IG-00-060

AUDIT

REPORT CONFIGURATION CONTROLS IN

DESKTOP OUTSOURCING

September 29, 2000

National Aeronautics and

Space Administration

OFFICE OF INSPECTOR GENERAL
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Acronyms

CIO Chief Information Officer

IT Information Technology

JPL Jet Propulsion Laboratory

ODIN Outsourcing Desktop Initiative for NASA
W September 29, 2000

TO: A/Administrator

FROM: W/Inspector General

SUBJECT: INFORMATION: Configuration Controls in Desktop Outsourcing

Report Number IG-00-060

The NASA Office of Inspector General has completed an audit of NASA’s configuration

controls in desktop outsourcing. We found that the desktop seat1 prices at the Jet Propulsion

Laboratory (JPL) significantly exceeded those paid by other NASA installations using the

Outsourcing Desktop Initiative for NASA (ODIN) contract. Because the JPL outsourcing

contract was based on adequate price competition, we did not question the basis of JPL’s

desktop seat prices. However, if JPL uses the ODIN contract to acquire desktop services

after its current contract expires, NASA could avoid costs of as much as $33 million over a 3-

year period. We also found that NASA had not assessed the effectiveness of the installationwide2

 or installation-component3 approaches used by the installations in making desktop seat

assignments and had not issued guidance for determining seat selections. Accordingly, NASA

lacks assurance that it has assigned seats to employees in the most efficient and effective

manner.

Background

In 1996, NASA chartered the ODIN to develop an outsourcing arrangement that provides

support for the majority of NASA’s desktop and intra-installation communication systems. In

1998, NASA awarded a master ODIN contract to seven companies. Each NASA installation

or Enterprise4 may select any one of the seven companies to provide desktop, server, and intrainstallation communication services. Also in 1998, JPL awarded a separate outsourcing

contract to acquire similar services.

 

1

 A seat is the hardware, software, and maintenance required to support the user of one desktop computer.

2

 Installations specify one or more desktop seats as the standard seat(s) for all installation employees.

3

 Managers in various organizational components assign seats to the installation employees.

4

 NASA established four strategic Enterprises, each covering a major area of the Agency's research and development

efforts. The Enterprises are: Aerospace Technology, Earth Science, Human Exploration and Development of Space,

and Space Science. NASA is creating a fifth Enterprise, Fundamental Space Research, from elements under the Human

Exploration and Development of Space Enterprise.
2

Recommendations

We recommended that the Associate Administrator for Space Science ensure that JPL includes

ODIN among competitors when awarding the installation’s future desktop

outsourcing contract. NASA could avoid significant costs if ODIN is included among

competitors for JPL's next outsourcing contract. We also recommended that the NASA Chief

Information Officer (CIO) direct the ODIN Program manager to assess the effectiveness of the

two seat assignment approaches and to issue guidance to all installations for use in selecting an

appropriate approach. The assessment and guidance will help ensure effective and efficient seat

assignments.

Management Response and OIG Evaluation

Management concurred with the findings and recommendations. The Associate Administrator

for Space Science agreed that JPL should consider ODIN among competitors for future

desktop outsourcing and has obtained JPL’s commitment to including ODIN in the next

competition. Management stated it was unable to comment on the estimated $33 million of

funds that could be put to better use. Also, the NASA CIO has directed the ODIN Program

Manager to assess the effectiveness of the seat assignment approaches and to develop a

guidance document that installations may use for determining their seat selection approach.

Although management agreed to consider ODIN among competitors for future desktop

outsourcing, management did not explain why it could not comment on the $33 million of funds

that could be put to better use. Therefore, we request that management comment on the

potential monetary benefits in reponse to the final report.

Details on the status of the recommendations are in the Findings section of the report.

[Original signed by]

Roberta L. Gross

Enclosure

Final Report on Audit of Configuration Controls

 in Desktop Outsourcing
FINAL REPORT

AUDIT OF CONFIGURATION CONTROLS IN

DESKTOP OUTSOURCING
W September 29, 2000

TO: S/Associate Administrator for Space Science

AO/Chief Information Officer

FROM: Assistant Inspector General for Auditing

SUBJECT: Final Report on Audit of Configuration Controls in

Desktop Outsourcing

Assignment Number A0000800

Report Number IG-00-060

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. Your comments on a draft of this report were responsive; however, we

request that management provide comments on the potential monetary benefits in response to

the final report. For recommendation 2, we request that you notify us of the actions taken,

including the extent of testing performed to ensure corrective actions are effective. The

recommendations will remain open for reporting purposes.

If you have questions concerning the report, please contact Mr. David L. Gandrud, Program

Director, Information Technology Program Audits, at (650) 604-2672, or Mr. Roger Flann,

Program Manager, at (818) 354-9755. We appreciate the courtesies extended to the audit

staff. The final report distribution is in Appendix G.

[Original signed by]

Russell A. Rau

Enclosure
2

cc:

B/Chief Financial Officer

B/Comptroller

BF/Director, Financial Management Division

G/General Counsel

JM/Acting Director, Management Assessment Division
Contents

Executive Summary, i

Introduction, 1

Findings and Recommendations, 2

Finding A. Desktop Seat Prices at JPL, 2

Finding B. ODIN Desktop Seat Assignment Approaches, 5

Appendix A - Objective, Scope, and Methodology, 7

Appendix B – Calculation of Potential Funds

 That Could Be Put To Better Use, 9

Appendix C - Comparison of Similar JPL and ODIN Desktop Seats, 10

Appendix D - Desktop Outsourcing Contract at JPL, 11

Appendix E - Summary of Prior Audit Coverage, 12

Appendix F - Management’s Response, 13

Appendix G - Report Distribution, 15
NASA Office of Inspector General

IG-00-060 September 29, 2000

 A0000800

Configuration Controls in Desktop Outsourcing

Executive Summary

Background. NASA chartered the Outsourcing Desktop Initiative for NASA ODIN in

December 1996 to develop an outsourcing arrangement that provides support for the majority

of NASA’s desktop and intra-installation communication systems. One of the ODIN

objectives was to facilitate management of information technology resources.

In 1998, NASA awarded to seven companies a master ODIN contract with a total estimated

value of at least $4 billion over 9 years.5 Each NASA installation or Enterprise may select any

one of the seven contractors to provide desktop, server, and intra-installation communication

services. The contractors will provide the services on a per seat basis. Also in 1998, the JPL,

a Federally funded Research and Development Center managed by NASA through a contract

with the California Institute of Technology, awarded a separate 5-year, $110 million contract to

acquire desktop and network services.

Objective. Our overall audit objective was to determine whether NASA installations were

effectively and efficiently meeting their employees' desktop seat configuration requirements.

Specifically, our objective was to determine whether installations were assigning desktop seat

configurations according to employee work requirements and whether contractors were

providing appropriate seat configurations. Details on our scope and methodology are in

Appendix A.

Results of Audit. Based on work performed at four NASA installations, we found no

indications that the reviewed installations had assigned seats that failed to satisfy employee work

requirements. Also, we found no indications that contractors had provided inappropriate seat

configurations. However, we identified two outsourcing issues:

• JPL’s seat prices significantly exceeded those paid by other NASA installations

using the ODIN contract. If JPL uses the ODIN contract to acquire desktop services

after its current contract expires, NASA could avoid costs of as much as $33 million

over a 3-year period.

 

5

 The ODIN master contract’s period of performance is June 22, 1998, through June 21, 2007. The period of

performance of each delivery order shall not exceed 3 years; the delivery order may be renewed on a sole-source basis.
ii

ADMINISTRATIVELY CONTROLLED INFORMATION - INTERNAL PREDECISIONAL

FOR OFFICIAL USE ONLY DRAFT AUDIT REPORT

• NASA installations used either an installation-wide approach or an

installation-component approach in assigning seats to their employees. For the

installation-wide approach, installations specified one or more desktop seats as the

standard seat(s) for all installation employees. For the installation-component approach,

managers in various organizational components assigned seats to the installation

employees. Though either approach may satisfy employee work requirements, NASA

had not assessed the effectiveness of the two seat assignment approaches or issued

guidance for determining seat selections. Without such an assessment, NASA lacks

assurance that it has assigned seats in the most efficient and effective manner.

Recommendations. The Associate Administrator for Space Science should ensure that JPL

includes ODIN among competitors. Also, the NASA CIO should direct the ODIN Program

Manager to assess the effectiveness of the two seat assignment approaches and issue guidance

to all installations for use in selecting an appropriate seat assignment approach.

Management’s Response. Management concurred with both recommendations. The

Associate Administrator for Space Science has obtained JPL’s commitment to consider ODIN

among competitors for future desktop outsourcing. Management stated that it was unable to

comment on the estimated $33 million of funds that could be put to better use. Also, the NASA

CIO has directed the ODIN Program Manager to assess the effectiveness of the seat

assignment approaches and to develop a guidance document that installations may use for

determining their seat selection approach. The complete text of management’s response is in

Appendix F.

Evaluation of Management’s Response. The actions taken or planned by management are

responsive to the recommendations. However, we ask that management comment on the $33

million in potential monetary benefits in response to the final report. The recommendations will

remain undispositioned and open pending completion of the planned actions.
Introduction

ODIN contractors are responsible for providing and managing the majority of NASA’s

desktop, server, and communications assets and services. With respect to desktop computing,

the ODIN contractors shall provide services to NASA employees on a “per seat” basis. Seats

include the following components:

• Hardware and software, installation, and maintenance.

• System administration, relocation, and network access.

• Customer support and training.

NASA managers can assign employees any one of six desktop seats identified in the ODIN

master contract: General Purpose (GP) 1, 2, and 3 and Scientific and Engineering (SE) 1, 2,

and 3. The various desktop seats differ by hardware features including processor speed, hard

disk storage and memory, and monthly seat prices. Seat prices are fixed for the 3-year delivery

order period.

As of June 2000, NASA Headquarters and five installations6 had awarded delivery orders for

desktop, server, and communications services. Four installations7 plan to award delivery orders

during August through November 2000.

On February 11, 1998, about 4 months before NASA awarded the master ODIN contract,

JPL awarded a separate 5-year desktop outsourcing contract (see Appendix D) with a total

value of $110 million. Similar to the ODIN contractors, the JPL contractor is responsible for

providing JPL employees with desktop seats that include hardware, software, and service

support. The contractor bills JPL monthly on a per seat basis.

 

6

 The installations are Goddard Space Flight Center (Goddard), John F. Kennedy Space Center (Kennedy), Lyndon B.

Johnson Space Center (Johnson), George C. Marshall Space Flight Center (Marshall), and John C. Stennis Space Center

(Stennis).

7

 The installations are Ames Research Center (Ames), Dryden Flight Research Center (Dryden), John H. Glenn

Research Center (Glenn), and Langley Research Center (Langley).
2

Findings and Recommendations

Finding A. Desktop Seat Prices at JPL

The monthly seat prices of JPL’s outsourced desktop seats are significantly higher than

comparable desktop seats at the installations covered by ODIN. We do not question the basis

for the higher monthly seat prices because JPL awarded its contract based on adequate price

competition. Nonetheless, NASA may be able to put significant funds to better use if JPL uses

ODIN after the installation’s current desktop outsourcing contract expires in 2002. Funds that

could be put to better use over the 3-year life of an ODIN delivery order could total as much as

$33 million.

Management Controls

The Clinger-Cohen Act of 1996 gives the authority to acquire information technology8 (IT)

resources to each executive agency and makes each agency responsible for effectively managing

its IT acquisitions. Under the Act, the head of each executive agency shall design and

implement a process for maximizing the value and assessing and managing the risks of the IT

acquisitions. Management assessments of various outsourcing alternatives (for example, ODIN

or non-ODIN sources) would represent one form of management control for achieving

maximum value from IT acquisitions. JPL’s desktop outsourcing contract involves a significant

IT acquisition and, therefore, NASA should assure that JPL assesses whether ODIN is the

most cost-effective alternative for desktop outsourcing.

Comparison of Desktop Seat Prices

We performed two comparisons related to seat prices. First, we compared the actual average

seat prices at JPL with the (weighted9) actual average seat prices at Goddard, Johnson,

Kennedy, and Marshall (see Appendix B). The comparison showed that JPL is paying about

$11 million, or 78 percent, more per year under its current contract than other installations are

paying for ODIN desktop services, or about $33 million more over a 3-year ODIN delivery

order period. Second, we compared two similar desktop seat configurations, one from JPL

and the configuration of the installations covered by ODIN (see Appendix C). The two

desktop seats had similar hardware and software. Notwithstanding their similarities, JPL’s seat

price ($273 per month) was about 60 percent higher than the ODIN seat price ($171 per

month).

 

8

 The term “information technology” includes computers, software, services, and related resources.

9

 The weighted average cost equals the total invoice costs of all desktop seats at Goddard, Johnson, Kennedy, and

Marshall divided by the total number of desktop seats at those same installations.
3

Most of the difference in the seat prices is attributed to JPL’s higher service support cost.

Specifically, JPL’s service support cost per seat was $140, and the other installations’ average

service support cost per seat was $49. The difference per seat ($91) totals about $8.1 million

annually.10 The substantial difference between the JPL and the other installations’ service

support costs is not warranted based on the level of services provided by JPL’s outsourcing

contractor. To illustrate, the JPL contract provides a help desk that is available 24 hours per

day, 7 days per week. The ODIN help desks are available 12 hours per day (6:00 a.m. to

6:00 p.m.), 5 days per week. Notwithstanding the additional hours of service provided by the

JPL help desk, typically, only one contractor employee staffs the help desk during swing, night,

weekend, and holiday shifts. The annual cost of this one employee would account for only a

small fraction of the total $8.1 million annual difference between JPL's and the other

installations’ support service costs.

To determine whether other factors contributed to the substantially higher seat prices at JPL, we

compared seat specifications and dates of award for JPL and the other installations (see

Appendix C). We found no differences that would materially contribute to the higher seat

prices at JPL. Specifically, both the JPL and ODIN outsourcing contractors offered desktop

seats with essentially the same computer hardware (550 megahertz Intel-based processor),

software (standard application suites), and hardware refresh period (3 years).11 Additionally,

JPL awarded its desktop outsourcing contract only 8 months before NASA awarded its first

ODIN delivery order12 and, therefore, the time difference would have a minimal effect on seat

pricing levels.

The Deputy Manager, Institutional Computing and Information Services Office, JPL, offered no

explanation for the significantly higher desktop seat prices at JPL. He told us that JPL had

awarded the outsourcing contract based on adequate price competition. In this regard, our

review of the contract files showed that four vendors had submitted proposals to JPL for the

outsourcing contract. JPL asked two of the four vendors to perform due diligence reviews.

After JPL completed its analysis of the two vendors’ due diligence reviews, JPL awarded the

desktop outsourcing contract to one of the two vendors. We reviewed relevant JPL documents

and confirmed that JPL had awarded the outsourcing contract based on adequate competition.

NASA may be able to put significant funds to better use if JPL uses ODIN after JPL’s current

outsourcing contract expires in December 2002. NASA would be able to use the funds for

other programs.

 

10 We calculated the total annual difference of $8.1 million as follows: ($140 - $49) X 12 months X 7,413 seats =

$8,094,996.

11 The hardware refresh period is the length of time that the computer (furnished by the contractor as part of the

desktop seat) will be used before the contractor replaces it with a new computer. Replacement typically occurs every 3

years.

12 JPL awarded its outsourcing contract in February 1998, and Goddard awarded its ODIN delivery order in October

1998.
4

Recommendation, Management’s Response, and Evaluation of

Response

1. The Associate Administrator for Space Science should ensure that JPL includes

ODIN among competitors for future desktop outsourcing.

Management’s Response. Concur. Management agreed that JPL should consider ODIN

among competitors for future desktop outsourcing and has obtained JPL’s commitment to

including ODIN in the next competition. Management stated that it was unable to comment on

the report’s $33.6 million of funds that could be put to better use. The full text of management’s

response is in Appendix F.

Evaluation of Management’s Response. Management's action is responsive to the

recommendation. However, we request that management provide comments on the $33.6

million that can be put to better use in response to the final report. The recommendation will

remain open for reporting purposes.
5

Finding B. ODIN Desktop Seat Assignment Approaches

NASA installations have used either an installation-wide or installation-component approach in

selecting ODIN desktop seats for their employees. Though either approach may satisfy

employee work requirements, the ODIN Program Office had not assessed the merits of the two

approaches or issued guidance on their use. The two approaches resulted from the installations’

discretion in making seat assignment decisions. Without an assessment of the two approaches

and appropriate guidance, NASA lacks assurance that it has assigned seats in the most efficient

and effective manner.

Management Controls

The Clinger-Cohen Act of 1996 gives each executive agency the authority to acquire IT

resources and makes each agency responsible for effectively managing them. Effective IT

management requires that the agency implement management controls to ensure the appropriate

acquisition and use of IT resources. With respect to ODIN, management controls are

necessary because ODIN involves a significant acquisition of IT resources. Management

assessments represent one form of management control and can be used to ensure that the

ODIN program acquires and manages desktop computing resources in the most cost-effective

manner.

Assignment of Desktop Seats to Employees

The NASA CIO has delegated overall ODIN program responsibility to the ODIN Program

Office at Goddard. In turn, the ODIN Program Office delegated the seat assignment

responsibility to the installations. The installations then used either an installation-wide or

installation-component approach in meeting their seat assignment responsibilities. Each

approach is discussed below.

• Installation-wide approach. Johnson, Marshall, and Kennedy used the

installation-wide approach in assigning ODIN desktop seats to their employees. Each

of the installations had specified one or more desktop seats as the standard seat(s) for

all installation employees. (The installations may allow employees to use other seat

configurations if the employees’ special work requirements justify a deviation from the

standard seats.) Based on their analyses of employees’ desktop computing needs, the

installation CIO’s concluded that the installation-wide approach was appropriate and

satisfied the employees’ work requirements.

• Installation-component approach. Goddard used the installation-component

approach in assigning ODIN desktop seats to its employees. Specifically, the

installation delegated the seat assignment responsibility to managers (such as directors,

division chiefs, and branch chiefs) in various organizational components. The ODIN

Project Manager at Goddard stated that Goddard used
6

this approach because it believed the employees’ managers were most knowledgeable

of employee work requirements. Accordingly, the managers were best qualified to

select their employees' seats.

The ODIN Program Manager has not assessed the relative merits of each approach the

installations used to manage their desktop resources. A management assessment would identify

advantages and disadvantages of each seat assignment approach and would give the ODIN

Program Manager a basis for developing guidance for installations' use. Installations could use

the guidance for either initial or follow-on delivery orders.

Recommendation, Management’s Response, and Evaluation of

Response

2. The NASA CIO should direct the ODIN Program Manager to assess the

effectiveness of the two seat assignment approaches and to issue guidance to all

installations for their use in making appropriate seat assignments.

Management’s Response. Concur. The NASA CIO has directed the ODIN Program

Manager to assess the effectiveness of the seat assignment approaches and to develop a

guidance document that the installations may use for determining their seat selection approach

(see Appendix F). The NASA CIO stated that he would issue the guidance document by

March 31, 2001.

Evaluation of Management’s Response. Management's actions are responsive to the

recommendation. However, the recommendation will remain undispositioned and open pending

issuance of the guidance document.
7

Appendix A. Objective, Scope, and Methodology

Objective

Our overall audit objective was to determine whether NASA installations were effectively and

efficiently meeting their employees' desktop seat configuration requirements. Specifically, we

determined whether:

• installations were assigning desktop seat configurations according to employee work

requirements; and

• contractors were providing appropriate seat configurations.

Scope and Methodology

We performed work at Goddard, Johnson, Marshall, Kennedy, and JPL. Specifically, we:

• Reviewed the ODIN master contract and the JPL desktop outsourcing contract to

understand the terms and conditions of these contracts relative to the announced audit

objectives.

• Interviewed the Agencywide ODIN Program Manager to understand the role of the

ODIN Program Office in determining the desktop seat configuration requirements of

NASA employees.

• Interviewed NASA officials at the five NASA installations to identify the policies and

procedures for assigning desktop seats to employees.

• Selected a judgmental sample of 75 ODIN seats at Johnson and Goddard. The sample

seats represented 42 organizations. We then interviewed cognizant managers to

determine their justifications for seat assignments.

• Analyzed the results of the judgmental sample to determine the propriety of the seat

assignment process.

• Reviewed JPL’s process of awarding the desktop outsourcing contract to identify

causes for the high desktop seat prices at JPL and to determine whether the installation

had awarded the contract based on adequate price competition.

• Compared JPL’s average actual desktop seat costs to weighted13 average actual

desktop seat costs at Goddard, Johnson, Kennedy, and Marshall, to determine the

reasonableness of JPL’s desktop seat costs.

• Compared two similar desktop seats, one seat from JPL and another seat that was

common to Johnson, Kennedy, and Marshall, to determine the reasonableness of JPL’s

desktop seat costs. We selected these three installations because each used the same

ODIN contractor and ODIN catalog.

 

13 The weighted average cost equals the total invoice costs of all desktop seats at Goddard, Johnson, Kennedy, and

Marshall divided by the total number of desktop seats at those same installations.
8

Appendix A

Management Controls Reviewed

We reviewed management controls relating to JPL’s desktop seat prices (see Finding A).

Though we found these management controls adequate, the Associate Administrator for Space

Science should ensure that JPL assesses whether ODIN is the most cost-effective alternative

for JPL’s next desktop outsourcing contract. We also reviewed management controls relating

to NASA’s organizational structure for implementing the ODIN program. We considered

management controls to be adequate. However, NASA had not assessed the merits of the two

desktop seat assignment approaches (see Finding B).

Audit Field Work

We performed the audit field work from October 1999 through July 2000 at Goddard,

Johnson, Kennedy, Marshall, and JPL. We conducted the audit in accordance with generally

accepted government auditing standards.
9

Appendix B. Calculation of Potential Funds

That Could Be Put to Better Use

Recommendation 1 results in a potential $33.6 million that NASA can put to better use as

shown in the calculation below. We made the calculation based on contractor invoices for

October 1999.

JPL Marshall Kennedy Johnson Goddard

All Four

ODIN

Centers

Total number of desktop

seats 3,398 7,065 3,460 10,530 3,258 24,313

Total monthly invoice cost

for all seats $976,673 $1,272,119 $569,371 $1,674,443 $389,597 $3,905,530

Average actual seat price

per month $287 $180 $165 $159 $120 $161

The amount of potential funds that can be available for other use is based on the 7,413 desktop

seats that JPL was using in October 1999 (3,398 seats were outsourced to the contractor and

4,015 were Government-owned). We used the 7,413 seats for our calculation because they

represent the total number of desktop seats that JPL would eventually outsource.

Average actual seat price per month at JPL $287

Average actual seat price (weighted1) per month at the four installations

 covered by ODIN $161

JPL monthly seat price in excess of the ODIN monthly seat price $126

Potential monthly funds available for other use if JPL uses ODIN

 ($126 x 7,413 seats) $934,038

Potential annual funds available for other use use if JPL uses ODIN

 ($934,038 x 12 months) $11,208,456

Potential funds available for other use over a 3-year delivery order period2

 if JPL uses ODIN after JPL’s current outsourcing contract expires

 ($11,208,456 x 3 years).

O

$33,625,3683

1We computed the weighted average cost of desktop seats by dividing the total invoice costs of all desktop seats at

Goddard, Johnson, Kennedy, and Marshall by the total number of desktop seats for the four installations.

2The 3-year delivery order period would be January 2003 through December 2005.

3We based the $33,625,368 of potential funds available for other use on the assumption that JPL’s desktop seat prices

and the number of seats for the 3-year delivery order period will be the same as the current seat prices and seat

quantity.
10

Appendix C. Comparison of Similar JPL and ODIN Desktop Seats

(Based on Contractors’ Product Catalogs as of October 1999)

Feature JPL ODIN Installations Difference

Most sophisticated standard

desktop seat provided by contractor

550 Megahertz Pentium III,

384 megabyte random access

memory, 9 gigabyte hard

drive, 32 speed compact

disk.

550 Megahertz Intel Xeon

PIII, 512 megabyte random

access memory, 9 gigabyte

hard drive, 32 speed

compact disk, 21” monitor.

The ODIN hardware has

more memory. Also, the

ODIN seat includes a 21”

monitor, while the JPL seat

includes no monitor.

Standard application software Standard application

software suite (word

processing, spreadsheet,

presentation graphics,

e-mail, Internet, anti-virus).

Standard application

software suite (word

processing, spreadsheet,

presentation graphics,

e-mail, Internet, anti-virus).

None

Printer Not included in JPL's seat

refreshment. Printer is an

optional peripheral.

ODIN's seat includes access

to a networked black and

white printer.

The ODIN seat includes a

shared printer. The JPL seat

has no printer.

Hardware technology refresh Every 3 years Every 3 years None

Software technology refresh Provided as part of “Normal

Assistance Service.”

Provided as part of the

ODIN seat.

None

Maintenance support Includes hardware, system

software, and application

software support. “Normal

Assistance Service” restores

service within 8 hours for

on-site assistance.

Includes hardware, system

software, and application

software support. Restores

service by close of next

business day.

JPL’s Normal Assistance

Service has a slightly better

turn-around time than

ODIN’s maintenance

support service.

Contractor help desk Available 24 hours a day, 7

days a week.

Available from 6:00 a.m. to

6:00 p.m. on workdays.

JPL’s help desk provides

wider time coverage.

Systems administration Included Included None

Local Area Network connectivity Included Included None

Monthly seat price

$273 1$1712$102

1

The JPL seat price is based on a Compaq EN 550 computer ($97) plus a Compaq P110 21-inch monitor ($36) plus

Normal Assistance Service ($140).

2 The ODIN seat price at Johnson, Kennedy, and Marshall is based on the average monthly cost of a Scientific and

Engineering 2 (SE2) seat.
11

Appendix D. Desktop Outsourcing Contract at JPL

The following information pertains to the desktop and network services contract at JPL.

Contract Number: 961148

Contract Awarded By: Jet Propulsion Laboratory (JPL), California Institute of

Technology

Outsourcing Contractor: OAO Corporation

Contract Dates: JPL issued a letter contract on November 14, 1997, and a

definitive contract on February 11, 1998.

Contract Type: Fixed-price contract with fixed prices at the unit level

Period of Performance: December 22, 1997, through December 31, 2002

Contract Ceiling Price: $110 million

Contract Services and

Pricing:

The contractor shall provide all necessary resources, including

but not limited to personnel, proximal and remote facilities,

transportation, computer hardware, software, documentation,

and all necessary equipment and support services. The primary

service categories are:

• Help desk

• System administration

• Computer hardware maintenance

• System replenishment

The monthly desktop seat price consists of two components: (1)

JPL pays the contractor a fixed monthly assistance service

charge of $140 per seat for help desk, system administration,

and hardware maintenance; and (2) JPL pays the contractor a

monthly charge (replenishment service charge) per seat for using

the contractor-provided computer hardware. This charge equals

the contractor’s actual invoice costs for the hardware and a fixed

dollar markup, divided by the hardware replenishment service

period of 36 months.
12

Appendix E. Summary of Prior Audit Coverage

The NASA Office of Inspector General has issued two final reports relating to the Outsourcing

Desktop Initiative for NASA. (Copies of the reports are available at

www.hq.nasa.gov/office/org/hq/issuedaudits.html.

“Delivery Order Placement Under Outsourcing Desktop Initiative Contracts,” Report

Number IG-99-003, November 10, 1998.

NASA can improve its readiness to place ODIN delivery orders by implementing an effective

program management process. Key documents such as the Program Commitment Agreement

(PCA) and program plan and an overall risk management process have not been approved and

put into effect as required by NASA policy. Improved program management will help NASA

identify and benefit from lessons learned from outsourcing and effectively manage ODIN

delivery order placement. We recommended that the NASA CIO submit an ODIN PCA to

the NASA Administrator for review and approval. We also recommended that the ODIN

Program Manager complete and execute a program plan for ODIN. Additionally, we

recommended that the ODIN Program manager establish a continuous risk management

process that would identify risk and its effects, prioritize risks for mitigation or elimination, and

maintain a risk management plan. Management concurred with the report recommendations

and took responsive actions.

“Outsourcing of Desktop Computers,” Report Number IG-98-029, September 14,

1998.

NASA had not ensured the adequacy or consistency of cost data to be used to place

outsourcing delivery orders. After completing the Business Case analysis, which supported

outsourcing, NASA updated the available cost data on outsourcing desktop computers, through

successive iterations, to support each phase of the competitive procurement process. NASA

used the updated data to assess the Agency-wide benefits of outsourcing. However, NASA

had not issued guidance on preparing reliable cost estimates in support of delivery order

placement. Without consistently prepared and reliable estimates of the costs of the Government

activities to be outsourced, the Centers may be unable to make well-informed decisions on the

type and extent of outsourcing services they should acquire, particularly with regard to services

other than general-purpose computing (for example, intra-Center communications). Also,

Centers may be unable to reliably compare the costs of doing business with eligible vendors or

to determine the total amount of savings actually achieved through outsourcing. We

recommended that the NASA CIO require Centers to develop Government cost estimates for

use in determining the type and extent of outsourcing services to be acquired. We also

recommended that the CIO issue detailed guidance for the Centers to use in developing their

cost estimates. Management concurred with the report recommendations and took responsive

actions.
13

Appendix F. Management’s Response
14

Appendix F
15

Appendix G. Report Distribution

National Aeronautics and Space Administration (NASA) Headquarters

A/Administrator

AE/Chief Engineer

AI/Associate Deputy Administrator

AO/Chief Information Officer

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

HK/Director, Contract Management Division

HS/Director, Program Operations Division

J/Associate Administrator for Management Systems

JM/Acting Director, Management Assessment Division

L/Associate Administrator for Legislative Affairs

M/Associate Administrator for Space Flight

Q/Associate Administrator for Safety and Mission Assurance

R/Associate Administrator for Aerospace Technology

R/Chief Information Officer Representative

NASA Centers

Director, Goddard Space Flight Center

Director, Johnson Space Center

Director, Kennedy Space Center

 Chief Counsel, John F. Kennedy Space Center

Director, Marshall Space Flight Center

 Head, Program Management Council Working Group

Director, NASA Management Office, Jet Propulsion Laboratory

Non-NASA Federal Organizations and Individuals

Assistant to the President for Science and Technology Policy

Director, Office of Management and Budget

Deputy Director of Management, Office of Management and Budget

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

 Budget
16

Appendix G

Non-NASA Federal Organizations and Individuals (Cont.)

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

 Acquisitions 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 Subcommittee on National Security, Veterans Affairs, and International Relations

House Committee on Science

House Subcommittee on Space and Aeronautics, Committee on Science

Congressional Member

Honorable Pete Sessions, U.S. House of Representatives
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