JULY 27, 2010

AUDIT REPORT

REPORT NO. IG-10-017 (ASSIGNMENT NO. A-09-009-05)

OFFICE OF AUDITS

AUDIT OF NASA’S RECOVERY ACT PROCUREMENT 

ACTIONS AT JOHNSON SPACE CENTER,

GODDARD SPACE FLIGHT CENTER, LANGLEY 

RESEARCH CENTER, AND AMES RESEARCH CENTER

OFFICE OF INSPECTOR GENERAL

National Aeronautics and 

Space Administration

JULY 27, 2010

REPORT NO. IG-10-017

OVERVIEW

AUDIT OF NASA’S RECOVERY ACT PROCUREMENT ACTIONS

AT JOHNSON SPACE CENTER, GODDARD SPACE FLIGHT 

CENTER, LANGLEY RESEARCH CENTER, AND 

AMES RESEARCH CENTER

The Issue

The American Recovery and Reinvestment Act of 2009 requires an unprecedented level 

of transparency and accountability to ensure that Recovery Act funds are expended in 

accordance with the requirements of the Act and to make information about these 

expenditures readily available to the public. In support of these objectives, the Act 

requires Federal Offices of Inspector General to assess their agency’s compliance with the 

Recovery Act provisions set forth in the Office of Management and Budget’s 

Implementing Guidance1(OMB Guidance), which details requirements that Agencies 

must follow in awarding and modifying contracts, grants, and cooperative agreements 

using Recovery Act funds. In addition to the OMB Guidance, NASA developed new

Procurement Information Circular (PIC) and Grant Information Circular (GIC) to provide 

additional guidance for contract, grant, and cooperative agreement actions using 

Recovery Act funds. 

The NASA Office of Inspector General (OIG) examined Recovery Act-funded 

procurement actions NASA awarded from February 17, 2009 (when the Recovery Act 

was enacted), through November 30, 2009. We reviewed contracts, cooperative 

agreements, and contract modifications to determine NASA’s compliance with Recovery 

Act requirements and with NASA and OMB guidance. We performed our audit work at 

four NASA Centers, reviewing 28 procurement actions totaling $432 million in Recovery 

Act funds. The procurement actions involved 11 programs, projects, and activities (see 

Table 1). 

 

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

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

ii REPORT NO. IG-10-017

Table 1. Recovery Act-Funded Awards to 11 NASA Programs and Projects

NASA 

Center

Contract 

Amount 

(million) Recipient Program/Project

Johnson $201.3 Cross-Agency Support: Institutional Investments Program

Orion Project

Goddard $193.5 Landsat Data Continuity Mission 

Global Precipitation Measurement (GPM) Project

Glory Project

NASA/NOAA Climate Sensors Investment: Total and Spectral Solar 

Irradiance Sensor (TSIS) Instrument

James Webb Space Telescope (JWST) Project

Langley $21.2 NASA/NOAA Climate Sensors Investment: Clouds and the Earth’s 

Radiant Energy System Flight Module 6 (CERES FM6) Instrument

Ames $16.3 Unitary Plan Wind Tunnel (UPWT) Facility Upgrade Project

High-End Computing Capability (HECC) Project

Wildfire Research and Applications Partnership (WRAP) Activity

For each of the awards and modifications, we analyzed the contract and cooperative 

agreement files and reviewed each Center’s process for modifying the contracts and 

awarding the cooperative agreement under the Recovery Act requirements outlined in the

OMB and NASA guidance. Details of the audit’s scope and methodology are in 

Appendix A.

Results

Of the 28 procurement actions we reviewed, all 28 complied with the OMB Guidance. 

However, 3 of the procurement actions did not fully comply with NASA guidance

governing the use of Recovery Act funds. 

Specifically, we found that the contract modification files for the Orion Project at 

Johnson Space Center and the Landsat Data Continuity Mission at Goddard Space Flight 

Center did not contain all of the supporting documentation to demonstrate that the 

negotiations had taken place between NASA and the respective contractors for the 

Recovery Act work. NASA’s PIC2states that contracting officers shall document 

negotiations for Recovery Act work in the contract file. NASA procurement staff told us 

that they conducted negotiations with the Orion and Landsat Data Continuity Mission

contractors but did not fully document these negotiations in the contract file because they 

believed conducting verbal/e-mail negotiations was sufficient. However, by not fully 

documenting the negotiations in the contract file NASA officials do not have all of the

evidence to support that they communicated to the contractor that this portion of the work 

 

2 NASA Procurement Information Circular 09-06D, “Contracting With Recovery Act Funds,” October 15, 

2009.
OVERVIEW

REPORT NO. IG-10-017 iii

would be paid for using Recovery Act funds. As a result, NASA runs the risk that 

Recovery Act funds expended on the Orion Project and Landsat Data Continuity Mission

may not be used for their intended purpose.

The third procurement action that did not fully adhere to NASA guidance pertained to the 

award of a cooperative agreement. In this case, Ames Research Center (Ames)

procurement staff did not require California State University-Monterey Bay3(California 

State) to submit an updated schedule of Recovery Act task milestones with their revised 

proposal for the Wildfire Research and Applications Partnership Activity funded with

Recovery Act funds. California State originally submitted a proposal for non-Recovery 

Act NASA funds to conduct research in collaboration with NASA to improve wildfire 

response. The proposal was not selected for award. When Recovery Act funds became 

available, Ames awarded a cooperative agreement based on the previously submitted 

proposal.

4

 Ames and California State agreed to a two year period of performance, 

however, Ames did not direct California State to file a Recovery Act task schedule to 

reflect the new milestones and period of performance. NASA’s GIC, which applies to 

grants and cooperative agreements, states that NASA should require updated proposals 

that include the minimal amount of detail necessary to execute an award. Ames

procurement personnel did not require California State to file an updated schedule 

because, in their view, it was not a necessary element of the revised proposal and was not 

specifically required by the GIC. However, without an updated schedule to demonstrate 

Recovery Act task milestones, Ames would not have a key element with which to 

measure California State’s performance. Since NASA may award up to 10 cooperative 

agreements to other Recovery Act recipients, it is imperative that updated schedules be 

required for all cooperative agreement awards to ensure accountability and transparency. 

Subsequent to our review, Ames provided the OIG with a copy of the updated schedule 

they received from California State, reflecting the new period of performance for the 

cooperative agreement. 

Management Action

To ensure accountability and transparency in the use of Recovery Act funding, we 

recommend that NASA’s Recovery Act Implementation Executive require that the Orion 

Project and Landsat Data Continuity Mission fully comply with requirements to 

document all contract negotiations in writing and include the documentation in the 

contract file. We also recommend that the Recovery Act Implementation Executive 

 

3 The cooperative agreement was awarded to The University Corporation at Monterey Bay on behalf of 

California State University-Monterey Bay. 

4 NASA Grant Information Circular 09-03A, “Implementation of the American Recovery and Reinvestment

Act of 2009,” August 28, 2009. The GIC states that Recovery Act funds may be used to fund proposals 

not previously awarded provided the date of the non-selection decision has not exceeded 6 months. The 

award of the cooperative agreement to California State University-Monterey Bay was within the 6-month 

limit.
OVERVIEW

iv REPORT NO. IG-10-017

remind contracting officers of the importance of ensuring that contract negotiations are 

properly documented.

In addition, we recommend the Recovery Act Implementation Executive require grant 

officers to obtain a schedule of milestones or other appropriate documentation to ensure 

that the awardee is measured against the accountability aspects of the Recovery Act and 

to demonstrate that the awardee understands the terms and conditions of the Recovery 

Act award.

In NASA’s response to our draft report, received July 23, 2010, the Recovery Act 

Implementation Executive states that the Agency generally concurs with the observations 

noted in this report and has taken action to address our recommendations to include 

adding the requisite documentation to the procurement files. 

However, the response also indicates the Agency has concerns with one of our 

observations, which states that without proper documentation to support negotiations with

the contractors, Recovery Act funds might not be used for their intended purpose. NASA 

believes that detailed negotiations and the execution of the contract modifications by both 

parties results in minimal risk that Recovery Act funds would not be used for their 

intended purpose. Further, NASA feels if the funds were not used for their intended 

purpose, the contractor would be in default.

While we understand the Agency’s concerns, we believe maintaining complete 

documentation of all negotiations in the contract files provides evidence of the specific 

tasks agreed upon between NASA and the contractor. Such documentation would also 

assist in supporting NASA’s position should a dispute arise with the contractors at a later 

date, thereby protecting the interests of the Agency.

The Recovery Act Implementation Executive’s actions are responsive to our 

recommendations. Therefore, the recommendations are resolved and we will close the 

recommendations upon verifying proper implementation of the recommended corrective 

actions.
JULY 27, 2010

REPORT NO. IG-10-017

CONTENTS

INTRODUCTION

Background _________________________________________ 1

Objectives __________________________________________ 2

RESULTS

Three Recovery Act Procurement Actions Did Not Follow

NASA Guidance ___________________________________ 4

APPENDIX A

Scope and Methodology_______________________________ 11

Review of Internal Controls ____________________________ 12

Prior Coverage ______________________________________ 12

APPENDIX B

Programs/Projects Reviewed ___________________________ 14

APPENDIX C

Report Distribution___________________________________ 21

JULY 27, 2010

REPORT NO. IG-10-017 1

INTRODUCTION

Background

On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (Recovery 

Act) was signed into law. The Recovery Act seeks to strengthen the U.S. economy 

through the creation of new jobs, spur technological advances in science and health, and 

invest in infrastructure to provide long-term benefits. The Recovery Act also requires an 

unprecedented level of transparency and accountability to ensure that Recovery Act funds 

are expended in accordance with the requirements of the Act and to make information 

about the expenditure of Recovery Act funds readily available to the public.

NASA received $1 billion under the Recovery Act, allocated to the following mission 

areas:

Science: $400 million to accelerate the development of the tier 1 set of Earth 

Science climate research missions recommended by the National

Academies Decadal Survey and to increase the agency’s supercomputing 

capabilities.

Aeronautics: $150 million for system-level research, development, and 

demonstration activities related to aviation, safety, environmental impact 

mitigation, and the Next Generation Air Transportation System.

Exploration: $400 million to develop safe and robust capabilities for human space 

exploration and to stimulate efforts within the private sector to develop and 

demonstrate technologies that enable commercial human spaceflight capabilities.

Cross-Agency Support: $50 million to restore NASA-owned facilities damaged by 

natural disasters in 2008.

We examined 28 procurement actions awarded to 11 programs, projects, and activities

totaling $432 million in new contracts, cooperative agreements, and modifications to 

existing contracts funded with Recovery Act funds. Our audit locations included the 

Johnson Space Center, Goddard Space Flight Center, Langley Research Center, and 

Ames Research Center. Table 2 identifies the programs/projects we reviewed at each 

Center. See Appendix B for a more detailed description of the programs and projects

examined in this review.
INTRODUCTION

2 REPORT NO. IG-10-017

Table 2. Recovery Act Procurement Actions Reviewed

NASA 

Center

Mission 

Area Program/Project

Types of Procurement 

Actions Reviewed

Amount 

(million)

Johnson CrossAgency

Support

Cross-Agency Support: 

Institutional Investments Program

8 newly awarded 

contracts

5 contract modifications

$35.4

Exploration Orion Project 1 contract modification $165.9

Goddard Science/

Earth 

Science

Landsat Data Continuity Mission 3 contract modifications $44.2

5

Global Precipitation 

Measurement Project

2 contract modifications $32.0

Glory Project 1 contract modification $16.0

NASA/NOAA Climate Sensors 

Investment: Total and Spectral 

Solar Irradiance Sensor 

1 contract modification $26.3

Science/

Astrophysics

James Webb Space Telescope 

Project

2 contract modifications $75.0

Langley Science/

Earth 

Science

NASA/NOAA Climate Sensors 

Investment: Clouds and the

Earth’s Radiant Energy System 

Flight Module 6 (CERES FM6) 

instruments

1 contract modification $21.2

Ames Aeronautics Unitary Planned Wind Tunnel 

Facility 

1 contract modification $9.0

Science/

Earth 

Science

High-End Computing Capability 

Project

2 contract modifications $6.0

Wildfire Research and 

Applications Partnership Activity

1 newly awarded 

cooperative agreement

$1.3

 Total $432.3

Source: NASA Recovery Act Contract Files 

Objectives

Our overall audit objective was to determine whether NASA awarded contracts, 

cooperative agreements, and contract modifications in compliance with the Recovery Act 

provisions set forth in OMB and NASA guidance for grants and procurements.

Specifically, we examined whether NASA

properly posted funding opportunities to the NASA and Recovery.gov Web sites;

structured award documents to result in meaningful and measurable outcomes 

consistent with goals of the Recovery Act;

included the appropriate Recovery Act clauses on the contract, contract 

modification, and cooperative agreement award documents;

executed Recovery Act awards in a timely manner; 

 

5 The Landsat Data Continuity Mission received $63.4 million in Recovery Act funds. At the time of our 

review, $44.2 million had been awarded.
INTRODUCTION

REPORT NO. IG-10-017 3

documented justification for the type of contract awarded and ensured the 

justification aligned with contract objectives and Recovery Act goals; and

properly awarded and justified any contract that was other than competitively 

awarded.

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

4 REPORT NO. IG-10-017

THREE RECOVERY ACT 

PROCUREMENT ACTIONS DID 

NOT FOLLOW NASA

GUIDANCE

Based on our review of 28 procurement actions, we determined that NASA’s 

Recovery Act-funded awards generally complied with OMB and NASA guidance, 

although we identified 3 procurement actions that did not fully comply with NASA 

guidance. For each contract action, we reviewed the contract file to ensure that,

when practical, firm-fixed-price contracts were awarded, contracts were competed, 

and small business participation was considered. We noted that 6 of the 28 

procurement actions were not competitively awarded; however, these awards were 

properly justified. The 6 procurement actions were awarded to small disadvantaged 

businesses and had contract values of less than the $3.5 million threshold that 

requires competition according to Federal regulations.

6

 We also reviewed the 

contract files to ensure they contained appropriate Recovery Act clauses in the award 

documents; that the contract requirements, including cost and schedule information,

were separate for each Recovery Act action; and that each NASA Center complied 

with the requirements for the pre-award and pre-solicitation process outlined in the 

OMB Guidance and NASA Circulars. In addition, we reviewed the contract and 

contract modification files to ensure the Recovery Act tasks identified could be easily 

tracked and segregated from work funded by non-Recovery Act funds. Finally, we 

reviewed the contract modification files for documentation of communications 

between NASA procurement officials and the respective contractors regarding their 

ability to perform the work while adhering to the terms of the Recovery Act. 

Two Contract Negotiations Did Not Fully Comply With NASA 

Guidance 

Two of the 28 contract files we reviewed did not contain full documentation of 

negotiations between NASA and the contractor to modify Recovery Act-funded 

procurement actions. Specifically, the contract files for the Orion Project at Johnson and 

the Landsat Data Continuity Mission at Goddard did not contain all of the supporting 

documentation of the negotiations held between NASA and the respective contractors 

regarding the work to be performed. Procurement officials for both projects explained 

that they had conducted multiple negotiations with the contractors regarding the scope 

and cost of the Recovery Act work; however, they did not document these negotiations in 

the contract modification files. NASA’s Procurement Information Circular7, states that 

contracting officers shall document negotiations for Recovery Act work in the contract 

 

6

Federal Acquisition Regulation (FAR), Part 19.805-1. 

7

PIC 09-06D, “Contracting With Recovery Act Funds,” October 14, 2009. 
RESULTS

REPORT NO. IG-10-017 5

file. Specifically, section 3, paragraph e, states that negotiation documents, which might 

include a detailed pre- and post-negotiation memorandum for large, new awards, or a 

memorandum to the file for modifications to existing awards, shall indicate that pricing

of work to be performed with Recovery Act funds was negotiated or agreed upon as a 

stand-alone effort that is separately identifiable. 

Project personnel stated that they were unaware of the requirements for documenting the 

negotiations in a written summary and believed that verbal or e-mail negotiations sufficed 

because the procurement actions were modifications to existing contracts and the scope 

and pricing of the work was outlined in the contract modification document. However, 

because they did not document these verbal or e-mail negotiations in the contract file, 

NASA officials did not have the necessary supporting documentation that NASA staff

communicated to the contractor that this portion of the work would be performed using 

Recovery Act funds. Subsequently, the Orion Project and Landsat Data Continuity 

Mission run the risk that Recovery Act funds may not be used for their intended purpose.

One Cooperative Agreement Did Not Fully Comply with NASA 

Guidance

California State University-Monterey Bay (California State) originally submitted a proposal 

for the Wildfire Research and Applications Partnership (WRAP) Activity in response to a 

NASA Broad Agency Announcement.

8

 However, the proposal was not selected for award at 

the time of original submission. When Recovery Act funds became available, Ames 

Research Center awarded a cooperative agreement to California State based on the 

previously submitted proposal. NASA policy states that Recovery Act funds may be used to 

fund proposals not previously awarded provided the date of the non-selection decision has 

not exceeded 6 months. In addition, the recipient must agree to all terms and conditions 

required by the Recovery Act and must be provided a reasonable opportunity to revise its 

proposal. If these conditions are met, the grant or cooperative agreement is determined to be 

awarded competitively. We verified that the date of non-selection had not exceeded the 6-

month time limit, that there was adequate documentation showing California State agreed 

with all Recovery Act clauses and conditions, and they had the opportunity to revise their 

proposal. However, the cooperative agreement did not contain a revised schedule that would 

allow NASA to measure performance.

We reviewed the revised proposal submitted by California State in relation to the 

Recovery Act portion of the cooperative agreement. Ames and California State agreed to 

a 2-year period of performance, however, the table with the specific activities and dates 

for when these activities would be accomplished had not been updated to reflect the new 

period of performance. NASA’s Grant Information Circular9states that NASA should 

 

8 Broad Agency Announcement is a competitive solicitation procedure used to obtain proposals for basic 

and applied research not related to the development of a specific system or hardware procurement.

9 GIC 09-03A, “Implementation of the American Recovery and Reinvestment Act of 2009,” August 28, 

2009. 
RESULTS

6 REPORT NO. IG-10-017

request updated proposals that include the minimal amount of detail necessary to execute 

an award. Ames procurement personnel stated that California State did not submit a 

revised schedule with their revised proposal. In the view of Ames procurement 

personnel, the schedule was not a necessary element of the revised proposal. Ames

procurement personnel explained that they measure performance against the project 

objectives listed in the proposal and require the recipient to provide monthly progress 

reports. They also stated that the nature of the cooperative agreement requires NASA to 

have an integral role in the work and, in complying with that requirement, they will 

monitor California State’s achievement of the milestones throughout the period of 

performance.

We believe the updated schedule is an integral part of the cooperative agreement because

the schedule is a necessary metric for Ames to use in measuring performance and 

ensuring California State is successfully completing activities and objectives funded with

Recovery Act funds. Without an updated schedule, the ability of Ames procurement 

personnel to measure performance against milestones is impaired.

Subsequent to our review, Ames procurement personnel provided the OIG with a copy of 

the updated schedule from the California State University-Monterey Bay reflecting the 

new period of performance for the cooperative agreement. Since the schedule is an 

integral part of the cooperative agreement, we believe NASA should ensure that 

schedules are included as a part of all future awards proposals. 

Federal and NASA Recovery Act Guidance

OMB Guidance. OMB Guidance10 details specific requirements for awarding contracts 

under the Recovery Act. The guidance emphasizes the importance of contract type, 

competition, and small business participation as well as the unique transparency 

requirements for the pre-award and pre-solicitation process. Specifically, OMB Guidance 

requires the use of firm-fixed-price contracts and competition to the maximum extent 

possible. Firm-fixed-price contracts provide maximum incentive for the contractor to 

control costs and perform effectively. Contractors competing for contracts saves taxpayer 

money, improves contractor performance, curbs fraud, and promotes accountability for 

results. The Guidance allows agencies to use contract types other than firm-fixed-price

and to award contracts on a non-competitive basis; however, the agencies must document 

the reasons for doing so and post this justification on Recovery.gov. Under OMB 

Guidance, agencies must provide maximum practicable opportunities for small 

businesses to compete for contracts and to participate as subcontractors in contracts 

awarded by agencies. Finally, pre-solicitation notices and contract awards must be posted 

on FedBizOpps.gov (https://www.fbo.gov/) and include the word Recovery in the title. 

 

10 OMB, “Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009,” 

April 3, 2009. 
RESULTS

REPORT NO. IG-10-017 7

Procurement Information Circular. NASA’s PIC 09-06 provides detailed guidance for 

NASA’s procurement community on implementation of the Recovery Act. For example, 

the Circular contains general principles along with more detailed requirements that 

contracting officers and other procurement personnel must follow when awarding a 

contract or modifying an existing contract using Recovery Act funds. In the PIC, the 

requirements are specified as Pre-award Considerations, Posting Requirements, Reporting 

Requirements, Audit Rights, Construction Contracts, Communication, and Invoicing. 

The Agency issues revisions to PIC 09-06, as necessary to provide the latest Recovery 

Act guidance to NASA procurement officials. The current revision, 09-06G was issued 

on April 7, 2010.

Grant Information Circular. NASA’s GIC 09-03 provides guidance to the grant- and 

cooperative agreement-issuing community regarding access to Recovery Act funds. The 

GIC contains general principles along with more detailed requirements that grant officers 

and other personnel must follow when awarding a grant or cooperative agreement funded 

with Recovery Act funds. The requirements are identified as General Principles, 

Requisition Requirements, Pre-Award considerations, Posting Requirements, Special 

Terms, Communication, and Payment. Each section has more detailed guidance for grant 

officers.

11

 

The GIC requires that grant officers or the requesting office set distinct parameters and 

measurable performance requirements when generating a requisition to initiate a grant or 

cooperative agreement using Recovery Act funds. In addition, the GIC states that grant 

officers and the requesting office must be able to quantify and assess the quality of the 

research, education, training, or other public outreach effort during the specified 

increment or parameters and also able to specify performance in a manner that permits 

evaluation and review of the effort performed. The Agency issues revisions to GIC 09-03

as necessary to provide the latest Recovery Act guidance to NASA procurement officials. 

The current revision, 09-03B, was issued on December 24, 2009.

Conclusion

Based on our review of 28 procurement actions, we determined that NASA’s Recovery 

Act-funded awards generally complied with OMB and NASA guidance with the 

exception of 3 actions that did not fully follow NASA guidance. 

The contract files for the Orion Project at Johnson and for the Landsat Data Continuity 

Mission at Goddard did not contain full documentation of the negotiations between 

NASA and the respective contractors regarding the Recovery Act work. NASA PIC 09-

06D states that contracting officers shall document negotiations for Recovery Act work in 

the contract file. However, the project personnel did not document the verbal or e-mail

negotiations in the contract file because they mistakenly believed that the verbal or e-mail

negotiations were sufficient to meet the documentation requirement. Because there is no

 

11 Grant officers are responsible for overseeing both grants and cooperative agreements.
RESULTS

8 REPORT NO. IG-10-017

documentation of the negotiations in the contract files, NASA officials cannot support 

that the contractors were informed that this portion of the work would be performed using 

Recovery Act funds. Without proper documentation, the Orion Project and the Landsat 

Data Continuity Mission cannot ensure that project funds will be used for their intended 

purposes.

In addition, Ames awarded a cooperative agreement but failed to require the awardee to 

provide an updated performance schedule. Consequently, Ames did not have measurable 

criteria to evaluate California State’s performance. Subsequent to our review, Ames

provided a copy of the updated schedule from California State reflecting the new period 

of performance for the cooperative agreement. Since NASA may award up to 10

cooperative agreements to other Recovery Act recipients, future cooperative agreement 

awards should require updated schedules.

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

Recommendation 1. The Recovery Act Implementation Executive should require Orion 

Project and Landsat Data Continuity Mission personnel to comply with requirements to 

document all contract negotiations involving Recovery Act funds in writing in the contract 

file.

Recommendation 2. The Recovery Act Implementation Executive should periodically 

remind contracting officers of the importance of properly documenting contract negotiations.

Recommendation 3. The Recovery Act Implementation Executive should require grant 

officers to obtain a schedule of milestones or other appropriate documentation to ensure that 

the awardee is measured against the accountability aspects of the Recovery Act, and to 

demonstrate that the awardee understands the terms and conditions of the Recovery Act 

award.

Management’s Response. Prior to formally responding to the draft report, NASA 

provided technical corrections for our consideration and we updated the draft as 

appropriate. In NASA’s response, received July 23, 2010, the Recovery Act 

Implementation Executive states that the Agency generally concurs with the observations 

noted in this report and has taken action to address our recommendations to include 

adding the requisite documentation to the procurement files. 

However, the response also indicates that the Agency has concerns with one of our 

observations, which states that without proper documentation to support negotiations with

the contractors, Recovery Act funds expended on the Orion Project and Landsat Data 

Continuity Mission might not be used for their intended purpose. NASA believes the 

detailed discussions to negotiate the Recovery Act work with the two contractors and the 

execution of the contract modifications by both parties results in minimal risk that 
RESULTS

REPORT NO. IG-10-017 9

Recovery Act funds would not be used for their intended purpose. Further, NASA feels if 

the funds were not used for their intended purpose, the contractor would be in default.

Evaluation of Management’s Response. While we understand the Agency’s concerns, 

we believe maintaining complete documentation of all negotiations in the contract files 

provides evidence of the specific tasks agreed upon between NASA and the Contractor. 

Such documentation would also assist in supporting NASA’s position should a dispute 

arise with the contractors at a later date, thereby protecting the interests of the Agency. 

The Recovery Act Implementation Executive’s planned actions are responsive to our 

recommendations. Therefore, the recommendations are resolved and we will close the 

recommendations after verifying proper implementation of the recommended corrective 

actions.

APPENDIXES

REPORT NO. IG-10-017 11

APPENDIX A

Scope and Methodology

We performed this audit from October 2009 through July 2010 in accordance with 

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

and perform our work to obtain sufficient, appropriate evidence to provide a reasonable 

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

evidence obtained during this audit provides a reasonable basis for our findings and 

conclusions based on our objectives. 

We reviewed 28 procurement actions totaling $432 million in Recovery Act funds issued 

from February 17, 2009, when the Recovery Act was signed, through November 30, 

2009. We performed our work at Johnson Space Center, Goddard Space Flight Center, 

Langley Research Center, and Ames Research Center because these four Centers had the 

largest number of Recovery Act procurement actions awarded or modified prior to 

November 30, 2009. The program and projects reviewed at Johnson include the CrossAgency Support: Institutional Investment Program (8 new contracts and 5 modifications)

and the Orion Project (one contract modified). At Goddard, we reviewed the Landsat 

Data Continuity Mission, Global Precipitation Measurement Project, Glory Project, the 

Total and Spectral Solar Irradiance Sensor project (part one of an agreement with the 

National Oceanic and Atmospheric Administration’s Climate Sensors Investment), and 

the James Webb Space Telescope Project (all had modified contracts). At Langley, we 

reviewed Clouds and the Earth’s Radiant Energy System Flight Module 6 (CERES FM6) 

instruments project (part two of an agreement with NOAA’s Climate Sensors Investment) 

(one contract modified). Finally, at Ames we reviewed the Unitary Plan Wind Tunnel 

Facility Project (one contract modified), the High-End Computing Capability Project (two

contracts modified), and the Wildfire Research and Applications Partnership (WRAP) 

Activity (one cooperative agreement awarded). 

For our audit, we reviewed the following:

American Recovery and Reinvestment Act of 2009, February 17, 2009

OMB’s “Updated Implementing Guidance for the American Recovery and 

Reinvestment Act of 2009,” April 3, 2009

Procurement Information Circular (PIC) 09-06D, “Contracting with Recovery Act 

Funds,” October 14, 2009

Grant Information Circular (GIC) 09-03A, “Implementation of the American 

Recovery and Reinvestment Act of 2009,” August 28, 2009
APPENDIX A

12 REPORT NO. IG-10-017

Computer-Processed Data 

We did not use computer-processed data to perform this review. 

Review of Internal Controls

We reviewed internal controls as they relate to NASA’s process for awarding contracts, 

grants, and cooperative agreements and modifying contracts for Recovery Act-funded 

procurement actions. We met with the Recovery Act Implementation Executive and 

NASA Procurement officials to gain an understanding of NASA’s processes for awarding 

contracts, grants, and cooperative agreements, detailed in the Procurement Information 

Circular (PIC) and Grant Information Circular (GIC). We reviewed these Circulars to 

determine whether they documented the internal controls required to award contracts, 

grants, and cooperative agreements for the Recovery Act, and whether the controls were 

sufficient to ensure NASA was complying with Recovery Act provisions, OMB 

Guidance, and NASA policy. We interviewed procurement officials at Johnson, 

Goddard, Langley, and Ames and asked them to identify the internal control mechanisms 

in place at the Center level to ensure they were awarding contracts, grants, and 

cooperative agreements in compliance with the Recovery Act. In addition, we asked 

them to walk us through the award process and provide supporting documentation to

ensure their internal controls were functioning effectively. As discussed in this report, 

NASA’s process for awarding Recovery Act contracts, grants, and cooperative 

agreements could be improved. Our recommendations, if implemented, will improve the 

controls over the Recovery Act award process.

Prior Coverage

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

Accountability Office (GAO) have issued two memoranda and four reports of particular 

relevance to the subject of this report. Unrestricted reports can be accessed over the 

Internet at http://oig.nasa.gov/audits/reports/FY10 (NASA OIG) and http://www.gao.gov

(GAO). 

We considered the following memoranda in planning and performing our audit activities:

“Final Memorandum on Analysis of NASA’s Final Program-Specific Recovery Act 

Plans” (IG-10-005, January 5, 2010)

“Final Memorandum on Analysis of NASA’s Final Agency-Wide Recovery Act Plan” 

(IG-10-06, January 5, 2010)

“Final Memorandum on Review of Open Audit Recommendations Affecting Recovery 

Act Activities” (IG-10-014, May 20, 2010)
APPENDIX A

REPORT NO. IG-10-017 13

The following reports are related to the programs and projects we reviewed in our audit 

and were all issued within the last 5 years. The recommendations contained in these 

reports did not have an effect on the Recovery Act programs and projects we reviewed.

Government Accountability Office

“NASA: Assessments of Selected Large-Scale Projects” (GAO-10-227SP, February 

2010)

National Aeronautics and Space Administration

“The Landsat Program Is Not Meeting the Goals and Intent of the Land Remote Sensing 

Policy Act of 1992” (IG-09-021, September 2, 2009)

“Final Memorandum on the Standing Review Board for Orion Crew Vehicle Project” 

(IG-08-018, April 28, 2008)

“Final Memorandum on Audit of NASA’s Global Precipitation Measurement Project” 

(IG-08-016-R, March 31, 2008)
APPENDIX B

14 REPORT NO. IG-10-017

PROGRAMS/PROJECTS 

REVIEWED

Johnson Space Center

Cross-Agency Support: Institutional Investments Program. This Program received 

$50 million in Recovery Act funding to restore NASA-owned facilities damaged by 

natural disasters in 2008. The goal of the Cross-Agency Support: Institutional 

Investments Program is to strategically invest funds to meet the Agency’s infrastructure 

needs and assure the availability of critical facilities for the safe and efficient conduct of 

Agency missions. 

According to the Cross-Agency Support Program Manager, the facilities repaired with 

Recovery Act funds at Johnson in Houston, Texas, are crucial to NASA’s human 

spaceflight missions. These missions include completion of the remaining launches for 

the Space Shuttle Program, completion of assembly of the International Space Station 

(ISS), operation and use of the ISS, implementation of the Constellation Program 

including the Orion Project, and support for the Commercial Crew & Cargo Program.12

The activities involve construction work, including repair of roofs and loggia on several 

dozen buildings at Johnson Space Center. They also include the replacement of leaking 

windows; waterproofing of exterior building walls; repair of street, parking lot, and 

sidewalk lights; reconstruction of a hangar at Ellington Field; and securing of a barge 

dock on Clear Lake.

NASA created nine work packages (repair activities of a similar kind, area, or operation) 

that will be managed to the same schedule and subject to NASA’s standard processes and 

procedures for construction of facilities. Of the nine work packages, eight were awarded 

at the time of our review. In addition to these nine work packages, NASA is also 

awarding modifications to five existing Support Service Contracts to assist NASA with

support services that go along with the necessary construction work. 

Orion Project. Recovery Act funds for the Exploration Mission Directorate were 

applied to the Constellation and Commercial Crew and Cargo Programs. Constellation 

systems currently in the development stage are the Orion Crew Exploration Vehicle 

(CEV), the Ares I Crew Launch Vehicle (CLV), and supporting mission and ground 

support systems. The Recovery Act funds were intended to support accelerated testing, 

procurement, and manufacturing to maximize NASA’s ability to meet a March 2015 

 

12 In February 2010, the President submitted to Congress his FY 2011 budget request for NASA. A key 

feature is the termination of the Constellation Program at the end of FY 2010. As of the date of this 

report, Congress has not taken final action on the budget request.
APPENDIX B

REPORT NO. IG-10-017 15

Initial Operational Capability (IOC) date, when the first transport of the crew to the 

International Space Station (ISS) was planned.

The Orion spacecraft is being designed to carry crewmembers to and from the ISS and on 

lunar missions. Once in orbit, Orion and its service module will rendezvous and dock 

with either the ISS or the Altair Lunar Lander and the Ares V Earth Departure Stage, 

which could propel astronauts on their way to the Moon. 

The Orion Crew Exploration Vehicle Project awarded a contract modification for the 

Recovery Act funded portion of the project under contract number NNJ06TA25CA to 

Lockheed Martin on August 19, 2009. The total contract modification amount is $165.9 

million. In May of 2010 the contract was modified as noted below. The total amount of 

Recovery Act funds applied to the Orion contract remained $165.9 million.

According to NASA’s May 2009 Recovery Act Program Plan for Exploration, from 

August 2009 through May 2010, NASA applied Recovery Act funds to complete the 

design of ground test articles, engineering units, test, design and analysis for the Orion 

project. Elements of this work were originally planned to occur in FY 2011 but were 

accelerated into FY 2010 to inform the flight design. In May 2010, the planned Orion 

Project Recovery Act funded content was re-scoped to reduce risk to the completion of 

planned work for FY 2010, deemed to be higher priority than the originally scoped work 

that had been accelerated. For the remainder of the award, the Recovery Act funds will 

be used to fund the majority of the work performed under the Orion Lockheed Martin 

prime contract from May 29, 2010 to June 25, 2010. This shift in scope also assured the 

continuation of the Orion development contract further into this fiscal year and the 

preservation of the associated jobs.

Goddard Space Flight Center

Landsat Data Continuity Mission. The Landsat Data Continuity Mission (LDCM) is a 

joint NASA-United States Geological Survey (USGS) mission to extend the LDCM

system’s useful life and incorporate several data collection improvements. The LDCM

satellites were designed for observing land surfaces, recording the Earth’s surface as seen 

from space, and providing spatial imagery and data illustrating human-induced large-scale

environmental changes. Examples of these changes are the rapid expansion of desert 

cities like Dubai and Las Vegas; the deforestation of the Amazon rainforest; and the 

disappearance of the Aral Sea. LDCM-related research has led to the implementation of 

improved water management techniques, crop insurance fraud reduction, natural disaster 

relief planning, continental-scale carbon estimates, and extensive cartographic advances. 

Efforts to implement LDCM have been ongoing since the launch of Landsat 7 in 1999. 

The purpose of LDCM is to provide continuity to the Landsat 7 mission. The Landsat 

series of satellites has provided multispectral data of Earth’s surface on a global scale. 

LDCM has a projected launch date of June 2013 to replace the Landsat 5 and 7 satellites.
APPENDIX B

16 REPORT NO. IG-10-017

The LDCM project received $63.4 million of Recovery Act funds, which NASA is using 

to continue work on the instruments, including the Thermal Infrared Sensor (TIRS), and 

spacecraft needed to sustain the more than 35-year record of continuous observations of 

the Earth provided by Landsat images. Recovery Act funds contributed to the:

Design, development, and test of:

o TIRS:

 Cryocooler

 Application-Specific Integrated Circuit (ASIC)

 Programmatic, mission assurance, and engineering support for 

TIRS

o Operational Land Imager (OLI)

o LDCM spacecraft

Global Precipitation Measurement Project. The Global Precipitation Measurement 

(GPM) mission is one of the next generation of satellite-based Earth science missions that 

will study global precipitation (rain, snow, and ice). GPM’s stated goal is to address the 

difficulties of measuring precipitation from a ground-based system that can only measure 

a small area at one time. GPM provides the only practical way to obtain useful regional 

and global scale precipitation measurements from the vantage point of a space-based 

remote sensing instrument. 

GPM received $32 million in Recovery Act funds for the GPM Microwave Imager (GMI)

#1 and GMI #2 instruments. The Recovery Act funding allowed essential near-year 

rephasing of activities to decrease mission schedule risk. Both were modifications to 

existing contracts; however, GMI #2 was treated as new contract scope because it 

involved procurement of additional equipment and starting the development on time. 

Recovery Act funds will be used to maintain the delivery date of GMI #1 and allow the 

construction of a second microwave imager GMI #2 as planned. According to Project 

officials, the funding allows essential near-year rephasing of activities to decrease mission 

schedule risk and run-out costs on GMI #2.

Glory Project. Glory is a low Earth orbit (LEO) scientific research satellite designed to 

collect data on the properties of aerosols, including black carbon, in the Earth’s 

atmosphere and climate system and to collect data on solar irradiance for studying the 

long-term effects on the Earth climate record. The scientific community can use the data 

in determining whether the temperature increase and climate changes are byproducts of 

natural events or are human induced. This will enable a greater understanding of aerosols

as agents of climate change. 

The project received $16 million of Recovery Act funds that were used to modify an 

existing contract awarded on August 14, 2009. Activities funded under the Recovery Act

are those that will take the spacecraft into completion for launch and include efforts to: 

finish remaining work computers for the Payload Interface Processors (PIP);

complete design, fabrication, test, and delivery additional PIPs;
APPENDIX B

REPORT NO. IG-10-017 17

complete remaining work on the Observatory to accommodate the new PIPs;

complete the Glory Ground Systems;

prepare for Mission Operations of Glory Spacecraft;

prepare for, pack and ship Glory spacecraft to launch site; and

conduct launch. 

The Recovery Act funds are necessary to maintain the current workforce throughout the 

planned launch in calendar year 2010.

Climate Change Sensors Investment. The Climate Change Sensors Investment by the 

National Oceanic Atmospheric Administration (NOAA), at both Goddard and Langley, is 

part of the National Polar-orbiting Operational Environmental Satellite System 

(NPOESS) Preparatory Project, which is jointly managed by the (NOAA) and NASA. 

Due to schedule slippages and cost overruns, in June 2006, NPOESS was restructured

and four climate and space environment sensors were removed from the program. A 

memorandum of understanding (MOU) between NOAA and NASA was executed in 

February 2008 to initiate studies assessing the impact of restoring two of the climate 

sensors that play a critical role in assessing climate change data. 

NOAA received $48 million of Recovery Act funding for the climate sensor project. In 

July 2009, NASA and NOAA signed Amendment 2 to the MOU, which authorized 

NASA to continue the work on the Climate Sensors Investment and transferred the 

majority of the Recovery Act funding to NASA.

Total and Spectral Solar Irradiance Sensor (TSIS). Through a reimbursable 

agreement with NOAA, $26.3 million of Recovery Act funding and procurement 

responsibility was transferred to the Goddard Space Flight Center for work on the Total 

and Spectral Solar Irradiance Sensor (TSIS) instrument. The TSIS instrument

measures the total amount of solar energy coming into the Earth’s atmosphere, a 

fundamental element in understanding climate change, and 

helps to better differentiate between the natural and human causes of climate 

change and monitors the long-term energy shifts related to climate change.

The TSIS instrument is in the development stage.

On February 1, 2010, the White House decided to restructure the larger NPOESS 

program. However, the NOAA Climate Sensors Investment and the reimbursable 

agreements under which the Recovery Act funding was transferred to NASA were not 

impacted by this decision.

James Webb Space Telescope Project. The James Webb Space Telescope (JWST) is 

NASA’s next-generation successor to the Hubble Space Telescope. The JWST is a large, 

space-based observatory with a 6.5-meter primary mirror optimized for infrared 

wavelengths, which will complement and extend the discoveries of the Hubble Space 
APPENDIX B

18 REPORT NO. IG-10-017

Telescope. The JWST will have longer wavelength coverage and greatly improved 

sensitivity. The longer wavelengths enable JWST to look further back in time to find the 

first galaxies that formed in the early Universe, and to look inside dust clouds where stars 

and planetary systems are forming today. Its scheduled launch date is June 2014. 

Recovery Act funds for the JWST Project will be used to retain jobs, maintain the 

schedule of key development activities, and improve the likelihood of launching on the 

planned date. 

JWST received $75 million of Recovery Act funds that will be applied as contract 

modifications to two major JWST contracts: Northrop Grumman Aerospace Systems 

($65 million) and to the University of Arizona ($10 million). The Recovery Act funds 

were used to continue the work on the project and avoided a work stoppage on the design 

and development of the ground and space-based portions of the JWST observatory. 

Langley Research Center

Climate Sensors Investment. As at Goddard, the Climate Change Sensors Investment at 

Langley is part of the NPOESS Preparatory Project, which is jointly managed by NOAA

and NASA. 

Due to schedule slippages and cost overruns in June 2006, NPOESS was restructured. 

This removed four climate and space environment sensors from the program and 

degraded four others. A MOU between NOAA and NASA was executed in February 

2008 to initiate studies assessing the impact of restoring two of the climate sensors that 

play a critical role in assessing climate change data. 

NOAA received $48 million of Recovery Act funding for the Climate Sensor Investment. 

In July 2009, NASA and NOAA signed Amendment 2 to the MOU which authorized 

NASA to continue the work on the Climate Sensors Investment and transferred the 

majority of the Recovery Act funding to NASA. 

Clouds and the Earth’s Radiant Energy System Flight Module 6 (CERES FM6) 

Instrument. Through a reimbursable agreement with NOAA, $21.2 million of Recovery 

Act funding and procurement responsibility was transferred to the Langley Research 

Center for work on the Ceres FM6 instrument. The Ceres instrument

complements the TSIS measurements by providing information on how clouds 

influence the Earth’s energy balance and

identifies the role of clouds in regulating climate.

The Ceres FM6 instrument is in the development stage.

On February 1, 2010, the White House decided to restructure the larger NPOESS 

program. However, the NOAA Climate Sensors Investment and the reimbursable 
APPENDIX B

REPORT NO. IG-10-017 19

agreements under which the Recovery Act funding was transferred to NASA were not 

impacted by this decision.

Ames Research Center

Unitary Planned Wind Tunnel (UPWT) Facility. The UPWT Facility at Ames is a 

major part of NASA’s Aeronautics Test Program (ATP). ATP was created to preserve 

and promote the testing capabilities of one of a comprehensive set of research facilities in 

the United States. ATP develops and implements a facility investment and divestment 

plan to fully support the current and long-term missions of NASA, the Department of 

Defense, and American industry. The UPWT Facility at Ames includes an 11-foot 

transonic wind tunnel that is used extensively for airframe development and aerodynamic 

studies and played a vital role in every manned space-flight program, including NASA’s 

Crew Exploration Vehicle. In addition, the UPWT facility includes a 9 foot by 7 foot 

Supersonic Wind Tunnel that has provided ascent and reentry aerodynamic data for every 

NASA-designed, manned space-flight program, including NASA’s Space Shuttle and 

Constellation Programs. 

Recovery Act funding for the UPWT Facility will be applied to re-activating the 

Mitsubishi Make-Up Air System. Specific activities include reactivating an existing 

compressor, repairing tie lines, and replacing feeder cables. These improvements will 

result in improved tunnel reliability and productivity. Ames awarded a contract 

modification for the Recovery Act funded portion of the project under its existing 

Aerospace Testing and Facilities Operations Maintenance (ATOM) contract

NNA09DB39C to Jacobs Technology, Inc. on October 14, 2009. The total contract 

modification amount is $9 million.

High-End Computing Capability Project (HECC). The HECC at Ames is focused 

around the Columbia supercomputer and the associated network connectivity, data 

storage, data analysis and visualization, and application software support. The Science 

Mission Directorate funds and manages the HECC resources, which serve the 

supercomputing needs of all of NASA’s Mission Directorates. Science Mission 

Directorate funding supports the operation, maintenance, and upgrade of the 

supercomputing capability, while the Strategic Capabilities Assets Program exercises the 

oversight and insight functions.

Recovery Act funding for the HECC project at Ames will be applied to two existing 

tasks: Ames Compute System and Ames Terrestrial Observation and Prediction System 

(TOPS). The Ames Compute System will increase the supercomputing capability for 

climate modeling. Ames awarded a contract modification for the Recovery Act portion of

this task to Computer Sciences Corporation under contract NNA07CA29C on August 31, 

2009. The total contract modification amount is $5.1 million. The TOPS task will help 

develop specific computing resources for climate impact studies. Ames awarded a 

contract modification for the Recovery Act portion of this task to Computer Sciences 
APPENDIX B

20 REPORT NO. IG-10-017

Corporation under NNA07CA29C on October 14, 2009. The total contract modification 

amount is $900,000.

Wildfire Research and Applications Partnership (WRAP) Activity. The WRAP

Activity is part of the Earth Science-Applied Sciences Program. The program conducts 

research and development activities with collaborating organizations to use Earth Science 

observations, data, and research in environmental decision making and resource 

management. WRAP is a collaborative effort between Ames, California State University, 

United States Department of Agriculture-Forest Service, and the National Interagency 

Fire Center. The purpose of the activity is to develop and mature technologies to improve 

remote sensing capabilities for wildfire research applications. 

Recovery Act funding for the WRAP Activity will be focused on the application of 

NASA technologies to improve wildfire response and management through a 

collaborative decision environment. NASA and the United States Forest Service 

developed the Wildfire Collaborative Decision Environment (W-CDE), and Recovery 

Act funds will be used for research to enhance existing capabilities of the W-CDE to 

support pre-, active-, and post-fire assessments. NASA awarded a cooperative agreement 

to California State University-Monterey Bay for this work. The cooperative agreement 

was authorized on September 30, 2009, for $1.3 million.
APPENDIX C

REPORT NO. IG-10-017 21

REPORT DISTRIBUTION

National Aeronautics and Space Administration

Administrator

Deputy Administrator

Chief of Staff

Chief Financial Officer/Recovery Act Senior Accountable Official

Recovery Act Implementation Executive

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 Management, Organization, and Procurement

House Committee on Science and Technology

Subcommittee on Investigations and Oversight

Subcommittee on Space and Aeronautics

REPORT NO. IG-10-017 23

Major Contributors to the Report:

Laura Nicolosi, Director, Mission Support Directorate 

John Apker, Project Manager

Mark Benson, Auditor

John Pacious, Auditor

Tekla Szelong, Auditor

Keren West, Auditor

JULY 27, 2010

REPORT NO. IG-10-017

OFFICE OF AUDITS

OFFICE OF INSPECTOR GENERAL

ADDITIONAL COPIES

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

202-358-1232.

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.