OIG Dings NASA on Award Fee Contracts
NASA OIG: NASA’s Use of Award Fee Contracts
“The Office of Inspector General (OIG) found that shortcomings with NASA’s award fee practices, including use of overly complex formulas to calculate the fees and a clause designed to hold contractors accountable for the quality of the final product that disregards interim performance evaluations, have diminished the effectiveness of NASA’s use of award-fee contracts. In 26 of the 45 contracts we reviewed, we found erroneous award-fee payments totaling $66.4 million. We found that these errors resulted from NASA policy requiring the use of complex mathematical formulas to calculate interim and provisional payments. Although NASA has the opportunity to fix these errors as part of the final award-fee calculation, these funds are not available for NASA’s use until corrected.”