International Space Station Spare Parts Costs

STATION NEWS

Inspector General Releases Report on ISS Spare Part Costs

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NASA Office of Inspector General
Washington - Apr 2, 2002
NASA budgeted $831 million to acquire spare parts for the International Space Station (ISS) through fiscal year (FY) 2007. We found that the Agency did not properly acquire and account for the spare parts. NASA used noncompetitive contract modifications to issue orders to acquire groups of spare parts from the ISS prime contractor.

Although the Agency properly justified and approved noncompetitive contract modifications, it did not negotiate prices for individual spare parts as required by the ISS contract. The Agency also did not develop a pricing history for use in purchasing additional spare parts.

As a result, NASA had no assurance that it paid fair and reasonable prices for the $334 million spent on ISS spare parts through FY 2000. In addition, because the Agency has no pricing histories, it may not be able to cost-effectively and competitively procure about $608 million in future ISS spare parts.

Additionally, we found that the ISS prime contractor omitted contractor fee and indirect costs from the value of spare parts recorded on receiving reports it submitted to NASA. Consequently, the Agency cumulatively understated by about $39 million the value of ISS spare parts in its annual financial statements from Program inception (FY 1995) through FY 2000.

We recommended that NASA require the ISS prime contractor to propose, negotiate, track, and report prices for individual spare parts and that NASA establish price histories for the parts. We also recommended that NASA ensure the ISS prime contractor includes fee and indirect costs in the value of ISS spare parts recorded in the official property records.

Further, we recommended that the Agency reestablish procedures for acquiring spare parts and reference the procedures in NASA policy.

NASA management concurred with the recommendations to require the contractor to propose and negotiate individual prices for spare parts and to include fee and indirect costs of spare parts on receiving reports submitted to NASA.

The audit report "International Space Station Spare Parts Costs" (IG- 02-011, March 22, 2002) has been posted to the NASA Office of Inspector General Web site
To comment on this report, send e-mail to [email protected]
NASA originally did not agree with the recommendation to track and report individual prices for ISS spare parts, but subsequently agreed to use contractor receiving reports to track prices and establish price histories for high-dollar value spare parts.

NASA also agreed to reestablish procedures for acquiring spare parts and to reference the procedures in NASA policy.

NASA NEWS

Nasa Budget Calls For Less Spending On Manned Flights

Washington (AFP) Feb. 4, 2002
The fiscal 2003 US budget proposal unveiled Monday by the administration of President George W. Bush will force the National Aeronautics and Space Administration to control its spending and will reduce allocations for manned space flights by nearly 700 million dollars.

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