AUGUST 9, 2012

AUDIT REPORT

REPORT NO. IG-12-020 (ASSIGNMENT NO. A-11-018-00)

OFFICE OF AUDITS

NASA’S INFRASTRUCTURE AND FACILITIES:

AN ASSESSMENT OF THE AGENCY’S

REAL PROPERTY LEASING PRACTICES

OFFICE OF INSPECTOR GENERAL

National Aeronautics and 

Space Administration

 
REPORT NO. IG-12-020 

Final report released by:

Paul K. Martin

Inspector General

Acronyms 

BW Business Warehouse 

C.F.R. Code of Federal Regulations

EUL Enhanced Use Lease 

FY Fiscal Year

GAO Government Accountability Office 

GSA General Services Administration

NAII NASA Advisory Implementing Instruction 

NPD NASA Policy Directive

NPR NASA Procedural Requirements

OIG Office of Inspector General

OMB Office of Management and Budget

OPF3 Orbiter Processing Facility 3

RFP Request for Proposal 

RPMS Real Property Management System

SAAM Space Act Agreement Maker

U.S.C. United States Code 
AUGUST 9, 2012

REPORT NO. IG-12-020 

OVERVIEW

NASA’S INFRASTRUCTURE AND FACILITIES: AN ASSESSMENT 

OF THE AGENCY’S REAL PROPERTY LEASING PRACTICES

The Issue

For the past several years, the Government Accountability Office (GAO) and Congress 

have identified real property management as a high-risk area in agencies across the 

Federal Government. NASA is no exception. The Agency’s real property inventory 

consists of more than 100,000 acres, including more than 44 million square feet within 

approximately 5,000 buildings and other structures. Over 80 percent of these facilities 

are 40 or more years old, and NASA faces a backlog of deferred maintenance totaling 

$2.5 billion.1

Real Property Agreements. NASA has several options when it identifies real property 

as underutilized, including retaining the property in its present state, demolition, 

transferring the property to the General Services Administration (GSA) for sale or 

transfer to another entity, or making the property available for lease. In this audit, we 

focused on NASA’s leasing program. 

 Moreover, the NASA Authorization Act of 2010 called for a reduction in 

NASA’s real property to fit current and future missions and expected funding levels. 

Against this backdrop, NASA is undergoing changes in mission focus and operating 

under constrained budgets. Given these challenges, NASA managers must balance 

reducing the Agency’s real property footprint with ensuring that the Agency retains and 

maintains currently underutilized facilities that it may later need to support future

missions. 

Leasing underutilized real property has several benefits. First, leases may generate 

revenue the Agency can use to help reduce overhead expenses and defray the costs of 

maintaining and improving aging infrastructure. Second, leasing enables NASA to keep 

in its inventory facilities that although currently underutilized may be needed for future 

missions. 

However, NASA must be careful to ensure that leasing does not replace its responsibility 

to dispose of property that is truly no longer required to meet current or future mission 

 

1 NASA defines deferred maintenance as the essential but unfunded work necessary to bring its Centers up 

to required standards. 
OVERVIEW

ii REPORT NO. IG-12-020 

needs.

2

As of September 2011, NASA had 430 leasing agreements of various types with outside 

entities at 9 of its 10 Centers.

 Furthermore, poor implementation and execution of its leasing program could 

result in NASA not realizing the program’s full benefits or lead to financial losses to the 

Agency. 

3

 The agreements included reimbursable and 

nonreimbursable agreements, concessionaire agreements, easements, and Enhanced Use 

Leases (EULs), and their scope varied from a single office in a facility to a lease for more 

than 75 acres of land.

4

• Easements. NASA grants an entity a temporary or permanent right to use real 

property for a specific purpose. For example, NASA granted an easement to the 

Southeast Louisiana Flood Protection Authority for a flood protection levee at its 

Michoud Assembly Facility. 

 For purposes of this report, we are using the term “lease” to refer 

to any type of real property agreement, (also referred to as an “out-grant” in NPR 

8800.15B), including easements, concessionaire agreements, nonreimbursable 

agreements, reimbursable agreements, or EULs, that allows others to use NASA real 

property. A description of the different types of leasing agreements follows:

• Concessionaire Agreements. A private business, such as a gift shop or food 

service vendor, operating at a NASA Center. 

• Nonreimbursable Agreements. NASA and one or more agreement partners are 

involved in a mutually beneficial activity that furthers the Agency’s mission, with 

each party bearing its own costs and no exchange of funds between the parties. 

For example, NASA has a nonreimbursable agreement with the Ames Child Care 

Center. 

• Reimbursable Agreements. NASA makes land or facilities available to a third 

party and the third party pays NASA for the right to use the property. For 

example, NASA has multiple agreements with the Navy for the use of buildings 

and land at Stennis Space Center (Stennis). Unless the agreements are enhanced 

use leases (discussed below), NASA must remit any revenues it receives from 

non-Federal entities in excess of its costs to the U.S. Treasury. 

 

2 Title 40, United States Code (U.S.C.), Section 524, requires that each Executive agency maintain 

adequate inventory controls and accountability systems for property under its control, continuously 

survey property under its control to identify excess property, and promptly report excess property to the 

Administrator of General Services. NASA Procedural Requirements 8800.15B, “NASA Real Property 

Management,” June 21, 2010, further requires NASA Centers to identify property that does not meet a 

current or future mission need and take actions to dispose of unneeded real property.

3 Dryden Flight Research Center was the only Center that had no lease agreements at the time of our audit 

fieldwork. 

4 NASA’s reimbursable and nonreimbursable agreements are primarily entered into under the authority of 

the National Aeronautics and Space Act. However, NASA can also enter into agreements under other 

authorities, such as the National Historical Preservation Act. 
OVERVIEW

REPORT NO. IG-12-020 iii

• Enhanced Use Leases (EULs). Agreements that allow NASA to retain proceeds 

in excess of its costs rather than remitting them to the Treasury.

Evolution of Enhanced Use Leases. NASA first received EUL authority as part of the 

Consolidated Appropriations Resolution of 2003, which enabled it to lease underutilized 

real property at Ames Research Center (Ames) and Kennedy Space Center (Kennedy) to 

private entities for cash or in-kind consideration and retain the proceeds. 5 In 2008, 

NASA received EUL authority for all its Centers; however, the legislation only permitted 

the Agency to accept cash payments and not in-kind consideration.6

 In November 2011, 

the law was amended again to allow NASA to accept in-kind consideration, but only as it 

relates to the development of renewable energy production facilities.7

The decision of whether to retain and lease or dispose of a particular piece of real 

property involves a difficult balancing act for NASA. On one hand, leasing can generate 

revenue to offset facilities operations and maintenance costs and potentially reduce a 

portion of the Agency’s deferred maintenance liability. On the other hand, entering into 

lease agreements for property that has no identified mission use cuts against the Agency’s 

efforts to reduce its real property footprint and diverts attention and resources away from 

its core space, aeronautics, and science missions. In addition, because leasing is not a 

long-established NASA function, the Agency’s guidance and the experience of its 

personnel in this area are still evolving. 

In this audit, we examined NASA’s leasing program and reviewed leasing operations at 

selected Centers and component facilities: Ames; Glenn Research Center (Glenn) and its 

Plum Brook Station; Kennedy; Michoud Assembly Facility (Michoud) (a component of 

Marshall Space Flight Center); and Stennis. Specifically, we assessed whether NASA 

effectively (1) identified space available for lease to other entities, (2) marketed available 

space to potential Federal and non-Federal tenants, (3) established internal controls to 

ensure that lease agreements provide the best value to the Government and are fair to 

potential tenants, and (4) accounted for in-kind consideration received from EULs. 

Details of the audit’s scope and methodology are in Appendix A. 

Results

Although NASA has made improvements to its leasing program in recent years, the 

Agency still faces significant challenges to ensure that it has effective controls in place to 

maximize the benefits of its leasing program. Specifically, we found that NASA did not 

 

5 Public Law 108-7, “Consolidated Appropriations Resolution, 2003,” February 20, 2003. The in-kind 

consideration could come in the form of maintenance, construction, modification, or improvement of 

facilities on real property under the jurisdiction of the Administrator, or the provision of services to 

NASA including use by NASA of facilities built by the tenant on the property.

6 Public Law 110-161, “Consolidated Appropriations Act, 2008,” December 26, 2007.

7 Public Law 112-55, “Consolidated and Further Continuing Appropriations Act, 2012,” November 18, 

2011.
OVERVIEW

iv REPORT NO. IG-12-020 

have clear guidance to ensure that property identified for leasing was not excess to the 

Agency’s needs.

8

NASA Guidance for Identifying Property for Lease Is Unclear and Ineffective

 We also determined that NASA lacked a complete inventory of space 

available for lease as well as an effective marketing program to attract potential tenants. 

Further, we found various internal control weaknesses that limit NASA’s ability to ensure 

that leases provide the best value to the Agency and are fair to its partners and potential 

partners. Finally, we found that while NASA’s reporting of in-kind consideration in its 

financial statements is improving, the Agency’s existing guidance does not ensure that 

the types of in-kind consideration NASA accepts actually benefit the Agency. Absent 

better controls and improved guidance, NASA will be hard-pressed to maximize the 

potential of its leasing program to help reduce the cost of maintaining underutilized 

facilities while meeting its obligation to ensure that leasing does not become a substitute 

for disposing of excess property. 

Although NASA has made improvements to its leasing guidance, the Agency faces 

significant challenges in identifying real property that is appropriate for leasing. For 

example, we found that the NASA Centers have few incentives to declare underutilized 

property excess to their needs so that it may be removed from NASA’s inventory. We 

also found that NASA lacks clear guidance for assisting Agency personnel in determining 

whether property is necessary to meet the Agency’s current or future mission needs. 

While NASA revised its leasing policy in June 2010 in an attempt to ensure that real 

property considered for leasing has a current or future use, the 2010 policy does not 

adequately describe the criteria the Centers should use to make this determination. 

NASA Lacks Comprehensive Inventory of Property Available for Lease 

NASA does not have a complete inventory of property available to lease, which hinders 

its ability to advertise to potential tenants or provide effective oversight of its leasing 

efforts. Managers at Ames, Kennedy, and Stennis had only partial inventories of 

buildings or land available for lease while managers at Glenn and Michoud could not 

provide us with any formal inventory of their available properties. Without compiling a 

complete inventory of available space, NASA cannot maximize its potential leasing 

opportunities. 

Centers Did Not Adequately Market Their Properties for Leasing

The Centers we visited generally relied on informal “word-of-mouth” efforts to attract

potential tenants. However, NASA is not taking other steps that could help the Agency 

better market its leasing opportunities to both Federal and non-Federal entities. For 

example, NASA has not coordinated with the GSA Office of Client Solutions to identify 

potential Federal tenants. Indeed, we found that most of the Center personnel we spoke 

with were not aware they could coordinate with GSA about this issue. In addition, when 

 

8 Excess property means property under the control of a Federal agency that the head of the agency 

determines is no longer required to meet the agency’s needs.
OVERVIEW

REPORT NO. IG-12-020 v 

seeking non-Federal tenants, the Centers had not consistently publicized leasing 

opportunities to the broadest possible audience. Accordingly, NASA may not be fully 

realizing the potential of its leasing program to defray the costs of maintaining its aging 

infrastructure or help consolidate Government-wide real property inventories. 

Internal Controls Need Strengthening to Ensure the Best Value to the Government and 

Fairness to Partners 

At the five Centers we visited, we found a variety of internal control weaknesses that 

hinder NASA’s ability to ensure that real property leases provide the best value to the 

Government and are fair to all parties.

9

These conditions occurred due to inadequate internal controls, including a lack of 

training, guidance, and documentation. As a result, personnel were unsure about how 

and when to use competition, when to use market analysis to develop pricing, and who 

has proper signature authority. Without stronger internal controls, it will be difficult for 

NASA to ensure that the Agency is receiving the highest return from its real property 

agreements and that the agreements are legally binding.

 Specifically, we found that (1) the Centers did 

not consistently use competition for agreements with non-Federal entities, (2) three of the 

Centers did not conduct a required market analysis or used the analysis inappropriately 

when developing pricing, and (3) three of the Centers entered into lease agreements 

signed by unauthorized personnel. 

NASA’s Reporting of In-Kind Consideration Is Improving but In-Kind Benefits Were 

Not Consistently Realized

NASA is improving its reporting of in-kind consideration in its financial records, and the 

Centers have achieved some in-kind benefits through EUL agreements. However, out of 

the eight in-kind agreements we reviewed, NASA did not receive any benefit from one 

agreement and received only limited benefit from five others. For example, Ames leased 

land for the placement of two satellite antennas and accepted the part-time use of the 

antennas as in-kind consideration. However, NASA has not used the transmission 

frequencies available through the antennas over the past four years. Without improved 

guidance, NASA may not realize the full benefits of its in-kind authority. 

Conclusion 

NASA faces significant challenges as it works to comply with the 2010 Authorization 

Act directive to reduce its infrastructure at a time when mission requirements are still 

evolving and somewhat uncertain. Given these challenges, it is important that NASA 

consider an array of options to manage its underutilized real property, including leasing it 

to other entities. Properly implemented, leasing can generate revenue to offset facilities 

 

9

 The best value is the most advantageous balance of revenues and compatibility with NASA mission 

achieved through competitive methods that provides the greatest overall benefit to the Government.
OVERVIEW

vi REPORT NO. IG-12-020 

operations and maintenance costs and potentially reduce the Agency’s deferred 

maintenance liability. However, NASA must be careful not to use leasing as a substitute 

for excessing property for which it has no current or expected future mission use. 

Leasing property in such circumstances frustrates the Agency’s efforts to reduce its real 

property footprint and can divert effort and resources from its core missions. As NASA

considers expanding its leasing agreements to help manage its infrastructure challenges, 

the Agency should strengthen its guidance, training, and documentation requirements to 

ensure it is receiving the highest possible benefits from its lease agreements and that the 

agreements are made in the most transparent manner to ensure fairness to all parties. 

Management Action

To improve management of NASA’s real property leasing program, we recommended

that the Associate Administrator for Mission Support revise existing policy and develop 

new policy: 

• articulating the criteria Centers should use to determine whether underutilized 

property has a current or future mission use; 

• requiring that Federal entities be considered for leasing opportunities and that 

NASA coordinate with the GSA Office of Client Solutions to identify potential 

Federal tenants; 

• requiring that leasing opportunities be widely publicized; 

• providing guidance for Center management addressing the requirements for lease 

agreements; and 

• providing guidance for determining whether in-kind consideration provides the 

best value to the Government. 

In addition, the Associate Administrator should coordinate with the Centers to implement 

a process for identifying and maintaining a complete inventory of real property available 

for leasing. Finally, the Associate Administrator should institute a review of all existing

agreements to ensure they are consistent with applicable statutes and regulations 

regarding signature authority and other required terms.

 

In response to a draft of this report, the Associate Administrator concurred with our 

recommendations to clarify the criteria Centers should use to determine if underutilized 

property has a current or future mission-related use, maintain a complete inventory of real 

property available for leasing, and review all real property agreements to ensure they are 

consistent with applicable statutes and regulations. The Associate Administrator partially 

concurred with our other recommendations, stating that while NASA’s current policy 

addresses these issues, he agreed that the policies could be strengthened to better 

articulate that Federal entities be considered for leasing opportunities; require that leasing 
OVERVIEW

REPORT NO. IG-12-020 vii

opportunities be widely publicized; provide guidance for Center management addressing 

the requirements for lease agreements; and provide guidance for determining whether 

in-kind consideration provides the best value to the Government. 

We question why NASA characterized its responses to five of our eight recommendations 

as partial concurrences when the Agency agreed in each instance that its policy could “be 

strengthened” and agreed to take corrective action. Nevertheless, because we find that 

the Agency’s proposed actions address the intent of our recommendations we are 

resolving all eight recommendations and will close them upon completion and 

verification of the proposed corrective actions. 

As NASA considers expanding its leasing agreements to help manage its infrastructure 

challenges, the establishment and clarification of guidance, training, and documentation 

requirements will help ensure that the Agency is receiving the highest possible benefits 

from its lease agreements and that the agreements are made in the most transparent 

manner to ensure fairness to all parties. 

AUGUST 9, 2012

REPORT NO. IG-12-020 

CONTENTS

INTRODUCTION

Background _________________________________________ 1 

Objectives __________________________________________ 4 

RESULTS

NASA Guidance for Identifying Property for Lease Is Unclear and 

the Agency Lacks a Comprehensive Inventory of Property 

Available for Leasing ________________________________ 6 

Centers Did Not Adequately Market Their Properties for 

Leasing _________________________________________ 13

Internal Controls Need Strengthening to Ensure the Best 

Value to the Government and Fairness to Partners for 

Real Property Agreements___________________________ 16

NASA’s Reporting of In-Kind Consideration Is Improving but 

In-Kind Benefits Were Not Consistently Realized _________ 24

APPENDIX A 

Scope and Methodology_______________________________ 27

Review of Internal Controls ____________________________ 29

Prior Coverage ______________________________________ 30

APPENDIX B 

History of Federal and NASA Requirements________________ 31

APPENDIX C 

Management Comments ______________________________ 34

APPENDIX D 

Report Distribution___________________________________ 37

AUGUST 9, 2012

REPORT NO. IG-12-020 1 

INTRODUCTION

Background

For the past several years, the Government Accountability Office (GAO) and Congress 

have identified real property management as a high-risk area in agencies across the 

Federal Government. NASA is no exception. The Agency’s real property inventory 

consists of more than 100,000 acres, including more than 44 million square feet within 

approximately 5,000 buildings and other structures. Over 80 percent of these facilities 

are 40 or more years old, and NASA faces a backlog of deferred maintenance totaling 

$2.5 billion.10

This balancing act is not a new challenge for NASA or the other Federal agencies. Since 

1949, agencies have been required to identify and promptly report excess property to the 

Administrator of General Services.

 Moreover, the NASA Authorization Act of 2010 called for a reduction in 

NASA’s real property to fit current and future missions and expected funding levels. 

Against this backdrop, NASA is undergoing considerable changes in mission focus and 

operating in a budget-constrained environment. Given these challenges, NASA’s real 

property managers must balance reducing the Agency’s real property footprint with 

ensuring that NASA prudently retains and maintains facilities that are currently 

underutilized but may later be needed to support future missions. 

11 More recently, the Federal Real Property Council 

in 2004 and President Obama in 2010 issued guidance to Federal agencies regarding 

disposal of unneeded real property. Particular to NASA, Congress has noted that the 

Agency needs to re-scope and, as appropriate, downsize its physical footprint and 

directed it to develop a strategy to evolve toward the most efficient retention, sizing, and 

distribution of facilities, laboratories, test capabilities, and other infrastructure consistent 

with its mission.12

Real Property Agreements. In June 2010, NASA updated its policy to include the 

Agency’s first overall guidance for developing and managing real property agreements. 

This revised guidance requires that, with limited exceptions, only property that has a 

current or future mission-related use be made available for lease to third parties. 

 

NASA has several options if it identifies any of its real property as underutilized: 

retaining the property in its present state, demolition, mothballing, declaring the property 

“excess” to NASA’s needs and transferring it to the General Services Administration 

 

10 NASA defines deferred maintenance as the essential but unfunded work necessary to bring its Centers up 

to required standards. 

11 40 U.S.C. § 524. 

12 Public Law 111-267, “National Aeronautics and Space Administration Authorization Act of 2010.” 
INTRODUCTION

2 REPORT NO. IG-12-020 

(GSA) for disposition, or making the property available for lease.13

• Easements. NASA grants an entity a temporary or permanent right to use real 

property for a specific purpose. For example, NASA granted an easement to the 

Southeast Louisiana Flood Protection Authority-East for a flood protection levee 

at Michoud Assembly Facility. 

 In this audit, we 

focused on NASA’s leasing program, including the different types of real property 

agreements NASA uses. For purposes of this report, we are using the term “lease” to 

refer to any type of real property agreement, (also referred to as an “out-grant” in NASA 

Procedural Requirements (NPR) 8800.15B “NASA Real Property Management,” June 

21, 2010), including easements, concessionaire agreements, nonreimbursable agreements, 

reimbursable agreements, or Enhanced Use Leases (EUL), that allows others to use 

NASA real property.

• Concessionaire Agreements. A private business, such as a gift shop or food 

service vendor, operating at a NASA Center. 

• Nonreimbursable Agreements. NASA and one or more agreement partners are 

involved in a mutually beneficial activity that furthers the Agency’s mission with 

each party bearing its own costs and no exchange of funds between the parties. 

For example, NASA has a nonreimbursable agreement with the Ames Child Care 

Center. 

• Reimbursable Agreements. NASA makes land or facilities available to a third 

party and the third party pays NASA for the right to use the property. Under a 

reimbursable agreement with another Federal agency, NASA receives payment to 

cover its costs. For example, NASA has multiple agreements with the Navy for 

buildings and land at Stennis Space Center (Stennis) in which the Navy 

reimburses the Center for costs incurred. Leases to non-Federal entities should be 

set at market rate and any revenues in excess of cost that NASA receives should 

be remitted to the U.S. Treasury, unless the agreement is an enhanced use lease as 

discussed below. 

• Enhanced Use Leases. Agreements that allow NASA to retain proceeds in excess 

of its costs. 

As of September 30, 2011, NASA had 430 active real property agreements. The scope of 

these agreements varied from use of a single office in a larger facility at Stennis to a lease 

for more than 75 acres of land at Ames Research Center (Ames). For our review, we 

included one additional reimbursable agreement at Kennedy Space Center (Kennedy) that 

was created on October 6, 2011, 6 days outside our audit sample timeframe, because of 

its high visibility. 

 

13 NPR 8800.15B, “Real Estate Management Program,” June 2010.
INTRODUCTION

REPORT NO. IG-12-020 3 

The following table shows the 431 agreements by type and location. 

Type of Agreements

Center/

Component

Enhanced

Use Lease Reimbursable

NonReimbursable Concessionaire Easement Total 

Ames 52 20 4 — 27 103 

Glenn — 3 3 1 3 10 

- PBS — 21 1 — 17 39 

Goddard — 2 — — 2 4 

- Wallops — 12 4 — 13 29 

JPL — — — — 5 5 

Johnson — 2 3 — 56 61 

- White Sands — — — — 2 2 

Kennedy 14 6 7 1 7 35 

Langley — 1 2 — 3 6 

Marshall — 4 — 6 — 10 

- Michoud — 14 4 1 4 23 

Stennis — 35 5 10 54 104 

 Total 66 120 33 19 193 431 

Ames: Ames Research Center

Glenn: Glenn Research Center 

 - PBS: Plum Brook Station 

Goddard: Goddard Space Flight Center

 - Wallops: Wallops Flight Facility

JPL: Jet Propulsion Laboratory

Johnson: Johnson Space Center 

 - White Sands: White Sands Test Facility 

Kennedy: Kennedy Space Center 

Langley: Langley Research Center 

Marshall: Marshall Space Flight Center

 - Michoud: Michoud Assembly Facility

Stennis: Stennis Space Center 

Source: Office of Inspector General (OIG) analysis of active real property agreements received from 

Centers.

Evolution of NASA Enhanced Use Leases. In the Consolidated Appropriations 

Resolution of 2003, NASA received authority to establish EUL demonstration projects at 

two of its Centers. NASA selected Ames and Kennedy to exercise this authority. Under 

the law, NASA could accept cash or in-kind consideration in the form of maintenance, 

construction, modification, or improvement of facilities or the provision of services, 

including launch services and payload processing services.

14 For example, NASA has an 

EUL agreement with Airship Ventures for the use of 24,000 square feet of space in 

Hangar 2 at Ames’ Moffett Field to store a rigid airship.15

 

14 Public Law 108-7, “Consolidated Appropriations Resolution, 2003,” February 20, 2003.

 In return, the base rent and 

15 Airship Ventures is a privately held company that conducts sightseeing tours by airship. 
INTRODUCTION

4 REPORT NO. IG-12-020 

reimbursement of costs for institutional support services from this agreement generated 

over $98,000 in fiscal year (FY) 2011. 

In 2007, GAO reported that NASA did not have adequate controls in place to report 

in-kind consideration received from its EULs.16 In response, in July 2007 NASA issued 

an interim Agency-wide facilities policy for EULs, which was finalized in December 

2008 as the NASA Desk Guide for Enhanced Use Leasing of Real Property (the EUL 

Desk Guide). Under the policy, Centers with EUL authority are responsible for 

developing leases that support NASA missions in space exploration, scientific discovery, 

and aeronautics research. The policy states that “each lease will likely be unique in its 

aspects but all should support the NASA mission.”17

In 2008, Public Law 110-161 extended NASA’s EUL authority to all Centers but limited 

the Agency to accepting cash rather than in-kind consideration for any new leases. 

NASA subsequently placed a moratorium on EULs while it developed further guidance.

 

18

In June 2010, NASA published updated guidance, NPR 8800.15B, “Real Estate 

Management Program,” which directs the Centers to submit all EULs, regardless of 

scope, duration, or amount of revenue, to the Director, Facilities Engineering and Real 

Property Division, for review and approval, rescinding authority previously granted to 

Centers to enter into some EULs without prior review by Headquarters.

 

NASA revised its EUL Desk Guide in February 2010 and lifted the moratorium on EULs 

in March 2010. 

19

In November 2011, Public Law 112-55 restored NASA’s authority to accept in-kind 

consideration but only for leases related to the development of renewable energy 

production facilities.

 

20

Objectives

 

Given the Agency’s real property challenges and the potential for leasing to help address 

aspects of those challenges, we examined NASA’s leasing program and reviewed leasing 

operations at selected NASA Centers and component facilities: Ames; Glenn Research 

Center (Glenn) and its Plum Brook Station; Kennedy; Michoud Assembly Facility 

 

16 GAO Report, “NASA: Enhanced Use Leasing Program Needs Additional Controls” (GAO-07-306R, 

March 1, 2007). 

17 EUL financial policy was included in NASA Procedural Requirements (NPR) 9090.1, “Reimbursable 

Agreements,” finalized in September 2008.

18 NASA Associate Administrator Memorandum to all Center Directors, “Enhanced Use Leasing 

Agreements,” February 17, 2009. 

19 The Facilities Engineering and Real Property Division is now referred to as the Technical Capabilities 

and Real Property Management Division.

20 Public Law 112-55, “Consolidated and Further Continuing Appropriations Act, 2012,” November 18, 

2011.
INTRODUCTION

REPORT NO. IG-12-020 5 

(Michoud), a component of Marshall Space Flight Center; and Stennis. Specifically, we 

assessed whether NASA (1) effectively identified space available for lease to other 

entities, (2) effectively marketed its available space to potential Federal and non-Federal 

tenants, and (3) had effective internal controls to ensure that agreements provide the best 

value to the Government and are fair to potential tenants and to account for in-kind 

consideration received from EULs. See Appendix A for details of the audit’s scope and 

methodology, our review of internal controls, and a list of prior coverage. 
RESULTS

6 REPORT NO. IG-12-020 

NASA GUIDANCE FOR IDENTIFYING PROPERTY 

FOR LEASE IS UNCLEAR AND THE AGENCY 

LACKS A COMPREHENSIVE INVENTORY OF 

PROPERTY AVAILABLE FOR LEASING

Although NASA has made improvements to its leasing guidance, the Agency still 

faces significant challenges in identifying real property that is available for leasing.21

Challenges to Identifying Real Property Suitable for Leasing

 

Specifically, we found that the Centers have greater incentives to retain and lease 

underutilized property than to declare it excess to Agency needs so that it can be 

removed from NASA’s inventory. In addition, NASA’s leasing guidance does not 

make clear the criteria the Centers should use for determining if underutilized 

property has a current or future mission use and is therefore suitable for leasing. 

Accordingly, NASA may be leasing property that is more appropriate for excessing. 

We also found that NASA does not have a complete inventory of the space it has 

available to lease, making it more difficult for the Agency to maximize potential 

leasing opportunities and perform effective oversight of its leasing operations. 

The decision whether to lease or excess underutilized real property represents a difficult 

balancing act for NASA. On one hand, leasing could generate revenue to offset facilities 

operations and maintenance costs and potentially reduce some of the Agency’s deferred 

maintenance liability. On the other hand, retaining and leasing property that has no 

identified mission use hinders the Agency’s efforts to reduce its real property footprint 

and diverts focus and resources from NASA’s primary space, aeronautics, and science 

missions to property development and management. 

According to NASA policy, the Agency’s overall utilization goal is to put its facilities to 

their highest and best uses and to ensure that its inventory of facilities remains consistent 

with its program and institutional priorities.22

NASA Has Few Incentives to Identify Property as Unneeded. Centers may have valid 

reasons for retaining underutilized real property, such as a potential future mission use, 

the need to maintain a buffer area surrounding test and launch facilities, historical 

preservation, or the location of the property within the Center’s established boundary. 

 In sum, NASA should operate the 

minimum number of facilities and infrastructure required to conduct Agency programs 

and meet its varied responsibilities. 

 

21 In February 2010, NASA revised its 2008 EUL Desk Guide, and in June 2010 NASA issued NPR 

8800.15B, “Real Estate Management Program,” which included NASA’s first overall guidance for 

developing and managing real property agreements. 

22 NPR 8800.15B.
RESULTS

REPORT NO. IG-12-020 7 

However, according to Agency and Center officials, few incentives exist for NASA to 

identify underutilized property as unnecessary to its mission needs, a prerequisite to 

removing the property from the Agency’s jurisdiction and relieving NASA of the 

associated maintenance costs. For example, demolition can have significant up-front 

costs and there may be local and political opposition to disposing of facilities. Similarly, 

if NASA declares property excess and transfers it to GSA, any proceeds from a 

subsequent sale go to the general Treasury rather than NASA. In addition, it may be 

difficult for NASA to predict future mission needs and therefore give up technical or 

highly specialized assets that would be extremely expensive to replicate. For all of these 

reasons, leasing may be a more attractive option to NASA managers than disposing of the 

property. 

The Agency’s efforts to dispose of Hangar One – an iconic landmark built in the 1930s to 

house naval airships that is located at Ames’ Moffett Field – illustrate several of these

challenges. In April 2012, the NASA Administrator notified a member of Congress that 

because NASA no longer needed Hangar One and other property at Moffett Field, it was 

working with GSA to transfer the property for disposition.23 At the time, the massive 

hangar was being “de-skinned” to remove siding that was leeching toxic chemicals. Prior 

to the Administrator’s decision to transfer the hangar to GSA, a private company, H211, 

had proposed to evaluate the possibility of re-siding the hangar in return for rights to 

lease space in the hangar to house its private aircraft. Although, as stated in the 

Administrator’s April 2012 letter to a member of Congress, because NASA had no 

mission use for Hangar One or the other Moffett Field property it would not be consistent 

with Federal law for the Agency to lease the property to H211.24

Unclear Guidance for Determining Whether Underutilized Property Is Suitable for 

Lease. Although NASA improved its leasing guidance, we found that the Agency still 

needs to clarify the criteria the Centers should use for determining whether underutilized 

property is needed for a current or future mission and therefore suitable for leasing. Prior 

to 2010, NASA guidance did not specifically require a link to a NASA mission before 

underutilized property could be considered for leasing. In an effort to ensure Centers do 

not lease underutilized property that has no mission connection, NASA revised its leasing 

policy in June 2010 to mirror Federal guidance that directs agencies to reduce their 

unneeded property and overall footprint. Specifically, the policy states that, with limited 

exceptions, only real property that has a current or future mission use should be 

considered for leasing.

 The Administrator’s 

action nevertheless sparked significant opposition from members of Congress, local 

residents, and the media. 

25

 

23 We reported on the re-siding project in “NASA’s Hangar One Re-Siding Project” (IG-11-020, June 22, 

2011). We questioned whether NASA spending $32.8 million to re-side the hangar was the best use of 

the Agency’s limited funding given that the Agency had no identified mission need for the building and 

had other higher priority and mission-critical renovation projects.

 Absent an identified current or future use, Center Directors 

24 40 U.S.C. § 524. 

25 NPR 8800.15B, Excess property, as defined in 40 U.S.C. 472(e), is property under the control of a 

Federal agency that is not required for its needs and the discharge of its responsibilities as determined by

the head of the agency.
RESULTS

8 REPORT NO. IG-12-020 

must provide a justification for retaining the property and request approval from NASA 

Headquarters to do so.26

Despite these improvements, the revised policy does not adequately explain the criteria 

Centers should use to determine whether property has a current or future mission use. 

For example, the policy does not direct the Centers to request formal input from Mission 

Directorates regarding their real property needs and future plans or suggest consideration 

of such factors as the cost of rebuilding unique assets. 

 

The difficult choices NASA faces in determining whether property is suitable for leasing 

are demonstrated by several current leasing agreements at Ames and Plum Brook Station 

that were entered into prior to the 2010 change in NASA policy. In 2008, Ames entered 

into two EUL agreements: 

• The first with Planetary Ventures for 42 acres of undeveloped land for a 

maximum 90-year term to develop business and research-related facilities on the 

property.27

• The second with University Associates for 77 acres of land for a maximum 

90-year term to develop business, education, research, and housing facilities on 

the property.

 NASA is receiving both cash and in-kind consideration in the form of 

infrastructure improvements under this agreement.

28

Figure 1 shows the location of the property covered by these agreements. 

 Although the agreement calls for NASA to receive both cash and 

in-kind consideration for infrastructure improvements, as of February 2012 

University Associates had not begun the planned improvements. 

 

26 Approvals are granted by the Director of the Technical Capabilities and Real Property Management 

Division.

27 Planetary Ventures is a Delaware-incorporated limited liability company owned by Google, Incorporated. 

28 University Associates is a nonprofit Silicon Valley limited liability company formed by the University of 

California, Santa Cruz, and Foothill-De Anza Community College District to provide integrated 

academic and research programs. Several NASA buildings on this parcel are currently slated to be 

demolished by University Associates.
RESULTS

REPORT NO. IG-12-020 9 

Figure 1. Ames Land Involved in Two Lease Agreements

Source: Map from Ames Research Center; captions added 

by the OIG.

Part of the Ames campus has been designated as the Shenandoah Plaza Historic District 

and NASA has an obligation under Federal law to preserve this area. Ames has 

developed a research park in portions of the Center including the Historic District, which

has been recognized for its preservation efforts. However, the parcels of land Ames 

leased to Planetary Ventures and University Associates are outside the Historic District 

and Ames did not identify a mission use for the parcels other than enabling collaboration 

with external partners. Furthermore, the agreements are not contingent on any formal 

collaboration between the lessees and NASA. 

Similarly, in January 2009 and May 2010 Glenn leased two parcels of land totaling 

approximately 900 acres outside the fence line at Plum Brook Station to private entities

for agricultural use. According to Glenn’s 20-year Facilities Master Plan, NASA hopes 

to someday develop this land into a visitors’ center and technology park. 

Approximate

location of 

Planetary Ventures 

lease agreement.

Approximate

location of 

University 

Associates lease 

agreement.
RESULTS

10 REPORT NO. IG-12-020 

Plum Brook Station is shown in Figure 2 and the leased land is marked as “Agricultural 

Buffer Area.” Although Glenn officials identified the land as “Buffer Area,” they could 

not provide documentation to support safety-based or other reasons why such a buffer 

zone was required. 

Figure 2. Plum Brook Station Land Involved in Glenn’s Lease Agreements

Source: Glenn Research Center’s 20-year master plan; captions added by OIG.

As noted above, all of these leases were entered into prior to NASA’s 2010 guidance 

requiring a mission-related use for property considered for leasing; consequently, we are 

not suggesting that the Centers acted inappropriately by entering into these agreements. 

However, looking forward NASA may miss opportunities to reduce its real property 

footprint if it leases rather than excesses properties like these Ames and Plum Brook 

Station parcels. 

In sum, we found that NASA policy is unclear regarding what criteria the Centers should 

use to evaluate whether to retain and lease underutilized Agency property rather than

dispose of it. Without guidance that more clearly articulates what constitutes a NASA 

mission, the Agency may be missing significant opportunities to reduce its real property 

footprint and decrease associated operations and maintenance costs.

Approximate locations of 

agricultural lease agreements.
RESULTS

REPORT NO. IG-12-020 11

Incomplete Inventory of Space Available to Lease

NASA’s lack of a complete inventory of space available to lease makes it more difficult 

for the Agency to manage its leasing efforts effectively, to advertise available space to 

potential tenants, and to match potential tenants with the space that best fits their needs. 

Although the Centers are required to identify underutilized real property suitable for 

lease, none of the five Centers we visited had compiled complete inventories of available 

land and buildings. Ames managers had a list of buildings and land in the NASA 

Research Park available for lease, but it did not include any buildings on the main Ames 

campus. Similarly, Kennedy’s inventory included facilities within its launch complexes

but no land or buildings located on other parts of the Center, and Stennis had a complete 

inventory of buildings but had not identified underutilized land. 

Managers at Glenn and Michoud could not provide us with a formal inventory of 

available properties. According to Glenn personnel, the Center had very little 

underutilized space at its Cleveland campus. However, we estimated that Glenn had over 

500 acres of underutilized land within the core of its Plum Brook Station facility. 

According to Michoud personnel, approximately 40–60 percent of their facilities were 

underutilized and therefore potentially available for lease but because of uncertainties 

about future requirements for NASA programs they had not identified the precise areas 

that could be leased. After our visit to Michoud, officials told us they have received more 

definitive information about NASA’s needs and implemented a space management 

tracking system that identifies underutilized space suitable for leasing. 

We acknowledge that identifying potentially leasable space is challenging given the 

Agency’s changing and uncertain mission requirements and the current lack of guidance 

regarding how to evaluate current or future mission needs. However, identifying and 

maintaining inventories of real property available for lease is essential to effective 

marketing of potential leasing opportunities. Moreover, according to NASA policy the 

identification of underutilized real property assets should be part of a continuous process 

so that as future mission requirements become more firm Centers can efficiently and 

effectively identify leasable property.

29

 

29 NPR 8800.15B. 

 
RESULTS

12 REPORT NO. IG-12-020 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

To improve management of NASA’s real property leasing program, we made the following 

recommendations to the Associate Administrator for Mission Support: 

Recommendation 1. Clarify the criteria Centers should use to determine whether 

underutilized property has a current or future mission-related use and provide training to 

Center personnel on the revised criteria. 

Management’s Response. The Associate Administrator concurred with our 

recommendation, stating that while NASA’s current policy addresses this item the 

Agency agrees that the policy could be strengthened to ensure Centers have clearer 

statements of requirements relating to NASA’s leasing program. The Associate 

Administrator said management will draft and submit for official review the revised 

policy by the end of calendar year 2012.

Evaluation of Management’s Response. Management’s comments are responsive; 

therefore, the recommendation is resolved and will be closed upon verification and 

completion of the proposed corrective actions. 

Recommendation 2. Coordinate with the Centers to develop a process to maintain a 

complete inventory of real property available for leasing. 

Management’s Response. The Associate Administrator concurred with our 

recommendation, stating that NASA will include the requirement for Centers to identify 

and maintain a complete inventory of real property leasing opportunities in its revised 

policy. In addition, NASA will establish within its Real Property Management System 

the capability for Centers to identify and maintain inventory of real property leasing

opportunities and request that Centers submit a complete inventory of real property 

leasing opportunities by the end of calendar year 2012.

Evaluation of Management’s Response. Management’s proposed actions are 

responsive; therefore, the recommendation is resolved and will be closed upon 

verification and completion of the proposed corrective actions. 
RESULTS

REPORT NO. IG-12-020 13

CENTERS DID NOT ADEQUATELY MARKET 

THEIR PROPERTIES FOR LEASING 

The Centers we visited generally relied on informal “word-of-mouth” efforts to 

attract new leasing clients. However, NASA could take additional steps to market its 

leasing opportunities more effectively to Federal and non-Federal entities. For 

example, NASA had not coordinated with the GSA Office of Client Solutions to 

promote leasing opportunities to Federal entities and the Centers had not consistently 

published leasing opportunities to the widest-possible market to attract non-Federal 

tenants. Unless it expands its marketing efforts, NASA may not realize the full 

benefits of its leasing authority. 

Marketing to Federal Entities

We found that the NASA Centers we visited had not effectively marketed leasing 

opportunities to other Federal entities. In our judgment, giving preference to Federal 

agencies would promote the Federal Government’s goal of reducing the costs of 

maintaining facilities and consolidating its overall real property inventory. The President 

and the Office of Management and Budget (OMB) issued memorandums in 2010 and 

2011 directing Federal agencies to realign and consolidate Government-wide real 

property inventories. However, NASA has not provided guidance to its Centers about 

giving other Federal agencies preference for leasing opportunities. In addition, none of 

the five Centers we visited had formal marketing plans to identify or attract Federal 

tenants. Rather, the Centers primarily relied on informal word-of-mouth efforts to attract 

new tenants. 

Although word-of-mouth can be an effective tool to attract Federal tenants and at least at 

Stennis has appeared to work successfully (Stennis is known as a “Federal City”), NASA

could improve its marketing efforts by coordinating with the GSA Office of Client 

Solutions to identify potential Federal tenants.

30

 

30 In the mid-1970s, Stennis adopted a multi-agency facility concept to better utilize its Federal land. 

Stennis now supports Federal tenants including the Navy, the National Oceanic and Atmospheric 

Administration, and the Environmental Protection Agency. 

 One of GSA’s missions is to provide 

facilities and workspace to Federal agencies, which look to GSA when they need to 

acquire space. By failing to coordinate with the GSA Office of Client Solutions, NASA 

may be missing opportunities to lease its underutilized property and other Federal 

agencies may be missing opportunities to use existing space in the larger Federal 

inventory. GSA staff we spoke with indicated a willingness to work with NASA to 

increase efficiency in back-filling vacant space, sharing existing space, and maximizing 

utilization of property between NASA and other agencies. Such coordination would 
RESULTS

14 REPORT NO. IG-12-020 

align with plans for cutting waste by pursuing consolidation opportunities within and 

across Federal agencies as outlined in OMB’s Accountable Government Initiative.31

Marketing to Non-Federal Entities 

 

We also found that Centers could improve their marketing efforts to non-Federal entities. 

According to NASA guidance, Centers should ensure that the intent to lease land or 

facilities to non-Federal entities is made available to the widest possible competitive 

market and the guidance suggests publishing leasing opportunities on public websites. 

However, the Centers we visited generally limited their marketing efforts to informal 

word-of-mouth outreach. For example, officials at several Centers we spoke with said 

they notify State development organizations, local media, attendees at tradeshows, and 

existing tenants about available space. Although this method has been successful in 

many cases and should be continued, additional opportunities exist to expand Centers’ 

marketing efforts. For example, we found that the Centers did not consistently publish 

opportunities to nationwide markets or make use of Government-operated websites such 

as FedBizOpps.32

We determined that inadequate marketing stemmed from Center personnel’s lack of 

knowledge about available options for publishing leasing opportunities or reluctance to 

widely disseminate information about real property for fear that outside agencies might 

question why NASA was retaining the property. If potential tenants are not aware of 

opportunities to lease buildings or land at NASA Centers, the Agency may be missing 

opportunities to earn revenue that could be used to defray the costs of maintaining its 

aging infrastructure. 

 Specifically, we found 10 instances at 4 Centers we visited where we 

believe it would have been prudent for Centers to market leasing opportunities on a 

national level in order to ensure the greatest level of competition. 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

To improve management of NASA’s real property leasing program and maximize its leasing 

potential, we made the following recommendations to the Associate Administrator for 

Mission Support: 

Recommendation 3. Develop guidance that requires increased consideration of Federal 

entities for leasing opportunities and coordination with GSA to identify potential Federal 

tenants. 

 

31 Memorandum for the Senior Executive Service from OMB, “The Accountable Government Initiative – 

an Update on Our Performance Management Agenda,” September 14, 2010. 

32 FedBizOpps is a database of Federal Government contracting opportunities, including notices of 

proposed Government procurement actions, contract awards, and sales and leases of Government assets.
RESULTS

REPORT NO. IG-12-020 15

Management’s Response. The Associate Administrator partially concurred with our 

recommendation, noting that NASA’s current policy addresses this item but agreeing that

the policy could be strengthened to ensure that Centers have clearer requirements relating 

to the Agency’s leasing program. The Associate Administrator stated that revisions to 

the existing policy will be drafted and submitted for official review by the end of 

calendar year 2012.

Evaluation of Management’s Response. We consider the Associate Administrator’s 

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 

Recommendation 4. Develop guidance and training for personnel addressing the 

requirements and best practices for marketing leasing opportunities to non-Federal entities.

Management’s Response. The Associate Administrator partially concurred with our 

recommendation, noting that NASA’s current policy addresses this item but agreeing that 

the policy could be strengthened to ensure Centers have clearer statements of 

requirements relating to best practices for marketing leasing opportunities to non-federal

entities. The Associate Administrator stated that changes to the Agency’s existing policy 

would be drafted and submitted for official review by the end of calendar year 2012. In 

addition, the Associate Administrator stated that further guidance relating to this subject 

has been provided in the Real Property Desk Guide and that this information was 

presented at training in June 2012. 

Evaluation of Management’s Response. We consider the Associate Administrator’s

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 
RESULTS

16 REPORT NO. IG-12-020 

INTERNAL CONTROLS NEED STRENGTHENING TO 

ENSURE THE BEST VALUE TO THE 

GOVERNMENT AND FAIRNESS TO PARTNERS 

FOR REAL PROPERTY AGREEMENTS 

We found that NASA personnel at four of the five Centers we visited did not 

consistently use competition to ensure the best value to the Government for real 

property agreements with non-Federal entities. In addition, three Centers did not 

conduct a required market analysis or used the analysis inappropriately when 

developing pricing, and three Centers entered into lease agreements signed by 

unauthorized personnel.33

Internal Controls Need Strengthening to Ensure Competition Is 

Used Where Appropriate

 The overriding factors contributing to these conditions 

were inadequate internal controls, particularly in training and guidance, and lack of 

documentation that led to confusion on how and when to use competition, when to 

use market analysis to develop pricing, and who has the proper signature authority. 

Without stronger internal controls, it will be difficult for NASA to ensure that the 

Agency is receiving the best possible benefits from its real property agreements and 

that the agreements are legally binding.

NASA did not have sufficient internal controls to ensure competition was used where 

appropriate for its real property agreements with non-Federal entities.34 Although NASA 

is not required to follow the Federal Acquisition Regulation when leasing real property, 

according to NASA guidance competition should be used when appropriate to ensure the 

best value to the Government and fairness to all potential tenants.35

We examined 48 leasing agreements to determine whether they involved circumstances 

in which competition would have been appropriate. We based our determination on the 

desirability of the property, the duration of the lease, the amount of property involved, 

and whether more than one party had expressed interest. Based on these factors, we 

identified 17 agreements where we believe competition would have been appropriate. 

We found that the Centers took appropriate steps to ensure competition before entering 

into 6 of the 17 agreements, but either failed to do so or could not provide adequate 

evidence that they had done so for the other 11 agreements. 

 

 

33 The best value is the most advantageous balance of revenue and compatibility with NASA’s mission 

achieved through competitive methods that provides the greatest overall benefit to the Government.

34 Competition is generally not required when making agreements with other Federal agencies. In fact, the 

Economy Act of 1932 directs agencies to price services to other agencies based on estimated or actual 

costs. 

35 Competition may not be appropriate when a mutually beneficial relationship exists with an entity that 

directly relates to the real property or when a cost-based NASA contractor is searching for space. 
RESULTS

REPORT NO. IG-12-020 17

The following leases at Ames and Glenn are examples of where competition was used 

appropriately. 

• In 2005, Ames issued a Request for Proposal (RFP) to locate a tenant for its 

animal care facility. Although Ames received only one qualified proposal, the 

announcement of the opportunity was sent to eight entities and the resulting 

agreement appeared to provide NASA with the best benefit possible. Ames also 

maintains a public website where it publishes the availability of property within 

the Center-controlled NASA Research Park and Moffett Field.36

• In November 2008, Glenn issued an RFP to lease 13 plots of land at Plum Brook 

Station for agricultural use.

 Within our 

sample, we identified three other leasing agreements that resulted from use of this 

website. 

37

The following leases are examples where we believe the Centers should have taken 

additional steps to ensure the competitive process was transparent or where Centers failed 

to document that the tenant chosen represented the best value to the Government. 

 Glenn appropriately applied a competitive process 

to leasing the properties by posting the RFP at local post offices and through 

outreach to area farm associations. Glenn received 37 proposals for the 13 plots 

of land. Glenn based the competition solely on price, and the agreements 

appeared to provide NASA with the best benefit possible. 

• As previously discussed, Ames entered into lease agreements with Planetary 

Ventures and University Associates in 2008 for 42 and 77 acres of land 

respectively. According to Ames personnel, they contacted local media, other 

research partners, and existing tenants to inform them of the availability of this 

land. These efforts attracted a number of parties interested in leasing the land. 

However, Ames did not publish the announcement or identify the specific 

location of the land to a national market. In addition, although Ames personnel 

told us they chose the current tenants because they met the Center’s overall goals 

for use of the land and provided the best value to NASA, they could not document 

their analyses or the methodology they used to narrow the competition to the 

current tenants. Given the relatively narrow search and lack of documented 

analyses, it is unclear whether these leases provided the best value to NASA. 

• In July 2007, Ames entered into a 2-year EUL agreement, later extended to 

7 years, that provides H211 the use of over 69,000 square feet of space in a 

hangar at Moffett Field. Ames used a market estimate to determine the price of 

the lease agreement. In FY 2011, this agreement generated over $1.1 million in 

cash. This type of agreement – leasing space in an underutilized hangar to a 

 

36 http://researchpark.arc.nasa.gov/ (accessed July 5, 2012). 

37 This is the same property discussed on page 8. Note that our sample of 48 real property agreements 

included only 2 of the 13 agricultural agreements.
RESULTS

18 REPORT NO. IG-12-020 

private entity to maintain aircraft – is consistent with NASA guidance and 

applicable laws. 

According to Center personnel, H211 knew about the unused hangar space 

because of dealings the company had with Ames on other matters and unilaterally 

approached the Center to inquire about leasing the hangar to house the company’s 

passenger aircraft. According to Center officials, NASA and H211 have 

conducted 155 flights in support of scientific research-related missions using the 

company’s Alpha Jet or other aircraft. 

Although there was no specific requirement that Ames publish the availability of 

the hangar space to other parties before leasing it to H211, an official 

announcement of the hangar’s availability would have ensured a more transparent 

leasing process as well as fairness to other interested parties.38

Figure 3. H211 Alpha Jet Plane at 

Ames Research Center’s Moffett Field

 

Source: NASA photograph. 

• In October 2011, Kennedy entered into an agreement with Space Florida for a 

maximum term of 21 years for use of the Orbiter Processing Facility 3 (OPF3), 

the Processing Control Center, and other peripheral buildings.39

 

38 In May 2012, Senator Charles Grassley, Ranking Member of the Senate Committee on the Judiciary, sent 

a letter to the NASA Administrator requesting additional information on the Planetary Ventures and 

H211 partnerships with NASA, including their activities at Moffett Field. 

 Kennedy 

managers conducted outreach and published the availability of the properties on 

the FedBizOpps webpage and received seven responses of interest in one or more 

of the properties. However, according to a Kennedy official, Kennedy and Space 

Florida have a long-standing partnership and the Center was in discussions with 

Space Florida to lease the OPF3 properties prior to the public notification. The 

39 Space Florida is an independent agent of the State of Florida created to foster the growth and 

development of a sustainable space industry in Florida.
RESULTS

REPORT NO. IG-12-020 19

official indicated that Space Florida was always the preferred tenant for these 

properties and the public notification was only to comply with NASA regulations. 

Other Kennedy officials said, that in making their selection, they determined that 

only Space Florida would be ready to lease the property in June 2011 and that 

timing was the reason the other parties were not considered. However, according 

to a Space Shuttle Transition and Retirement Program official we spoke with, 

NASA was not scheduled to vacate the majority of the facilities covered by the 

agreement until January 2012 and all the facilities until May 2012. Moreover, the 

lease with Space Florida was not signed until October 2011 and, as of January 

2012, NASA still had personnel in all of the primary facilities and was providing 

funding for the majority of the maintenance and utilities of these facilities. 

Therefore, even though Kennedy officials used schedule as their primary selection 

criteria, other parties may have been ready to lease the property by the time the 

property was available and were, therefore, excluded prematurely.

• In July 2010, Michoud entered into a real property agreement with Blade 

Dynamics for over 29,000 square feet of manufacturing and office space where 

Blade Dynamics plans to manufacture wind turbine blades. According to 

Michoud personnel, they contacted State development organizations, local media, 

and trade shows to identify possible tenants for unused space at Michoud. 

However, Michoud officials did not publicize the availability of this space to a 

national market. 

In these cases, we question the thoroughness and fairness of the solicitation process and 

ultimately could not determine if NASA was receiving the best value from these 

agreements. According to Center officials we interviewed, many of these issues resulted

from inadequate guidance on when to use competition. Specifically, the current guidance 

does not explain when it is appropriate to use competition, how the competition should 

take place, or what information should be retained as part of the Center’s official records

to document the solicitation and decision process. Without clear guidance, it will be 

difficult for the Centers to determine how and when competition should be used. 

Moreover, without documenting the Center’s decision process, it is difficult to determine 

whether the lease agreements resulted from an open process that was fair to all potential 

tenants and whether NASA is receiving the best value on these long-term agreements. 

Inconsistent Adherence to Pricing Policy for Real Property 

Agreements 

Of the 51 agreements we assessed, we found 9 cases from three of the five Centers where 

the Centers did not price real property agreements in accordance with NASA policy.

40

 

40 For this section of the report, we added 3 agreements to our sample as a result of Glenn personnel 

identifying additional agreements that did not conform to pricing guidance but were outside the 

timeframe of our original sample. 

 
RESULTS

20 REPORT NO. IG-12-020 

We determined that four of these agreements were priced at rates that were not fully 

beneficial to NASA. 

Pricing guidance is different for Federal and non-Federal tenants. Government policy 

requires Federal agencies to price goods or services provided to another Federal agency 

at the estimated or actual costs of those goods or services, a requirement also reflected in 

NASA guidance.41 When leasing to non-Federal entities, NASA policy generally 

requires that the Centers conduct a market analysis to ensure the Agency does not 

inappropriately compete for potential tenants with owners of private facilities.

42

Market Analysis for Non-Federal Tenants. We found five cases – one at Stennis and 

four at Michoud – where market analyses were not conducted before lease agreements 

with non-Federal tenants were signed. In one of these cases, we determined that the 

Agency undercharged the tenants, which gave the tenant an unfair cost advantage over its 

competitors and resulted in NASA unfairly competing with private industry by charging 

less than the prevailing market rates. In lieu of a market analysis, both Michoud and 

Stennis priced the real property agreements based on the Center’s costs. 

 

• Michoud had four active agreements where managers did not conduct market 

analyses prior to entering into lease agreements with private parties. Michoud 

completed a market analysis for these properties in 2011 and determined that the 

rents the Center was charging were consistent with the market rates.

• Stennis appears to be pricing an agreement with Rolls Royce below the market 

rate for its buildings and charges no rent for the use of NASA land. Specifically, 

Stennis officials were charging Rolls Royce $2.14 per square foot annually for 

office space.

43

 

41 The Economy Act of 1932 requires Federal agencies to price goods or services provided to another 

Federal agency at the estimated or actual cost for those goods or services. NPR 9090.1, “Reimbursable 

Agreements,” provides the same direction to NASA organizations. 

 Stennis had not performed a market analysis to set the rent and the 

amount charged covered only its estimated costs. A market analysis, as required 

by NASA policy, would clarify the appropriate rate for future Stennis agreements. 

Moreover, in addition to the buildings that Rolls-Royce is leasing from Stennis, 

the company also constructed four additional buildings or structures for their use 

on Center-owned land. However, Rolls-Royce is not paying any additional rent 

for this land and we question the basis for and appropriateness of this 

arrangement. 

42 NPR 9080.1G, “Review, Approval, and Imposition of User Charges.” OMB Circular A-25, “User 

Charges,” July 1993, also requires user charges to be based on market prices when the Government, not 

acting in its capacity as a sovereign, is leasing or selling goods or resources or is providing a service 

(e.g., leasing space in federally owned buildings). 

43 A market analysis completed by officials at Michoud, approximately 40 miles from Stennis, determined 

that local office space in the Michoud region rents for between $8.50 and $13.50 per square foot. The 

rates at Michoud would be expected to be higher than at Stennis given Michoud’s proximity to New 

Orleans, but absent market analysis, it is unclear whether this alone accounts for the substantial 

difference in the two rates. 
RESULTS

REPORT NO. IG-12-020 21

Pricing for Federal Tenants. In other cases, the Agency leased real property to Federal 

tenants at rates that were not consistently beneficial to NASA. Specifically, we found

that Glenn managers incorrectly priced four agreements with Federal tenants by 

inappropriately using a market analysis as a basis to price these property agreements.44

Center personnel at both Glenn and Stennis said it was unclear when they should use 

market analyses to establish lease costs. As a result of the different understandings of 

Center personnel and the resulting inconsistent adherence to policy, the Centers leased 

real property at rates that were not fully beneficial to NASA. 

 

As discussed above, NASA is required to use actual or estimated costs as the basis to 

determine the rent for Federal tenants. However, Glenn charged its Federal tenants 

almost $70,000 less than the estimated costs for operations and maintenance of the 

facilities. Glenn personnel said they plan to adjust the pricing of these leases when the 

current agreements expire in 2013. 

Real Property Agreements Were Improperly Signed 

Of the 48 real property agreements we reviewed at the Centers, we found 13 signed by 

individuals who lacked the authority to bind the Agency.45 According to the Code of 

Federal Regulations (C.F.R.), Center Directors or their designees do not have the 

authority to sign agreements for terms longer than 5 years.46 In addition, the C.F.R. 

stipulates that all agreements signed by Center Directors are required to contain a specific 

termination clause. Pursuant to the C.F.R., Center Directors may delegate their signature 

authority to two subordinates. Of these 13 agreements, 6 were for terms longer than 

5 years and 8 did not contain the required termination clause.47

In 2010, NASA initiated a new process to route real property agreements through the 

Technical Capabilities and Real Property Management Division at NASA Headquarters. 

According to Center officials, the Directors may not have been fully aware of the 

limitations the C.F.R places on their signature authority. 

 In addition, 5 were 

signed by personnel who had not received delegated authority from the Center Director. 

For example, the 30-year agreement signed in May 1998 by the Stennis Center Director 

with Boeing North American Inc. for use of the B-1 Test Stand did not contain the 

required termination clause. In addition, because the agreement was for more than 

5 years, the Center Director was not authorized to sign for the Agency. 

 

44 In one of the four agreements with Federal partners, Glenn charged more than the Center’s estimated 

costs.

45 These 13 agreements included 3 at Kennedy, 5 at Marshall (for Michoud), and 5 at Stennis.

46 14 C.F.R. 1204.503, “Delegation of Authority to Grant Easements,” and 14 C.F.R. 1204.504, 

“Delegation of Authority to Grant Leaseholds, Permits, and Licenses in Real Property.”

47 The numbers add to more than 13 due to some leases fitting into multiple categories. For example, a 

lease may have been for longer than 5 years and also failed to contain the required termination clause.
RESULTS

22 REPORT NO. IG-12-020 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

Recommendation 5. The Associate Administrator for Mission Support should clarify 

guidance to ensure the widest possible publication of leasing opportunities and competition 

when appropriate. 

Management’s Response. The Associate Administrator partially concurred with our 

recommendation, noting that NASA’s current policy addresses this item but agreeing that 

the policy could be strengthened to articulate that leasing opportunities should be widely 

publicized. The Associate Administrator stated that changes to the Agency’s existing 

policy will be drafted and submitted for official review by the end of calendar year 2012. 

Evaluation of Management’s Response. We consider the Associate Administrator’s 

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 

Recommendation 6. The Associate Administrator for Mission Support should instruct 

Center management of the limitations of their signature authority regarding real property 

agreements. 

Management’s Response. The Associate Administrator partially concurred with our 

recommendation, noting that NASA’s current policy addresses this item but agreeing that 

the policy could be strengthened to clearly articulate Center management roles and 

responsibilities for lease agreements. The Associate Administrator stated that changes to 

the Agency’s existing policy will be drafted and submitted for official review by the end 

of calendar year 2012. 

Evaluation of Management’s Response. We consider the Associate Administrator’s 

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 

Recommendation 7. The Associate Administrator for Mission Support should review all

real property agreements to ensure they are consistent with applicable statutes and 

regulations regarding proper signature authority and required contractual terms. 

Management’s Response. The Associate Administrator concurred with our 

recommendation, stating that NASA will review and revise its policy to ensure that 

appropriate guidance is provided to Centers relating to the applicable statutes and 

regulations regarding signature authority and require the Centers to review all existing 

agreements for compliance with Agency leasing requirements. Finally, the Technical 

Capabilities and Real Property Management Division will conduct reviews of existing 

Center leasing agreements during fiscal year 2013. 
RESULTS

REPORT NO. IG-12-020 23

Evaluation of Management’s Response. We consider the Associate Administrator’s 

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 
RESULTS

24 REPORT NO. IG-12-020 

NASA’S REPORTING OF IN-KIND CONSIDERATION 

IS IMPROVING BUT IN-KIND BENEFITS WERE 

NOT CONSISTENTLY REALIZED

NASA is improving its reporting of the in-kind consideration received from EULs in 

its financial records, and Centers have achieved some benefits through EUL 

agreements. However, of the eight in-kind EUL agreements we reviewed, NASA 

did not receive any benefit from one agreement and received limited benefits from 

three others. This occurred because NASA does not have adequate guidance for

determining whether in-kind consideration provides the best value to NASA. 

NASA’s Reporting of In-Kind Consideration Is Improving

According to NASA guidance, in-kind consideration may consist of expenses associated 

with property repairs, upgrades, or capital improvements that improve or extend the 

useful life of Agency property or other services rendered by the lessee. In 2007, GAO 

reported that NASA did not have adequate controls in place to report in-kind 

consideration received from its EUL agreements.

48

In-Kind Benefits Were Not Consistently Realized

 In response, NASA issued guidance 

for both the financial and facilities management of real property agreements, which 

included specific procedures for EULs. Although this guidance was issued in 2008, 

Kennedy had not recorded the Center’s in-kind consideration as directed by the guidance. 

As a result of this audit, Kennedy’s personnel are in the process of identifying the value 

of the in-kind consideration and plan to record the consideration as directed by NASA 

guidance. 

We found that NASA was not consistent in maximizing the potential of the in-kind 

benefits it accepted as part of EULs. Of the eight agreements we reviewed, we found two

in which NASA received mission-related benefits; five in which NASA received 

improvements to the property but no direct mission-related benefits; and one in which 

NASA received no benefit. 

In-Kind Benefits Fully Realized. In two agreements, NASA received mission-related 

benefits in the form of in-kind consideration. In an agreement with Florida Power and 

Light Company, Kennedy provides undeveloped land and Florida Power and Light 

provides the Center with a one-megawatt solar power facility that meets about 1 percent 

of the Center’s electric power demand. This agreement benefits Kennedy by providing 

 

48 GAO Report, “NASA Enhanced Use Lease Program Needs Additional Controls” (GAO-07-306R, 

March 1, 2007). 
RESULTS

REPORT NO. IG-12-020 25

about half of the energy needed to meet the Center’s goal for the use of renewable 

energy. In a separate agreement with Lifesource Biomedical, Ames provides an animal 

care facility and, in lieu of some cash payments, Lifesource Biomedical provides care for 

animals involved in NASA research programs. 

In-Kind Benefits Not Clearly Mission Related. We also identified five agreements in 

which NASA received improvements to the property but no direct mission-related 

benefits. In three cases, the Centers entered into agreements pursuant to which the 

tenants would develop land for business or educational use. The in-kind consideration

was in the form of infrastructure improvements, such as installing roads and utilities.

49

In the other two agreements, both located at Ames, Bloom Energy renovated the building 

it occupies and H211 removed a skywalk in the hangar it leases at Moffett Field. NASA 

accepted the cost of these renovations as in-kind payment.

 

Although NASA may accept such infrastructure improvements pursuant to its EUL 

authority, in our judgment they provide little benefit to the Agency when the terms of the 

lease agreements at issue are as long as 90 years. With agreements of such length, most 

of the improvements appear to benefit the current tenants rather than NASA. 

Accordingly, we question the value of such arrangements to the Agency. 

50

In-Kind Benefits Not Realized. For one real property agreement with General 

Dynamics at Ames, NASA did not receive any benefit. In February 2008, Ames entered 

into an agreement under which General Dynamics would place two satellite antennas on 

Ames property (see Figure 4). As in-kind consideration, Ames accepted the part-time use 

of the satellite antennas, which Ames personnel planned to use in connection with several 

planned small satellite missions. However, Headquarters did not grant approval to use 

the antennas and therefore Ames has not realized any benefit from this agreement. Ames 

officials said they do not expect to renew the agreement when it expires in December 

2012. 

 Although these in-kind 

benefits were not clearly mission related, these are short-term agreements and the 

improvements could benefit NASA if the properties revert to the Agency. 

 

49 In one agreement with Planetary Ventures, the tenant agreed to relocate a cooling tower and construct a 

recreational field, improvements that once completed would provide an immediate benefit to the Agency. 

50 Bloom Energy is a private company that develops and produces power generation systems that utilize a 

new fuel cell technology. 
RESULTS

26 REPORT NO. IG-12-020 

Figure 4. Antennas at Ames Research Center

Source: OIG photograph.

In-kind benefits were not consistently realized because NASA did not have adequate 

guidance as to what services or goods should be accepted as in-kind consideration. 

Without adequate guidance on determining whether proposed in-kind consideration is the 

best value to the Government, NASA may not fully realize the benefits of its authority to 

accept in-kind consideration associated with renewable energy production. 

Recommendation, Management’s Response, and Evaluation of 

Management’s Response

Recommendation 8. We recommended that the Associate Administrator for Mission 

Support develop guidance for determining whether in-kind consideration provides the best 

value to the Government. 

Management’s Response. The Associate Administrator partially concurred with our 

recommendation, noting that NASA’s current policy addresses this item but agreeing that 

the policy could be strengthened to ensure the Centers have clearer requirements related 

to the Agency’s leasing program. The Associate Administrator further noted that 

although at the start of the audit NASA did not have the authority to accept in-kind 

considerations, under the 2012 Consolidated and Further Continuing Appropriations Act 

the Agency may accept in-kind consideration for leases entered into for the purpose of 

developing renewable energy production facilities. The Associate Administrator stated 

that changes to Agency policy will be drafted and submitted for official review by the 

end of calendar year 2012.

Evaluation of Management’s Response. We consider the Associate Administrator’s 

proposed corrective actions responsive; therefore, the recommendation is resolved and 

will be closed upon verification and completion of the proposed corrective actions. 
APPENDIXES

REPORT NO. IG-12-020 27

APPENDIX A 

Scope and Methodology

We performed this audit from July 2011 through July 2012 in accordance with generally 

accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based on 

our audit objectives. 

We reviewed real property agreement requirements contained in the following NASA 

policy, as well as Center-specific policy that corresponded with the NASA guidance: 

• NASA Policy Directive (NPD) 1050.1I, “Authority to Enter Into Space Act 

Agreements,” December 23, 2008, and NASA Advisory Implementing Instruction 

(NAII) 1050-1B, “Space Act Agreements Guide,” June 10, 2011. 

• NPD 8800.14D, “Policy for Real Estate Management (Revalidated, October 14, 

2009),” July 15, 2004. 

• NPR 8800.15B, “Real Estate Management Program,” June 21, 2010, and the 

previous version, NPR 8800.15A, “Real Estate Management Program 

Implementation Manual,” June 1998.

• NPR 9090.1, “Reimbursable Agreements,” September 30, 2008. 

• NPD 9080.1G, “Review, Approval, and Imposition of User Charges (Revalidated 

w/admin changes 8/28/09),” October 14, 2004. 

• “NASA Desk Guide for Enhanced Use Leasing of Real Property,” Revised 

February 2010, with earlier versions dated July 11, 2007, and December 29, 2008. 

We reviewed real property agreement requirements contained in several Federal laws and 

policy documents as they related to NASA, as described in Appendix B. 

To determine whether NASA effectively identified space available for lease to other 

entities, we interviewed real property and facility managers at NASA Headquarters and 

the following NASA Centers and component facilities: Ames Research Center, Glenn 

Research Center and its Plum Brook Station, Kennedy Space Center, Michoud Assembly 

Facility (a component of Marshall Space Flight Center), and Stennis Space Center. We 

also toured each of the NASA Centers identified above. Additionally, we coordinated 
APPENDIX A 

28 REPORT NO. IG-12-020 

with officials at GSA to determine GSA practices for leasing real property to other 

Federal agencies.

To determine whether NASA appropriately used competition to ensure best value to the 

Government and fairness to potential tenants and whether NASA effectively marketed its 

available space to potential Federal and non-Federal tenants, we conducted in-depth 

reviews with real property managers, legal counsel, and other relevant Center officials at 

each of the Centers we visited. We performed a preliminary review of 430 agreements 

the Centers provided covering FY 2010 through FY 2011 (October 1, 2009, through 

September 30, 2011). We added one additional agreement that was created 6 days after 

the sample range (October 6, 2011) because of its high visibility prior to our visit to that 

Center (Kennedy). Our review analyzed all the leases for compliance with requirements 

in seven categories: (1) Benefit to NASA/Link to Mission, (2) Business Case, 

(3) Documented Future Use or Waiver, (4) Notice of Availability or Waiver, (5) Use of 

Market Prices for Private Entities, (6) Priority of Use (Termination) Clause or Waiver, 

and (7) Signed by Authorized NASA Official. 

Of the 431 agreements in our preliminary review, 193 were easements, which we 

determined presented less risk to the Agency than the other agreement types, so we

focused on agreements such as reimbursable Space Act Agreements, leases, and EULs. 

We judgmentally chose the five Centers or subordinate facilities based on the number of 

real property agreements at these Centers, selecting a composite of some Centers with 

many agreements and others with less real property agreement experience. From these 

Centers, we chose 48 agreements for further review based on compliance issues with the 

regulatory requirements above and considering risk in leasing to private versus public 

entities, scope of the agreement, range of old and new leases, and outliers with issues in 

reporting documentation. The real property agreements selected for further review 

represented an average of 17 percent of the real property agreements at the selected 

Centers. During our site visits, we reviewed compliance with the seven regulatory 

requirements identified above and determined the circumstances related to compliance 

issues. We also reviewed the Centers’ revenues and costs associated with the selected 

agreements. For the pricing section of the report, we added three agreements to our 

sample as a result of Glenn personnel taking proactive action to identify agreements that 

did not conform to pricing guidance. 

To determine whether NASA had effective internal controls to account for in-kind 

consideration for EULs, we reviewed NASA policies identified in Appendix B as they 

referred to procedures for managing in-kind consideration. We also conducted interviews 

with real property managers and personnel in the Office of the Chief Financial Officer at 

the two Centers that have used EULs since the pilot authority was first granted in 2003: 

Ames Research Center and Kennedy Space Center. At the site visits for these Centers, 

we also reviewed EUL agreements selected from our sample with the real property and 

financial managers and legal counsel.
APPENDIX A 

REPORT NO. IG-12-020 29

Use of Computer-Processed Data. We used the SAP Business Warehouse (BW) for its

Real Property Management System (RPMS) and financial data, and the Space Act 

Agreement Maker (SAAM) system for data that was significant to the assignment 

objectives. We did not assess the reliability of financial data in SAP BW, but we did not 

rely on the data solely to make our conclusions; we also obtained supporting 

documentary and testimonial evidence from the Centers as appropriate. 

We determined that the RPMS was not sufficiently reliable because an OIG report 

completed in August 2011 had already identified weaknesses in NASA’s methods used to 

capture information on its real property assets, which resulted in significant data 

reliability issues in key fields in the RPMS, specifically in the three key elements of 

utilization, mission dependency, and condition.51

Review of Internal Controls 

 These elements are primary factors 

driving NASA’s decisions on whether to maintain, repair, consolidate, lease, sell, or 

demolish existing assets. Therefore, we sought and obtained sufficient supporting 

documentary evidence from the actual agreements at each of the Centers. We did not 

assess the reliability of the SAAM system because we did not depend on its data to reach 

our conclusions, but we also obtained supporting documentary and testimonial evidence 

from the Centers. 

We performed a preliminary assessment of the internal controls associated with our audit, 

including identifying controls that should be in place according to regulation. 

Throughout the audit we reviewed controls associated with the audit objectives and 

identified that NASA did not have sufficient controls to ensure that property identified 

for potential leasing is not excess to NASA’s needs. Further, we found various internal 

control weaknesses, particularly in training and guidance, and lack of documentation that 

limit NASA’s ability to ensure that leases provide the best value to the Agency and 

fairness to its real property agreement partners. Headquarters and Center officials have 

indicated they are taking actions to address these weaknesses.

 

51 NASA OIG Report, “NASA Infrastructure and Facilities: Assessment of Data Used to Manage Real 

Property Assets” (IG-11-024, August 4, 2011).
APPENDIX A 

30 REPORT NO. IG-12-020 

Prior Coverage

During the last 5 years, the NASA OIG and GAO have issued 11 reports and testimonies

of particular relevance to the subject of this report. Unrestricted reports can be accessed 

over the Internet at http://oig.nasa.gov/audits/reports/FY12 (NASA OIG) and 

http://www.gao.gov (GAO). 

“NASA Infrastructure and Facilities: Assessment of Data Used to Manage Real Property 

Assets” (IG-11-024, August 4, 2011) 

NASA Office of Inspector General

“NASA’s Hangar One Re-Siding Project” (IG-11-020, June 22, 2011) 

“Final Memorandum on NASA’s Accounting for Real Property Leased to Other Entities” 

(IG-08-004, December 11, 2007) 

“Defense Infrastructure: The Enhanced Use Lease Program Requires Management 

Attention” (GAO-11-574, June 30, 2011) 

Government Accountability Office

“Reimbursable Space Act Agreements: NASA Generally Adhering to Fair 

Reimbursement Controls, but Guidance on Waived Cost Justifications Needs 

Refinement” (GAO-11-553R, May 26, 2011) 

“Federal Real Property: Progress Made on Planning and Data, but Unneeded Owned and 

Leased Facilities Remain” (GAO-11-520T, April 6, 2011) 

“GAO’s 2011 High-Risk Series: An Update” (GAO-11-394T, February 17, 2011) 

“Federal Real Property: The Government Faces Challenges to Disposing of Unneeded 

Buildings” (GAO-11-370T, February 10, 2011) 

“Federal Real Property: Authorities and Actions Regarding Enhanced Use Leases and 

Sale of Unneeded Real Property” (GAO-09-283R, February 17, 2009) 

“NASA: Issues Surrounding the Transition from the Space Shuttle to the Next 

Generation of Human Space Flight Systems” (GAO-07-595T, March 28, 2007) 

“NASA: Enhanced Used Leasing Program Needs Additional Controls” (GAO-07-306R, 

March 1, 2007) 
APPENDIX B 

REPORT NO. IG-12-020 31

HISTORY OF FEDERAL AND NASA

REQUIREMENTS

The following table summarizes significant Federal and NASA requirements applicable 

to real property agreements. 

Title Date Significance

31 U.S.C. 1535, “The 

Economy Act of 1932” 

June 30, 1932 Provides guidance for establishing prices for Federal 

agencies to provide services or goods to another 

Federal agency. Pricing should be based on 

estimated or actual cost.

40 U.S.C. 524, “Duties of 

Executive Agencies,” 

June 30, 1949 Requires agencies to identify and promptly report 

excess property to the Administrator of General 

Services. 

40 U.S.C. 586, “Charges 

for space and services” 

June 30, 1949 Provides that all revenues should be returned to 

Treasury under Miscellaneous Receipts. 

31 U.S.C. 9701, “Fees and 

Charges for Government 

Services” 

Aug. 31, 1951 Provides guidance for establishing prices for 

services to non-Federal entities. 

National Aeronautics and 

Space Act

July 29, 1958 Authorizes NASA “to enter into and perform such 

contracts, leases, cooperative agreements, or other 

transactions as may be necessary in the conduct of 

its work and on such terms as it may deem 

appropriate, with any agency or instrumentality of 

the United States, or with any state, territory, or 

possession, or with any political subdivision thereof, 

or with any person, firm, association, corporation, or 

educational institution.” 

14 C.F.R. 1204.504, 

“Delegation of authority to 

grant leaseholds, permits, 

and licenses in real 

property. 

Aug. 1, 1986 Delegates authority in the Space Act for leasing real 

property to the Assistant Administrator for Strategic 

Infrastructure and Director, Technical Capabilities 

and Real Property Management Division. Also 

grants NASA Center Directors the limited authority 

to lease NASA property. 

OMB Circular A-25, “User 

Charges” 

July 8, 1993 Provides 31 U.S.C. 9701 implementation guidance 

to agencies that convey special benefits to recipients 

beyond those accruing to the general public. 

NPD 9080.1G, “Review, 

Approval, and Imposition 

of User Charges” 

Oct. 14, 2004 Current NASA guidance for pricing special benefits 

as directed by OMB Circular A-25. 

Public Law 108-7, “Con- solidated Appropriations 

Resolution, 2003” 

Feb. 20, 2003 First authority for two NASA Centers (Ames and 

Kennedy were chosen) to enter into Enhanced Use 

Leases. Also grants in-kind consideration as 

possible payment. 
APPENDIX B 

32 REPORT NO. IG-12-020 

Title Date Significance

Executive Order 13327, 

“Federal Real Property 

Asset Management” 

Feb. 4, 2004 Establishes the Federal Real Property Council. 

Federal Real Property 

Council, “Guidance for 

Improved Asset 

Management”

Dec. 22, 2004 Guidance issued that directs agencies to dispose of 

real property that is not needed. 

Public Law 110-161, 

“Consolidated 

Appropriations Act, 2008” 

Enacted:

Dec. 26, 2007 

Effective:

Dec. 31, 2008 

Expands the Enhanced Use Lease authority to all 

NASA Centers. Removes the authority to take 

in-kind consideration as possible payment and 

stipulates that the real property to be leased cannot 

be excess. 

NPR 9090.1, “Reimbursable Agreements” September 30, 

2008 

Current NASA guidance for the financial 

management of reimbursable agreements.

NAII 1050-1, “Space Act 

Agreements Guide” 

Aug. 15, 2006 First Desk Guide on NASA agreement practice and 

provide assistance to those involved in formation 

and execution of Space Act Agreements.

NPD 1050.1I, “Authority 

to Enter into Space Act 

Agreements” 

Dec. 23, 2008 Current NASA guidance for development and 

management of Space Act Agreements. 

“NASA Desk Guide for 

Enhanced Use Leasing of 

Real Property” (and the 

earlier versions dated July 

2007 and December 2008) 

February 2010 Revised the 2008 Desk Guide. 

Presidential Memorandum

“Disposing of Unneeded 

Federal Real Estate – 

Increasing Sales Proceeds, 

Cutting Operating Costs, 

and Improving Energy 

Efficiency” 

June 10, 2010 Directed agencies to scrutinize and eliminate excess 

real property. 

NPR 8800.15B, “Real 

Estate Management 

Program” 

June 21, 2010 Revision of the first overall NASA guidance issued 

for developing and managing real property 

agreements, NPR 8800.15A, “Real Estate 

Management Program Implementation Manual,” 

June 1998. 

Public Law 111-267, “National Aeronautics and 

Space Administration 

Authorization Act of 

2010” 

Oct. 11, 2010 Authorizes NASA programs and directs NASA to 

re-scope and, as appropriate, downsize its 

institutional capabilities, including its infrastructure,

to fit current and future missions and expected 

funding levels. 

NAII 1050-1B, “Space Act 

Agreements Guide” 

June 10, 2011 Revised NASA’s 2008 Space Act Agreements 

Guide. 
APPENDIX B 

REPORT NO. IG-12-020 33

Title Date Significance

Presidential Memorandum, “Accelerating Technology 

Transfer and 

Commercialization of 

Federal Research in 

Support of High-Growth 

Businesses” 

Oct. 28, 2011 Guidance for agencies to encourage external 

partners through real property agreements to locate 

applied research and support activities near Federal 

laboratories and other Federal research facilities. 

Public Law 112-55, 

“Consolidated and Further 

Continuing Appropriations 

Act, 2012” 

Nov. 18, 2011 NASA may accept in-kind consideration for leases 

entered into for the purpose of developing 

renewable energy production facilities.

Source: OIG compilation. 
APPENDIX C

34 REPORT NO. IG-12-020 

MANAGEMENT COMMENTS
APPENDIX C

REPORT NO. IG-12-020 35
APPENDIX C

36 REPORT NO. IG-12-020 
APPENDIX D 

REPORT NO. IG-12-020 37

REPORT DISTRIBUTION

National Aeronautics and Space Administration

Administrator

Deputy Administrator

Chief of Staff

NASA Advisory Council’s Audit, Finance, and Analysis Committee 

Associate Administrator for Mission Support 

Assistant Administrator for the Office of Strategic Infrastructure 

Director, Ames Research Center

Director, Dryden Flight Research Center

Director, Glenn Research Center

Director, Plum Brook Station 

Director, Goddard Space Flight Center 

Director, Jet Propulsion Laboratory

Director, Johnson Space Center 

Director, Kennedy Space Center

Director, Langley Research Center

Acting Director, Marshall Space Flight Center

Director, Michoud Assembly Facility 

Director, Stennis Space Center

Non-NASA Organizations and Individuals

Office of Management and Budget

Deputy Associate Director, Energy and Science Division

Branch Chief, Science and Space Programs Branch 

Government Accountability Office 

Director, Office of Acquisition and Sourcing Management 

Congressional Committees and Subcommittees, Chairman and 

Ranking Member

Senate Committee on Appropriations 

Subcommittee on Commerce, Justice, Science, and Related Agencies

Senate Committee on Commerce, Science, and Transportation

Subcommittee on Science and Space

Senate Committee on Homeland Security and Governmental Affairs
APPENDIX D 

38 REPORT NO. IG-12-020 

Congressional Committees and Subcommittees, Chairman and 

Ranking Member (continued)

House Committee on Appropriations 

Subcommittee on Commerce, Justice, Science, and Related Agencies

House Committee on Oversight and Government Reform 

Subcommittee on Government Organization, Efficiency, and Financial Management

House Committee on Science, Space, and Technology 

Subcommittee on Investigations and Oversight 

Subcommittee on Space and Aeronautics
REPORT NO. IG-12-020 39

Major Contributors to the Report: 

Ridge Bowman, Director, Space Operations Directorate 

Karen VanSant, Project Manager

Janice Smith, Auditor 

Troy Zigler, Auditor 

Earl Baker, Attorney-Advisor 
AUGUST 9, 2012

REPORT No. IG-12-020 

OFFICE OF AUDITS

OFFICE OF INSPECTOR GENERAL

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