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International Space Station Spare Parts Costs
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.
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