IG-00-035

AUDIT

REPORT CONTRACT SAFETY REQUIREMENTS AT KENNEDY

SPACE CENTER AND

MARSHALL SPACE FLIGHT CENTER

June 5, 2000

National Aeronautics and

Space Administration

OFFICE OF INSPECTOR

GENERAL
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Acronyms

ASI Agency Safety Initiative

DCMC Defense Contract Management Command

FACS Financial and Contractual Status

FAR Federal Acquisition Regulation

NHB NASA Handbook

NPD NASA Policy Directive

NPG NASA Procedures and Guidelines

OSHA Occupational Safety and Health Administration
W June 5, 2000

TO: A/Administrator

FROM: W/Inspector General

SUBJECT: INFORMATION: Contract Safety Requirements at Kennedy Space Center and

Marshall Space Flight Center

Report Number IG-00-035

The NASA Office of Inspector General has completed an audit of Contract Safety

Requirements at Kennedy Space Center and Marshall Space Flight Center. We found that

NASA is taking action to ensure its contractor workforce is supportive of and accountable for

safety. Through the Risk Based Acquisition Management initiative,1 the Agency is revising, but

has not yet published, the updated NASA Federal Acquisition Regulation (FAR) Supplement to

ensure that risk is the core concern of all contracting actions except for the purchase of

commercial off-the-shelf items. Although the initiative is a positive step toward improving the

safety practices of NASA contractors, it does not apply to existing contracts. The audit did

identify that the Agency has not applied existing basic safety provisions such as required

contract safety clauses, contractor safety plans at contract award and Center safety office

involvement in the procurement process for 15 of 25 contracts that we reviewed at Kennedy

and Marshall. As a result, NASA contractors including some involved in hazardous operations

may not be supporting the same safety goals as NASA.

Background

Both NASA Handbook (NHB) 1700.1,2 “NASA Safety Policy and Requirements Document,”

June 1, 1993, and the NASA FAR Supplement have established NASA’s requirements

regarding safety with contractors. Chapter 2 of NASA Handbook 1700.1 requires that (1) the

 

1

 The Agency established Risk-Based Acquisition Management as a NASA procurement initiative in April

1999 to reduce the likelihood and severity of impact from unforeseen events through vigorous risk

management. A key element of the initiative includes revising the NASA Federal Acquisition Regulation

Supplement to incorporate risk management including safety and security considerations.

2

 On January 24, 2000, the Agency issued NASA Procedures and Guidelines 8715.3, “NASA Safety

Manual,” which replaced NHB 1700.1.
2

Agency review all procurement documentation and actions for safety implications, (2)

contractors submit a safety plan as part of the contract, and (3) NASA conduct appropriate

surveillance of contractor safety operations. The NASA FAR Supplement requires that

contracts costing more than $1 million, construction contracts, or contracts involving hazardous

operations contain appropriate clauses related to safety.

Recommendations, Management's Response, and Evaluation of Response

We recommended that the Directors, John F. Kennedy Space Center and George C. Marshall

Space Flight Center (1) identify all open contracts that either involve potentially hazardous

operations or exceed $1 million and determine whether those contracts have the required safety

clauses and contractor safety plans; (2) determine the cost-effectiveness of modifying those

contracts determined deficient, assess the risk of not modifying the contracts, and make those

modifications deemed cost-effective and necessary; and (3) direct Center safety offices to assist

the responsible Center official in performing an appropriate level (based on assessed risk) of

contractor surveillance for each current applicable contract.

Management concurred with the recommendations. Kennedy and Marshall have planned

procedures to ensure that all open contracts are modified to include the required safety clauses

and contractor safety plans and that an appropriate level of contractor surveillance is performed

on those contracts. Details on the status of the recommendations are in the report's

recommendations section.

Kennedy and Marshall management provided extensive comments on our findings (see

Appendix D). We respond to those comments in Appendix E of the report. Included among

the comments are the following: Management stated that three contracts we questioned related

to shipping liquid hydrogen across the country did not need to be reviewed from a safety

standpoint and were not subject to NASA’s safety policies because the contracts were treated

as commercial acquisitions under FAR Part 12.3 Our concern is that Kennedy management has

not taken appropriate measures such as reviewing the contractor’s safety record and safety

procedures to assure safe contractor shipping of an extremely hazardous material across the

country and safe unloading of the material at NASA facilities.

Management stated that the report listing of contractor mishaps and the U.S. Department of

Labor’s Occupational Safety and Health Administration (OSHA) safety violations is misleading

because it includes close calls and OSHA violations that occurred outside the scope of NASA

work. We believe that it is important to include close calls in our reporting of contractor mishap

statistics because close calls are included in NASA’s definition of mishaps and because they

indicate potential problems that could lead to more serious mishaps. We further believe that it is

proper to report on company-wide OSHA

 

3

 FAR Part 12, “Acquisition of Commercial Items,” identifies special requirements and other considerations

necessary for proper planning, solicitation, evaluation, and award of contracts for commercial items.
3

information in our assessment of a contractor’s safety performance because it is a reflection of

the overall safety management practice of the NASA contractor, an area that should be

reviewed and evaluated by NASA prior to contract award.4

[Original signed by]

Roberta L. Gross

Enclosure

 Final Report on Audit of Contract Safety Requirements at Kennedy Space Center and

 Marshall Space Flight Center

 

4

 NHB 1700.1, "NASA Safety Policy and Requirements Document," June 1, 1993, states that NASA safety

officials are responsible for reviewing a prospective contractor’s safety performance history during bid

evaluation and source selection.
FINAL REPORT

AUDIT OF CONTRACT SAFETY REQUIREMENTS

AT KENNEDY SPACE CENTER AND

MARSHALL SPACE FLIGHT CENTER 
W June 5, 2000

TO: Q/Associate Administrator for Safety and Mission Assurance

AA/Director, John F. Kennedy Space Center

DA/Director, George C. Marshall Space Flight Center

FROM: W/Assistant Inspector General for Auditing

SUBJECT: Final Report on Audit ofContract Safety Requirements at Kennedy Space

Center and Marshall Space Flight Center

Assignment Number A9900302

Report Number IG-00-035

The subject final report is provided for your information and use. Our evaluation of your

response is incorporated into the body of the report. The corrective actions planned for the

recommendations are responsive. The recommendations will remain open for reporting purposes

until agreed to corrective actions are completed. Please notify us when action has been

completed on the recommendations, including the extent of testing performed to ensure corrective

actions are effective.

If you have questions concerning the report, please contact Mr. Kevin J. Carson, Program

Director, Safety and Technology Audits, at (301) 286-0498, or Mr. Karl Allen, Auditor-inCharge, at (202) 358-2595. We appreciate the courtesies extended to the audit staff. The final

report distribution is in Appendix F.

[Original signed by]

Russell A. Rau

Enclosure
2

cc:

B/Chief Financial Officer

B/Comptroller

BF/Director, Financial Management Division

G/General Counsel

H/Associate Administrator for Procurement

JM/Director, Management Assessment Division

M/Associate Administrator for Space Flight

QS/Director, Safety and Risk Management Division

KSC/300/Director, Office of Safety and Mission Assurance

MSFC/300/Director, Office of Safety and Mission Assurance
NASA Office of Inspector General

IG-00-035 June 5, 2000

 A9900302

Contract Safety Requirements at Kennedy Space Center and

Marshall Space Flight Center

Introduction

The NASA Administrator stated in a January 19, 1999, message that safety is the Agency’s highest

core value. On February 26, 1999, the Administrator emphasized the need for NASA contractors

to be supportive of and accountable for safety and has reiterated this point several times since. The

NASA Safety Policy generally requires that NASA safety personnel be actively involved in NASA

procurement actions and conduct appropriate surveillance of contractors’ safety programs.

The overall audit objective was to evaluate the safety procedures of NASA contractors. The

specific objectives were to determine whether:

• contractor safety programs are adequately assessed as part of the preaward

procurement process and the contracts contain appropriate safety clauses and

• contractor operations are appropriately reviewed and evaluated for compliance with the

contract safety provisions and Federal and Agency safety requirements.

As part of the audit, we reviewed contracts at the John F. Kennedy Space Center (Kennedy) and

the George S. Marshall Space Flight Center (Marshall) with completion dates of 2000 and beyond.

For fiscal years 1998 and 1999, contractors at these Centers were involved in 93 mishaps5 resulting

in more than $1.3 million in damage.

Appendix A contains further details on the audit objectives, scope, and methodology.

Results in Brief

NASA is taking action to improve safety with its contractor workforce. Through the Risk Based

Acquisition Management initiative,6 the Agency is revising, but has not yet published, the revised

 

5

 NASA Policy Directive (NPD) 8621.1G, “NASA Mishap Reporting and Investigation Policy,” defines a mishap

as “any unplanned occurrence or event resulting from a NASA operation or NASA equipment, involving injury

or death to persons, damage to or loss of property or equipment, or mission failure.”

6

 The Agency established Risk-Based Acquisition Management as a NASA procurement initiative in April 1999

to reduce the likelihood and severity of impact from unforeseen events through vigorous risk management. A key

element of the initiative includes revising the NASA Federal Acquisition Regulation Supplement to incorporate

risk management including safety and security considerations.
2

NASA Federal Acquisition Regulation (FAR) Supplement to ensure that risk is the core concern of

all contracting actions except for purchasing commercial off-the-shelf items. Under this initiative,

contractor safety programs will be appropriately reviewed by Agency safety personnel, based on

assessed risk, from preaward through contract execution. This revision to the NASA FAR

Supplement will apply to all prospective NASA contracts. Although this represents a positive step

by management that should improve safety for all future NASA contracts, this strategy does not

apply to existing contracts. The Agency has not applied existing basic safety provisions such as

required contract safety clauses, contractor safety plans at contract award and Center safety office

involvement in the procurement process to 15 out of 25 contracts that we reviewed at Kennedy and

Marshall. As a result, NASA contractors including some involved in hazardous operations may not

be supporting the same safety goals as NASA.

Background

Both NHB 1700.1,7 “NASA Safety Policy and Requirements Document,” June 1, 1993, and the

NASA FAR Supplement have established NASA’s requirements regarding safety with contractors.

Chapter 2 of NHB 1700.1 addresses contractor safety and requires that (1) the Agency review all

procurement documentation and actions from a safety standpoint, (2) contractors submit a safety

plan as part of the contract, and (3) NASA conduct appropriate surveillance of contractor safety

operations. The NASA FAR Supplement requires that contracts costing more than $1 million,

construction contracts, or contracts involving hazardous operations contain appropriate clauses

related to safety. In addition, the NASA FAR Supplement requires that the offeror submit a detailed

safety and health plan that will be included in the resulting contract. The NASA Office of

Procurement has revised the NASA FAR Supplement to include many of the safety provisions of

Chapter 2 of NHB 1700.1, but has not yet published the revised NASA FAR Supplement.

We selected contracts for review from both Kennedy and Marshall because both Centers administer

contracts for many high-risk NASA operations within the Space Shuttle and International Space

Station programs. Such contracted operations include payload processing, orbiter preparation, and

launch operations at Kennedy and the construction of the Space Shuttle external tank, main engines,

and solid rocket boosters that are managed at Marshall. According to NASA Office of Safety and

Mission Assurance records for 1998, both Centers incurred mishap damage totaling $772,000 or

94 percent of all reported NASA contractor mishap damage.8 NASA Office of Safety and Mission

Assurance personnel told us that these Centers accounted for most mishap damage due to the highvalue Space Shuttle and International Space Station hardware that the Centers used.

 

7

 On January 24, 2000, the Agency issued NASA Procedures and Guidelines 8715.3, “NASA Safety Manual,”

which replaced NHB 1700.1.

8

 NASA’s Office of Safety and Mission Assurance maintains a consolidated record of contractor mishap data

reported by NASA Centers. The Ames Research Center, Dryden Flight Research Center, Jet Propulsion

Laboratory, and the Langley Research Center did not report damage due to contractor mishaps for 1998.
3

Basic Contract Safety Requirements

Finding. Sixty percent (15 out of a total of 25) of contracts reviewed at Kennedy and Marshall did

not include basic requirements to ensure safety. Specifically, not all contracts that we reviewed

included basic requirements such as the NASA FAR Supplement safety clause and a NASAapproved, contractor safety plan at contract award.9

 This condition occurred because the applicable

Center safety offices were not adequately involved in the procurement process to ensure that these

basic safety requirements were consistently applied to NASA contractors. As a result, NASA lacks

assurance that its contractors at Kennedy and Marshall are working in accordance with NASA

safety standards. By not including certain safety provisions and requirements in the contract,

contractors are not contractually bound to the requirement for compliance with all Federal, state and

local laws applicable to safety. Three of the questioned contracts involve extremely hazardous

operations, and three are with contractors who have been involved in NASA mishaps. In addition,

five of the questioned contractors have had prior safety violations as reported by OSHA. The

OSHA violations were for the entire company and were not in all cases at the place of NASA

contract performance (other than three violations under contract NAS10-12060 that occurred at

NASA’s Vandenberg launch site).

NASA FAR Supplement and NHB 1700.1 Requirements

Section 1823 of the NASA FAR Supplement requires that the Contracting Officer insert the

following provision in all negotiated contracts of $1 million or more; all construction, repair, or

alteration contracts; or any acquisition regardless of dollar amount when the deliverable is of a

hazardous nature:

The Offeror shall submit a detailed safety and health plan, as part of the

offeror’s proposal, showing how the Contractor intends to protect the life,

health, and well being of NASA and contractor employees as well as property

and equipment. This plan, as approved by the Contracting Officer, will be

included in any resulting contract.

In addition to the NASA FAR Supplement, NHB 1700.1, Section 207(b) states that:

The contractor will be required to submit Safety Program Plans to the

Contracting Officer for safety review by the safety Contracting Officer’s

Technical Representative and to obtain NASA approval before startup of

operations.

 

9

 NHB 1700.1, Section 207, “Safety Program Plans,” states that these plans are intended to ensure that the

contractor has adequate safety programs and has not neglected safety in the interest of obtaining a more

favorable bid in the short term. The safety plan shall furnish specific information on how the contractor intends

to protect the life and well being of contractor and Agency employees and the public as well as any NASA

property and equipment.
4

Results of Contracts Reviewed

Our sample10 of 25 contracts at Kennedy and Marshall showed that the required NASA FAR

Supplement clause, contractor safety plans, or both were missing on 14 contracts. Details are

shown in the following table.

Contracts With Missing Clauses and Safety Plans

Kennedy Marshall Total

Contracts Reviewed 13 12 25

No required NASA FAR

Supplement safety clause.

2 4 6

No required contractor safety plan at

award date. *

5 9 14

* These figures include five contracts for which there was no safety plan and nine contracts for which a safety

plan was not provided by the contractor at the time of contract award. Appendix C contains details on the results

of our review for each contract and a table of the contracts for which exceptions were identified.

Safety Office Oversight

The missing safety clauses and contractor safety plans can be attributed to the lack of continuous

Center safety office involvement in the contracting process. NHB 1700.1, Chapter 2, Section

202(c)(2), states that Safety Officials are responsible for:

(a) Reviewing and providing safety input for documents (including

requirements, objectives, specifications, standards) and specific tasks.

(b) Serving as a member or technical advisor on safety matters during source

evaluation board matters . . . .

(e) Conducting safety program reviews or technical evaluations of the

contractor’s operation or product for safety, including compliance with

safety provisions of the contract.

There was no evidence that either Center’s safety office had been involved (such as review of

specifications and review and approval of contractor safety plan) in the contracting process for 13 of

the 25 contracts examined. Had Centers participated in the contracting process, they would have

identified the missing safety clauses and contractor safety plans. Also, neither the Kennedy nor

Marshall safety office had formal procedures for reviewing contractor safety programs. Safety

 

10 See Appendix A for details on the contract sample selection.
5

program reviews of contractor operations (also referred to in NHB 1700.1 as “surveillance”) would

also have detected missing contractor safety plans, and more timely corrective actions could have

been taken. Details regarding each Center follow:

• Kennedy Safety Office Involvement. At Kennedy, there was no evidence in the contract

files of safety office input into the contracting process for 6 of the 13 contracts reviewed. The

Kennedy Chief Safety Officer stated that the Kennedy safety office reviews the safety

requirements and contractor safety plans of all contracts, but does not always document this

review process. For three contracts that involve the shipment of hazardous material, the

Kennedy procurement office told us that the contracts did not have safety plans because the

procurement office treated the contracts as commercial acquisitions. The Kennedy Chief Safety

Officer informed us that a safety plan should have been included in the contracts, but was not,

which indicated to us that the safety office did not review the contracts. In addition, the

Kennedy Chief Safety Officer stated that because of limited staffing, the Kennedy safety office

conducts fewer contract safety surveillance activities. These safety surveillance activities are

limited to various inspections of major contractors in support of award fee evaluations.

• Marshall Safety Office Input. At Marshall, there was no evidence in the contract files of any

safety office input into the contracting process for 7 of the 12 contracts reviewed. Marshall’s

procedure for conducting surveillance of contractor safety was unclear. Marshall procurement

and safety personnel informed us early in the audit that safety surveillance was generally

delegated to the Defense Contract Management Command (DCMC). However, the DCMC

representative at Marshall stated that safety was usually not delegated. Subsequently, Marshall

Safety, Reliability and Quality Assurance Department officials informed us that Contracting

Officers are responsible for ensuring contractor compliance with safety requirements. This

position is in contrast to the requirements of NHB 1700.1, which states that the safety office is

responsible for conducting safety reviews or technical evaluations of the contractor’s operations.

Marshall safety office personnel informed us that they perform independent reviews of contractor

safety programs to ensure compliance with contracted safety requirements. However, when we

asked for documentation on the reviews, the Marshall safety office was unable to provide the

documented support for the reviews.

Effects of Missing Contract Safety Provisions

By not ensuring that contractor safety plans are included in all contracts, NASA has no assurance

that its contractors have effective policies and procedures in place to protect the life and well being

of contractor and Agency employees, the public, and NASA property and equipment. Additionally,

by not including required safety clauses in the contracts, contractors are not contractually bound to

the requirement for compliance with all Federal, state and local laws applicable to safety. The

contracts that lacked the required safety clauses or contractor safety plans present potential

increased safety risks. Specifically, several of the contracts involved extremely hazardous

operations, while some of the contractors were involved in NASA mishaps or have had prior OSHA

safety violations.
6

• Hazardous Operations. Three Kennedy contracts11 that did not contain the required safety

clause or contractor safety plan were with vendors for transporting liquid hydrogen from

Pennsylvania and Connecticut to various locations in California. According to NASA Safety

Standard 1740.16, “Safety Standard for Hydrogen and Hydrogen Systems,” February 12,

1997, the primary hazard of any form of hydrogen is inadvertently producing a flammable or

detonable mixture leading to a fire or detonation. A material safety data sheet from one of the

contractors described liquid hydrogen as an extremely cold flammable liquid that can cause

severe frostbite, form explosive mixtures with air, freeze air in vent lines, and cause dizziness and

drowsiness. One of the contractors in question experienced an employee fatality in 1997 when a

pressurized tank exploded. Kennedy contracting personnel informed us that safety plans were

not required for these contracts because the procurements were treated as commercial

acquisitions in order to streamline the acquisition process. The Kennedy Chief Safety Officer

stated that the contracts should have had safety plans regardless of the type of acquisition.

• Prior OSHA Violations and Mishaps. Some of the questioned contracts posed significant

safety risks due to the past safety records of the contractors involved. Five of the questioned

contractors were cited for 43 OSHA safety violations since 1994, including accidents resulting in

two fatalities and serious bodily injury. Three of the safety violations occurred on a NASA

facility. Also, three of the questioned contractors reported 55 mishaps during fiscal years 1998

and 1999, resulting in more than $73,000 in damages. Overall, the 25 contractors reviewed

were cited for 126 OSHA violations since 1994 and were involved in 119 mishaps resulting in

more than $103,000 in damage.

See Appendix C for more details, by contract, on hazardous operations and prior violations and

mishaps.

NASA is taking action to improve safety with its contractors for all prospective NASA contracts.

We believe that NASA’s Risk-Based Acquisition Management initiative should prevent the

deficiencies noted in this report for all future NASA contracts. However, there are some existing

high-risk contracts with periods of performance through 2010. The contracts include contractors

with questionable safety records that require immediate action to ensure that the contractors follow

NASA’s safety policy.

Recommendations, Management’s Response, and Evaluation of Response

Kennedy and Marshall management provided extensive comments on our finding that are addressed

in Appendix E of the report.

The Directors, John F. Kennedy Space Center and George S. Marshall Space Flight

Center should:

 

11 Contracts NAS10-12150 and NAS10-98011 were with Air Products and Chemicals, and contract NAS10-98012

was with Praxair, Inc.
7

1. Identify all open contracts that involve either potentially hazardous operations or

exceed $1 million and determine whether those contracts have the required safety

clauses and contractor safety plans.

Management’s Response. Concur. Both Centers will take action to review applicable contracts

to ensure that they include the safety and health clause and a contractor safety plan. Additionally,

Marshall plans to develop a database to track contractor safety requirements and approval of safety

and health plans. Marshall has also approved two new Center-wide work instructions in the

contracting area with specific safety review steps in the procurement process. The complete text of

management's response is in 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 for

reporting purposes until corrective actions are completed.

2. Establish a methodology for determining the cost-effectiveness of modifying those

contracts determined deficient (as defined above), and use this methodology to assess

the risk of not modifying the contracts and make those modifications deemed costeffective and necessary.

Management’s Response. Concur. Marshall plans to establish a methodology to determine

which existing contracts will be updated to meet safety requirements. Kennedy will request a

proposal from each applicable contractor of the cost of adding the required clauses (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 for

reporting purposes until corrective actions are completed.

 3. Direct the Center safety offices to assist the responsible Center official in

performing an appropriate level (based on assessed risk) of contractor surveillance,

either themselves or by delegation, for each current applicable contract.

Management’s Response. Concur. Under Kennedy’s reorganization, the safety and mission

assurance function will be embedded in all organizations that will have the responsibility to assure the

appropriate level of contractor surveillance. Marshall will use the database developed as part of

Recommendation 1 to track contractor surveillance and plans to develop a work instruction to

document the surveillance process (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 for

reporting purposes until corrective actions are completed.
8

Appendix A. Objectives, Scope, and Methodology

Objectives

The overall objective of the audit was to evaluate the safety procedures of NASA contractors. The

specific objectives related to this report were to determine whether:

• contractor safety programs are being adequately assessed as part of the preaward

procurement process and the contracts contain appropriate safety clauses and

• contractor operations are appropriately reviewed and evaluated for compliance with the

contract safety provisions and statutory and regulatory safety requirements.

This is the third report issued as part of the overall audit of NASA’s Safety Program Management.

Details on the findings and recommendations contained in the two previous reports are in Appendix

B.

Scope and Methodology

To accomplish our objectives we:

• Reviewed NASA’s safety requirements for contractors.

• Discussed NASA contractor safety policies and procedures with officials from NASA’s Office

of Safety and Mission Assurance and Office of Procurement and from the Defense Contract

Management Command.

• Reviewed a total of 13 Kennedy contracts and 12 Marshall contracts and discussed each

contract’s safety requirements with the Contracting Officers, Contract Specialists, and the

Center safety officials.

Sample Selection

To select our sample, we identified, from the NASA Financial and Contractual Status (FACS)

System, all open contracts with completion dates of 2000 and beyond, that either exceeded $1

million or, by contract work description, appeared to involve hazardous or potentially hazardous

work. We relied on the automated data in the FACS System to complete our audit objectives and

performed no additional verification of the system. From the FACS System, we identified a universe

of 26 Kennedy contracts and 64 Marshall contracts. From the universe, we judgmentally selected

for review 13 contracts from Kennedy and 12 contracts from Marshall. These samples represented

approximately 50 and 19 percent of the universes from Kennedy and Marshall, respectively. During

our review of the contracts, we confirmed that each contract involved hazardous or potentially

hazardous operations.
10

Appendix A

Criteria Followed

In conducting our audit, we followed the requirements of NASA Handbook (NHB) 1700.1,

“NASA Safety Policy and Requirements Document,” that was in effect during the time of our audit

field work. On January 24, 2000, NASA issued NASA Procedures and Guidelines (NPG) 8715.3,

“NASA Safety Manual,” which effectively replaced NHB 1700.1. NPG 8715.3 incorporates most

of the requirements of NHB 1700.1 including the requirements that all procurement documentation

and actions be reviewed from a safety standpoint, contractors submit a safety plan as part of the

contract, and NASA conduct appropriate surveillance of contractor safety operations.

Management Controls Reviewed

We reviewed management controls relative to safety requirements for NASA contracts as described

in NHB 1700.1, Section 202. Specifically, we reviewed the Contracting Officer’s procedures for

ensuring that specific contractor safety tasks are clearly defined in the basic contract and that the

contracts contain the required safety clauses and contractor safety plans. As discussed in the finding,

controls need to be strengthened to ensure that Kennedy and Marshall include the NASA FAR

Supplement safety clauses and contractor safety plans in each applicable contract.

Audit Field Work

We conducted field work from October 1999 through March 2000, at NASA Headquarters,

Kennedy, and Marshall. We performed the audit in accordance with generally accepted government

auditing standards.
Appendix B. Summary of Prior Audit Coverage

“Safety Considerations at Goddard Space Flight Center,” Report Number IG-00-047,

September 22, 1999. In an April 1998 Senior Management Council meeting, the NASA

Administrator stated that safety is the Agency's highest priority. The Administrator's mandate

renewed the Agency's emphasis on safety and culminated in the Agency Safety Initiative (ASI.) The

basic goal of the ASI is to make NASA the safest organization in the nation with zero tolerance for

mishaps. The overall objective of the audit was to evaluate management of NASA's safety program.

While conducting the audit, we identified issues requiring immediate management attention that could

affect the safety of Goddard Space Flight Center (Goddard) employees. Specifically, we

determined that (1) Goddard's various safety offices are not consolidated into one organization with

a full-time director; (2) the mishap reporting process does not ensure that the causes of all mishaps

are properly addressed and that all mishaps and related information are adequately reported; and (3)

contractor's safety records were not evaluated prior to contract award, as required by the NASA

Safety Manual. We recommended that the Director of Goddard (1) evaluate the effectiveness of the

ongoing safety initiatives, (2) ensure that all mishaps are reported accurately and in a timely manner

and that the root causes are identified, and (3) establish procedures for reviewing contractor safety

records before contract award. Management concurred with each recommendation.

“Safety Concerns with Kennedy Space Center’s Payload Ground Operations,” Report

Number IG-00-28, March 30, 2000. In February 1999, the NASA OIG was requested by the

House of Representatives Committee on Science to address concerns related to safety functions of

the Kennedy Space Center’s Payload Ground Operations Contract performed by McDonnell

Douglas Aerospace, Space and Defense Systems; a subsidiary of The Boeing Company (Boeing).

In response to this request, we reviewed the contractor’s operations to determine whether (1) safety

responsibilities between Boeing and NASA had been clearly defined; (2) hazardous materials were

being used in Kennedy’s processing facilities; and (3) hazardous materials, if used, were properly

controlled. The audit identified that ground workers were using potentially hazardous materials in

Kennedy processing facilities without exercising proper control and safety precautions. This

condition exists because (1) Boeing safety personnel have not performed adequate, contractrequired inspections of the facilities and (2) Kennedy or Boeing safety personnel had not reviewed

the Materials Usage Agreements, which were not supported by risk analyses, authorizing use of the

hazardous materials. As a result, NASA lacks assurance that associated risks are adequately

identified, documented, reviewed, and mitigated. Improper use of these materials is hazardous to

ground workers and increases the risk of damage to Space Shuttle payloads, including International

Space Station hardware and equipment. Recommendations were made to management to (1) direct

the contractor to perform analyses to support the use of all materials that do not meet requirements

for flammability and electrostatic discharge, (2) clarify instructions for preparation of Materials Usage

Agreements, and (3) increase surveillance of the contractor’s safety office inspection procedures.

Management concurred with each recommendation.
Appendix C. Detailed Review of Contracts

Contract Number/

Contractor Description Auditor Observations

Kennedy Contracts

NAS3-27262

Lockheed Martin

Astronautics

Firm fixed-price contract for

Launch Services of Intermediate

Expendable Launch Vehicles for

Earth Observing System AM-1.

OSHA cited the contractor for two safety

violations since 1994.

NAS5-30722

McDonnell Douglas

Corp.

Firm fixed-price contract for

launch of Medium Class

Expendable Launch Vehicles

with Government payloads into

assigned orbit(s).

OSHA cited the contractor for six safety

violations since 1994.

NAS10-11400

McDonnell Douglas

Aerospace, Space and

Defense Systems

Cost-plus-award-fee contract

for payload ground operations

at Kennedy.

We identified a significant safety problem in

that the contractor was not properly

controlling the use of potentially hazardous

materials in Kennedy processing facilities.

We reported on these problems in audit

report number IG-00-028, dated March 30,

2000. See Appendix B.

The contractor, who is responsible for safety

in several facilities, reported 34 mishaps in

fiscal year 1998 and 29 mishaps in fiscal year

1999. Total damage incurred, as a result of

those mishaps, was $29,467.

NAS10-12060

Space Mark, Inc.

Cost-plus-fixed-fee contract for

operation support services at

the Vandenberg launch site in

California.

Kennedy did not require the contractor to

submit a safety plan as part of the contract

evaluation process. There was no contractor

safety plan in the contract file prior to our

audit. When our audit was announced, the

Contracting Officer requested and received a

safety plan from the contractor.

OSHA cited the contractor for seven safety

violations since 1994. Three of the violations

occurred at the Vandenberg launch site in

California. Also, the contractor reported two

mishaps in fiscal year 1998 and four mishaps

in fiscal year 1999. Total damage incurred, as

a result of the mishaps was $1,350.

NAS10-12100

Praxair, Inc.

Fixed-price contract for

providing liquid hydrogen for

users on the east coast.

We found no evidence of review of the

contractor’s safety plan by Kennedy. The

review is required by NHB 1700.

OSHA cited the contractor for 14 safety

violations since 1994. One of the violations

was imposed as a result of a fatal accident.
3

Appendix C

Contract Number/

Contractor Description Auditor Observations

NAS10-12150

Air Products and

Chemicals

Fixed-price contract for providing

liquid hydrogen for users on the

east coast.

Kennedy could not produce the contractor

safety plan.

OSHA cited the contractor for seven safety

violations since 1994. One of the violations

was imposed as a result of a nonfatal

accident.

NAS10-98011

Air Products and

Chemicals

Firm fixed-price contract for

providing and transporting liquid

hydrogen from Pennsylvania to

destinations in California and

New Mexico.

The contract did not contain the required

safety clause, and a contractor safety plan

was not included as part of the contract.

OSHA cited the contractor for seven safety

violations since 1994. One of the violations

was imposed as a result of a nonfatal

accident.

NAS10-98012

Praxair, Inc.

Firm fixed-price contract for

providing and shipping liquid

hydrogen from Connecticut to

destinations in California.

The contract did not contain the required

safety clause, and a contractor safety plan

was not included as part of the contract.

OSHA cited the contractor for 14 safety

violations since 1994. One of the violations

was imposed as a result of a fatal accident.

NAS10-98050

York International

Firm fixed-price contract for

upgrading the utility annex

chillers at Kennedy and

reconditioning the motors.

OSHA cited the contractor for 45 safety

violations since 1994. Six of these violations

were imposed as a result of a fatal accident.

NAS10-99001

Space Gateway Support

Cost-plus-award-fee contract for

joint base operations and

support services for Kennedy,

Cape Canaveral Air Station, and

Patrick Air Force Base.

The contractor safety plan was not included

as a contract deliverable, thus Kennedy never

reviewed the contractor safety plan. When

our audit was announced, the Contracting

Officer requested and received a safety plan

from the contractor.

The contractor, who is responsible for a large

portion of Kennedy safety, reported 1 mishap

in fiscal year 1998 and 47 mishaps in fiscal

year 1999. Total damage incurred as a result

of these mishaps was $42,507.
4

Appendix C

Contract Number/

Contractor Description Auditor Observations

NAS10-96033

RKT Constructors

Firm fixed-price contract for

replacing boilers 1, 2, and 3 at

Kennedy’s central heat plant.

None

NAS10-99023

Oneida Construction

Firm fixed-price contract for

modifying various Kennedy

facilities to accommodate the

disabled.

OSHA cited the contractor for three safety

violations since 1994.

NAS10-99036

Rush Construction, Inc.

Firm fixed-price contract for

construction of Flight Vehicle

Landing Support Complex at

Kennedy.

OSHA cited the contractor for 10 safety

violations since 1994.

Marshall Contracts

NAS8-37716

Massachusetts Institute

of Technology

Cost-no-fee contract to

conduct an x-ray imaging

spectroscopy scientific

investigation.

The contractor safety plan was not in the

contract file when we reviewed the file.

Management subsequently produced a copy

of the safety plan; however, the plan was

dated September 1994 –more than 4 years

after NASA awarded the contract. There is

no evidence of Marshall safety office review

and approval of the safety plan.

OSHA cited the contractor for one serious

safety violation in 1994.

NAS8-97256

Teledyne Brown

Engineering

Cost-plus-incentive fee

contract for operation and

maintenance of propellants,

pressurants, and calibration

services at Marshall.

OSHA cited the contractor for 13 serious

safety violations since 1994.

The contractor was involved in one close call

in July 1999, but it did not result in injury or

damage.

NAS8-99073

New Century

Pharmaceuticals

Cost-plus-fixed-fee contract for

the Protein Crystal Growth

Facility-based microgravity

hardware; science, and

applications.

The contract did not contain the required

safety clause nor was there a contractor

safety plan.

NAS8-37710

TRW

Cost-plus-award-fee contract

for the Advanced X-ray

Astrophysics Facility.

The contractor did not submit a safety plan

until October 1992, more than 2 years after

contract award. We found no evidence of

Marshall safety office review and approval of

the safety plan.

OSHA cited the contractor for 10 serious

safety violations since 1994 and reported

three accidents resulting in an employee

fatality, a lost fingertip, and a broken leg.
6

Appendix C

Contract Number/

Contractor Description Auditor Observations

NAS8-40887

Orbital Sciences

Corporation

Firm fixed-price contract to

perform a study known as “X34”

The contractor did not submit a safety plan

until 3 years after contract award (1 day

before our scheduled review). There was no

evidence of Marshall safety office’s review

and approval of the safety plan.

NAS8-38100

Thiokol

Cost-plus-award-fee contract

to manufacture and deliver the

Shuttle redesigned rocket

motors.

OSHA cited the contractor for four safety

violations since 1994 and three accidents, one

resulting in loss of an employee’s finger.

NAS8-99057

Smith Service Corporation

Firm fixed-price contract to

repair and modernize Marshall

building 4711.

The contract did not include the standard

NASA FAR Supplement safety clause. A

safety plan was not available in the contract

file. Marshall management eventually

produced a contractor safety plan dated 4

months after contract award. There was no

evidence of review and approval of the safety

plan by the Marshall safety office.

NAS8-97331

Sauer inc.

Firm fixed-price contract for the

construction of the Marshall

centralized chiller facility.

The contract did not include the standard

NASA FAR Supplement safety clause. A

safety plan was not available in the contract

file. Marshall management eventually

produced a contractor safety plan dated 4

months after contract award. There was no

evidence of review and approval of the safety

plan by the Marshall safety office.

The contractor was involved in a mishap at

Marshall in May 1999 that resulted in

damages of $30,000.

NAS8-39038

Lockheed/IBM

Cost-plus-fixed-fee contract for

the Space Shuttle modular

rocket engine.

The contract did not include the standard

NASA FAR Supplement safety clause. A

contractor safety plan was not in the contract

file.

NAS8-50001

Boeing Aerospace

Cost, no-fee consolidated

facility contract.

None.

NAS8-99053

Lee Builders

Firm fixed-price contract to

repair the roof of Marshall

Building 4619.

A safety plan was not in the contract file.

Marshall management eventually produced a

contractor safety plan that was dated 3

months after contract award.

OSHA cited the contractor for five safety

violations since 1994.

NAS8-98053

United Technologies

Corporation

Hamilton Sundstrand

Space Systems

International

Cost-plus-award-fee contract

for the preliminary definition of

the International Space Station

water processor assembly and

oxygen generator assembly.

The contractor safety plan was dated 7

months after contract award.
7

Appendix C

Summary of Questioned Contracts

No Safety No Safety No Evidence of No. of OSHA No. of $ Value

Contract Clause Plan1 Safety Office Review Violations Mishaps of Mishaps

NAS10-12060 X X 7 6 $1,350

NAS10-12100 X 14

NAS10-12150 X X 7

NAS10-98011 X X X

NAS10-98012 X X

NAS10-99001 X X 48 $42,507

NAS8-37716 X X

NAS8-99073 X X X

NAS8-37710 X X 10

NAS8-40887 X X

NAS8-99057 X X X

NAS8-97331 X X X 1 $30,000

NAS8-39038 X X X

NAS8-99053 X 5

NAS8-98053 X

15 6 14 13 43 55 $73,857

Percentage2

60% 24% 56% 52%

1 The contractor did not submit a safety plan at contract award as required by NHB 1700.

2 The percentages are of the total universe (25) of contracts reviewed.
8

Appendix D. Management’s Response
9

Appendix D

See Appendix E,

OIG Comment 1.

See Appendix E,

OIG Comment 2.

See Appendix E,

OIG Comment 3.

See Appendix E,

OIG Comment 4.

See Appendix E,

OIG Comment 5
10

Appendix D

See Appendix E,

OIG Comment 5.

See Appendix E,

OIG Comment 6.

See Appendix E,

OIG Comment 7.

See Appendix E,

OIG Comment 8.

See Appendix E,

OIG Comment 5.

See Appendix E,

OIG Comment 1.
11

Appendix D

See Appendix E,

OIG Comment 1.

See Appendix E,

OIG Comment 7.

See Appendix E,

OIG Comment 7.

See Appendix E,

OIG Comment 9.

See Appendix E,

OIG Comment 10.

See Appendix E,

OIG Comment 11.
12

Appendix D

See Appendix E,

OIG Comments 1,5.

See Appendix E,

OIG Comment 12.

See Appendix E,

OIG Comment 3.

See Appendix E,

OIG Comment 13.

See Appendix E,

OIG Comment 14.

See Appendix E,

OIG Comment 2.

See Appendix E,

OIG Comment 15.
13

Appendix D

See Appendix E,

OIG Comment 16.
14

Appendix D

See Appendix E,

OIG Comments 17,

18 and 20.

See Appendix E,

OIG Comments 17,

18, 19 and 20.

See Appendix E,

OIG Comments 18

and 21.

See Appendix E,

OIG Comments 18

and 20.
15

Appendix D
16

Appendix D
17

Appendix E. OIG Comments on Management’s Response

Kennedy and Marshall management provided the following comments in response to our draft

report. Our responses to the comments are also presented.

Management’s Comment. The report states that 60 percent of the contracts reviewed did not

have basic safety requirements. This figure is overstated because several contracts that were

reported as deficient either had a safety and health clause in the contract or did not require this

clause.

1. OIG Comment. Management provides no support for its statement that some of the questioned

contracts contained either the required safety clause or the contractor safety plans. We gave

management at both Centers several months to review the results of our audit and to provide

supporting documentation to refute our observations. For example, during the initial stages of the

audit in September 1999, we found that contract NAS10-12150 at Kennedy did not contain a

required contractor safety plan. We immediately brought this discrepancy to the attention of the

Contracting Officer. The Contracting Officer stated that he could not locate a copy of the safety

plan and sent us to the Kennedy safety office to obtain a copy of the plan. The Kennedy safety

office, in turn, could not locate the contractor safety plan, and told us that we had to obtain it from

the Contracting Officer.

In December 1999, we gave management a spreadsheet detailing the results of our review of

Marshall contracts. Marshall management responded with additional information and supporting

documentation that we incorporated into our overall observations. On

March 1, 2000, we provided management with a copy of the proposed draft report (including

Appendix C which shows the detailed results of our review of each contract) and followed up with a

March 8, 2000, visit to Marshall to discuss the proposed report with responsible management

officials. During this meeting, Marshall management did not dispute the facts in the proposed draft

report and did not offer additional information or documentation to refute the audit observations.

Management’s Comment. Appendix C of the report cites OSHA violations on NASA

contractors that are misleading. For example, Teledyne Brown Engineering (NAS8-97256) has held

the Pressurants and Propellants contract at Marshall for more than 20 years and has never been

cited for violations. The report, however, states that OSHA cited the contractor for 13 serious safety

violations since 1994.

2. OIG Comment. According to OSHA’s Integrated Management Information System, Teledyne

Brown Engineering was cited for 13 safety violations from January 1994 through December 1997.
18

Appendix E

Management’s Comment. Contract NAS10-11400 at Kennedy had only 10 type C mishaps and

5 incidents12 during 1998 and 1999, not the 63 mishaps reported by the OIG. We speculate that the

OIG’s total includes close calls, which are not mishaps.

3. OIG Comment. Kennedy’s Incident Reporting Information System records show that the

contractor, McDonnell Douglas Aerospace, Space and Defense Systems, reported 63 mishaps

totaling $29,467 in damages during 1998 and 1999. NASA Policy Directive 8621.1G, “NASA

Mishap Reporting and Investigation Policy,” defines a mishap as:

Any unplanned occurrence or event resulting from any NASA operation or

NASA equipment anomaly, involving injury or death to persons, damage to

or loss of property or equipment, or mission failure. . . .

Included in that definition of mishaps are close calls that are defined as:

An occurrence in which there is no injury, no equipment/property damage

equal to or greater than $1,000, and no significant interruption of productive

work, but which possesses a high severity potential for any of the mishaps

defined as Types A, B, or C Mishaps, Mission Failure, or Incident.

Management’s Comment. The OIG recognizes that many of the safety clause requirements

discussed are applied to contracts based on NASA risk management initiatives and are applicable to

defined classes of acquisitions except for contracts for commercial off-the-shelf items. Yet, the

report fails to note this exception.

4. OIG Comment. As noted in the first paragraph on page 2 of the report, NASA’s Risk-Based

Acquisition Management initiative did not apply to contracts that were active as of the time of our

audit.

Management’s Comment. Contracts treated as commercial acquisitions under FAR Part 12, and

contracts subject to the Walsh-Healey Public Contracts Act13 are not subject to the NASA FAR

Supplement safety and health clause.

 

12 NASA Policy Directive 8621.1G, section 2 (b.)(1), defines the various mishaps as follows:

Type A – Mishap causing death or damage greater than $1 million.

Type B – Mishap resulting in permanent disability, hospitalization, or damage greater than $250,000.

Type C – Mishap causing damage to property greater than $25,000 and/or lost workdays.

Mission Failure – Mishap that prevents the achievement of a primary NASA mission.

Incident – Mishap that results in personal injury greater than first-aid severity and property damage greater than

$1,000.

13 The Walsh-Healey Public Contracts Act requires that “contracts entered into by any agency of the United

States for the manufacture or furnishing of materials, supplies, articles, and equipment in any amount exceeding

$10,000 must contain, among other provisions, a stipulation that no part of such contract will be performed nor

will any of the materials, supplies, articles, or equipment to be manufactured or furnished under the contract be

manufactured or fabricated in any plants, factories, buildings, or surroundings or under working conditions which

are unsanitary or hazardous or dangerous to the health and safety of employees engaged in the performance of

the contract.”
19

Appendix E

5. OIG Comment. Throughout its response, management basically states that Kennedy contracts

NAS10-12100, NAS10-12150, NAS10-98011 and NAS10-98012 were treated

either as commercial acquisitions or were subject to the Walsh-Healey Public Contracts Act and

were, therefore, not subject to NASA’s safety policy. We do not agree with management's position

for the following reasons:

• FAR Part 12.202 (a) states, “Market research is an essential element of building an effective

strategy for the acquisition of commercial items and establishes the foundation for the agency

description of need . . .” The safety of the general public and NASA employees has been

clearly communicated to all NASA employees as a basic agency need as part of the Agency

Safety Initiative (ASI). However, the market research documentation that supports these

contracts makes no reference to safety. As a result, there is no documented evidence of

NASA’s assurance that the liquid hydrogen is transported safely as part of these contracts.

• The Walsh-Healey Public Contracts Act requires contracts entered into by a Federal agency for

the furnishing of materials exceeding $10,000 to contain a stipulation that no part of the contract

will be performed under working conditions that are unsanitary, hazardous, or dangerous to the

health and safety of its employees engaged in the performance of the contract. Provisions do not

ensure the safety of the general public during potentially hazardous operations such as the

transport of liquid hydrogen across the country and do not ensure the safety of NASA

employees when the liquid hydrogen is unloaded at its final destination.

• NHB 1700.1 requires that the safety requirements, documentation, and procedures (including

contractor safety plans, safety office review, etc.) outlined in the handbook be included in all

contracts that support NASA operations and makes no exceptions.

Regardless of these requirements, sound management and common sense should prevail. The

shipment of an extremely hazardous material like liquid hydrogen across the country is a hazardous

operation. By allowing this contract to proceed without ensuring that the contractor has a sound

safety program in place, NASA has not demonstrated the commitment to safety emphasized by the

ASI.

Management’s Comment. The report states that both Centers incurred mishap damage totaling

$772,000 or 94 percent of all NASA contractor mishap damage. It is important to distinguish

between “all” and “reported” as not all NASA Centers report their contractor mishaps.

6. OIG Comment. Footnote 8 has been added to the report to show that contractor mishap

information was obtained from a NASA Office of Safety and Mission Assurance database and that

several NASA Centers did not report contractor mishap data to that database.

Management's Comment. The report states "Sixty percent (15 of 25) of contracts reviewed at

Kennedy and Marshall did not include basic requirements to ensure safety." This statement implies

that there were no safety and health plans for 60 percent of the contracts reviewed.
20

Appendix E

However, the table "Contracts With Missing Clauses and Safety Plans," on page 4 of the report

contradicts this statement. The table lists eight contracts for which a safety plan was

not provided at the time of contract award, although subsequent to contract award, safety plans

were provided. Also, two of these contracts were fixed price Invitation for Bid construction

procurements. Safety plans for these contracts are approved after bid opening and prior to notice to

proceed. No work occurs until after the notice to proceed.

7. OIG Comment. The NASA FAR Supplement and NHB 1700.1 clearly state that contractor

safety plans should be reviewed before awarding the contract. Some of the safety plans were

submitted 2 to 3 years after contract award including one safety plan that was dated the day before

we arrived to conduct audit work at Marshall. We question the effectiveness of reviewing a safety

plan after contract award, and in particular, 2 to 3 years after contract award. We also question the

value of a safety plan submitted by a contractor 2 to 3 years after contract award. When formulating

our audit conclusions, we did not question any contract for which we found even minor evidence to

support that NASA safety had reviewed the safety plan. For all questioned contracts, there was no

evidence of NASA safety office review of the safety plan at any time.

The table on page 4 of the report explains that some of the contracts’ safety plans were submitted

late. We have revised the Results in Brief section of the report to clarify that the safety plan is

required at contract award.

Management’s Comment. Footnote 5 states that "The OSHA violations were for the entire

company and not necessarily at the place of NASA contract performance." This footnote should be

explained in the main body. It is important to differentiate between safety violations at the NASA

Center and those at other locations. Even though the violations were for the same contractor, they

are different contacts and often, if not always, different management teams. It is improper to reflect

this company-wide OSHA information since the events may not be related to NASA activities.

8. OIG Comment. The information previously discussed in the footnote has been placed in the

body of the report. We believe that it is proper to show company-wide OSHA information because

it is a reflection of the overall safety management practice of the particular NASA contractor. This

information should be reviewed and evaluated by NASA prior to contract award. The OSHA

information reflects that the company as a whole has a history of safety violations, indicating the need

for a thorough NASA review of the contractor's safety plan prior to contract award.

Management’s Comment. The OIG indicates that the Kennedy Chief Safety Officer stated that

two commercial item contracts should have had safety plans regardless of the type of acquisition. In

subsequent discussions, the Kennedy Chief Safety Officer indicated that he was unfamiliar with the

rules applicable to commercial acquisitions and that his comments were
21

Appendix E

made simply on the basis that the commodity in question was a potentially hazardous item. He did

not have a problem with the absence of a safety plan on these contracts in consideration of these

circumstances.

9. OIG Comment. No change has been made to the report. The Chief Safety Officer was

concerned enough about the nature of these contracts to initially state to the audit team that the

contracts should have safety plans "regardless" of the type of acquisition. Kennedy personnel and

not the audit team conducted the subsequent discussions referred to by management.

Management Comment. We agree that the procedure for conducting surveillance of contracts

was not clearly explained, but evidence of independent reviews exists in the form of periodic

contractor evaluations provided to the Contracting Officer for award fee performance. We also

perform building inspections and participate in mishap investigations involving onsite contractors.

Marshall personnel who stated that safety was usually delegated to DCMC were either misinformed

or misunderstood by the auditor. Marshall also performs surveillance through periodic, documented

NASA Engineering Quality Audits at onsite contractor locations. These audit teams include safety

personnel.

10. OIG Comment. Participation in mishap investigations and input to award fee evaluations is not

the same as conducting surveillance of contractor operations. NHB 1700.1, Chapter 2, Section

202(c)(2), states that Safety Officials are responsible for:

Conducting safety program reviews or technical evaluations of the

contractor’s operation or product for safety, including compliance with safety

provisions of the contract.

Section 209 further states:

Field Installations are expected to have appropriate, adequate, and effective

contractor safety and surveillance and evaluation programs. The

contractor’s approved safety programs, including actual performance and

accident experience, will be evaluated during the initial stages of contract

work to ensure early correction of deficiencies and, subsequently, will be

evaluated at least annually throughout the life of the contract.

Marshall had no documented, auditable procedures for conducting any of the aforementioned

reviews. We acknowledge in the report that Marshall management stated that it performed some

contractor reviews. However, there was no record of these reviews which the report also notes.

Management’s Comment. The report states that by not including required safety clauses in the

contracts, contractors are not bound to safety requirements. This is not a true statement.
22

Appendix E

11. OIG Comments. The report has been revised to state that by not including required safety

clauses in the contracts, “the contractors are not contractually bound to the requirement for

compliance with all Federal, state, and local laws applicable to safety.”

Management’s Comment. We believe that the number of violations listed comes from the

Incident Reporting Information System and does not include those dropped or documented as

potential close calls. In addition, NASA safety officials queried the OSHA Web site and could not

reconcile to the OSHA violations cited in the report.

12. OIG Comment. We obtained the mishap information from NASA’s Incident Reporting

Information System maintained at each Center. We took into consideration mishaps that were

dropped or documented as potential close calls and determined that they should all be included. Just

because an incident was dropped from the system does not negate the fact that a mishap occurred

and could happen again. As stated in OIG Comment 3, close calls are included in NASA’s

definition of mishaps and should be included in the number of mishaps per contractor. We obtained

information on OSHA violations from OSHA’s Integrated Management Information System on the

World Wide Web.

Management Comments. The required safety plan for contract NAS10-98050 (shown in

Appendix C) was reviewed and concurred in by the safety office, and the documentation is in the

contract file.

13. OIG Comment. The appropriate NASA FAR Supplement safety clause and a safety plan

were included in the contract. Within the contract file, there was documented approval of the safety

plan by the Kennedy safety office on May 12, 1998. Also, the Contracting Officer’s Technical

Representative reviewed and signed off on the plan on May 14, 1998. We revised the report

accordingly.

Management Comment. Regarding contract NAS8-37716, the report (Appendix C) states that

"OSHA cited the contractor for one serious safety violation in 1994." However, OSHA cleared the

contractor of any blame for the cited incident.

14. OIG Comment. The OSHA inspection record does not support management’s statement that

the contractor was cleared by OSHA of any blame for the incident.

Management’s Comment. Regarding contract NAS8-37710, the report (Appendix C) states that

"OSHA cited the contractor for 10 serious safety violations in the last 5 years including 2 accidents;

1 resulted in an employee losing a finger." We are unable to verify the cited 10 violations.

15. OIG Comment. The OSHA Integrated Management Information System showed 10

violations in the last 5 years for this contractor.

Management’s Comment. For contract NAS8-38100, the report (Appendix C) states that

OSHA cited the contractor for five safety violations since 1994 including three accidents.
23

Appendix E

There were only two OSHA violations/citations issued as a result of the 1994 accident. No

additional violations/citations were issued up to the time the OIG issued its report. However, it came

to our attention on April 13, 2000, that a recent OSHA inspection resulted in two minor citations.

16. OIG Comment. We have revised the report accordingly.

Management’s Comment. For contracts NAS8-97331 and NAS8-99057, the report (Appendix

C) states that the contracts did not contain the NASA FAR Supplement standard safety and health

clause. The NASA FAR Supplement safety and health clause is in both contracts.

17. OIG Comment. We found no evidence of the applicable safety and health clause in either

contract file.

Management’s Comment. For contracts NAS8-97331, NAS8-99057, NAS8-99053 and

NAS8-98053, the report (Appendix C) states that the contractor safety plans were submitted after

contract award. Construction procurements are fixed-price invitation for bid and safety plans are

approved after bid opening and prior to notice to proceed. No onsite work at Marshall occurs until

after the notice to proceed. For contract NAS8-98053, a waiver for providing the safety and health

plan with the offeror's proposal was obtained and is on file.

18. OIG Comment. The NASA FAR Supplement and NHB 1700.1 clearly state that contractor

safety plans should be reviewed before contract award. We question the effectiveness of reviewing

a safety plan after a contract is awarded. Also, we found no evidence of the aforementioned waiver

in the contract file for contract NAS8-98053.

Management’s Comment. For contract NAS8-97331, the report (Appendix C) states that there

was personal injury as a result of the contractor’s mishap. NASA recovered $30,000 for damages

due to improper removal of asbestos, but there were no injuries associated with this incident as

indicated by the OIG.

19. OIG Comment. We revised Appendix C of the report to show that there was no immediate

personal injury as a result of the mishap.

Management Comment. For contracts NAS8-99057 and NAS8-97331, the report (Appendix

C) states that there was no evidence of review and approval of the safety and health plan by the

Marshall safety office. For contract NAS8-99057, a safety and health plan was approved on

January 14, 1999. For contract NAS8-97331, a safety and health plan was approved on

December 29, 1998.

20. OIG Comment. We found no evidence of review of the safety plan by Marshall safety

personnel for either contract.
24

Appendix E

Management’s Comment. For contract NAS8-99053, the report (Appendix C) states that

OSHA cited the contractor for five safety violations in the last 5 years. There have been no OSHA

violations on this contract, only one close call.

21. OIG Comment. OSHA’s Integrated Management Information System shows five safety

violations for this contractor since 1994.
25

Appendix F. Report Distribution

National Aeronautics and Space Administration (NASA) Headquarters

A/Administrator

AE/Chief Engineer

AI/Associate Deputy Administrator

B/Chief Financial Officer

B/Comptroller

BF/Director, Financial Management Division

C/Associate Administrator for Headquarters Operations

G/General Counsel

H/Associate Administrator for Procurement

J/Associate Administrator for Management Systems

JM/Director, Management Assessment Division

L/Associate Administrator for Legislative Affairs

M/Associate Administrator for Space Flight

P/Associate Administrator for Public Affairs

Q/Associate Administrator for Safety and Mission Assurance

R/Associate Administrator for Aerospace Technology

S/Associate Administrator for Space Science

U/Associate Administrator for Life and Microgravity Sciences and Applications

Y/Associate Administrator for Earth Science

Z/Associate Administrator for Policy and Plans

NASA Centers

Director, Ames Research Center

Director, Dryden Flight Research Center

Director, John H. Glenn Research Center at Lewis Field

Director, Goddard Space Flight Center

Director, Jet Propulsion Laboratory

Director, Lyndon B. Johnson Space Center

Director, John F. Kennedy Space Center

Director, Langley Research Center

Director, George C. Marshall Space Flight Center

Director, John C. Stennis Space Center
26

Appendix F

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

Associate Director, National Security and International Affairs Division, Defense Acquisition

 Issues, General Accounting Office

Professional Assistant, Senate Subcommittee on Science, Technology, and Space

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 Management, Information, and Technology

House Committee on Science

House Subcommittee on Space and Aeronautics

Congressional Member

Honorable Pete Sessions, U.S. House of Representatives
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: Final Report on the Audit of Contract Safety Requirements at Kennedy Space

Center and Marshall Space Flight Center

Report Number: Report Date: 

Circle the appropriate rating for the following statements.

Strongl

y

Agree

Agree Neutra

l

Disagre

e

Strongl

y

Disagre

e

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 this Report

Kevin J. Carson, Program Director, Safety and Technology Audits

Karl M. Allen, Auditor-in-Charge

Rebecca L. Andrade, Auditor

Eugene Bauer, Auditor

Nancy C. Cipolla, Report Process Manager

Iris Purcarey, Program Assistant