The National Aeronautics and Space Administration (NASA) is in the hot seat again. And it’s not for once more failing to bring new space and defense programs in on budget (or an aborted lift-off for that matter). This time, NASA has failed at something far more basic: implementing a strategic sourcing program that ensures accountability for total spending (approximately $15 billion annually). NASA’s Office of Inspector General recently released a damning report on the agency’s wasteful spending practices resulting from a lack of strategic sourcing. I’ll be covering some of the findings and recommendations based on the analysis in the coming days.
But first, the context. The report frames the opportunity (and OMB requirements) that NASA has failed to latch onto:
In 2006, NASA’s Headquarters Office of Procurement established a Strategic Sourcing Program to save money by strategically acquiring products and services common across the Agency. NASA Procurement officials expected the program to result in a better understanding of Agency spending patterns; maximize procurement efficiencies through collaborative acquisitions; and achieve better value for products and services while satisfying OMB’s strategic sourcing requirements. Because NASA annually spends approximately 80 percent of its approximately $17 billion annual appropriated funding acquiring products and services, the Agency has the potential to realize significant savings.
With this backdrop, now enter the audit committee, whose simple objective “was to examine NASA’s Strategic Sourcing Program and determine whether it adequately addresses the Federal Strategic Sourcing Initiative and has resulted in cost savings for NASA.”
The result? You pretty much can guess that by now. The auditors found that “NASA has failed to develop a robust, Agency-wide strategic sourcing program over the past seven years, thereby missing opportunities to maximize savings by aggregating its purchasing power and market position when procuring commodities.”
But the story underneath the surface is what is most interesting and involves a 100 percent failure to monitor underlying spending and sourcing activity. In the meantime, let’s just hope that NASA is not “flying as blind” in putting satellites and spaceships into orbit.