August 31, 1999

Thompson Letter on GPRA - NASA

Thompson Letter on GPRA - NASA

August 17, 1999

The Honorable Daniel S. Goldin

Administrator

National Aeronautics and Space Administration

300 E St., SW

Washington, DC 20546

Dear Administrator Goldin:

As you know, the Congress is focused on ensuring that the federal government delivers better results to its citizens and taxpayers. The Congress has enacted a statutory framework to achieve these results. This statutory framework includes the Government Performance and Results Act (GPRA); financial management statutes, such as the Chief Financial Officers Act; and information resources management statutes, such as the Clinger-Cohen Act. Each of these reforms aims at achieving more efficient and effective performance throughout the federal government.

As part of our oversight agenda, the Committee has developed information on how effectively the National Aeronautics and Space Administration (NASA) is using the above statutory tools to improve its performance in several key areas such as becoming more results-oriented and resolving long-standing problems of fraud, waste, and mismanagement. The purpose of this letter is to share with you the information we have developed and obtain your response to certain questions pertaining to it. With this dialog as a start, we hope to work with you on a continuing basis to ensure that NASA delivers the best possible results for the American people.

Performance Plan Assessment

The Congress continues to look closely at how well departments and agencies are implementing GPRA. At the request of this Committee and others, GAO recently completed an assessment of the NASA’s annual performance plan for fiscal year (FY) 2000. According to GAO, NASA’s FY 2000 plan "represents a moderate improvement" over its FY 1999 plan.

The FY 2000 plan’s major strengths are that it shows how budgetary resources are related to performance, and provides expanded detail on performance evaluations and identifies specific data sources. Among the improvements in the plan are the inclusion of (1) performance objectives or targets that fully or partially address 5 of the 10 management challenges; (2) a crosswalk to relate budget categories with performance objectives and targets; and (3) expanded detail on internal and external evaluations of performance.

GAO found that the FY 2000 plan had two key weaknesses. One was the lack of a clear rationale for how information technology-related (IT) strategies and programs contribute to achievement of performance goals. For instance, GAO believes that the plan is unrealistic in its discussion of how the Earth Observing System Data and Information System (EOSDIS), an IT-related resource, will contribute to the achievement of NASA’s performance goal of increasing the number of products delivered from its archive and make the data available to users more rapidly in fiscal year 2000.

The other key weakness is that the plan does not include procedures for verifying and validating performance data. The plan identifies internal and external organizations that will evaluate performance, provides expanded detail on such evaluations, and identifies specific internal and external sources for data. However, it does not include an explicit discussion of procedures that will be used to verify and validate performance data. Furthermore, the plan does not address possible limitations in internal and external sources of data. As a result, the plan provides limited confidence that the agency’s performance information will be credible.

Need to implement audit recommendations on major management problems

One area where there have been too few results is solving major management challenges that seem to persist year after year at most agencies, including NASA. One problem area of particular concern at NASA is contract management. While there currently are no GAO open recommendations related to contract management, it is still a high-risk area. GAO says that until NASA’s financial management system is developed and operational, NASA performance assessments relying on cost data may be incomplete.

According to information provided to the Committee by your Inspector General (IG) and GAO, there are a number of open audit recommendations addressing other major management problems at NASA as well. The enclosure describes many such unresolved recommendations by the IG, and another enclosure describes additional open GAO recommendations. Several of the IG recommendations propose ways to improve the Aeronautics Grant Financial Transactions.

Need for specific performance goals to address major management problems

It is essential that agency heads and other managers commit themselves to tangible steps that will lead to solutions and that agency heads accept accountability for following through on these commitments. One obvious way to do this is to establish specific and measurable goals in your annual GPRA performance plans. OMB guidance in Circular A-11 for agencies to prepare their performance plans states that

performance goals for management problems should be included particularly for problems whose resolution is mission-critical or which could potentially impede achievement of program goals...

GAO recently evaluated the extent to which NASA’s FY 2000 GPRA performance plan contains specific and measurable performance goals to address the high risk and other most serious management problems confronting NASA that GAO and your IG have identified. According to the GAO evaluation, which is detailed in the enclosure, NASA’s plan has no specific goals for 6 of these 10 problem areas. Without such measures or goals, it is difficult, if not impossible, to assess progress in addressing major management problems and to hold agencies accountable.

Congressional Follow-Up

With so many tax dollars being wasted, this Committee expects agencies to take every opportunity to use the many tools available to them, such as GPRA plans, to resolve major management problems. Furthermore, the GAO and your own IG exist to work in partnership with you to solve longstanding issues of waste, fraud, and abuse.

I hope that the information provided with this letter will stimulate you to make greater use of these tools and resources. In this regard, I ask that you review the enclosed information and respond to the following questions:

• Do you disagree with any of the GAO or IG recommendations described in the enclosures? If so, what is the basis for your disagreement?

• Where you agree with the recommendations, what specific actions are you taking to implement each one and how long will it take to complete?

• Do you disagree with any of the GAO or IG designations of management problems facing NASA? If so, which ones and why?

• Where you agree with the problem designations, are you prepared to establish specific and measurable commitments to address each one of them in your next performance plan?

• If so, could you outline what approach you plan to take for each problem?

• If you believe that any of these problems do not lend themselves to specific and measurable performance plan goals, please explain why. Please also explain what alternative steps you are taking to solve the problem.

I would appreciate your prompt response to this letter. After receiving your response, the Committee staff will arrange a meeting with your representatives, as well as GAO and IG officials, to discuss your response. If you have any questions about this request, please contact Robert Shea, of the Committee staff, on 224-4751.

Sincerely,

Fred Thompson

Chairman

FT/rs

Enclosures

OPEN GAO RECOMMENDATIONS ON NASA’s MAJOR MANAGEMENT CHALLENGES

Controlling International Space Station Costs

The National Aeronautics and Space Administration (NASA) and its international partners—Japan, Canada, the European Space Agency, and Russia—are building a space station as a permanently orbiting laboratory to conduct research on materials and life sciences, to observe the Earth, and to provide for commercial opportunities under nearly weightless conditions. In December 1998, the first two parts of the space station were successfully coupled in orbit.

In May 1998, GAO reported that the life cycle cost estimate to develop, operate, and decommission the station had increased by about $2 billion since 1995, to about $95.6 billion. Regarding the prime contractor’s performance, its estimate of a cost overrun at completion has increased several times; it stands at $986 million as of April 1999. Since May 1998, the program has continued to face cost and schedule problems and the effects of funding shortfalls in Russia. Delivery of a key Russian part of the station—the Service Module—has slipped by 8 months. On April 29, 1999, GAO testified before the Congress that uncertainty regarding Russian involvement will require NASA to continually plan and implement contingency initiatives. Although NASA has a contingency plan to mitigate Russian nonperformance, it does not have an approved overall contingency plan to address issues such as late delivery or loss of critical hardware. The agency acknowledges that the lack of an overall contingency plan makes the program more risky.

Following Through on Aerospace Test Facilities Cooperative Efforts

NASA is cooperating with the Department of Defense (DOD) to address issues of mutual interest regarding investment in, and use of, aerospace test facilities. In April 1996, NASA and DOD agreed to form joint working groups for six types of major test facilities, including wind tunnels and rocket engine test stands. In September 1996, the Congress added to this effort by requiring NASA and DOD to prepare a joint plan on rocket propulsion test facilities.

In March 1998, GAO reported that the promise of closer NASA/DOD cooperation remains largely unfulfilled because NASA and DOD (1) had not convened most test facility working groups, (2) have competed with each other to test engines for new rockets, and (3) had not prepared a congressionally required joint plan on rocket propulsion test facilities. GAO also reported that although NASA and DOD had agreed to go beyond cooperative working groups in aeronautics and jointly manage their aeronautical test facilities, they had not yet reached agreement on key aspects of a new management organization to be called the National Aeronautical Test Alliance. Ultimately, if this alliance is successful, the adoption of joint management by other working groups could be considered.

 

There is one open recommendation related to this major management challenge that would require congressional action. In a March 1998 report, GAO stated that congressional intent, as reflected in the statutory requirement for joint planning of rocket propulsion test facilities, is not being fully met by NASA and DOD. GAO further stated that the Congress may wish to consider reaffirming its intention in this regard and extend its joint planning requirement to other types of aerospace test facilities, including a requirement that NASA and DOD assess the possible extension of joint management of aeronautical facilities to other types of test facilities, especially rocket propulsion. Since GAO’s report, a joint meeting of most working groups was held in May 1998. An inaugural meeting of the working group for wind tunnels was held in August 1998. NASA and DOD did not prepare the legislatively mandated joint plan to coordinate rocket propulsion test facilities. However, according to a NASA official, the rocket propulsion test working group is performing joint planning and preparing guidance to ensure the best use of each agency’s test facilities. On May 24, 1999, a NASA official said that NASA and DOD expect to establish the new National Aeronautical Test Alliance in the summer of 1999.

 

 

 

SPECIFIC PERFORMANCE GOALS IN NASA’s FY 2000 PERFORMANCE PLAN ADDRESSING

GAO- AND IG-DESIGNATED MAJOR MANAGEMENT CHALLENGES

Major Management Challenge	Specific Performance Goal(s)
Contract Management: GAO has reported that NASA’s contract management is a continuing area of high risk. Implementation of the financial management system and its integration with full cost accounting has been delayed. Until the financial management system is operational, performance assessments relying on cost data may be incomplete. NASA’s OIG reported contract management as a GAO-identified management challenge.	NASA’s performance plan includes a performance target to implement new financial systems and business procedures (including a new financial classification structure and full cost budgeting and accounting procedures through the introduction and installation of the Integrated Financial Management System (FMS). The plan notes that following completion of system testing, the system will begin to be installed at NASA headquarters and field centers. The final FY 1999 performance plan also added targets to describe additional procurement actions being undertaken in FY 1999. It stated that contract management systems would be enhanced through improved systems and information for monitoring and through an emphasis on the training of procurement personnel. Also, metrics would be revised to assess the overall health of the procurement system. It also stated that a strategy for evaluating the efficacy of procurement operations would be implemented in FY 1999. (NASA officials noted that these specific remedial actions will be completed in FY 1999 and thus do not appear in the FY 2000 plan.)
International Space Station Program: GAO reported that the International Space Station Program continues to face cost and schedule challenges and the effects of funding shortfalls in Russia; NASA continues to identify cost growth and limited reserves as major program concerns and is now giving added attention to problems with support from others than the prime contractor. In January 1999, GAO reported that the prime contractor’s latest overrun estimate at completion has increased from $680 million to $780 million. NASA’s OIG also reported that the International Space Station Program continues to experience cost overruns and scheduling delays.	None.
Cooperation Between NASA and Department of Defense on aerospace test facilities: GAO reported that the promise of closer cooperation between NASA and DOD and the development of a national perspective on aerospace test facilities remain largely unfulfilled. NASA and DOD (1) have not convened most joint test facility working groups on a regular basis, (2) have competed with each other to test engines for new rockets; and (3) have not prepared a congressionally required joint plan on rocket propulsion test facilities.	None.
Safety and mission assurance: NASA’s OIG has reported that safety and mission assurance has become a serious challenge to NASA. The challenges are ensuring an appropriate level of training for staff that conduct safety reviews and evaluations; maintaining adequate safety reporting systems; ensuring compliance with safety standards and regulations; ensuring product safety and reliability; and developing appropriate safety planning mechanisms.	NASA’s performance plan includes an objective that the Space Shuttle will continue with safety and performance upgrades. Phase 1 upgrades are designed to improve safety and performance that will enable the shuttle to achieve the orbital inclination and altitude of the International Space Station. A variety of process improvements will be implemented to enhance shuttle safety and reliability and reduce costs. Performance targets include (1) having a shuttle upgrade program that ensures the availability of safe and reliable shuttle systems through the International Space Station era and (2) achieving seven or fewer flight anomalies per mission. NASA included an objective to ensure the health, safety, and performance of humans in space. Performance targets include (1) developing medical protocols and testing the capability of crews’ health care system as integrated in the U.S. laboratory; (2) completing the first phase of the advanced life support system integration test bed facility, which will provide the capability to conduct a series of long duration, human in the loop, advanced technology tests of the next 6 years; and (3) providing training to the appropriate NASA supervisors with specific emphasis on actions to prevent injury and illness on the job. NASA included an objective to contribute to aviation safety by reducing airacraft accident rates. The performance target is to demonstrate a conceptual aircraft flight deck integrated with evolving ground-based runway incursion avoidance technologies installed at a major airport.
Safety and mission assurance (Cont.):	The plan discusses safety in the context of performance measurement. It notes that it is important to avoid evaluating actual output performance in research and development (R&D) organizations by counting the number of planned events for the year with the number that actually occurred. The "bean count" approach, according to the plan, is more appropriate to a known manufacturing environment. In the high performance, high-risk R&D environment that characterized NASA’s programs, NASA believes that it is inadvisable to incentivize on-time performance and thereby deemphasize safety, quality, high performance, and appropriate risk-taking.
Year 2000 computer problems: NASA’s OIG has reported that NASA’s assessment of Year 2000 Y2K computer problems has major gaps. NASA has identified the Y2K problems as a significant area of management concern in the annual Federal Managers’ Financial Integrity Act report. OIG audits found gaps in NASA’s guidance on cost estimation, documentation of its Y2K efforts, and its identification of critical systems. Although GAO did not characterize the Y2K problems as a major management challenge, GAO raised a concern similar to the OIG’s in a review of NASA’s FY 1999 Performance Plan. The concern related to the failure of the information technology goal and measure to address the Y2K problems as well as any significant information security weaknesses. (GAO/NSIAD-98-181)	None.
Information Technology Security System: NASA’s OIG reported that the IT security system has serious weaknesses. The OIG recommended that NASA designate IT security as a high-risk area in the annual Federal Managers’ Financial Integrity act report based on the fragmentation of the system, the lack of policies and guidance, network physical and system security weaknesses, the lack of properly trained personnel, and the lack of threat analysis.	None.
Waste and abuse as Financial Management system is integrated: NASA’s OIG has reported concerns with waste and abuse as NASA integrates its financial management system. NASA has identified its financial management environment, comprising of decentralized, nonintegrated systems, as a significant area of concern in its FY 1998 FMFIA report. To remedy this situation, NASA will implement the IFMS. The OIG continues to have serious concerns about delays in delivery of this product, disputes about the scope of the deliverables, and the costs associated with running parallel systems until the IFMS is fully implemented. GAO’s concern on contract management includes this issue.	The plan includes a performance target to implement new financial systems and business procedures (including a new financial classification structure and full cost budgeting and accounting procedures) through the introduction and installation of the IFMS. Following completion of testing, the system will begin to be installed at NASA headquarters and field centers.
Launch vehicles: NASA’s OIG reported on challenge in (1) ensuring the availability of small expendable launch vehicles so that milestones can be met and NASA’s missions are cost-effective and (2) evaluating whether NASA’s providing the majority of development funds and assigning technology rights to its industry partners in the development of the new reusable launch vehicles is in the best interest of the government.	The plan includes an objective to revolutionize space launch capabilities. The X-33 program will begin and complete flight testing in FY 2000 to demonstrate technologies that are traceable to the mass fraction and operability required for future reusable launch vehicles. The target is to conduct flight-testing of the X-33 vehicle in FY 2000. The X-34 program will demonstrate technologies applicable to future, low-cost reusable launch vehicles, including high flight rates. The target is to complete vehicle assembly and begin flight testing of the second X-34.
International Agreements: NASA’s OIG reported that international agreements are needed to ensure effective and efficient programs. Key considerations include program and project vulnerability to schedule delays and cost overruns that require diplomatic rather than contractual solutions; security controls on technology that impact national security; controls to ensure the quality and timeliness of the goods and services provided; and mechanisms to assure balance between program needs and national considerations.	None.
Environmental cleanup: NASA’s OIG reported that NASA has not addressed its many environmental cleanup issues. Years of operations and research activities have left NASA with major environmental cleanup issues.	None.