NASA Awards Bonuses Despite Cost Overruns : Aerospace: TRW got $5 million for "excellent performance" on a program $40 million over budget.


The National Aeronautics and Space Administration recently awarded TRW an extra $5 million for "excellent performance" on a scientific satellite program in Redondo Beach--even though the project was $40 million over budget, according to documents and testimony presented at a House Government Operations Committee hearing Wednesday.

The case illustrates weak financial management and lax control of contractors at the space agency--a problem its own officials acknowledged Wednesday--at a time when NASA is also under scrutiny for major failures in space.

Meanwhile, the Clinton Administration's plan to have Russia participate in the U.S. space station ran into a barrage of criticism from another House committee, which expressed doubts about the program's cost, schedule and political viability.

Even assuming that the space station has no further cost overruns, NASA has committed itself to projects that will cost $20 billion more than its projected budgets over the next five years, according to Frank C. Conahan, assistant comptroller general for the General Accounting Office.

NASA "is wrought with inefficiency," he told the government operations panel, chaired by Rep. John Conyers Jr. (D-Mich.). "They have a very expensive operation over there."

NASA Inspector General Bill Colvin said that many of the agency's contractor employees were asleep on the job during floor checks at five of the space agency's centers around the country earlier this year.

An audit of NASA productivity found that 44% of night shift workers were not working on their assigned contracts. Colvin said he is conducting 450 investigations into waste, fraud and abuse at NASA and its contractors.

Meanwhile, Colvin said NASA's accounting system is in serious disarray, adding that the agency's financial books are "unauditable."

For example, he said, NASA could not locate documents that account for 37% of its assets, worth $12 billion. Nor could it reconcile 32% of its annual spending--roughly $4.5 billion--in its books, Colvin said.

NASA officials at the hearing were not asked and did not provide specific responses to the charges. But Jack Dailey, acting deputy administrator at NASA, said: "We are fully aware of it and are as concerned as the committee. It is our responsibility to correct it."

A recent audit found that a handful of contractors managed by the Goddard Space Flight Center in Maryland had received so-called award fees on programs with large cost overruns. TRW was one of those contractors.

Despite the overrun, the NASA deputy manager for the project, known as the Gamma Ray Observatory, wrote that TRW's performance was "highly successful" and qualified the firm for the extra money.

TRW declined to address the specific issue of the award fee, but said the satellite has been very successful in gathering data since its launch in April, 1991.

Separately, members of a House science, space and technology subcommittee, which oversees the nation's space program, peppered John H. Gibbons, the White House science adviser, with questions about the space station project, which could cost as much as $30 billion through the year 2003.

Gibbons turned aside the most serious questions about the project's cost and technical challenges. He said they cannot be fully answered until after Nov. 1, when a government panel is scheduled to release its report on the proposed Russian partnership.

Although he insisted that cooperation with the Russians would lower the program's total cost, his comments did not satisfy one persistent critic on the panel.

"We're spending about $6 million a day on a space station," said Rep. Dick Zimmer (R-N.J.). "We don't know what it looks like, we don't know what it is going to cost . . . (and) we don't know what it's going to do."

Rep. F. James Sensenbrenner Jr. (R-Wis.) demanded to know whether "more NASA programs (are) going to be cut in order to pay the Russians."

Sensenbrenner added that the proposed Russian deal, which would cost the United States at least $100 million a year over four years, represents a "chilling irony" at the end of the Cold War. "The spoils of victory are going to Russia," he said.

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