FEBRUARY 2, 2012

AUDIT REPORT

REPORT NO. IG-12-009-R (ASSIGNMENT NO. A-11-005-00)

REDACTED FOR PUBLIC RELEASE

OFFICE OF AUDITS

NASA’S MANAGEMENT OF SMALL BUSINESS 

INNOVATION RESEARCH AND SMALL BUSINESS 

TECHNOLOGY TRANSFER CONTRACTS FUNDED BY THE 

RECOVERY ACT

OFFICE OF INSPECTOR GENERAL

National Aeronautics and 

Space Administration

 
REPORT NO. IG-12-009-R 

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THE CONTRACT NUMBERS IN TABLE 2 AND APPENDIX B HAVE BEEN PARTIALLY REDACTED, 

AS THE INFORMATION MAY BE CONSIDERED CONTRACTOR PROPRIETARY INFORMATION. 

Final report released by:

Paul K. Martin

Inspector General

Acronyms 

AIP Acquisition Integrity Program Office

COTR Contracting Officer Technical Representative

DCAA Defense Contract Audit Agency 

FAR Federal Acquisition Regulation 

G&A General and Administrative

NSSC NASA Shared Services Center

OIG Office of Inspector General

OMB Office of Management and Budget

PI Principal Investigator

PIC Procurement Information Circular

PMO Program Management Office

SBIR Small Business Innovation Research

STTR Small Business Technology Transfer 
FEBRUARY 2, 2012

REPORT NO. IG-12-009-R 

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OVERVIEW

NASA’S MANAGEMENT OF SMALL BUSINESS INNOVATION 

RESEARCH AND SMALL BUSINESS TECHNOLOGY TRANSFER 

CONTRACTS FUNDED BY THE RECOVERY ACT

The Issue

Congress created the Small Business Innovation Research (SBIR) Program in 1982 to 

encourage small and disadvantaged businesses to participate in federally funded research 

and development opportunities. Pursuant to statute, 11 Federal agencies are required to 

participate in the SBIR Program.

1

NASA’s SBIR and STTR Programs both use a three-phase approach to award contracts 

to small businesses for the development of technologies that meet NASA mission needs. 

The purpose of Phase 1 awards is to determine the commercial merit and feasibility of the 

proposed innovation. Phase 2 awards are for the development, demonstration, and 

delivery of that innovation. Phase 3 awards are for the application and commercialization 

efforts of the innovation and possible transitioning of the innovation into products and 

services for NASA mission programs. 

 NASA, which awarded an average of $112 million 

annually to small businesses from 2004 through 2008, has the third largest SBIR Program 

in the Federal Government. Modeled after the SBIR Program, the Small Business 

Technology Transfer (STTR) Program is much smaller, but with the same basic 

requirements and phased funding structure. STTR Program funds also go to small 

business concerns for cooperative research and development; however, award recipients

must work with non-profit research institutions, such as universities, to facilitate the 

transfer of technology.

In 2009, NASA received $1 billion from the American Recovery and Reinvestment Act

(Recovery Act) and allocated $24.4 million for SBIR and STTR contracts.2

 

1 In addition to NASA, the Departments of Agriculture, Commerce, Defense, Education, Energy, Health 

and Human Services, Homeland Security, and Transportation, the Environmental Protection Agency, and 

the National Science Foundation participate in the Federal SBIR Program. 

 The 

Recovery Act requires a significant level of transparency and accountability to ensure 

that Recovery Act funds are expended in accordance with the Act’s requirements and to 

make information about these expenditures readily available to the public. The Recovery 

Act also requires Federal Offices of Inspector General to oversee agency compliance with 

the Office of Management and Budget’s (OMB) Implementing Guidance for the Act, 

which sets forth the requirements agencies must follow in awarding and modifying 

2 NASA also received $52 million in reimbursable funds from other Federal agencies, including the 

National Oceanic and Atmospheric Administration and the Department of Energy.
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contracts funded by the Recovery Act.3

In January 2011, the NASA Office of Inspector General (OIG) issued a report on 

NASA’s management of its overall SBIR Program.

 NASA’s Procurement Information Circulars

provide additional guidance for implementing the Recovery Act at NASA.

4

In an effort to ensure proper use of Recovery Act funds, NASA completed a risk 

assessment of its SBIR and STTR Programs in 2009. As a result of this effort, the 

Agency developed 13 internal controls intended to ensure the Act’s requirements would 

be met, including requiring contractors to certify quarterly that there was no fraud, waste, 

or abuse in their contracts; conducting cost/price analysis training for all technical 

personnel at the NASA Shared Services Center (NSSC); requiring NASA technical 

personnel to obtain contracting officer technical representative (COTR) certification; and 

requiring contractors to participate in virtual site visits with NASA officials.

 We found that while NASA’s initial 

choice of SBIR award recipients appeared objective and merit-based, the Agency’s 2008 

awards contained an estimated $2.7 million in unallowable and unsupportable costs. We 

also found that NASA lacked adequate procedures to ensure applicants’ past performance 

was considered in selecting Phase 2 awards, and NASA had not implemented appropriate 

internal controls to prevent fraud and abuse in its SBIR Program. We made a series of 

recommendations to NASA in that January report, including that the Agency implement 

specific internal controls that it was not then utilizing. NASA officials generally 

concurred with our recommendations and are currently implementing corrective actions. 

5

The overall objective of our audit was to determine whether NASA effectively managed 

SBIR and STTR contracts awarded with Recovery Act funds. Specifically, we examined 

whether cost, schedule, and performance milestones were met and whether NASA’s 

Recovery Act internal controls were properly implemented and operating effectively. We 

also reviewed the status of NASA’s implementation of the controls we recommended be 

adopted in our January 2011 report. See Appendix D for a listing of the recommended 

controls and the implementation status of each. To accomplish our objective, we 

reviewed all SBIR and STTR awards funded by the Recovery Act at Langley Research 

Center, Ames Research Center, and the Jet Propulsion Laboratory. In total, we reviewed 

37 contracts (48 percent) of the 77 SBIR/STTR Recovery Act funded awards. In addition, 

we interviewed Agency program and project officials, including the SBIR Program 

Manager and the SBIR Business Manager responsible for both the SBIR and STTR 

Programs. We also visited NSSC, which is responsible for the administrative oversight 

of all SBIR and STTR contracts. See Appendix A for details of the audit’s scope and 

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

 See 

Appendix C for a complete list of NASA’s 13 Recovery Act internal controls. 

 

3 Office of Management and Budget, “Updated Implementing Guidance for the American Recovery and 

Reinvestment Act of 2009” (M-09-15, April 3, 2009).

4 NASA OIG, “Review of NASA’s Management of Its Small Business Innovation Research Program” 

(IG-11-010-R, January 12, 2011).

5 Technical personnel include program investigators and technical project managers. 
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Results

We found NASA’s Recovery Act internal controls were generally effective in ensuring

proper oversight, management, and transparency of Recovery Act funded SBIR/STTR 

contracts. The contracts we reviewed largely met cost, schedule, and performance 

milestones. In addition, 76 percent of contract deliverables were submitted within the 

agreed-upon timeframes, and NSSC implemented controls to further reduce the 

occurrence of late deliverables. However, we also found that due to resource limitations 

NASA did not implement three Recovery Act internal controls, including two controls 

relating to COTR certification and training. As a result, we noted seven instances where 

NASA employees designated as COTRs did not have the proper certification or training 

required by OMB guidance. In addition, we identified four contracts that contained 

unallowable equipment costs totaling $115,297. Lastly, we determined that NASA is 

making progress implementing the 14 internal controls identified in our January 2011 

audit report as necessary to prevent and detect fraud in the SBIR Program.

Recovery Act Controls Were Generally Effective. Our review of 37 SBIR and STTR 

award contract files found that in most cases contractors met cost, schedule, and 

performance milestones. We found that 10 of the 13 Recovery Act internal controls 

NASA implemented in 2009 were operating effectively and led to improved management 

of the contracts. We identified one of these controls – virtual site visits through which 

NASA SBIR Program and project officials view contractors’ research facilities, confirm 

key contractor personnel, assess contractors’ progress, and ensure that contractors are 

complying with requirements – as a best practice. NASA SBIR Program officials told us 

that they intend to extend the practice of virtual site visits to all new SBIR/STTR Phase 2 

contractors. We believe the Agency could benefit from applying the other Recovery Act 

controls, including the three the Agency had not yet implemented, to all SBIR and STTR 

contracts as well. 

Late Deliverables Successfully Mitigated by NSSC Controls. Contractors submitted 

deliverables on time for 28 of the 37 contracts (76 percent) we reviewed. The remaining 

9 contractors submitted deliverables on average between 10 and 60 days after the 

established deadline. We found that NSSC actively monitors late deliverables for all 

SBIR and STTR contracts and has taken steps to ensure NASA does not make payments 

to contractors until the Agency has received and accepted the deliverables. In November 

2010, NSSC began generating a biweekly report that identifies late deliverables and 

describes the remedial actions taken by Agency personnel, such as phone calls or e-mails 

to the contractor. 

NSSC’s actions appear to have mitigated the problem of late deliverables. The frequency 

of late deliverables decreased by 60 percent in the first 5 months of 2011 – from 208 

instances of late deliverables for both Recovery Act and non-Recovery Act funded 

contracts in January 2011 to 84 in May 2011. Currently, NSSC does not provide its 

report regarding late deliverables to the SBIR Program officials. We believe providing 

this report to these individuals may result in additional reductions in late deliverables.
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Three Recovery Act Controls Not Implemented. NASA officials told us that due to 

resource limitations they did not implement 3 of the 13 Recovery Act controls. First, 

NASA did not assign a full-time liaison from the Acquisition Integrity Program Office 

(AIP) to the SBIR and STTR Programs. However, even in the absence of this control we 

found that AIP was involved in developing the Recovery Act controls and was available 

on an as-needed basis to address any integrity issues that arose. According to SBIR 

Program officials, the Agency is working to identify an AIP liaison for both Programs 

and hopes to have this position filled in the near future. 

The other two Recovery Act controls NASA did not implement relate to training and 

certification of COTRs. COTRs are responsible for monitoring contractor performance, 

contract funding, and costs incurred by the contractor, as well as performing critical 

technical functions to ensure that contracts are managed properly. Obtaining proper 

certification and training is essential to performing these functions. 

We found that the COTRs responsible for seven different Phase 2 contracts did not have 

the proper certification or required training. In six instances, the COTRs had confirmed 

they attended training when in fact they had not. In the seventh instance, the assigned 

individual was provided a 6-month waiver to attend the training. However, he did not 

complete the training until nearly 18 months after this deadline and more than 9 months 

after the contract to which he was assigned had been completed. Moreover, at the 

completion of our fieldwork in November 2011, three of the COTRs without proper 

certification or training were still assigned to active contracts. 

On January 20, 2011, NASA issued Procurement Notice 04-55, “Appointment of 

Contracting Officer Technical Representatives,” which states that to improve internal 

controls in the SBIR and STTR Programs, the NASA Federal Acquisition Regulation 

(FAR) Supplement is revised to require that COTRs on newly awarded Phase 2 and 

Phase 3 SBIR and STTR contracts must be certified. This policy is a positive step 

forward.

Unallowable Equipment Costs. We identified direct charges for equipment costs in 4 of 

the 37 contracts we reviewed for which the contract files contained no documentation or 

justification as to reasonableness or necessity for the equipment. The 2009 SBIR/STTR 

Program Solicitation states that NASA will not fund the acquisition of equipment, 

instrumentation, or facilities costs for Phase 1 and Phase 2 contracts as a direct cost. As a 

result, we question equipment costs totaling $115,297 and the associated general and 

administrative costs of $30,956 for a total of $146,253 in questioned costs.6

 

6 General and administrative (G&A) costs are costs incurred by the contractor that are not directly related 

to the research and development project funded by NASA, but are a necessary cost of the contractor’s 

business.

 Because we 

raised similar issues about the allowability of equipment costs in our January 2011 report, 

SBIR Program officials have taken steps to address this issue. Specifically, NASA 

changed its 2010 SBIR/STTR Program Solicitation Guide language to clarify when such 

costs are allowable and to make clear that such costs must be properly justified by the 
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contractor and approved by NASA during contract negotiations. However, it remains to 

be seen whether these actions will address our underlying concerns. 

NASA Is Making Progress Implementing Controls Identified in Prior OIG Audit. 

The prior OIG audit recommended implementation of 14 internal controls to prevent and

detect fraud in the SBIR Program, 9 of which were identified as critical. During the 

course of this audit, we considered the extent to which the Agency’s implementation of 

the Recovery Act controls had addressed our earlier recommendations. We also 

reviewed the implementation status of the 14 recommended controls to determine 

whether the Agency was on track to implement related corrective actions; however, we 

did not perform any testing to determine their effectiveness. We found that 1 of the 9 

critical controls and 1 of the 5 noncritical controls were addressed by the implementation 

of the Recovery Act controls. Additionally, 3 other recommended critical controls were 

partially addressed by the implementation of the Recovery Act controls. We also 

determined the Agency is making progress toward implementing the remaining controls 

identified in the January 2011 audit report. An update as to the implementation status of 

each control is documented in Appendix D. 

Management Action

The Agency has effectively implemented 10 of the 13 Recovery Act controls it developed 

to help ensure proper administration of SBIR and STTR contracts funded by the 

Recovery Act. However, the Agency failed to implement 3 Recovery Act controls due to 

resource limitations. We recommend that the Agency consider extending these controls 

to its non-Recovery Act funded SBIR and STTR Programs.7

Specifically, we recommended that the Recovery Act Implementation Executive work 

with the SBIR Program Executive and the Assistant Administrator for Procurement to:

 In addition, NASA 

management should remedy the deficiencies we identified in this report in order to 

strengthen performance of these controls. 

• Revise program policy to require the application of the appropriate Recovery Act 

controls to improve the administration of the SBIR and STTR Programs. 

• Provide the information from NSSC’s biweekly late deliverables report to the 

SBIR Program Manager and Business Manager at key decision points in program 

implementation so they are aware of any problem contractors and can take actions 

as necessary.

• Evaluate the feasibility of utilizing the virtual site visit technology for other 

NASA awards where funds for on-site surveillance are limited.

 

7 Two controls related to entering information in a Government-wide database maintained by the Recovery 

Act Board would not be applicable to contracts not funded by the Recovery Act. 
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• Issue a written policy reminder to all contracting officers to follow existing policy 

on the appointment and removal of COTRs who fail to meet training, 

certification, and educational requirements. 

• Strengthen controls to ensure contracting officers and evaluators maintain proper 

documentation in the SBIR contract files to justify and validate equipment 

purchases. 

In response to our draft report, NASA’s Chief Financial Officer concurred with four of 

our recommendations, stating that the Agency’s Recovery Act Implementation Executive 

will work with NASA’s Assistant Administrator for Procurement and the SBIR/STTR 

Program Executive to address the recommendations and further strengthen the 

administration of the SBIR/STTR Programs (see Appendix E for a copy of the Chief 

Financial Officer’s comments). Specifically, by March 2012 the Assistant Administrator 

for Procurement will remind contracting officers to follow existing policy on the 

appointment of COTRs and on the removal of those who fail to meet training, 

certification, and educational requirements. In addition, by June 2012 the Agency will 

revise program policy to adopt, where appropriate, the controls that were piloted on the 

Recovery Act funded awards. The Agency will also perform an analysis of where virtual 

site visits may be applicable to other types of NASA awards, beyond the Recovery Act 

and provide the results of this analysis to the OIG. Further, by June 2012 the contracting 

officers at NSSC will provide the SBIR Program Manager and Business Manager an 

analysis of past performance of any of the proposers, to include issues such as late 

deliverables, to factor into the evaluation for new awards. We consider the Chief 

Financial Officer’s proposed actions responsive to our recommendations and will close 

the recommendations upon completion and verification of these actions.

The Chief Financial Officer partially concurred with the fifth recommendation, stating 

that although she agreed that the contract files lacked proper documentation, she does not 

agree that the costs we identified were unallowable. In explaining her disagreement with 

our finding, she notes that such costs are allowable when they comply with all of the 

following requirements: reasonableness; allocability; generally accepted accounting 

principles and practices; terms of the contract; and FAR Subpart 31.2. 

We continue to believe that the costs we identified were unallowable. First, as noted in 

our report, NASA’s 2009 SBIR/STTR Program Solicitation explicitly states that the 

Agency will not fund the purchase of equipment as a direct cost. Moreover, FAR 31.201-

3 states a cost is reasonable if, in its nature and amount, it does not exceed that which 

would be incurred by a prudent person in the conduct of competitive business. In the 

absence of any information in the contract files explaining the relevance of the equipment 

to performance of the contracts or the reasonableness of the amount expended, we were 

unable to determine whether these costs were prudent or reasonable. 

Despite the disagreement about our underlying finding, the Chief Financial Officer listed 

a number of completed and planned actions to ensure that costs are documented properly 

in SBIR/STTR files. Specifically, the Agency has trained NSSC contracting officers on 
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effective proposal evaluation, accounting for costs, and proper documentation of contract 

files; the format for price negotiation memorandums has been improved to ensure that all 

elements of cost, including equipment costs, are appropriately considered; and a new 

technical evaluators’ guide to support the proposal selection and award process is 

expected to be implemented in the coming selection cycle. We consider these actions to 

be responsive to the intent of our recommendation. Therefore, the recommendation is 

resolved and will be closed upon completion and verification of the actions.

FEBRUARY 2, 2012

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CONTENTS

INTRODUCTION

Background _________________________________________ 1 

Objectives __________________________________________ 3 

RESULTS

NASA Appropriately Managed SBIR/STTR Contracts Funded by 

the Recovery Act___________________________________ 5 

APPENDIX A 

Scope and Methodology_______________________________ 13

Review of Internal Controls ____________________________ 14

Prior Coverage ______________________________________ 16

APPENDIX B 

Schedule of Questioned Costs __________________________ 17

APPENDIX C 

Recovery Act Controls ________________________________ 18

APPENDIX D 

Controls Recommended in Prior Audit to Prevent and Detect 

Fraud and Abuse __________________________________ 20

APPENDIX E 

Management Comments ______________________________ 28

APPENDIX F 

Report Distribution___________________________________ 32

FEBRUARY 2, 2012

 

 REPORT NO. IG-12-009-R 1 

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INTRODUCTION

Background

Congress created the Small Business Innovation Research (SBIR) Program in 1982 to 

stimulate technological innovation, increase participation by small and disadvantaged 

businesses in federally funded research and development, and increase private-sector 

commercialization of innovations derived from federally funded research and 

development. In 2000, Congress enacted legislation that extended and strengthened the 

SBIR Program and increased emphasis on pursuing commercial applications of SBIR 

project results. The strengthened SBIR Program provides funding for the critical startup 

and development stages of innovative research activities while encouraging the 

commercialization of technology, products, and services.

NASA has the third largest SBIR Program of the 11 participating Federal agencies.8

Modeled after the SBIR Program, the Small Business Technology Transfer (STTR) 

Program is much smaller, but has the same basic requirements and phased funding 

structure. STTR Program funds are also awarded to small business concerns for 

cooperative research and development; however, award recipients must work with a nonprofit research institution, such as a university, to facilitate the transfer of technology. 

 

NASA’s program is designed to help small businesses develop technologies that address 

NASA mission-driven needs. For example, an area of research funded under the SBIR 

Program is the development of Advanced Composite Technologies, which focuses on 

technologies to mature the use of composite structures and materials for launch vehicles 

and/or the lunar lander. 

As shown in the following figure, NASA awards contracts for both its SBIR and STTR 

Programs in three phases. Phase 1 awards are for determining the commercial merit and 

feasibility of the proposed innovation; Phase 2 awards are for the development,

demonstration, and delivery of that innovation; and Phase 3 awards are for application 

and commercialization efforts of the innovation and possible transitioning of the 

innovation into products and services for NASA mission programs. 

 

8 In addition to NASA, the participating Federal agencies are the Departments of Agriculture, Commerce, 

Defense, Education, Energy, Health and Human Services, Homeland Security, and Transportation, the 

Environmental Protection Agency, and the National Science Foundation.
INTRODUCTION

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SBIR/STTR Contract Award Phases

According to the 2009 SBIR/STTR Program Solicitation, NASA’s objective is to select 

for award those proposals that offer the best value to the Government and to NASA’s 

SBIR and STTR Programs. 

Recovery Act Funded Awards. On February 17, 2009, the American Recovery and 

Reinvestment Act (Recovery Act) became law. The Recovery Act seeks to strengthen 

the U.S. economy by creating new jobs, spurring technological advances in science and 

health, and investing in infrastructure. The Act requires a significant level of 

transparency and accountability to ensure that funds are expended in accordance with 

requirements. NASA received $1 billion in Recovery Act funds and allocated 

$24.4 million for SBIR and STTR projects (see Table 1).

9

Table 1. Recovery Act Funded SBIR/STTR Contracts

Date of Award

Type of Award 

and Phase

No. of Contracts 

Awarded Value of Awards

December 2009 SBIR Phase 1 31 $3,068,423

December 2009 STTR Phase 1 10 $998,787

January 2010 SBIR Phase 2 26 $15,611,901

January 2010 STTR Phase 2 3 $1,799,134

Various 2010 SBIR Phase 3 7 $2,929,217 

 Total 77 $24,407,462 

 

9 NASA also received $52 million in reimbursable funds from other Federal agencies, including the 

National Oceanic and Atmospheric Administration and the Department of Energy.

Phase 1 

• provides small 

businesses with a startup period to establish 

the scientific, 

technical, and 

commercial feasibility 

of the proposed 

innovation

• awards of up to 

$100,000 

• 6-month period of 

performance

Phase 2

• provides for further 

development of the 

scientific and 

commercial promise of 

research from Phase 1

• includes only firms 

that have successfully 

completed Phase 1 

• awards of up to 

$750,000 

• 24-month period of 

performance

Phase 3

• provides the firm an 

opportunity to move 

the technology 

innovations from 

Phase 2 to the 

marketplace 

• provides funds 

through normal 

procurement 

processes at the 

agency and/or private 

sector procurements
INTRODUCTION

 

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To ensure proper use of the Recovery Act funding for SBIR/STTR contracts, in June 

2009 NASA completed a risk assessment of its SBIR and STTR Programs. As a result of 

this assessment, the Agency identified 13 internal controls it believed would help ensure 

effective compliance with the requirements of the Recovery Act and further strengthen 

the implementation of the SBIR and STTR Programs at NASA: 

1. Issuing a Notice of Intent to alert contractors to Recovery Act requirements. 

2. Developing policies and guidelines to require all technical personnel to obtain 

contracting officer technical representative (COTR) certification.

10

3. Adding a full-time SBIR/STTR liaison from the Acquisition Integrity 

Program Office. 

4. Enhancing the Electronic Handbook (EHB) to include NASA Account 

Management System (NAMS) security requirements. 

5. Completing a surveillance plan for each contract. 

6. Conducting Price Cost Analysis training at the NASA Shared Services Center 

(NSSC). 

7. Requiring firms to certify quarterly that there was no SBIR/STTR contractrelated fraud, waste, or abuse. 

8. Having companies enter data into the Recovery Act website. 

9. Having NSSC validate data entered into the Recovery Act website. 

10. Checking the Central Contractor Registration (CCR) and Excluded Parties 

(debarred) databases. 

11. Conducting checks of the past performance database. 

12. Monitoring Center COTR assignments and delegation. 

13. Requiring SBIR/STTR Phase 2 contractors to participate in a virtual (via 

Internet) site visit with NASA procurement and program official. 

Objectives 

The overall objective of our audit was to determine whether NASA effectively managed 

SBIR/STTR contracts funded by the Recovery Act. Specifically, we examined whether 

 

10 Technical personnel include program investigators and technical project managers. 
INTRODUCTION

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cost, schedule, and performance milestones were met and whether the new Recovery Act 

internal controls identified by the Agency were properly implemented and operating 

effectively. To accomplish our objective, we reviewed all SBIR and STTR awards 

funded by the Recovery Act at Langley Research Center, Ames Research Center, and the 

Jet Propulsion Laboratory. In total, we reviewed 37 contracts, or 48 percent of all 77

SBIR/STTR awards funded by the Recovery Act. We also performed a site visit at 

NSSC, which is responsible for the administrative oversight of all SBIR/STTR contracts. 

See Appendix A for details of the audit’s scope and methodology, our review of internal 

controls, and a list of prior audit coverage.
RESULTS

 

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NASA APPROPRIATELY MANAGED SBIR/STTR

CONTRACTS FUNDED BY THE RECOVERY ACT 

We found that NASA was generally effective in managing contracts funded by the 

Recovery Act and that the Agency had fully implemented 10 of the 13 internal 

controls it developed specifically for these contracts, including conducting virtual 

site visits of Phase 2 contractors. In our judgment, the Agency could benefit from 

applying these controls across both the SBIR and STTR Programs.11

NASA had not implemented three of the Recovery Act controls it identified in 2009, 

including two controls relating to COTR training and certification processes. We 

found that 7 of the 14 COTRs responsible for Phase 2 Recovery Act contracts did not

have the certification or training required to perform their duties. We also identified 

four contracts in which $115,297 in equipment costs and $30,956 in associated 

general and administrative (G&A) costs were charged as direct costs without proper 

justification. 

 Further, the 

contracts we reviewed largely met cost, schedule, and performance milestones, and 

the contractors were generally providing deliverables on time. In addition, NSSC

has implemented a control to ensure contractors are not paid until their deliverables 

are submitted and approved. 

Recovery Act Controls Helped Ensure Proper Contract 

Performance 

Implementation of Recovery Act Controls. In June 2009, NASA’s Recovery Act 

Implementation Executive, Acquisition Integrity Program Office (AIP) representatives, 

and SBIR Program officials completed a risk assessment of the SBIR and STTR 

Programs in light of the requirements of the Recovery Act.12

Based on interviews conducted with the COTRs and SBIR Program officials as well as 

our testing, review of contract file documents, and assessment of contract performance, 

we determined that NASA had fully implemented 10 of the 13 controls and that these 10 

controls were operating effectively. Based on our review, we believe the Agency would 

 As a result of this 

assessment, they identified 13 internal controls they believed would ensure effective 

implementation of Recovery Act requirements. (Appendix C provides full details of 

NASA’s Recovery Act controls and their implementation status.) 

 

11 Two controls related to entering information in a Government-wide database maintained by the Recovery 

Act Board would not be applicable to contracts that are not funded by the Recovery Act.

12 SBIR Program Officials are responsible for the programmatic oversight of NASA’s SBIR and STTR 

Programs and include the SBIR Program Manager and the SBIR Business Manager.
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benefit from applying these controls across the SBIR and STTR Programs to 

non-Recovery Act funded awards.

Virtual Site Visits Have Helped NASA Monitor Contractor Performance. One of the 

Recovery Act internal controls NASA implemented is virtual site visits for Phase 2 

contractors.13

• oversight of project activities; 

 NASA officials conduct these virtual site visits using Internet-based 

meeting software with visual and voice telecommunication. The visits enable NASA 

officials to view contractors’ research facilities, compare actual contractor personnel to 

proposed personnel, assess contractor progress, and ensure that contractors are complying 

with requirements without incurring the cost and time associated with traveling to the 

contractors’ physical locations. During the visits NASA personnel assess the 

contractors’: 

• progress to date; 

• research plan to achieve project goals; 

• research accomplishments and their impacts to date; 

• project management and financial status; and

• future research goals and activities. 

According to the SBIR Program Manager, the SBIR Program Management Office plans 

to start conducting virtual site visits on all new contractors that received a 2009 

SBIR/STTR Phase 2 non-Recovery Act award.

We applaud NASA’s use of technology to develop a low-cost alternative to physical site 

visits and agree with NASA’s plan to expand these visits to all new Phase 2 SBIR and 

STTR contracts. We also believe that NASA should consider utilizing this tool to 

monitor other NASA awards where funding for on-site surveillance activities is limited.

Deliverables Received on Time and Controls Implemented to Improve Timeliness. 

For 28 of the 37 contracts we reviewed (76 percent), the contractors submitted the 

required deliverables by the due dates identified in the contract and in NASA’s 

SBIR/STTR Electronic Handbook used by NSSC to administer the contracts. During our 

review, we found that NASA has taken several steps to help ensure that contractors meet 

their due dates. 

First, NASA has programmed the Electronic Handbook to prevent contractors from 

submitting invoices for payment until NASA technical personnel have received and 

accepted the required deliverables. We reviewed the validity of this function by checking 

contracts with late deliverables against payments recorded in NASA’s electronic financial 

 

13 Virtual site visits have not been instituted for Phase 1 contracts due to the large number of awards, the 

6-month period of performance, and the low dollar amount (less than $100,000) associated with the 

contracts.
RESULTS

 

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management system. We noted no instances of payments made before deliverables had 

been recorded in the Electronic Handbook as received and accepted. In an effort to 

further reduce the incidence of late deliverables, the SBIR Program Management Office 

is working on enhancements to the Electronic Handbook to enable a more proactive 

means of notifying contractors and NASA technical personnel of approaching due dates. 

Second, NSSC generates a biweekly report that identifies late deliverables and the actions 

NASA personnel have taken in response, such as phone calls or e-mails to the contractor. 

NSSC sends the report to the contracting officer, who is responsible for ensuring that 

appropriate action is taken. Implemented in November 2010, this control has reduced the 

frequency of late deliverables by 60 percent. In January 2011, 2 months after the control 

was implemented, NSSC reported 208 instances of late deliverables for both Recovery 

Act and non-Recovery Act funded SBIR/STTR contracts. By May 2011, that number 

had decreased to 84 instances of late deliverables. However, NSSC does not provide its 

biweekly report to the SBIR Program or Business Managers. We believe providing this 

report to these individuals may result in additional reductions in late deliverables.

Three Recovery Act Controls Not Implemented. We found that the Agency had not 

implemented three of the Recovery Act controls because, according to Program officials, 

of resource limitations. First, NASA did not assign a full-time SBIR/STTR Program 

liaison from AIP. One of AIP’s responsibilities is to increase fraud awareness and 

minimize waste and abuse within NASA programs. However, we found that AIP was 

involved in developing the 13 Recovery Act controls as well as in drafting the Notice of 

Intent through which NASA informed contractors of the special requirements applicable 

to Recovery Act funded contracts. In addition, AIP has been available as needed to help 

address integrity issues with the contracts as they arose. SBIR Program officials also told 

us that they are working to identify an AIP liaison for both the SBIR and STTR Programs 

and hope to have this position filled in the near future. 

The other two Recovery Act controls NASA has not implemented related to COTR

certification and training. In the absence of these controls, we found that 7 of the 14 

individuals assigned as COTRs for Phase 2 contracts did not have the certification or 

training required to perform their duties. COTRs are the liaisons between NASA and the 

contractor and are responsible for performing critical technical functions to ensure that 

contracts are managed properly. Obtaining proper certification and training is essential to 

performing these functions. Moreover, Office of Management and Budget (OMB) 

guidance recommends that COTRs achieve and maintain this certification.14

In six of the seven instances in which the COTRS lacked proper certification, they 

incorrectly affirmed on the COTR delegation letter that they had been certified and 

attended the basic training. In the seventh instance, the COTR acknowledged that he did 

not have the required training but agreed to complete the training by March 25, 2010. 

However, this individual did not complete the training until September 16, 2011, nearly 

 

 

14 OMB Memorandum, “The Federal Acquisition Certification for Contractor Officer Technical 

Representatives,” November 26, 2007.
RESULTS

 

8 REPORT NO. IG-12-009-R 

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18 months after the agreed-upon date and 9 months after the completion of the Recovery 

Act contract to which he was assigned. Although we brought these issues to 

management’s attention in July 2011, because work on the Recovery Act funded 

contracts was nearing completion, none of the COTRs were removed from their duties or 

provided training. Moreover, at the completion of our fieldwork, in November 2011, 

three of these COTRs remained assigned to active contracts.

The contracting officer responsible for all seven of these contracts was unaware of the 

COTR training issues until we brought them to her attention. She indicated the first six 

instances were the result of an administrative error due to the delegated COTR checking 

an incorrect box on the COTR delegation letter. The seventh instance resulted from the 

individual not having time to attend the training. We believe had the Agency 

implemented the Recovery Act controls relating to COTR certification and training, these 

issues could have been avoided. 

On January 20, 2011, NASA issued Procurement Notice 04-55, “Appointment of 

Contracting Officer Technical Representatives,” which states that to improve internal

controls in the SBIR and STTR Programs, the NASA Federal Acquisition Regulation 

(FAR) Supplement is revised to require that COTRs on newly awarded Phase 2 and 

Phase 3 SBIR/STTR contracts are certified. While a positive step forward in 

strengthening internal controls over the SBIR/STTR Programs, this policy only applies to 

contracts awarded after January 20, 2011, and therefore will not remedy the issue of the 

existing COTRs that lack the required certification and training. 

NASA Paid Contractors for Unallowable Costs. We found that NASA awarded 

Recovery Act funded contracts that contained $115,297 in equipment costs that were 

unallowable based on the 2009 SBIR/STTR Program Solicitation and the lack of 

documentation supporting their necessity. Of the 37 contracts files we reviewed, we 

identified 4 in which equipment was charged as an “other direct cost.” However, 

NASA’s 2009 SBIR/STTR Program Solicitation states that “NASA will not fund the 

purchase of equipment, instrumentation, or facilities under SBIR/STTR contracts as a 

direct cost.” It further provided that the offeror should describe the relevant facilities and

equipment, their availability, and those to be acquired to support the proposed 

activities.

15

 

15 The 2009 SBIR/STTR Program Solicitation was released prior to NASA receiving Recovery Act funds; 

therefore, the award process was not subject to NASA’s Recovery Act controls.

 As a result, we question these costs as well as an additional $30,956 in 

associated G&A costs for a total of $146,253 in questioned costs. 
RESULTS

 

 REPORT NO. IG-12-009-R 9 

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Table 2. Unallowable Equipment Costs

Phase

Contract 

Number

(redacted)

Equipment 

Charged

Equipment

Costs

General and 

Administrative 

Costs* 

Total 

Questioned 

Costs

Phase 1 NNX10RA

Optics and 

electronics $12,000 $780 $12,780

Phase 1 NNX10RA

Supplies for an 

analyzer system $7,500 $1,411 $8,911

Phase 2 NNX09RA Not Specified $13,797 $6,346 $20,143

Phase 2 NNX10RA

Camera and 

electronics 82,000 22,419 104,419

 Total $115,297 $30,956 $146,253

* G&A costs are costs incurred by the contractor that are not directly related to the research and 

development project funded by NASA, but are a necessary cost of the contractor’s business.

We found no information in the contract files explaining the relevance of the equipment 

to performance of the contracts. In addition, the pre-negotiation technical review 

questions contained no explanation of the need for the equipment and the post-award 

reviewer did not identify why the equipment was needed to achieve the objectives of the 

contract. Accordingly, we were unable to determine whether these costs were reasonable 

and necessary. 

Comparable to the finding in our 2011 audit report, contracting officers allowed these 

costs as other direct costs without proper justification. In their response to the January 

2011 OIG report, NASA management stated that the technical evaluators did not object 

to the proposed equipment costs, the authority to allow equipment purchases was within 

the discretion of the contracting officer, and that the solicitation might not have 

accurately reflected the Agency’s intent regarding the allowability of equipment costs. 

To address this issue, NASA changed the 2010 SBIR/STTR Program Solicitation Guide 

language to clarify the allowability of equipment costs for 2010 awards, including the 

need for the purchase to be properly justified by the offeror and approved by NASA 

during contract negotiations. However, the wording in the 2009 SBIR/STTR Program 

Solicitation used for award of Recovery Act funded contracts did not allow for equipment 

costs to be charged as direct costs; therefore, we question the equipment and associated 

G&A costs charged to these contracts. (See the Schedule of Questioned Costs, 

Appendix B.)

Implementation of Controls Identified in Prior OIG Audit. In our January 2011 audit 

report we recommended that NASA implement 14 internal controls to help prevent and 

detect fraud in the larger SBIR Program. During the course of this audit, we reviewed the 

status of the Agency’s efforts to implement our recommendations and whether the 

Agency’s new Recovery Act controls, if applied across the SBIR/STTR Programs, would 

remedy any of the control deficiencies identified in the January 2011 report. However, 

we did not perform testing to determine the effectiveness of the controls. We found that 

issues related to 2 of the 14 controls (14 percent) were addressed through implementation 
RESULTS

 

10 REPORT NO. IG-12-009-R 

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of the Recovery Act controls. Additionally, 3 other recommended controls were partially 

addressed by the implementation of the Recovery Act controls. We also determined the 

Agency is making progress toward implementing corrective actions to address the 

remaining controls. The status of each control is provided in Appendix D. However, as 

previously stated, the status of the controls is based solely on interviews conducted and 

does not constitute a comprehensive review of NASA’s efforts to implement these 

controls and remedy the January 2011 report’s findings. 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

Recommendation 1. The Recovery Act Implementation Executive should work with the 

SBIR Program Executive and Assistant Administrator for Procurement to revise program 

policy to require the application of the Recovery Act controls, as appropriate, to improve the 

administration of the SBIR and STTR Programs.

Management’s Response. The Chief Financial Officer concurred with this 

recommendation, stating that NASA’s SBIR/STTR Program Executive and Program 

Manager will revise program policy by June 2012 to adopt, where appropriate, the 

controls piloted on the Recovery Act funded awards. Of the 13 controls that NASA 

adopted, 3 related to notification and reporting provisions specific to the Recovery Act, 

and therefore are not applicable to the Agency’s broader Program. Eight of the 

remaining 10 controls have been applied to the broader Program, and the Agency is 

working to implement the remaining two by June 2012. 

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

responsive to the intent of the recommendation. Therefore, the recommendation is 

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

Recommendation 2. The Recovery Act Implementation Executive should work with the 

SBIR Program Executive and Assistant Administrator for Procurement to coordinate with 

NSSC’s Lead SBIR Contracting Officer to develop and implement procedures to provide the 

information from the biweekly late deliverables report to the SBIR/STTR Program Manager 

and Business Manager at key decision points in program implementation. This would 

enable them to be aware of any problem contractors with late deliverables so that they can 

take additional action as necessary, including limiting the award of any future contracts. 

Management’s Response. The Chief Financial Officer concurred with this 

recommendation, stating that by June 2012 the contracting officers at NSSC will provide 

the SBIR/STTR Program Manager and Business Manager an analysis, at the time of new 

proposal selection, that includes past performance issues of the proposers so that this 

information may be factored into evaluations. 
RESULTS

 

 REPORT NO. IG-12-009-R 11

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

responsive to the intent of the recommendation. Therefore, the recommendation is 

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

Recommendation 3. The Recovery Act Implementation Executive should work with the 

SBIR Program Executive and Assistant Administrator for Procurement to evaluate the 

feasibility of utilizing the virtual site visit technology for other NASA awards where funds 

for on-site surveillance are limited.

Management’s Response. The Chief Financial Officer concurred with this 

recommendation, stating the Recovery Act Implementation Executive will work with the 

Assistant Administrator of Procurement to perform an analysis of where this best practice 

may be applicable to other types of NASA awards beyond the Recovery Act. The results 

of the analysis will be provided to the OIG by June 2012. 

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

responsive to the intent of the recommendation. Therefore, the recommendation is 

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

Recommendation 4. The Recovery Act Implementation Executive should work with the 

SBIR Program Executive and Assistant Administrator for Procurement to issue a written 

policy reminder to all contracting officers to follow existing guidance on the appointment 

and removal of COTRs who fail to meet training, certification, and educational requirements 

to ensure they do not perform oversight on NASA contracts until these requirements are 

met. 

Management’s Response. The Chief Financial Officer concurred with this 

recommendation, stating that by March 2012 the Assistant Administrator for 

Procurement will remind contracting officers to follow existing policy on the 

appointment and removal of COTRs who fail to meet training, certification, and 

educational requirements. 

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

responsive to the intent of the recommendation. Therefore, the recommendation is 

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

Recommendation 5. The Recovery Act Implementation Executive should work with the 

SBIR Program Executive and Assistant Administrator for Procurement to strengthen 

controls to ensure contracting officers and evaluators maintain proper documentation in the 

SBIR contract files to justify and validate the necessity of equipment purchases.

Management’s Response. The Chief Financial Officer partially concurred with this 

recommendation, agreeing that the contract files lacked proper documentation but 

rejecting the underlying finding that the equipment costs were unallowable. 
RESULTS

 

12 REPORT NO. IG-12-009-R 

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However, the Chief Financial Officer also stated that corrective action has already been 

taken to resolve the documentation issues we identified. Specifically, the Agency has 

trained the contracting officers at NSSC on effective proposal evaluation, accounting for 

costs, and assuring that proper documentation of this evaluation is in the contract files; 

the format for the price negotiation memorandums has been improved to assure that all 

elements of cost, including equipment costs, are appropriately considered; and a new 

technical evaluators’ guide to support the proposal selection and award process is 

expected to be implemented in the coming SBIR/STTR selection cycle.

Evaluation of Management’s Response. We continue to believe that the costs we 

identified were unallowable. First, as noted in our report, NASA’s 2009 SBIR/STTR 

Program Solicitation explicitly states that the Agency will not fund the purchase of 

equipment as a direct cost. Moreover, FAR 31.201-3 states a cost is reasonable if, in its 

nature and amount, it does not exceed that which would be incurred by a prudent person 

in the conduct of competitive business. In the absence of any information in the contract 

files explaining the relevance of the equipment to performance of the contracts or the 

reasonableness of the amount expended, we were unable to determine whether these costs 

were prudent or reasonable. 

Despite the disagreement about our underlying finding, the Chief Financial Officer listed 

a number of completed and planned actions to ensure that costs are documented properly 

in SBIR/STTR files. We consider these actions to be responsive to the intent of our 

recommendation. Therefore, the recommendation is resolved and will be closed upon 

completion and verification of the actions.
APPENDIXES

 

 REPORT NO. IG-12-009-R 13

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APPENDIX A 

Scope and Methodology

We performed this audit from January 2011 through January 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. 

The scope of our audit included a review of all Phase 1, 2, and 3 contracts funded with 

Recovery Act funds. This universe totaled 77 contracts with a combined value of 

$24.4 million. We selected and reviewed a judgmental sample of 37 of these contracts, 

which amounted to 48 percent of the total universe: 18 Phase 1 awards, 14 Phase 2 

awards, and 5 Phase 3 awards. We reviewed all Small Business Innovation Research 

Program (SBIR) and Small Business Technology Transfer Program (STTR) awards 

funded by the Recovery Act and programmatically managed by the three NASA Centers 

with the highest concentration of awards – Langley Research Center, Ames Research 

Center, and the Jet Propulsion Laboratory. We also performed a site visit at the NASA 

Shared Services Center (NSSC), which is responsible for the administrative oversight of 

all SBIR/STTR contracts. We also conducted interviews of SBIR Program officials at 

Headquarters. 

As part of our review, to determine if the implementation of the Recovery Act controls 

was effective as well as determining whether cost, schedule, and performance milestones 

were met on Recovery Act contracts, we interviewed Agency program and project 

officials and reviewed contract files, technical reports produced by NASA’s Electronic 

Handbook, and other documentation. Our fieldwork also included interviews of SBIR 

Program officials to assess the progress of the implementation of internal controls 

identified in the prior OIG audit. Because the prior audit focused on program year 2008 

SBIR awards and our audit focused on program year 2009 SBIR/STTR awards funded by 

the Recovery Act, many of these controls were not implemented prior to the start of our 

audit. 

Our process for reviewing documentation included: 

1. Reviewing requirements for SBIR/STTR contracts as stated in the 2009 NASA 

SBIR/STTR Solicitation.

2. Interviewing SBIR/STTR Program and technical officials, procurement officials, 

technical evaluators, COTRs, and contracting support personnel to identify 

specific procedures for reviewing and awarding contracts under the Recovery Act. 
APPENDIX A 

 

14 REPORT NO. IG-12-009-R 

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3. Reviewing contract files for the judgmentally selected sample of 37 program year 

2009 SBIR/STTR Recovery Act contracts to assess whether costs were properly 

accounted for and supported. 

Use of Computer-Processed Data. We used data from two databases: (1) NASA’s 

Electronic Handbook, and (2) SAP, NASA’s financial management system used to 

process invoices, which is accessible by NASA personnel and SBIR/STTR contractors. 

The Electronic Handbook is used for all SBIR/STTR transactions such as proposal 

submissions, proposal evaluations, documentation submissions, and correspondence. We 

used the Electronic Handbook data for the fiscal year 2009 contracts we reviewed. We 

compared the data obtained from the Electronic Handbook to contract file data provided 

to determine the reliability and accuracy of the data extracted from the Electronic 

Handbook. Due to the presence of late deliverables on nine contracts in our sample, we 

ran SAP reports to ensure payment was not made to the contractor prior to the acceptance 

of the late deliverable. We reviewed the invoices submitted by the contractor in SAP and 

traced them back to the applicable data in the Electronic Handbook and the contract files. 

Based on our testing, we verified that the date payments were made was consistent with

the date the deliverables were accepted by technical personnel; we noted no 

inconsistencies. As we noted no issues based on the comparisons between the source 

data and the computer processed data, we determined the systems we utilized, for 

purposes of our audit, to be reliable. 

Review of Internal Controls 

Our review of the Recovery Act internal controls included a review of NASA’s policies 

and procedures as they related to the Recovery Act. Specific controls were established 

over SBIR/STTR contracts funded by the Recovery Act (see Appendix C) as a way to 

mitigate fraud, waste, and abuse in the program and ensure compliance with Recovery 

Act requirements. We reviewed the requirements of the Recovery Act as identified in the 

“Updating Implementing Guidance for the American Recovery and Reinvestment Act of 

2009,” issued by OMB, April 3, 2009. We also reviewed the “American Recovery and 

Reinvestment Act Implementation Report for NASA Small Business Innovation 

Research (SBIR) and Small Business Technology Transfer (STTR)” issued by the 

Recovery Act Implementation Team, on October 6, 2010. Included in this 

Implementation Report was the Procurement Information Circular (PIC) 09-06B, 

“Contracting with Recovery Act Funds,” July 8, 2009. We reviewed this PIC and 

subsequent PICs issued through November 23, 2010. The PICs we reviewed are 

designed to document the Agency’s internal control requirements and we used this 

document to ensure that NASA was complying with Recovery Act Provisions, OMB 

Guidance and NASA policy. 

In addition to reviewing the above guidance, we also met with the Recovery Act 

Implementation Executive and other NASA SBIR Program officials to gain an 

understanding of the Recovery Act controls and their implementation. Our interviews 
APPENDIX A 

 

 REPORT NO. IG-12-009-R 15

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with NASA officials were used as a means to discuss contract performance processes and 

provide supporting documentation to ensure the Recovery Act internal controls were 

functioning effectively. As discussed in this report, our recommendations, if 

implemented, will improve these Recovery Act controls and enable the majority of them 

to be expanded to both the SBIR and STTR Programs. 

For our review of internal controls, we also reviewed guidance from OMB Circular 

No. A-123 “Management’s Responsibility for Internal Control,” December 21, 2004, and 

NASA’s fiscal year 2010 report on OMB Circular A-123, Appendix A, “Internal Control 

Over Financial Reporting.” In addition, we reviewed the Government Accountability 

Office’s “Standards for Internal Control in the Federal Government,” November 1999, 

and “Internal Control Management and Evaluation Tool,” August 2001. 

In accordance with OMB Circular A-123, we reviewed NASA’s “Certification of 

Reasonable Assurance over Internal Controls” for the Innovative Partnership Program 

(IPP) and for the Office of Small Business, which are responsible for some of the 

functions of the SBIR and STTR Programs. Both offices performed self-assessments on 

the internal controls over the effectiveness and efficiency of operations and compliance 

with laws and regulations. No internal control weaknesses relevant to this audit were 

identified in the self-assessments. In addition, management from both offices also 

provided assurance that there were no material weaknesses found in the design or 

operation of these internal controls.

Further, we reviewed the internal controls from the prior OIG report where specific 

controls were identified that would prevent and detect fraud and abuse in SBIR contracts. 

The prior OIG report identified 24 controls necessary to prevent and detect fraud and 

abuse. Of these 24 controls, 14 were determined to be absent from SBIR Program 

processes. During the course of our audit, we reviewed the Agency’s progress in 

implementing these 14 internal controls; however, we did not perform any testing to 

determine their effectiveness. Our review of the implementation status of these 14 

controls was limited to interviews with SBIR officials and provides evidence of the steps 

the Agency has taken implement correct actions to address the issues uncovered in the 

previous SBIR audit. 
APPENDIX A 

 

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Prior Coverage

During the last 5 years, the NASA Office of Inspector General (OIG),the Government 

Accountability Office (GAO), the National Research Council (NRC), and the Department 

of Energy (DOE) have issued 6 reports of particular relevance to the subject of this 

report; these reports are listed below. Unrestricted reports can be accessed over the 

Internet at http://oig.nasa.gov/audits/reports/FY12 (NASA OIG), http://www.gao.gov

(GAO), http://www.nap.edu/catalog (NRC), and http://www.ig.energy.gov (DOE).

NASA Office of Inspector General

“Review of NASA’s Management of Its Small Business Innovation Research Program” 

(IG-11-010-R, January 12, 2011) 

“Fraud, Waste, and Abuse in the SBIR Program” Testimony of Thomas J. Howard, 

Acting NASA Inspector General, August 6, 2009 

Government Accountability Office

“Small Business Innovation Research: Observations on Agencies’ Data Collection and 

Eligibility Determination Efforts” (GAO-09-956T, August 2009) 

“Recovery Act Contracting Approaches and Oversight Used by Selected Federal 

Agencies and States” (GAO-10-809, July 2010) 

National Research Council

“An Assessment of the Small Business Innovation Research Program at the National 

Aeronautics and Space Administration” (2009) 

Department of Energy

“Management Controls over Monitoring and Closeout of Small Business Innovation

Research Phase II Grants” (OAS-M-08-09, July 2008) 
APPENDIX B 

 

 REPORT NO. IG-12-009-R 17

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SCHEDULE OF QUESTIONED COSTS

Questioned Equipment Costs*

Phase 

Contract 

 Number 

(redacted)

Equipment 

 Costs 

General and 

Administrative 

 Costs 

Total 

Questioned 

Costs Page

Phase 1 NNX10RA $12,000 $780 $12,780 10

Phase 1 NNX10RA $7,500 $1,411 $8,911 10

Phase 2 NNX09RA $13,797 $6,346 $20,143 10

Phase 2 NNX10RA $82,000 $22,419 $104,419 10

 Total $115,297 $30,956 $146,253

* Questioned Costs are expenditures that are questioned by the OIG because of an alleged 

violation of legal, regulatory, or contractual requirements, are not supported by adequate 

documentation at the time of the audit, or are unnecessary or unreasonable. 
APPENDIX C 

 

18 REPORT NO. IG-12-009-R 

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RECOVERY ACT CONTROLS

This appendix table lists NASA’s 13 Recovery Act internal controls, showing their 

implementation status as well as additional notes on implementation status.

Recovery Act Control Implemented? Notes

1. Issue a Notice of Intent to each company 

awarded a Recovery Act contract to inform 

all parties and participants of the Recovery 

Act reporting provisions of the SBIR/STTR 

Programs and to describe the additional 

surveillance requirements to reduce potential 

for fraud, waste, and abuse. 

Yes

This control is operating effectively 

on Recovery Act contracts. 

2. Develop policies and guidelines to require all 

technical personnel to obtain COTR

certification.

No

We identified seven instances where 

a COTR was not certified.

3. Add a SBIR/STTR Program liaison from the 

Acquisition Integrity Program Office (AIP). 

No

According to NASA AIP personnel, 

there is insufficient staff to provide 

this support. However contracting 

officers at NSSC told us that when

the AIP needs to be consulted, 

NSSC will do so. 

4. Enhance the Electronic Handbook (EHB) to 

include NASA Account Management System 

(NAMS) security requirements.

Yes

This control is operating effectively 

on Recovery Act contracts. 

5. Complete a surveillance plan for each 

contract, identifying methods and procedures 

that the Government will use to review and 

evaluate contractor performance to ensure 

that the proposed contract standards detailed 

in the contract and the scope of work are 

achieved along with special requirements 

under the Recovery Act.

Yes

This control is operating effectively 

on Recovery Act contracts. 

6. Conduct cost/price analysis training at 

NSSC. Yes Training has been provided for personnel at NSSC.

7. Require firms to certify no waste, fraud, or 

abuse on a quarterly basis. Yes This control is operating effectively on Recovery Act contracts. 

8. Require contractors to enter data into the 

Recovery Act financial reporting website on 

a quarterly basis. 

Yes

This control is operating effectively 

on Recovery Act contracts. 

9. Require NSSC to validate the data entered at 

the Recovery Act website. Yes This control is operating effectively on Recovery Act contracts. 
APPENDIX C 

 

 REPORT NO. IG-12-009-R 19

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Recovery Act Control Implemented? Notes

10. Check the Central Contractor Registration 

database and Excluded Parties (Debarred) 

databases to ensure the contractor is eligible 

for Federal awards.

Yes

This control is operating effectively 

on Recovery Act contracts. 

11. Conduct checks of the past performance 

database, obtain 3 additional references, and 

check current financial standing with banks.

Yes

This control is operating effectively 

on Recovery Act contracts. 

12. Monitor the Center COTR assignments and 

delegation. No We identified seven instances where a COTR was not certified.

13. Use virtual site visits to assess the progress 

on the contracts and ensure that contractors 

are complying with contracting 

requirements.

Yes

This control is operating effectively 

on Recovery Act contracts. 
APPENDIX D 

20 REPORT NO. IG-12-009-R 

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CONTROLS RECOMMENDED IN PRIOR 

AUDIT TO PREVENT AND DETECT 

FRAUD AND ABUSE

Our January 12, 2011, audit (IG-11-010) identified 24 controls that could prevent or 

detect fraud and abuse. Of those 24 controls, 14 had not been implemented by NASA at 

the time of our audit. This appendix table shows their implementation status as of 

November 2011. 

Fraud Category 1: Firms or Principal Investigators Received Duplicate Awards for Same Research

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

1. SBIR Program Management Office (PMO) 

performs automated word search of 

(1) SBIR research proposals submitted to 

NASA and (2) research proposals funded 

by other SBIR awards using the Electronic 

Handbook (EHB) and the Small Business 

Administration databases. Automated 

word search produces a report of research 

proposals submitted to NASA that appear 

to duplicate proposals funded through 

other SBIR awards. PMO enlists technical 

personnel to compare research proposals

and verify whether a proposal a firm 

submitted to NASA duplicates a proposal 

that firm received SBIR award funding for 

from another Federal agency.

(Reference Control 4 in Appendix D of 

Audit Report IG-11-010-R.)

No PMO does not have unilateral authority to 

search across agencies. Thus, PMO officials

have been unable to run searches against the 

Small Business Administration’s Tech-Net

database and are working on a process to try 

to implement searching this database. That

said, procedures in use include a two-pronged 

approach to search for duplicate proposals:

1. Software Approach: When proposals are 

submitted, a software program is run on 

the proposal project description abstracts 

to check for duplicity. The software allows 

the controller to set the percentage of 

duplicity they are looking for and

compares each of the abstracts. 

2. Manual Approach: When proposals are 

received, they are divided alphabetically

by contractor name and assigned to a 

reviewer who reviews for duplicity, proper 

formatting, whether the use of Government 

facilities is required, and to ensure that the 

information in the proposal lines up with 

the electronic forms, among other things. 

In addition, NSSC service providers check 

proposal abstracts for duplicity, and report 

inconsistencies to the contracting officer. 

If a contractor submitted two proposals, 

the service providers check to see if they 

are similar.

Summary: Control is partially implemented.
APPENDIX D 

REPORT NO. IG-12-009-R 21

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Fraud Category 1 (continued)

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

2. PMO performs automated word search of 

(1) SBIR research proposals submitted to 

NASA, (2) research proposals funded by a 

NASA grant or contract, and (3) research 

proposals funded by another Federal 

agency under a grant or contract using the 

Electronic Handbook, NASA grant and 

contract databases, and the General 

Services Administration Federal 

Procurement Data Systems database. 

Automated word search produces a report 

of research proposals submitted to NASA

that appear to duplicate proposals funded 

through another Federal grant or contract. 

PMO technical personnel compare 

research proposals and verify whether 

research proposal that firm submitted to 

NASA duplicated proposal that firm 

received funding for from another Federal 

grant or contract.

(Reference Control 5 in Appendix D of 

Audit Report IG-11-010-R.)

No PMO does not have unilateral authority to 

search across agencies. However, the search 

procedures they use include a two-pronged 

approach to search for duplicate proposals

(see comment to #1 above). 

Summary: This control is partially 

implemented.

Fraud Category 2: Contractors Submitted Questionable Research Product

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls Comments

3. PMO performs automated word search of 

(1) SBIR research reports submitted to 

NASA that year, (2) research reports 

submitted to NASA under a grant or 

contract, and (3) research reports 

submitted to other Federal agencies under 

a grant or contract. PMO uses Electronic 

Handbook, NASA grant and contract 

databases, and the General Services 

Administration Federal Procurement Data 

Systems database. Automated word search 

produces a report of research reports 

submitted to NASA that appear to 

duplicate research reports submitted under 

another Federal grant or contract. SBIR 

Program enlists technical personnel to 

compare the research reports. Technical 

No The PMO does not have unilateral authority 

to search across agencies.

However, the search procedures currently 

used include a 2-pronged approach to search 

for duplicate proposals:

1. Software Approach: Once all of the 

proposals have been submitted, a software 

program is run on all of the proposed 

project description abstracts to check for 

duplicity. The software allows the 

controller to set the percentage of duplicity 

that they are looking for. It runs a check 

comparing each and every one of the 

abstracts against each other. 
APPENDIX D 

22 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

Fraud Category 2 (continued)

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls Comments

personnel verify whether research reports 

that firm submitted to NASA duplicated 

research reports that firm had submitted 

under another Federal grant or contract.

(Reference Control 6 in Appendix D of 

Audit Report IG-11-010-R.)

2. Manual Approach: Once all of the 

proposals have been submitted, end 

processing begins, where the proposals are 

divided into alphabetical order by 

contractor name, assigned to a reviewer, 

and subsequently reviewed for duplicity, 

proper formatting, whether they require the 

use of government facilities, and to ensure 

that the information in the proposal lines 

up with the electronic forms, among other 

things. 

In addition, NSSC service providers check 

proposal abstracts for duplicity and report any 

inconsistencies to the contracting officer. If a 

contractor has submitted two proposals for 

funding, the service providers will check the 

abstract to see if they are similar.

Summary: The control is partially 

implemented.

Fraud Category 3: Firms and Principal Investigators Violated SBIR Program Requirements

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

4. For each Principal Investigator (PI) being 

considered for contract award:

• PMO performs automated search of the 

Small Business Administration’s 

Tech-Net database to obtain a report of 

SBIR awards during a period;

• PMO uses an automated procedure to 

group the report of SBIR awards into 

SBIR awards, by PI; 

• PMO uses an automated procedure to 

identify PIs that have more than 2 

SBIR awards during the period;

• Contracting officer requests contractor 

to provide percentage of time that PI 

worked for firm during the period;

In Part NSSC makes sure that there is an actual 

person employed as PI on the award and that 

PI is primarily employed by the Small 

Business Concern at the time of the award. 

For STTRs, PI can be employed by the Small 

Business Concern or the Research Institute. 

NSSC also checks that PI has not proposed 

more work hours than the amount of hours 

proposed for the work year.

PMO stated that it is not yet possible to 

perform automated searches of the Small 

Business Administration’s Tech-Net database. 

There is currently no way to perform 

automated searches by PI because there is no 

unique identifier by PI across agencies. 

Further, NASA is not able in input their data 

into other agencies’ websites. 
APPENDIX D 

REPORT NO. IG-12-009-R 23

REDACTED FOR PUBLIC RELEASE

Fraud Category 3 (continued)

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

• PMO obtains percentages of time PI 

spent on SBIR awards that other 

Federal agencies funded during the 

period; and

• PMO and technical officer determine 

whether percentages of time appear 

realistic for PI or indicate a potential 

abuse (mischarging, unreported use of 

subcontractor, or failure to perform 

research). PMO refers questionable 

firms, PI, and contracts to the OIG.

(Reference Control 8 in Appendix D of 

Audit Report IG-11-010-R.)

Internally, when a proposal is received, the 

amount of work performed by PI is evaluated. 

PI is essentially the coordinator of the work 

effort. 

Virtual site visits implemented for Recovery 

Act awards were also used to verify the 

existence of PI. No issues were identified in 

this regard during the course of these site 

visits. 

Summary: The control is partially 

implemented.

Fraud Category 4: Actual Effort and Costs Differed Materially from What Was Negotiated 

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

5. Contracting officer should verify the 

firm’s labor rates with the Defense 

Contract Audit Agency (DCAA) for firms 

that were audited; or with other funding 

agencies for firms that DCAA has not 

audited

(Reference Control 15 in Appendix D of 

Audit Report IG-11-010-R.)

No According to NSSC there needs to be a 

historical basis for the proposed rates. If they 

don’t have rates approved by another agency, 

NSSC will review the basis for the proposed 

rates and make a determination as to whether 

the rates are reasonable.

When the proposals are downloaded from 

Electronic Handbook, the service providers 

check Form C to determine if the contractor 

has listed a DCAA point of contact. The 

service providers will try to contact DCAA to 

verify whether the firm has approved/audited 

rates. Usually, small firms do not have 

audited/approved rates. The service providers 

try to verify the contractor’s proposed rates 

against rates already approved/audited by 

cognizant agency. As a last resort, the service 

providers may use the basis of the 

contractor’s rates. The contracting officers 

then review the information using their 

expertise to determine the rates fair and 

reasonable.

Summary: The control is fully implemented.
APPENDIX D 

24 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

Fraud Category 4 (continued)

IG-11-010-R 

Recommended Control

Covered by 

Recovery Act 

Controls? Comments

6. Technical officer prepares final 

performance file on Phase 2 contractor.

(Reference Control 17 in Appendix D of 

Audit Report IG-11-010-R.)

No Contract files are updated throughout the life 

of the contract; however, final documentation 

is normally placed in the files by the service 

providers before it is moved to closeout. 

After the contracting officers receive the final 

invoice, they perform a final check to confirm 

all deliverables received and accepted. The 

contracting officer then approves and pays the 

invoice. The service providers then close the 

contract out but do not review the contract 

file once it has been closed.

Summary: The control is fully implemented.

Fraud Category 5: Contractors Misused SBIR Funds

IG-11-010-R 

Recommended Control

Area Covered 

by Recovery 

Act Controls? Comments

7. PMO and technical officers assess 

indicators that firm will have excess cash 

on a NASA SBIR contract. Excess cash 

occurs when firm’s actual expenses are 

materially less than proposed. PMO refers 

problematic firms to the OIG. Also, PMO

assesses the following indicators:

• Firm demonstrated substandard 

performance. Substandard 

performance can indicate firm spent 

less on actual labor than it proposed.

• Firm recycled or plagiarized reports. 

Recycled reports can indicate that firm 

had to submit report from prior 

research as the deliverable because the 

firm did not spend contract funds on 

researcher labor.

• Firm submitted duplicate proposals. 

Duplicate proposals can indicate that 

firm did not use actually conduct 

research. 

• PI has an unreasonable number of 

awards for period of contract. An 

unreasonable number of awards can 

indicate that PI did not actually 

perform research, firm used 

In Part All SBIR/STTR awards are firm-fixed-price 

contracts, and all costs were previously 

negotiated. There were no instances of 

excess cash.

Instances of substandard performance are 

reviewed at NSSC. If a contractor has had a 

report of substandard performance it could 

stop them from being awarded a contract.

During the proposal search for duplicate 

work, the technical reviewers will assess 

whether any documentation appears to be 

recycled or plagiarized. 

Internally, the when a proposal is received, 

the amount of work performed by the PI is 

evaluated.

Virtual site visits implemented for Recovery 

Act awards were also used to verify the 

legitimacy of the contractor’s facility. 

Labor rates are reviewed by NSSC to 

determine reasonableness; however, they are 

not reevaluated when invoices are submitted. 

Summary: The control is partially 

implemented. 
APPENDIX D 

REPORT NO. IG-12-009-R 25

REDACTED FOR PUBLIC RELEASE

Fraud Category 5 (continued)

IG-11-010-R 

Recommended Control

Area Covered 

by Recovery 

Act Controls? Comments

subcontractor to perform research, or 

firm recycled old research. 

• Firm lacks a legitimate business 

facility. Lack of a business facility can 

indicate firm did little, if any, actual 

research.

• Firm proposed higher labor rates than it 

actually paid. Higher proposed labor 

rates can indicate that firm knowingly 

proposed lower rates to provide firm 

excess cash.

(Reference Control 18 in Appendix D of 

IG-11-010-R.)

8. PMO reviews indicators identified in 

Control No. 18 from IG-11-010-R against 

the firm’s cost-type contracts. For each 

SBIR contract identified at risk for fraud, 

waste, or abuse, the PMO will assess 

whether the firm may have applied 

overruns on a NASA SBIR contract to a 

cost-type contract. PMO refers 

problematic firms to the OIG. 

(Reference Control 20 in Appendix D of 

Audit Report IG-11-010-R.)

No All SBIR/STTR awards are firm-fixed-price 

contracts, and all costs were previously 

negotiated. There were no instances of cost 

overruns. 

Summary: The control is partially 

implemented.

9. PMO reviews indicators in Control No. 18, 

above, against the firm’s contracts that 

have large indirect accounts. For each 

SBIR contract identified at risk for fraud, 

waste, or abuse, the SBIR PMO will assess 

whether the firm may have applied 

overruns on a NASA SBIR contract to 

indirect accounts. SBIR PMO refers 

problematic firms to the OIG. 

(Reference Control 21 in Appendix D of 

Audit Report IG-11-010-R.)

No For Recovery Act contracts, contractors were 

required to certify quarterly that there was no 

fraud, waste or abuse. The Recovery Act 

contracts were all firm-fixed-price contracts

and all costs were previously negotiated so 

there were no instances of cost overruns. 

The contracting officer did state that if there 

was an issue with costs, it would be flagged 

on their internal checklist by the service 

providers. The contracting officer would 

work with the contractor to determine why 

the costs were misallocated or misclassified.

In cases of fraud, the contracting officer 

would work with the PMO to take a technical 

look at the work. After the technical review, 

the Inspector General’s office would be 

contacted as needed and, if another level of 

review is needed, they would contact the 

Acquisition Integrity Program Office. 

Summary: The control is partially 

implemented.
APPENDIX D 

26 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

Fraud Category 5 (continued)

IG-11-010-R 

Recommended Control

Area Covered 

by Recovery 

Act Controls? Comments

10.Contracting officer requires SBIR firms to 

describe researchers in progress reports. 

Firms should identify personnel who 

worked on the SBIR research during the 

reporting period and describe their role. 

Contracting officer requires SBIR firms to 

provide the names, phone numbers, and 

email addresses of the PI, researchers, and 

subcontract researchers.

(Reference Control 22 in Appendix D of 

Audit Report IG-11-010-R.)

Yes – Control 

No. 5

For Recovery Act contracts, key personnel 

are verified at the time of selection by the 

proposal evaluation team. NSSC compares 

the information from the proposal to the 

information on Form A. Also, the COTR/

technical monitor are required to complete a 

surveillance plan for each contract and 

provide quarterly reports to document various 

information on the work being performed. 

Summary: The control is fully implemented

with the Recovery Act Controls.

11.Contracting officer requires SBIR firms to 

submit evidence with the firm’s invoice 

that firm has not billed NASA for 

nonexistent employees. Evidence could 

include employee addresses or email, 

written employment agreement, or other 

support.

(Reference Control 23 in Appendix D of 

Audit Report IG-11-010-R.)

In Part NSSC personnel stated that for Recovery Act 

contracts this is difficult to complete because 

normally the proposal only lists the key 

employees whereas the labor dollars include 

all people involved in the work. This is why 

there is follow up on the virtual site visit to 

determine that the people proposed to work 

on the contract are actually the people that are 

engaged in the work.

Summary: The control is partially 

implemented.

12.PMO reviews indicators identified in 

Control No. 18 from report IG-11-010-R. 

For each SBIR contract identified at risk 

for fraud, waste, or abuse, the SBIR PMO

will assess whether the firm may have 

charged unallowable costs to a NASA 

SBIR contract. PMO refers problematic 

firms to the OIG. 

(Reference Control 24 in Appendix D of 

Audit Report IG-11-010-R.)

Yes – Control 

No. 7

For Recovery Act contracts, contractors were 

required to certify quarterly that there was no 

fraud, waste and abuse. Unallowable costs on 

these Recovery Act contracts have not been a 

big issue, but there has been a problem with 

unallowable cost of money being proposed. 

The contracting officers are responsible 

checking for unallowable costs. 

Summary: The control is fully implemented. 

13.PMO reviews indicators identified in 

Control No. 18 from report IG-11-010-R. 

For each SBIR contract identified at risk 

for fraud, waste, or abuse, the SBIR PMO

will assess whether the firm may have 

used funds from a NASA SBIR contract to 

support a commercial contract. PMO

refers problematic firms to the OIG. 

(Reference Control 25 in Appendix D of 

Audit Report IG-11-010-R.)

No For Recovery Act contracts, contractors were 

required to certify quarterly that there was no 

fraud, waste and abuse. Also, this 

information would be contained in section 8 

of the proposal which pertains to Company 

information and Facilities and lists any 

ongoing contracts the contractor has. 

However, there is essentially no way to verify 

this being done because NASA doesn’t 

perform individual audits of other SBIR 

contracts that a contractor may have received 

funding on, in addition to their current NASA 

SBIR contract. 

Summary: The control is not implemented. 
APPENDIX D 

REPORT NO. IG-12-009-R 27

REDACTED FOR PUBLIC RELEASE

Fraud Category 5 (continued)

IG-11-010-R 

Recommended Control

Area Covered 

by Recovery 

Act Controls? Comments

14.Technical officer compares actual labor 

rates reported on invoice with verified 

rates.

(Reference Control 26 in Appendix D of 

Audit Report IG-11-010-R.)

No All SBIR/STTR awards are firm-fixed-price 

contracts and all costs were previously 

negotiated. There was no requirement to 

break out costs by cost element on the 

contractor’s invoices.

Summary: Per IG-11-010-R, the control is 

partially implemented. NASA’s response 

(Appendix E of IG-11-010-R) stated that 

NASA will explore the option to implement 

this control, but there is not a mechanism in 

place Government- wide to compare actual 

labor rates on an invoice with previously 

verified rates for firm-fixed-price contracts.
APPENDIX E

28 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

MANAGEMENT COMMENTS
APPENDIX E

REPORT NO. IG-12-009-R 29

REDACTED FOR PUBLIC RELEASE
APPENDIX E

30 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE
APPENDIX E

REPORT NO. IG-12-009-R 31

REDACTED FOR PUBLIC RELEASE
APPENDIX F 

32 REPORT NO. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

REPORT DISTRIBUTION

National Aeronautics and Space Administration

Administrator

Deputy Administrator

Chief of Staff

Assistant Administrator for Procurement

Chief Financial Officer

Recovery Act Implementation Executive

SBIR Program Executive

SBIR Program Manager

SBIR Business Manager

NASA Advisory Council’s Audit, Finance, and Analysis Committee

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, NASA Financial Management, Office of Financial Management and 

Assurance 

Director, NASA Issues, 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

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-12-009-R 33

REDACTED FOR PUBLIC RELEASE

Major Contributors to the Report: 

Laura Nicolosi, Director, Mission Support 

John Apker, Project Manager 

Myra Thompson, Lead Auditor

Curt Brown, Procurement Analyst 

Arnold Pettis, Data Mining, Statistician
FEBRUARY 2, 2012

 REPORT No. IG-12-009-R 

REDACTED FOR PUBLIC RELEASE

OFFICE OF AUDITS

OFFICE OF INSPECTOR GENERAL

ADDITIONAL COPIES

Visit http://oig.nasa.gov/audits/reports/FY12/ to obtain additional copies of this report, or contact the 

Assistant Inspector General for Audits at 202-358-1232. 

COMMENTS ON THIS REPORT

In order to help us improve the quality of our products, if you wish to comment on the quality or 

usefulness of this report, please send your comments to Mr. Laurence Hawkins, Audit Operations and 

Quality Assurance Director, at Laurence.B.Hawkins@nasa.gov or call 202-358-1543. 

SUGGESTIONS FOR FUTURE AUDITS

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

Ideas and requests can also be mailed to:

Assistant Inspector General for Audits 

NASA Headquarters

Washington, DC 20546-0001 

NASA HOTLINE

To report fraud, waste, abuse, or mismanagement, contact the NASA OIG Hotline at 800-424-9183 or 

800-535-8134 (TDD). You may also write to the NASA Inspector General, P.O. Box 23089, L’Enfant 

Plaza Station, Washington, DC 20026, or use http://oig.nasa.gov/hotline.html#form. The identity of 

each writer and caller can be kept confidential, upon request, to the extent permitted by law.