Bill Livingstone

Headquarters, Washington, D.C.

July 24, 1992
(Phone: 202/453-1898)

RELEASE 92-123

GOLDIN OUTLINES NASA PROCUREMENT REFORM

NASA Administrator Daniel S. Goldin today announced a

series of procurement reforms to make NASA the model of
excellence for the Federal Government and ensure Americans
receive the very best value for their tax dollar.

"Through a focus on the customer, empowerment, teamwork

with our partners in industry, accountability and diversity,
we can achieve our goal and serve as a beacon to others,"
Goldin said in a speech to the National Contract Management
Association in Los Angeles.

Goldin said reforms in NASA's procurement process are

necessary because 90 percent of its budget is spent through
contracts.

"We must continue to give the American people technical

advances, but we must also give them 'best' value for their
tax dollar," Goldin said.

"In the future, NASA will not tolerate 300 percent cost
overruns, defective spacecraft hardware or the failure to
follow work instructions that protect government furnished
hardware," Goldin said.

"Nor will we tolerate schedule slippages," Goldin said.

"We can't keep letting months turn into years and years into
decades."

According to Goldin, the current procurement system

teaches people to fear making any mistake.

"Everyone involved in the acquisition process is swimming

in certifications," Goldin said. "Instead, we should be
encouraging innovation, creativity and efficiency."

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Goldin said NASA and contractor personnel will never

achieve excellence if they are not given clear lines of
responsibility and held accountable for their decisions.

Major changes in the procurement process include:

o New contracts will be awarded to companies that have

demonstrated they are accountable by delivering quality
systems that meet cost schedule and technical requirements;
and

o The amount of the award fee earned will be determined

by the end result, namely the quality, timeliness and cost of
what is delivered;

o Contractors will be given greater responsibility for

success of a program, and should be given the opportunity for
increased award fee if they hold to schedule, keep the program
within cost estimates and deliver a satisfactory product.

Total Quality Management

To determine contractor performance, Goldin said NASA

will soon establish a joint NASA-Industry team to develop a
source of "metrics" or measurements.

"Once the metrics are established, NASA will publish the

results on a generic basis, without identifying specific
contractors. On a semi-annual basis, we will notify each CEO
where their company stands," Goldin said.

Cultural Diversity

Finally, Goldin said NASA will aggressively promote

cultural diversity in the work place and to reaching its goal
for Small and Disadvantaged Business (SDB) contracts.

"As Administrator of NASA, I have made a personal

commitment to increasing cultural diversity in the workplace
and to increasing the contracting opportunities for small and
disadvantaged contracts," Goldin said.

Goldin said NASA had implemented a range of initiatives

to increase the number of SDB contracts, including:

o SDB considerations are part of NASA's earliest

procurement planning, and are emphasized in acquisition
strategy meetings or in procurement plans; and

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o In many of NASA's large prime contracts, NASA is

establishing firm percentages of the effort to be
subcontracted to SDBs and will reward those contractors with
special incentive fees when they exceed the SDB requirement.

"Small and disadvantaged businesses need assistance above

and beyond set-asides," Goldin said.

"In the coming months we will be setting up a new

'minority business resource advisory committee' in NASA to
help us bring more SDB contractors into the NASA family,"
Goldin said.

"Each of us as professionals and as citizens has an

obligation to help overcome the barriers that divide us as a
nation," Goldin said.

"The Los Angeles riots were visual proof that we must

redouble our efforts to help our minority citizens turn their
dreams into realities," Goldin said.

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