Long-Term Issue for the Agency
NASA continues to be on the contract management High-Risk List of the Government Accountability Office (GAO). This is a long-standing issue because NASA has been on the list since 1990, when the first High-Risk List was published. In the most recent GAO update to the High-Risk List, issued in January of 2007, GAO acknowledged NASA’s progress in addressing contract management issues highlighted in previous high-risk reports, but called for further improvement.
A Team to Solve the Issue
I am determined to find a solution to the continuing high-risk situation. I know the challenge inherent in the effort, but through a more concerted cross-agency effort we can make improvements and work towards getting off a list we have been on for too long. Contract management is very broad, incorporating elements such as project management, earned value management, and financial management, as well as procurement. Due to its unique integrative role, I tasked the Office of Program and Institutional Integration to assemble a team to lead the effort at making improvements in contract management. Our approach involves multiple organizations in an integrated fashion, including the Offices of the Chief Engineer, the Chief Financial Officer, and the Chief Information Officer. The Offices of Procurement and of Program Analysis and Evaluation also are key participants, and the Mission Directorates and Centers are important to help identify and implement improvements in an operational sense.
NASA Corrective Action Plan
The team has been developing a comprehensive corrective action plan (CAP) to address GAO’s concerns. The team is coordinating its efforts with GAO with the goals of opening the lines of communication and obtaining GAO’s agreement with the CAP. This approach sharpens our focus on the necessary improvement activities, and it improves the effectiveness of our communications with GAO because both parties are working from the same baseline.
Meanwhile, the GAO High-Risk areas caught the attention of the Office of Management and Budget (OMB) as well. As part of OMB’s mission to lead federal agencies to improve their performance, OMB launched a new approach toward their own oversight of GAO’s designated high-risk areas. OMB directed all agencies with high-risk areas to formulate a formal corrective action plan and to coordinate with GAO, just as NASA had already begun to do. OMB also instituted periodic three-party meetings (including the agency, OMB, and GAO) regarding each high-risk area to monitor agency progress.
In developing the CAP, our cross-functional team worked with GAO and OMB to ensure that their concerns were identified and addressed. I approved the final version of the CAP in October of 2007, and it now serves as the baseline against which our progress will be measured.
Five Focus Areas
As a starting point for the CAP, the cross-functional team analyzed GAO’s January 2007 update to the High-Risk list and broke it into five subjects, or focus areas. These are the five broad areas within which improvement is required: program/project management, the cost reporting process, cost estimating and analysis, standard business processes, and the financial management system. GAO reviewed the team’s analysis and agreed that these focus areas are correctly identified.
Next, the team sought to identify agency initiatives, or plans of action, that would address the focus areas. They found that the most meaningful plans of action would logically address more than one of the focus areas. For instance, a good plan to improve project management training would result in improvements in four focus areas: cost reporting, cost estimating and analysis, standard business processes and program/project management. This kind of interrelationship further demonstrates the critical need for cross-functional integration on the NASA team.
Seven Initiatives to Address the Focus Areas
In the end, the team agreed on a set of seven initiatives. For each initiative, the CAP identifies a Lead Executive, supporting organizations, objectives, milestones and metrics. As an integrated whole, these seven initiatives address the entirety of the High-Risk issues, and both GAO and OMB have agreed with this course of action.
The seven initiatives are:
1. Program/project requirements and implementation practices
2. Agency strategic acquisition approach
3. Contractor cost performance monitoring
4. Project management training and development
5. Improve life-cycle cost/schedule management processes
6. IEMP process improvement
7. Procurement processes and policies
By working together to accomplish the actions set forth in the new Corrective Action Plan, I am confident that NASA will make significant improvements in contract management and will successfully resolve the issues identified in the GAO high-risk report. I would like to thank Rick Keegan, Director of the Office of Program and Institutional Integration, and Rita Svarcas in his office who are spearheading the effort to move NASA on the path toward improvements in this area. They have put a lot of hard work into this effort and it is appreciated.