(Editor’s Note.  The recent NASA IG report indicates that contractors doing business with NASA can expect increased scrutiny of their government estimating and accounting practices.)

During a review of use of DCAA services for the National Aeronautical and Space Administration the NASA Inspector General found that contracting officers often failed to document the adequacy of contractors “business systems.”  Under FAR 15-406-3 and NASA FAR Supplement 1815.406, COs must assess relevant systems such as purchasing, estimating, accounting and compensation and document their adequacy in the contract file before negotiating a contract.  The report, issued September 25 said COs failed to meet these requirement in half the contract actions reviewed noting failure to do so jeopardizes NASA’s ability to make sure prices are reasonable and that such business systems are essential to allow the government to validate contractor cost estimates, accounting records and allowability and allocation of incurred costs.  

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