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High Risk Issue


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NASA Contract Management

Problem: The success of the National Aeronautics and Space Administration (NASA) depends on the work of its contractors ?? on which NASA spends about 85 percent of its annual budget. GAO designated NASA's contract management as high risk in 1990 principally because NASA has lacked a modern financial management system (FMS) to provide accurate and reliable information on contract spending. Although progress has been made in implementing a FMS, more emphasis on project performance, cost controls, and program outcomes is still needed for NASA to effectively meet the considerable challenges it faces in managing its contracts and making informed investment decisions. PARTWeb contains an executive summary of NASA's Corrective Action Plan. The full plan is available on NASA's website at, under Government Accountability Office High-Risk Improvement Plans.

Goal: Improve the effectiveness of its program/project management, including monitoring and analyzing contractor performance; life-cycle cost/schedule management practices; cost estimating practices; and associated business processes.


  • Consistently instilling a disciplined cost-estimating process in project development efforts.

    • Improve senior management oversight of project cost, schedule, and technical performance.
    • Improve cost/schedule management through independent cost estimates, state-of-the art cost estimation tools, and standardized reporting.
  • Reengineering key business processes to include enhanced contractor cost reporting processes.

    • Implement program/project management requirements incorporating cost/schedule reporting.
    • Develop agency-wide business concept of operations and conduct business system gap analysis.
  • Ensuring collection of information needed to assess progress on contracts.

    • Reengineer contractor cost reporting to ensure availability of needed data for effective project and financial management; and improve data collection from project managers for distribution to the NASA cost community.
    • Expand involvement of senior management in contracting strategy.
    • Improve contracting process by clarifying policies; promoting coordination; standardizing contract writing; implementing earned value management; and using award fees when appropriate.
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