase From People Who Are Blind or

Severely Disabled. 15 An ordering office is the office that requires a product or service. 16 The FSS identifies selected Executive Branch agencies as mandatory users. As a result, the FSS becomes a 

mandatory source for those agencies. The Code of Federal Regulations requires all Executive agencies to comply 

with the priorities for use identified in the FSS. 17 GSA management stated that it considers the GSA Ordering Procedures for Services to be mandatory for all

agencies. 

2 
signed statement identifying the supplies or services to be purchased 

and explaining why similar items listed in the applicable schedule

18

will not meet the requirement. 

The NASA FAR Supplement also discusses the process for reaching a decision if the 

contracting office disagrees that similar items listed in the applicable schedule will meet 

the requirement. However, the NASA FAR Supplement provides no further guidance on 

the use and potential benefits of the FSS. 

Availability of Services Through the FSS 

The Center CO’s should have used the FSS for 12 (37 percent) acquisitions for services. 

The acquisitions cost NASA $7.8 million and are summarized below: [Withheld per 

FOIA exemption 5, 5 U.S.C. §552 (b)(5).] 

• Nine acquisitions of services19 Marshall obtained outside of the FSS were 

available through the FSS. For seven of the nine acquisitions, the CO’s decided 

to continue with existing contractors by incrementally funding earlier contracts. 

For one of the nine acquisitions, the CO awarded a sole-source20 follow-on 

contract to the original sole-source award. The contract files did not include a 

documented exception from the initiating offices for the acquisitions of services 

from non-FSS sources or a justification for the sole-source award.21 For the one 

remaining acquisition (architectural and engineering services), the CO stated he 

did not consider the FSS because of the unique aspects of the necessary services. 

We could not identify any unique aspects of the needed architectural and 

engineering services. 

• Two of the services Johnson acquired outside the FSS were available through the 

FSS. In one case, the CO did not acquire the services through the FSS because 

the CO obtained the services from a company that had a history of providing the 

work to Johnson, and the company was not on the FSS. Further, the contract file 

did not include a justification from the initiating office, as required by the NASA 

FAR Supplement, for the acquisition of the service from a non-FSS source. For 

the remaining acquisition, the Johnson CO had not considered the FSS as a 

potential source because the work related to a sensitive utility tunnel system at 

 

18 The “applicable schedule” is the specific Federal Supply Schedule for the services that the office initiating the 

procurement request is seeking. 

19 These services included architectural and engineering services, data processing, and management support

services. 

20 FAR Part 2.101, “Definitions,” defines a "sole-source acquisition" as “a contract for the purchase of supplies or 

services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only 

one source.” 

21 FAR Part 6.302-5, “Circumstances permitting other than full and open competition” requires a written 

justification when an agency awards a sole-source contract.

3 
the Center. While maintenance services were available through the FSS, the CO 

had not considered the FSS because of the sensitivity of the location. The 

contract file did not include a discussion of the sensitivity of the tunnel system

location or an exception for the acquisition of the service from a non-FSS source. 

• One of the services Langley acquired outside of the FSS was for support services 

that were available through the FSS. The Langley CO did not check the FSS as a 

potential source, but instead, conducted a competition for the service. The 

contract file did not include documented exceptions from the initiating office for 

the acquisition of the services from a non-FSS source. The acquisition took 90 

days from the date the CO issued the RFQ to contract award. 

 

Inconsistent Center Use of the FSS

 

The five Centers did not consistently select the FSS to procure similar services. CO's at 

Goddard and Marshall acquired automatic data processing and telecommunications 

services and professional, administrative, and management support services through the 

FSS, while other CO’s at the same Centers acquired the same type of services from nonFSS vendors. CO's either had not researched the availability of services on the FSS or 

did not consider the FSS because they believed the nature of the services was too 

sensitive.22 

Waivers for Non-FSS Sources 

CO’s did not obtain waivers when non-FSS sources were used. The FAR explicitly 

states that the FSS is the second priority source for obtaining services. The NASA FAR 

Supplement states that the office initiating an acquisition request shall furnish a waiver 

when the FSS cannot be used. NASA should direct its CO’s to follow the requirements 

of the FAR and NASA FAR Supplement with regards to using the FSS when acquiring 

services. 

 

Availability of FSS Training 

To encourage agencies to use the FSS to acquire services, the GSA provides training to 

contracting personnel in the use of the FSS and has issued Ordering Procedures for 

Services. The GSA expects all Federal agencies to use these procedures, which are 

available on the Internet. At the request of the Center management, the GSA provided 

training to the contracting staff at Marshall.23 The other four Centers reviewed had not 

 

22 We did not find any evidence in the contract files that the services were sensitive. 23 GSA provided training to Marshall CO’s in February 2001. 

4 
requested the training. NASA should pursue this training for all Agency CO’s involved 

in the acquisition of services. 

Saving Resources by Using the FSS

Because CO’s did not take advantage of the services available through the pre-negotiated 

contracts in the FSS, NASA had reduced assurance that it received the best value in terms 

of scope of services and costs for its acquisitions of services. In addition, NASA 

contracting personnel unnecessarily expended time and budget resources in evaluating 

potential service providers when GSA had already accomplished the evaluations prior to 

awarding its FSS contracts. 

At the GSA Best Practices Conference in April 1999, a representative of the Social 

Security Administration cited cost savings of 10 to 60 percent through the use of the 

pre-negotiated contracts. A study24 of elapsed time savings at eight Executive Branch 

agencies conducted for the GSA in November 1998 reported an average of 49 days to 

place an order against an existing GSA contract (such as an FSS contract) compared to an 

average of 268 days to place an order under a non-GSA contract. The difference 

represents a time savings of more than 80 percent. 

Based on the savings experienced by other agencies, we believe that time and monetary 

savings are also possible for NASA through more extensive use of the FSS. NASA 

should take prompt action to ensure increased use of the FSS. 

Recommendations, Management’s Response, and Evaluation of 

Response 

The Assistant Administrator for Procurement should: 

1. Direct NASA CO’s to properly follow the FAR requirements for sources 

when acquiring services or to complete a waiver in accordance with the 

NASA FAR Supplement when using a non-FSS source for services that are 

available through the FSS. 

Management’s Response. Concur. The Office of Procurement agreed to issue a PIC to 

remind CO’s to follow the FAR requirements for sources when acquiring services. The 

expected completion date for this corrective action is June 30, 2002. The Assistant 

Administrator for Procurement did not see the need for or relevance of the waiver-related 

portion of the recommendation. Section 1808.404-3 of the NASA FAR Supplement 

addresses requests for waivers when acquiring certain services from non-FSS sources, 

 

 

24 Johnson & Johnson Associates, Inc., completed the study, entitled “Impact of FAR 8.4 Comparative Analysis 

of Customer Elapsed-Time Savings” on November 13, 1998. 

5 
but is limited to ordering offices that are mandatory users. The section implements section 

8.404-3 of the FAR, which states “[w]hen an ordering office that is a mandatory user 

under a schedule determines that items available from the schedule will not meet its 

specific needs, but similar items from another source will, it shall submit a request for 

waiver....” Currently, only three contracts are mandatory under the FSS. NASA CO’s 

do not negotiate awards for two of those contracts. The third mandatory contract relates 

to business cards, which NASA purchases from the GSA mandatory schedule. 

Additionally, management responded that the audit did not identify any instances of CO’s 

not providing waivers when such waivers were required for the three sources NASA 

considers mandatory. See Appendix D for the complete text of management’s comments. 

Evaluation of Management’s Response. Management’s planned actions are responsive 

to the recommendation. The recommendation is resolved but will remain 

undispositioned and open until agreed-to corrective actions are completed. 

Regarding the benefits available through the use of the FSS, NASA is limiting its ability 

to more effectively use the FSS by focusing its comments only on the three mandatory 

contracts. The FSS provides sources for a wide variety of services and allows agencies to 

shorten lead times and lower administrative costs. NASA contracting personnel 

unnecessarily expended time and budget resources in evaluating potential service 

providers when GSA had already accomplished the evaluations prior to awarding its FSS 

contracts. NASA can increase assurance that it received the best value in terms of scope 

of service and costs for its acquisition of services by emphasizing use of the FSS for any 

service, mandatory or nonmandatory, where possible. 

GSA management told us that all agencies are expected to use the FSS, which according 

to the FAR is the second priority source for obtaining services. Some NASA CO’s did 

not even consider the FSS as a source for services, while other NASA CO’s used the FSS 

to acquire 20 of 32 nonmandatory services in our sample. We believe this use of the FSS 

resulted in a savings of time and money for NASA. 

The Assistant Administrator's comments clarify NASA's position on when waivers are 

required, but the Agency still needs to encourage CO’s to acquire services through the 

FSS. The PIC should emphasize that CO's should acquire services through the FSS 

wherever possible whether the service is or is not obtained from a mandatory source. 

The CO's at 3 NASA Centers should have considered the FSS as a source for 12 

acquisitions of services. Other Federal agencies have experienced time and monetary 

savings by acquiring services through the FSS. NASA CO's could also experience 

similar savings and would be exercising good business sense by acquiring services 

through the FSS, where possible. 

6 
2. Request NASA Centers to obtain training directly from GSA on the efficient 

and economical use of the FSS. 

Management’s Response. Concur. The Office of Procurement will advise the Centers 

of the availability for the GSA training. This information will be included in the PIC that 

is to be issued by June 30, 2002 (see Appendix D). 

Evaluation of Management’s Response. Management’s planned actions are responsive 

to the recommendation. The recommendation is resolved but will remain 

undispositioned and open until agreed-to corrective actions are completed. 

7 
Finding B. Following GSA Ordering Procedures for Services 

CO’s did not properly follow GSA procedures in obtaining multiple price quotes or 

providing information in the RFQ or SOW when acquiring services through the FSS. 

Specifically, for 20 FSS services acquired at the 5 Centers, Ames, Goddard, and Marshall 

did not follow the GSA Ordering Procedures for Services for 8 (40 percent) acquired 

services. The eight acquisitions were valued at $2.9 million. The CO’s did not follow 

procedures because they either had not been trained in using the procedures or made 

intentional decisions to use a specific vendor. As a result, NASA had reduced assurance 

that it received the best value for the services acquired. 

GSA Ordering Procedures for Services 

The GSA Ordering Procedures for Services in support of FAR Part 8.402 state: 

...[t]he request [for quote] should be provided to three (3) contractors 

if the proposed order is estimated to exceed the micro-purchase 

threshold [$2,500], but not exceed the maximum order threshold [a 

variable threshold]. ... Ordering offices should strive to minimize the 

contractors' costs associated with responding to requests for quotes for 

specific orders. Requests should be tailored to the minimum level

necessary for adequate evaluation and selection for order placement. 

Oral presentations should be considered, when possible. 

The Ordering Procedures for Services also state: 

...[t]he request [for quote] shall notify the contractors what basis will 

be used for selecting the contractor to receive the order. The notice 

shall include the basis for determining whether the contractors are 

technically qualified and provide an explanation regarding the intended 

use of any experience and/or past performance information in

determining technical qualification of responses. 

The Ordering Procedures for Services require a SOW that outlines, at a minimum, the 

work to be performed, location of work, period of performance, deliverable schedule, 

applicable standards, acceptance criteria, and any special requirements (that is, security 

clearances, travel, special knowledge, etc.). 

Following Ordering Procedures for Services 

NASA CO’s at the three Centers did not consistently follow the GSA Ordering 

Procedures for Services when acquiring services through the FSS. As shown in the table 

that follows, the CO’s did not follow the GSA’s Ordering Procedures for Services for 8 

(40 percent) of the 20 acquisitions of services: [Withheld per FOIA exemption 5, 5 

U.S.C. §552 (b)(5).] 

7 
Use of Ordering Procedures for Services 

Location

Services Acquired 

Through FSS

GSA Ordering 

Procedures Properly 

Followed

Yes No

Ames 2 1 1 

Goddard 4 1 3 

Johnson 4 4 0 

Langley 6 6 0 

Marshall* 4 0 4

Total 20 12 8

* The four sampled FSS acquisitions at Marshall occurred before GSA provided training in 

February 2001 for Marshall CO’s on the use of the FSS. 

CO’s at Ames, Goddard, and Marshall did not request quotes from at least three vendors 

or did not provide the required specifics in the RFQ or the SOW. The following are 

examples of ways in which procedures were not followed: 

• A CO at Ames did not request quotes from three vendors but instead acquired 

critical engineering services from a contractor through the FSS, using a 

sole-source justification for unusual and compelling urgency. To test the 

reasonableness of the rates of the contractor that provided the services, the CO 

documented in the contract files the rates of a different contractor who also 

offered engineering services through the FSS. However, the CO did not offer the 

second contractor a chance to provide a quote for the work and did not request 

quotes from other vendors. A comparison of rates in this manner does not ensure 

best value because the comparison does not adequately consider other factors 

such as labor mix and number of hours.

• A CO at Goddard [selected a contractor through the FSS for professional 

secretarial services because the contractor had provided the same services in the 

past. However, the CO did not request quotes from at least three vendors as 

required by the Ordering Procedures for Services. Therefore, NASA did not have 

assurance that the CO obtained the best value.

• In another case at Goddard, the ordering office prepared a SOW for automatic 

data processing and telecommunications services for a specific FSS vendor. The 

CO did not request quotes from at least three vendors. The CO intended to 

acquire services from the particular vendor using a sole-source justification. In 

8 
addition, the purchase request, which serves as the basis for the RFQ, was dated 

December 18, 1998, 5 days after a proposal was received from the vendor on 

December 13, 1998. Further, the sole-source justification was dated 

December 28, 1998, 10 days after the purchase request. For a sole-source 

acquisition of services, the FAR requires that the ordering office prepare a solesource justification, a purchase request, and an SOW. The NASA CO then 

prepares an RFQ, which includes an SOW. After NASA issues the RFQ, the 

vendor submits either a quotation or proposal.

• In a third case at Goddard, an SOW involving automatic data processing and 

telecommunications services did not provide the specific information required by 

the GSA ordering procedures. The SOW included only a list of the line items of 

the required services and did not include other information such as the work to be 

performed, location of work, period of performance, deliverable schedule, 

applicable standards, acceptance criteria, and any special requirements (that is, 

security clearances, travel, special knowledge, etc.). 

• At Marshall, two FSS contracts were awarded to vendors based on the requestors' 

sole-source justifications. One of the contracts was for special studies and 

analyses, and the other was for professional, administrative, and management 

services. The CO accepted the sole-source justifications and made no efforts to 

obtain three quotes (as required by the ordering procedures) even though the 

services were readily available through the FSS. 

• In another case at Marshall, a CO initially sent an RFQ to one contractor (not to 

three as required by the ordering procedures) that had been specifically identified 

by the office requesting the automatic data processing and telecommunications 

services. The CO granted the contractor additional time to respond to the RFQ 

because of a holiday. The CO also modified the terms of the RFQ based on 

discussions between the requestor and the vendor. Subsequently, the CO sent an 

RFQ to two additional contractors, but did not grant them additional time to 

respond and did not modify the terms of that RFQ as the CO had done for the first 

contractor. Because the three contractors were not all responding to the same

RFQ and within the same timeframes, the CO was not able to fairly evaluate the 

responses for a best value selection. 

• In the fourth case at Marshall involving another request for automatic data 

processing and telecommunications services, the RFQ did not include the 

9 
evaluation criteria25 to be used for selecting the contractor as required by the 

Ordering Procedures for Services. 

NASA CO’s at Ames, Goddard, and Marshall were not familiar with the GSA Ordering 

Procedures for Services that require CO’s to request quotations from at least three 

vendors and to provide those vendors with the criteria that NASA CO’s will use in 

evaluating the quotations. Three CO’s at Goddard and three CO’s at Ames stated that 

they were not aware of the GSA Ordering Procedures for Services. 

Effects on NASA 

Because CO’s did not offer multiple contractors the opportunity to provide quotations for 

needed services and did not provide the required details in the RFQ or SOW, NASA had 

reduced assurance that it received the best value for acquisition of services using the FSS. 

Further, without giving multiple contractors an equal opportunity to respond and not 

advising contractors of the evaluation criteria, NASA had little assurance that related 

quotations addressed the same evaluation criteria. 

As discussed in Finding A, previous studies and historical data have shown that cost 

savings from 10 to 60 percent and time savings of more than 80 percent are obtainable 

through the use of the FSS. The CO’s proper use of the GSA Ordering Procedures for 

Services will help ensure that acquisitions of services using the FSS are timely and result 

in obtaining the best value for NASA. 

 

25 The evaluation criteria describe the basis that NASA will use in selecting the contractor to receive the order. 

The criteria shall include the basis for determining whether the contractors are technically qualified and provide 

an explanation regarding the intended use of any experience and/or past performance information in determining 

the technical qualification of the contractors’ responses. 

10 
Recommendation, Management’s Response, and Evaluation of 

Response

3. The Assistant Administrator for Procurement should issue a PIC directing 

NASA CO’s to follow the terms of the GSA Ordering Procedures for Services 

when ordering services through the FSS. 

Management’s Response. Concur. The Office of Procurement agreed to issue the PIC 

by June 30, 2002. 

Evaluation of Management’s Response. Management’s planned actions are responsive 

to the recommendation. The recommendation is resolved but will remain 

undispositioned and open until agreed-to corrective actions are completed. 

11 
Appendix A. Objectives, Scope, and Methodology 

Objectives

The overall objective was to determine whether NASA had effectively used the Federal 

Supply Schedules (FSS) for acquiring services, as described in the Federal Acquisition 

Regulation (FAR) Part 8.26 Specifically, we determined whether: 

• NASA’s procurement practices adequately considered acquisitions of services 

from the FSS as required by FAR Part 8 and 

• the Agency achieved maximum benefits by acquiring services from the required 

sources. 

Scope and Methodology 

We reviewed applicable regulations, policies, and documentation from NASA and other 

Government agencies. 

During the audit, we did the following: 

• Researched the FAR, the NASA FAR Supplement, guidance from the Office of 

Federal Procurement Policy and the General Services Administration (GSA), and the 

FSS for criteria related to the acquisition of services through the FSS. 

• Obtained current procurement information from NASA Headquarters to establish the 

number of service acquisitions by each Center for the period October 1, 1999, 

through February 28, 2001, and the number of acquisitions obtained through the FSS. 

• Randomly selected service acquisitions made by Ames Research Center (Ames), 

Goddard Space Flight Center (Goddard), Johnson Space Center (Johnson), Langley 

Research Center (Langley), and Marshall Space Flight Center (Marshall) for a more 

detailed evaluation and discussion with the respective CO’s. 

• Discussed service acquisition criteria and procedures with GSA officials. 

• Discussed specific acquisitions with Small Business Administration officials and with 

officials of the Wallops Flight Facility who have successfully used the FSS to acquire 

services. 

Management Controls Reviewed 

We reviewed management controls over the acquisition of services using the FSS, 

including: 

 

26FAR Part 8 provides guidance for the acquisition of services from or through Government supply sources. 

12 
Appendix A 

• FAR Part 8, “Required Sources of Supplies and Services” 

• NASA FAR Supplement Part 1808, “Required Sources of Supplies and Services” 

• FAR Part 38, “Federal Supply Schedule Contracting” 

• Office of Federal Procurement Policy, “Best Practices for Multiple Award Task 

and Delivery Order Contracting,” July 1997 

• General Services Administration “Ordering Procedures for Services (Requiring a 

Statement of Work),” September 2000 

Audit Field Work 

We conducted audit field work from April through December 2001 at NASA 

Headquarters, Ames, Goddard, Johnson, Langley, and Marshall. We performed the audit 

in accordance with generally accepted government auditing standards.

13 
Appendix B. Service Contracts Acquired Outside the FSS 

[Withheld per FOIA exemption 5, 5 U.S.C. §552 (b)(5).] 

14 
Appendix C. Service Contracts Acquired Through the FSS 

[Withheld per FOIA exemption 5, 5 U.S.C. §552 (b)(5).] 

15 
 Appendix D. Management’s Response 

16 
Appendix D 

16 
Appendix D 

17 
Appendix E. Report Distribution 

National Aeronautics and Space Administration (NASA) Headquarters 

A/Administrator 

AI/Associate Deputy Administrator 

B/Acting Chief Financial Officer 

B/Comptroller 

BF/Director, Financial Management Division 

G/General Counsel 

H/Assistant Administrator for Procurement 

HK/Director, Contract Management Division 

HS/Director, Program Operations Division 

J/Assistant Administrator for Management Systems 

JM/Director, Management Assessment Division 

L/Assistant Administrator for Legislative Affairs 

M/Associate Administrator for Space Flight 

NASA Centers 

Director, Ames Research Center 

Director, Dryden Flight Research Center 

Director, Glenn Research Center at Lewis Field 

Director, Goddard Space Flight Center 

Acting Director, Lyndon B. Johnson Space Center 

Director, Kennedy Space Center 

Director, Langley Research Center 

Director, George C. Marshall Space Flight Center 

Acting Director, Stennis Space Center 

Chief Counsel, John F. Kennedy Space Center 

Non-NASA Federal Organizations and Individuals 

Assistant to the President for Science and Technology Policy 

Deputy Associate Director, Energy and Science Division, Office of Management and 

 Budget 

Branch Chief, Science and Space Programs Branch, Energy and Science Division, Office 

 of Management and Budget 

Director, Acquisition and Sourcing Management Team, General Accounting Office 

Senior Professional Staff Member, Senate Subcommittee on Science, Technology, and 

 Space 

Director, Defense Contract Management Agency 

Director, Defense Contract Audit Agency 

Appendix E

19 
Chairman and Ranking Minority Member – Congressional Committees and 

Subcommittees 

Senate Committee on Appropriations 

Senate Subcommittee on VA, HUD, and Independent Agencies 

Senate Committee on Commerce, Science, and Transportation 

Senate Subcommittee on Science, Technology, and Space 

Senate Committee on Governmental Affairs 

House Committee on Appropriations 

House Subcommittee on VA, HUD, and Independent Agencies 

House Committee on Government Reform

House Subcommittee on Government Efficiency, Financial Management, and 

 Intergovernmental Relations 

House Subcommittee on Technology and Procurement Policy 

House Committee on Science 

House Subcommittee on Space and Aeronautics 

Congressional Member 

Honorable Pete Sessions, U.S. House of Representatives 

20 
NASA Assistant Inspector General for Auditing 

Reader Survey 

The NASA Office of Inspector General has a continuing interest in improving the 

usefulness of our reports. We wish to make our reports responsive to our customers’ 

interests, consistent with our statutory responsibility. Could you help us by completing 

our reader survey? For your convenience, the questionnaire can be completed 

electronically through our homepage at http://www.hq.nasa.gov/office/oig/hq/audits.html

or can be mailed to the Assistant Inspector General for Auditing; NASA Headquarters, 

Code W, Washington, DC 20546-0001. 

Report Title: NASA Acquisition of Services using the Federal Supply Schedules

Report Number: Report Date: 

Circle the appropriate rating for the following statements. 

Strongly

Agree Agree Neutral Disagree Strongly

Disagree N/A 

1. The report was clear, readable, and 

logically organized. 

5 4 3 2 1 N/A

2. The report was concise and to the point. 5 4 3 2 1 N/A 

3. We effectively communicated the audit 

objectives, scope, and methodology. 

5 4 3 2 1 N/A 

4. The report contained sufficient 

information to support the finding(s) in 

a balanced and objective manner. 

5 4 3 2 1 N/A 

Overall, how would you rate the report? 

# EXCELLENT # FAIR

# VERY GOOD # POOR

# GOOD

If you have any additional comments or wish to elaborate on any of the above 

responses, please write them here. Use additional paper if necessary. 
How did you use the report?

How could we improve our report?

How would you identify yourself? (Select one) 

# Congressional Staff # Media 

# NASA Employee # Public Interest 

# Private Citizen # Other:

# Government: Federal: State: Local:

May we contact you about your comments? 

Yes: __________ No: __________ 

Name: ___________________________ 

Telephone: ________________________ 

Thank you for your cooperation in completing this survey.
Major Contributors to the Report 

Lorne A. Dear, Program Director, Procurement Audits 

Tony A. Lawson, Program Manager 

Walter K. Curtis, Auditor-in-Charge 

Amy L. Larkin, Auditor 

Stephen K. Siu, Auditor 

Nancy C. Cipolla, Report Process Manager 

Debra A. Schuerger, Program Assistant