oversight

Use of Construction Authority by the National Aeronautics and Space Administration

Published by the Government Accountability Office on 1971-07-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

          RELEASED


Use Of Construction Authority
By The National Aeronautics And
Space Ad m i n istration 8-165718




BY THE COMPTROLLER    GENERAL
OF THE UNITED  STATES
                        COMPTROUSR       GENERAL       OF      THE       UNITED          STATES
                                       WASHINGTON.      D.C.         206.36




           B-165118




           Dear   Mr.   Chairman:                  .

                  The accompanying          report  presents     the results     of our                            re-
           view, made   pursuant       to your request      of February      24, 1971,                             of
           the use of construction        authority   by the National      Aeronautics
           and Space Administration.

                   As agreed    with your office,     we provided    a copy of the
           draft  report   to the National   Aeronautics       and Space Administra-
           tion for its review.      Its comments      are included    as appendix                                 II.

                  This is the second   of two reports                              you requested.         The       first,
           issued   March  29, 1971 (B- 165118),   dealt                            with the construction               of
           the Engineering    Building at the Manned                               Spacecraft     Center.

                  We believe      that the contents     of this report     will be of in-
           terest  to other    committees      and members       of Congress.       Release
           of the report,    however,     will be made     only upon your agreement
           or upon public     announcement        by you concerning      its contents.

                                                                                  Sincerely       your     s9




                                                                                   Comptroller           General
                                                                                   of the United         States
     ,f
c:        / The
              Honorable     Clinton     P. Anderson,  Chairman
      .$ommittee        on Aeronautical      and Space Sciences                                    <-@Q
67’ ..-t
    ~b United    States   Senate




                             50TH    ANNIVERSARY                 1921-            1971
    ~C~FTXlLLER GENERAL'S                                       USE OF CONSTRUCTION AUTHORITY BY
    REPORT2% THE COMMITTEEON                                    THE NATIONAL AERONAUTICS AND SPACE>{6
    AERONAUTICALAND SPACE SCIENCES                            I ADMINISTRATION B-165118
    UNITED STATES SENATE                                 /I

    DIGEST
    ------

    WHYTHE REVIEW WASMADE
           The Committee Chairman requested the General Accounting Office (GAO) to
I           (1) identify     instances where the National       Aeronautics      and Space Admin-
           istration     (NASA) has constructed      major facilities     different    from those
           approved by the Congress and (2) determine whether NASA is adhering to
           the dollar     limitations     imposed on the use of research and develqpment
           funds and research and program management fun%?%r'minor                   construction
           and alteration       projects.     (See p. 47.)

           The construction       projects reviewed by GAO were not selected on a
           statistical    basis and therefore     were not necessamy    representative   of
I
           the total NASA construction       program during the periods covered by the
           review.     GAO's review did not involve     an evaluation  of 0 the need for the                   -
           facilities.     (See p. 5.)


    FINDINGS AND CONCLUSIONS
           Major construction
           NASA has been required       to obtain congressional        approval     for each major
           facility   that it proposes to construct.            The legislative       history       indi-
           cates that, if NASA decides to construct             a major facility       which signifi-
           cantly differs     in purpose or scope from that described              to the Congress,
           the Congress expects NASA to notify           it of the deviation         and to obtain
           approval   to construct    the revised facility.         GAO found several            instances
           where NASA constructed      major facilities        which significantly         differed       in
           scope or purpose from those described             in its budget submissions to the
           Congress.     There were no indications         that the Congress or its committees
           had been notified     of the changes.        (See p. 6.)

           There is no legal requirement       that NASA advise the Congress of revisions
           made to construction      projects.    GAO, however, is of the opinion that the
           authorization     and appropriation    committees are in the best position    to
           decide whether NASA's practices        are in accordance with the committees'
           intent.      (See p. 7.)

           Construction     of facilities      funds are not to be used for rehabilitation
           and modification      of facilities      which will change the purpose of the

I   Tear Sheet



                                                                1
                                                                             JULYZOt1971
                                                                                                      *I
                                                                                              *
facility     or result  in an extension         of the facility.      GAO reviewed a re-          '
habilitation      and modification       project which changed the designated          pur-
pose of the two buildings          involved     and resulted     in an external   extension
of one of the buildings.           (See p0 23.)

The legislative       history   also indicates       that the Congress expects NASA to
include in the cost estimate of a major facility                  all costs needed to make
the facility    fully     operable.       Some  cost  estimates    submitted to the Con-
gress did not include all such costs.                There  is  a  degree   of uncertainty
on NASA's part, or disagreement             between the Congress and NASA, with re-
gard to what constitutes          a fully    operable facility       and what equipment
costs should be included in the estimated cost of a facility                    project.
(See pp. 25 and 26.)

Minor   corlstruction   and minor aZterations
NASA is authorized            to use research and development funds for minor con-
struction      projects       that have an estimated cost (including         collateral
equipment)       of $250,000 or less for additions,           extensions,    and expansions
of existing       facilities.         Also NASA is authorized     to use research and                  I
program management funds for new construction                 having an estimated cost
(including       collateral       equipment) of $100,000 or less.         NASA has unilat-             I
erally     applied the $100,000 limitation            to the use of research and devel-
opment funds for new construction.                (See p. 31.)                                         I

NASA is authorized  to use research and development            funds or research and                   I
program management funds for alterations        without dollar       limitation   and
                                                                                                       I
without obtaining  congressional    approval.      GAO, however, believes       that
the Congress has been led to understand that it would be notified               when
the estimated cost of an alteration      project    (including      collateral  equip-
ment) exceeded $250,000.     (See p. 35.)

For a number of projects     classified     as either minor construction        or al-
terations,    NASA did not include in the estimated cost of the projects
all costs needed to make the facilities          fully  operable.      As a result
NASA has constructed    major facilities      and has made major alterations          pur-
suant to its minor construction         and minor alteration      authority.    Again
there is a degree of uncertainty         on NASA's part, or disagreement        between
the Congress and NASA, with respect to what constitutes               a fully  operable
facility   and what equipment costs are to be included in the estimates to
determine whether the project        should be considered     major or minor.
GAO noted one case in which minor construction           authority    had been used
to complete a congressionally    authorized    facility.        The funding action
taken in this example was clearly     illegal.       In another case minor con-
struction  authority  was used to completely      build a construction       of
facilities  project  which had been previously        authorized    but subsequently
canceled.   NASA's actions in this instance were not in violation             of law.                 I
                                                                                                      I
(See pp. 40 and 42.)                                                                                  I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                          2                                                           I
                                                                                                      I
                                                                                                      I
                                                                                                      I
                                                                                                      I
;
I
I
I
 I
 I
 I
 I
                    AGENCYACTIONS AND UNRESOLVEDISSUES
  I
  I
  I
                          NASA is presently  engaged in a review to improve the controls    over fa-
  I                       cility  planning.  NASA said the matters included in GAO's draft report
  I                       would be considered along with the information   and recommendations   devel-
   I
   I                      oped during the broader NASA review.    (See p. 44.)
   I
   I
   I
                           The recommendations   approved by the Administrator  will be presented to
   I                       the Senate Committee on Aeronautical   and Space Sciences as a means of
   I
   I
                           developing  a complete understanding  with the Committee and its staff.
   I                       Therefore  NASA said it was not able at this time to furnish    separate
   I
   I
                           comments to GAO. (See p. 44.)
   I
   I
    I
    I
                    MATmRS FOR CONSIDERATIONBY Ti?E COXVITTEE
       I
       I                  Major construction
       I
       I
       I                   The Committee may wish to identify            in the authorization      acts for NASA
       I
       I
                           the specific     projects   that are to be constructed.           This identification
       I                   would restrict      the availability       of funds appropriated      under the con-
       I                   struction    of facilities     appropriations      to the projects     and amounts
       I
       I                   identified     in the authorization       acts.
       I
       I
       I                   The Corunittee may wish also to consider        requiring    NASA to include in
       I                   the estimated cost of proposed projects         all costs    required   to construct
       I
       I                   and equip a fully    operable facility    and   to notify    the Congress of the
        I                  need for any additional      construction  or   equipment    subsequently   identi-
        I
        I
                           fied.   (See p. 30.)
        I
        I
        I
                          Minor conm2uction       and minor   aBerations
        I
           I               The Committee may wish to consider requiring       NASA to include in the es-
           I
           I               timated cost of proposed projects    all reasonably     identifiable     costs.
           I               NASA has not always included    the estimated cost of all equipment in the
           I
           L               estimated cost of a project.     As a result facilities        costing in excess
           I               of the $250,000 limitation   have been constructed      as minor construction
            i
            I
                           projects.
            I
            I             The Cornnittee may wish also to consider the propriety    of NASA's using
            I
            I             minor construction  funds to construct  authorized  major facilities.
            I
            I               In addition,   the Committee may wish to impose a limitation      on the use
            I              of research and development funds and research and program management
            I
            I              funds for alteration      projects and require that projects   exceeding this
                           limitation    be submitted for review and approval.      (See p. 43.)
            I
                1
                I

                I
                I
                    Tear Sheet                                      3
                I
                I
                I
                I
                I
                I
                I
.



                             Contents
                                                                             Page

DIGEST                                                                         1

CHAPTER

    1     INTRODUCTION                                                         4
              Scope of review                                                  4

    2     MAJOR CONSTRUCTION                                                   6
              Deviation        in the scope and purpose of
                congressionally          authorized        facilities          6
                    Propellant       Systems Components Labo-
                        ratory                                                 8
                    Flight       Crew Training     Building                   11
                    Flight       Crew Training     Building         exten-
                        sion                                                  14
                    Life Support Technology              Laboratory           16
                    Systems Development           Laboratory                  18
                    Heater replacement,           3.5-foot         wind
                        alnn~l                                                21
              Use of construction           of facilities           funds
                 for rehabilitation          and modification
                projects                                                      23
                    Ames library                                              24
              Turn-key       concept                                          25
                    Space Science Research Laboratory                         27
                    Systems Engineering           Facility                    28
              Matters      for consideration         by the Com-
                mittee                                                        30

    3     MINOR CONSTRUCTION AND MINOR ALTERATIONS                            31
              Turn-key       concept --minor      construction                31
                    Addition      of two bays to the high
                       bay area of the Life Sciences Re-
                       search Laboratory                                      32
                    Closed Optical          Test Pad                          33
              Turn-key       concept--alterations                             35
                   Alteration        of a 40- by 80-foot wind
                        tunnel                                                35
                    Alterations        to Photographic        Technol-
                       ogy Laboratory                                         36
                    Installation         of film processors                   37
                                                                               ..

CHAPTER                                                                  Page

                Construction     of facilities    projects
                  completed under minor construction
                  authority                                               40
                      Basement of Administrative        Manage-
                        ment Building                                     40
                      Additions   to Fabrication     Services
                        Building                                          42
                Matters     for consideration    by the Commit-
                  tee                                                     43

       4   AGENCY COMMENTS                                                44

APPENDIX

       I   Letter   dated February      24, 1971, from the
              Chairman,   Committee    on Aeronautical      and
              Space Sciences,    United    States   Senate,    to
              Comptroller   General    of the United     States           47

  II       Letter   dated May 13, 1971, from the Asso-
              ciate  Administrator for Organization  and
             Management, NASA, to the General Account-
              ing Office                                                  48

                                  ABBREVIATIONS

GAO        General      Accounting      Office

           Lunar      Excursion      Module

NASA       National       Aeronautics         and Snace Administration
COMPTROLLER GENERAL'S                                 USE OF CONSTRUCTION AUTHORITY BY
REPORTTO THE COMMITT~ ON                              THE NATIONAL AERONAUTICSAND SPACE
AERONAUTICALAND SPACE SCIENCES                        ADMINISTRATION B-1651 18
UNITED STATES SENATE

DIGEST
------

WHY2TIEREVIEW WASMADE
     The Committee Chairman requested the General Accounting Office (GAO) to
      (1) identify     instances where the National Aeronautics         and Space Admin-
     istration     (NASA) has constructed      major facilities  different    from those
     approved by the Congress and (2) determine whether NASA is adhering to
     the dollar     limitations     imposed on the use of research and development
     funds and research and program management funds for minor construction
     and alteration       projects.     (See p. 47.)

     The construction       projects reviewed by GAO were not selected on a
     statistical    basis and therefore     were not necessamy     representative of
     the total NASA construction       program during the periods covered by the
     review.     GAO's review did not involve     an evaluation  of the need for the
     facilities.     (See p. 5.)


FINDINGS AND C'ONCLUSIONS            '

    Major corwtruction
    NASA has been required       to obtain congressional        approval     for each major
    facility   that it proposes to construct.            The legislative       history      indi-
    cates that, if NASA decides to construct             a major facility       which signifi-
    cantly differs     in purpose or scope from that described              to the Congress,
    the Congress expects NASA to notify           it of the deviation         and to obtain
    approval   to construct    the revised facility.         GAO found several           instances
    where NASA constructed      major facilities        which significantly        differed       in
    scope or purpose from those described             in its budget submissions to the
    Congress,     There were no indications         that the Congress or its committees
    had been notified     of the changes.        (See p. 6.)

    There is no legal requirement       that NASA advise the Congress of revisions
    made to construction      projects.   GAO, however, is of the opinion that the
    authorization     and appropriation    committees are in the best position    to
    decide whether NASA's practices        are in accordance with the committees'
    intent.      (See p. 7.)

    Construction     of facilities      funds are not to be used for rehabilitation
    and modification      of facilities      which will change the purpose of the




                                                       1
facility     or result  in an extension         of the faci1it.y.     GAO reviewed a re-
habilitation      and modification       project which changed the designated          pur-
pose of the two buildings          involved     and resulted     in an external   extension
of one of the buildings.           (See p. 23.)

The legislative       history   also indicates       that the Congress expects NASA to
include in the cost estimate of a major facility               all costs needed to make
the facility    fully     operable.       Some cost estimates submitted to the Con-
gress did not include all such costs.                There is a degree of uncertainty
on NASA's part, or disagreement             between the Congress and NASA, with re-
gard to what constitutes          a fully    operable facility    and what equipment
costs should be included in the estimated cost of a facility                project.
(See pp. 25 and 26.)

Minor comh+~&ion        and minor aZtera&m
NASA is authorized            to use research and development        funds for minor con-
struction      projects       that have an estimated cost (including         collateral
equipment)       of $250,000 or less for additions,           extensions,    and expansions
of existing       facilities.         Also NASA is authorized     to use research and
program management funds for new construction                 having an estimated cost
(including       collateral       equipment) of $100,000 or less.         NASA has unilat-
erally     applied the $100,000 limitation           to the use of research and devel-
opment funds for new construction.                (See p. 31.)

NASA is authorized  to use research and development funds or research and
program management funds for alterations        without dollar   limitation  and
without obtaining  congressional    approval.      GAO, however, believes   that
the Congress has been led to understand       that it would be notified     when
the estimated cost of an alteration      project    (including  collateral  equip-
ment} exceeded $250,000.     (See p. 35.)

For a number of projects     classified     as either minor construction       or al-
terations,   NASA did not include in the estimated cost of the projects
all costs needed to make the facilities          fully operable.      As a result
NASA has constructed    major facilities      and has made major alterations         pur-
suant to its minor construction         and minor alteration     authority.    Again
there is a degree of uncertainty         on NASA's part, or disagreement       between
the Congress and NASA, with respect to what constitutes              a fully  operable
facility   and what equipment costs are to be included in the estimates to
determine whether the project        should be considered major or minor.
GAO noted one case in which minor construction           authority    had been used
to complete a congressionally    authorized    facility.        The funding action
taken in this example was clearly     illegal.      In another case minor con-
struction  authority  was used to completely      build a construction       of
facilities  project  which had been previously        authorized    but subsequently
canceled.   NASA's actions in this instance were not in violation             of law.
(See pp. 40 and 42.)




                                          2
AGENCYACTIONS AND UNRESOLVEDISSUES
    NASA is presently  engaged in a review to improve the controls    over fa-
    cility  planning.  NASA said the matters included in GAO's draft report
    would be considered along with the information   and recommendations   devel-           '
    oped during the broader NASA review.    (See p. 44.)
    The recommendations   approved by the Administrator  will be presented to
    the Senate Committee on Aeronautical   and Space Sciences as a means of
    developing  a complete understanding  with the Committee and its staff.
    Therefore  NASA said it was not able at this time to furnish    separate
    comments to GAO. (See p. 44.)


MATTERSFOR CONSIDERATIONBY THE CWITTEE
    Major construction
    The Committee may wish to identify             in the authorization     acts for NASA
    the specific     projects   that are to be constructed.           This identification
    would restrict      the availability       of funds appropriated      under the con-
    struction    of facilities     appropriations       to the projects    and amounts
    identified     in the authorization        acts.

    The Conanittee may wish also to consider        requiring NASA to include in
    the estimated cost of proposed projects         all costs required   to construct
    and equip a fully    operable facility    and   to notify the Congress of the
    need for any additional      construction  or   equipment subsequently   identi-
    fied.   (See p. 30.)

    Minor cons-truction    and minor alterations
    The Committee may wish to consider requiring      NASA to include in the es-
    timated cost of proposed projects   all reasonably     identifiable     costs.
    NASA has not always included the estimated cost of all equipment in the
    estimated cost of a project.    As a result facilities        costing in excess
    of the $250,000 limitation   have been constructed     as minor construction
    projects.

    The ConWttee may wish also to consider the propriety    of NASA's using
    minor construction funds to construct authorized  major facilities.

     In addition,   the Con-unittee may wish to impose a limitation     on the use
    of research and development funds and research and program management
    funds for alteration      projects and require that projects    exceeding this
    limitation    be submitted for review and approval.     (See p. 43.)




                                             3
                                     CHAPTER1

                                  INTRODUCTION

          In recent years the Congress has authorized                   and appro-
priated      to NASA three types of funds--construction                   of fa-
cilities,       research and development,  and research                 and pro-
gram management.          .

         Construction      of facilities        funds are provided         for ad-
vance planning,         design,     and construction        of major facilities
and for acquisition           or condemnation         of real property.           Re-
search and development           funds are provided          for research,
development,        operations,       services,     and other activities,
including       minor construction,          maintenance,      repair,     and al-
terations       of real and personal          property     necessary     to carry
out aeronautical          and space research          and development        activ-
ities.       Research and program management funds are provided
for necessary         expenses of research          in Government labora-
tories,      management of programs and other activities,                     in-
cluding      minor construction          and maintenance,        repair,     and
alteration        of real and personal          property.     Thus NASA has
authority       to use research        and development       and research         and
program management funds, as well as construction                        of facil-
ities     funds for construction           purposes.

SCOPE OF REVIEW

        Pursuant   to the request of the Chairman,             Senate Com-
mittee    on Aeronautical        and Space Sciences,     we reviewed          NASA's
financial     management of construction           funds to (1) identify
instances     where NASA constructed       facilities      different        from
those described      to and approved by the Congress and (2)
determine     whether NASA is adhering        to the dollar        limitations
imposed on the use of research           and development        and research
and program management funds for minor construction                     and
minor alteration       projects.

      Our review of NASA's construction            activities        was con-
ducted at NASA Headquarters,         Washington,       D.C.; Goddard
Space Flight    Center,   Greenbelt,     Maryland;      John F. Kennedy
Space Center,    Florida;   Manned Spacecraft          Center,      Houston,
Texas; Ames Research Center,         Moffett    Field,      California;


                                          4
Langley Research Center, Hampton, Virginia;    Lewis Research
Center, Cleveland, Ohio; and the Jet Propulsion Laboratory,
Pasadena, California.   We reviewed construction    project
files and other related data and, where necessary, held
discussions with agency officials   at these locations.
       We restricted our review of major construction   projects
to those authorized during and subsequent to fiscal year
1965 which appeared to show the greatest potential    for de-
viation   from the congressionally approved project.
       We limited our review of minor construction       and minor
alteration     projects to those initiated  during and subse-
quent to fiscal year 1967 except for two projects initiated
prior to that time. In selecting minor construction          and
alteration     projects for detailed review, we gave priority
to those projects which appeared most likely       to involve
costs in excess of the imposed limitations       applicable   to
the type of project involved.
      Thus the projects reviewed in detail were not selected
on a statistical   basis and were not necessarily   representa-
tive of all major and minor facilities    projects initiated
during the periods covered by our review.      Our review.did
not involve an evaluation    of the need for the facilities
discussed in this report.
                                     CHAPTER 2

                             MAJOR CONSTRUCI'ION

DEVIATION IN THE SCOPE AND PURPOSE OF
CONGRESSIONALLY AUTHORIZED FACILITIES

         Since its creation          in 1958, N&SA has been required                 to
obtain      congressional        approval      for'each      major facility       it
proposes to construct.               Major construction            is defined     as a
construction        project      for a new facility           having an estimated
cost (including          collateral       equipmentI         of more than
$100,000 or a construction                project     relating       to an existing
facility      having an estimated            cost (including           collateral
equipment)       in excess of $250,000.

         NASA's construction         of facilities        budgets submitted         to
the Congress include            a detailed      description        of each pro-
posed project,        its    estimated     cost,     and  justification       for
the project,        The Congress,         after    reviewing       the budget sub-
mission,     authorizes        a specific      amount to be appropriated
for construction          projects     at each NASA center,             The projects
identified      in the NASA budget submission                are considered       to
be authorized       unless specifically            deleted      by the cognizant
committees.       Subsequently,         the Congress appropriates            a
lump-sum amount for the construction                    of NASA facilities.

          Although       the authorization         act for NASA does not
identify         specific     projects,      the amounts authorized            for con-
struction         of facilities         are based on a detailed          review of
the justification,              scope, and estimated          cost of each proj-
ect by the cognizant               congressional       committees.       Legislative
history        indicates      that the Congress assumes that the proj-
ects will         be constructed         in the manner and for the purpose
described         by NASA in its budget submission.                  Legislative
history        indicates      also that,       if for any reason NASA decides
to construct           a major facility          which significantly         differs
in purpose or scope from that described                       to the Congress,
the Congress expects NASA to notify                     it of the deviation          and
to obtain         the necessary         approval     to construct     the revised
facility.

1See page 25 for         NASA's     definition      of collateral        equipment.

                                            6
        Six major construction           projects    that    we reviewed    signif-
icantly     differed   in purpose or scope from              that which NASA
described       in its budget submissions          to the      Congress.   A
NASA Headquarters        official      advised us that         the Congress was
not advised of the deviations               because, in      NASA's opinion,
the changes made in the six projects                 were    within   the scope
of the congressional          authorization.

       As discussed      on page 22 of the Comptroller      General's
report   B-165118(1)       dated March 29, 1971, there is no legal
requirement     that NASA advise the Congress of revisions            made
to construction      projects.       In our opinion,  the authoriza-
tion and appropriation          committees  are in the best position
to decide whether NASA's practices           with respect to revising
congressional      authorized     projects  are in accordance with
the committees'       intent.
      The six projects          and their     location      are listed    and
discussed below.
                   Project                                   Location

Propellant     Systems Components)
    Laboratory                       >
Flight     Crew Training Building)                 Kennedy Space Center,
Flight     Crew Training Building)                   Florida
    extension                        >
Life Support Technology       Laboratory           Langley Research Center
                                                     Hampton, Virginia
Systems Development          Laboratory            Jet      Propulsion   Labora-
                                                         tory,   Pasadena, Cali-
                                                         fornia
Heater    replacement,       3.5-foot              Ames Research Center
  wind    tunnel                                     Moffett  Field, Cali-
                                                     fornia


1
 Report to the Committee on Aeronautical         and Space Sciences,
 United States Senate, entitled     "Building     Authorized   to Pro-
 vide Office    Space at Manned Spacecraft     Center Redesigned
 to Provide Laboratory    Space, National     Aeronautics    and
 Space Administration."

                                          7
Propellant       Systems Components       Laboratory

       A project     justification         for the construction        of the
Propellant      Systems Components Laboratory               at the Kennedy
Space Center was submitted              to the Congress as part of NASA's
fiscal     year 1965 construction            of facilities     program.      The
laboratory      was to consist        of a 4,100-square-foot          extension
to an existing       propellant       laboratory        and a 4,800-square-
foot Propellant        Transporter        Repair and Maintenance         Shed and
the necessary       equipment      for each.       The estimated      cost of
the project      was $588,000.

       The justification          for the project        stated that (1) the
extension     to the laboratory         was to provide         space for clean-
ing, analyzing,        repairing,      and testing       of propellant      com-
ponents and hardware of all NASA launch vehicles,                       launch
complexes,      and manned spacecraft         facilities        and (2) the
Propellant      Transporter       Repair and Maintenance           Shed was to
provide    space for the cleaning,           purging,       and repairing     of
50 propellant       transporters       and other support equipment.

       Revised     project    scope

         In October 1965, after         the project         had been approved
by the Congress,         the Kennedy Space Center submitted                  a jus-
tification      for a revised       and expanded project             to NASA Head-
quarters,       This justification           provided      for the construction
of (1) a 35,200-square-foot             Propellant         Laboratory     and High
Pressure Gas Maintenance            Facility       to be located       about
5 miles from the existing            propellant         laboratory     in lieu of
an extension       to the propellant          laboratory,        (2) a 4,800-
square-foot       Propellant     Transporter         Repair and Maintenance
Shed, (3) a Propellant           Equipment Storage Area, (4) a Cas-
eous Nitrogen        Loading and Charging            Station,      and (5) a
Deionized     Water Plant.

       The justification      for the revised     project    stated that
the expanded Propellant         Systems Components Laboratory           Com-
plex was needed to provide          adequate launch operations          sup-
port facilities        for the Kennedy Space Center.         It   stated
also that the requirement         for the propellant      laboratory      as
provided     for originally    had not been based on a considera-
tion of the needed cleaning          requirements    for the Apollo
spacecraft.
9
            The revised    project,      with certain    changes, was ap-
    proved by EJ&SA Headquarters            in January 1966.     The estimated
    cost of the revised         project     was $2,734,000,    an increase   of
    $2,146,000      over the estimated        cost of $588,000 for the
    project    as submitted      to the Congress.        The additional
    amount was obtained         by the transfer       of funds from another
    fiscal    year 1965 project         for additions    to the Manned Space-
    craft    Operations    and Checkout Building.

         Construction of the complex was completed              in October
    1967 at a cost of about $2,651,000.




b



                                        10
           Summary of project                       scope changes

       The project,                     as described  to the Congress, as revised,
and as constructed,                       is summarized below for comparative    pur-
poses.

                                                               Reject
                                                              description          Revised            Project
                                                              provided to          project               as
                        Description                         the Congress         description        constructed
 cost:
         Construction                                         $256,300           $1,997,300
         EQuip=t                                               331,700               736,700
              Total                                           $588,000           $2,734,000
 Number of structures by type:
     Facility--addition                                           1
            I, --building (single story)
            I, --other                                            1
     Concrete pads
     Paved parking and open storage areas                         cs>
 Area by type (approximate square feet):
     Facility--building                                          4,100                39,472               39,230
            I, --other                                           4,800                 8,750               17,520
     Concrete pads                                                                     1,500               (d)
     Paved parking and open storage areas                         (2                 444,042              334,323
 aIncludes some equipment required for the facility                     to accomplish    its   intended    func-    *
  tion, the amount of which could not be identified.
 b Not determined.

 'Revision   was made for parking; however, square                 footage     and number of parking        and
   storage areas were not indicated.

 dNot identified           in project    file.


Flight          Crew Training                    Building

        The project     justification      for additions   to the Manned
 Spacecraft     Operations       and Checkout Building    at the Kennedy
 Space Center was submitted           to the Congress as part of NASA's
 fiscal    year 1965 construction         of facilities   program.   The
 estimated     cost of the project       was $16,316,000.

         The justification          for the project  stated    that the ad-
 ditions     to the Operations          and Checkout Building     were re-
 quired    to provide       additional     assembly and checkout,      office,
 test,    and service       areas for contractor     and NASA personnel        to
 perform preflight          checkouts     of manned spacecraft     systems to
 prove flight        worthiness.
                                                r
                                           11   i
12
      Revised    proiect    scope

         In July 1964, after      the project     had been approved by the
Congress,       the Kennedy Space Center submitted        a revised       justi-
fication      for the project     to NASA Headquarters.        The revised
project      was for a separate      Manned Spacecraft    Flight      Crew
Training      Building    and an addition     to the Operations       and
Checkout Building.          The estimated     cost of the project,        as re-
vised,     remained at $16,316,000,        of which $14,054,800        was for
the addition        to the Operations     and Checkout Building        and
$2,261,200       was for a new Flight      Crew Training    Building.

       The separate     Flight   Crew Training       Building,    which had
not been included       in the project    justification        submitted    to
the Congress, was to provide         a working       area of 36,008 square
feet to house an Apollo mission          simulator,        a Lunar Excursion
Module (LEM) mission simulator,          and the required         computers
and related      equipment.     On October 26, 1964, NASA Head-
quarters     approved $16,124,000      of NASA's fiscal        year 1965
construction      of facilities    budget for the project.

       The cost of constructing         (1) the addition       to the Opera-
tions and Checkout Building--         the project     approved by the
Congress--was     about $13 million        and (2) the separate       Flight
Crew Training     Building --which was not part of the project
approved by the Congress--was           about $2 million.        In addition,
approximately     $39 million    of research and development           funds
were used to procure two Apollo            mission   simulators,    oneLEM
mission simulator,        and the related      equipment which were
not provided    for in the project         as presented     to the Congress,




                                      13
Flight     Crew Training     Building     extension

        A project     justification         for an extension      of the Flight
Crew Training       Building        at the Kennedy Space Center was sub-
mitted     to the Congress as part of NASA's fiscal                 year 1966
construction       of facilities         program.     The project    was esti-
mated to cost $1,425,000              and was to provide       17,640 s+are
feet of additional            space to house two flight-simulators             (an
Apollo    mission simulator           and a LEM mission      simulator)    and
related      computers.        The estimated      cost of the simulators
and computers was not included                 in the estimated     cost for
the building       extension.

       On June 24, 1965, NASA Headquarters                 advised the Kennedy
Space Center that the Congress had approved the Kennedy Space
Center's    total   construction        of facilities       program,    including
the Flight      Crew Training     Building       extension,      and that the
total    amount approved was $400,000 less than the amount re-
quested in the budget for the Center.                   The $400,000 reduc-
tion was made without          specifying     its allocation        to individ-
ual projects.

        On July 20, 1965, the Kennedy Space Center advised NASA
Headquarters    that the project    description   and justification
for the extension     to the Flight   Crew Training    Building     had
not changed but that the estimated         cost had been reduced
from $1,425,000     to $1,025,000   because of the reduction        of
$400,000 from the amount requested         in the budget for the
Center.

         Revised   project   scope

        In June 1966, after       the Congress had approved the ex-
tension    to the building,       the Kennedy Space Center submitted
to NASA Headquarters        a revised   project   justification      in-
creasing     the original     area of the extension        from 17,640 to
32,180 square feet and increasing            the estimated      cost from
$1,025,000      to $1,259,570.

       Construction    of the extension  to the Flight   Crew Train-
ing Building      was completed in August 1967.     The extension
provided    about 32,000 square feet of floor    area or about
80 percent     more space than that approved by the Congress.


                                        14
        Although   the Congress authorized         the construction     of
the extension      to the Flight    Crew Training      Building     to house
two mission simulators,        the extension       was never used for
that purpose.        We have found that the extension           to the build-
ing has been used since May 1969 to house a mock-up of the
LEM which does not simulate         flight.       The LEM mock-up is used
by the flight      crews to practice        tasks they will     perform on
the moon's surface,       such as climbing        out of the LEM and pick-
ing up moon rocks,        We were advised that,        prior    to May 1969,
the extension      to the building      had been used to house a
mock-up of the Apollo       spacecraft       which the flight      crews used
to practice      emergency exits and which did not simulate
flight.

Life     Support   Technology   Laboratory

        NASA's budget submission           for fiscal    year 1966, which
was approved by the Congress,              included   a project  for a Life
Support Technology          Laboratory     to be constructed    at the Lang-
ley Research Center,           The justification       for the project
stated     that the laboratory         was needed to provide     NASA with
the research      capability      to obtain and apply the technology
necessary      to equip future       manned space vehicles      with optimum
life    support   systems for future          manned missions   of extended
duration.

        The laboratory   was to contain   about 42,000 square feet
of laboratory      space at an estimated   cost of $2,492,000    in-
cluding    the cost of two environmental      simulators  to be
housed in the laboratory       to provide  a means of simulating
conditions     in space.

         NASA Headquarters   approved        the construction   of the fa-
cility     in November 1965,

         Revised   project   scope

       In February      1966 Iangley,   on the basis of a reevalua-
tion of the need for the two environmental            simulators,   de-
termined   that one of the simulators          would no longer meet
the sequirements        and that a more expensive     simulator   was
needed.    Because the additional         cost of the more expensive
simulator    prohibited     its purchase,     Langley decided to buy
only one or the two simulators          approved by the Congress,
                   0
                                      16
     i




aE

         15
17
        In November 1968, when the Life Support Technology               Lab-
oratory    was being occupied,     Langley submitted      a proposal      to
NASA Headquarters     for an addition     to the laboratory         of 7,900
square feet of office      space at an estimated        cost of $212,000.
Langley explained     that the cost of the addition            could be
funded within     the amount originally     estimated     for the proj-
ect because of favorable       bids on equipment      items and a reduc-
tion in the estimated      cost of constructing       the laboratory.
NASA Headquarters     approved the office-space         addition     on Feb-
ruary 13, 1969,

      . NASA therefore      constructed,       without   congressional      ap-
proval,     a 7,900-square-foot        office-space      addition     to the
Life Support Technology          Laboratory.         It appears that most
of the funding       for the addition        was available       because of the
elimination      of one of the two simulators            that had been ap-
proved by the Congress.

Systems Development           Laboratory

         A project     justification            for the construction        of a Space
Flight     Operations        Facility       Systems Development         Laboratory
at the Jet Propulsion               Laboratory      was authorized       by the Con-
gress as part of the NASA fiscal                    year 1968 construction           of
facilities       program.          The structure,       estimated     to cost
$1,195,000,        was to consist           of three stories        to provide      space
for a science computing               facility,       a data processing        develop-
ment workshop,         a telecommunications             development      laboratory,
and an engineering             office    area for related         technical     and
operational        personnel.                         v

       Incomplete      project     justification

        The justification       for the project,           as approved by the
Congress,     did not contain        a discussion        of NASA's plans to
ultimately      construct     an eight-story        Systems Development          Lab-
oratory.      On March 3, 1967, 5 months prior                  to congressional
approval    of the three-story          laboratory,        the Jet Propulsion
Laboratory     had developed       design criteria           which provided      for
the construction          of an eight-story       building.        Congressional
approval    of a three-story         structure,       in effect,     represented
only the first         phase of a much larger           building,




                                           18
       NASA is using the $1,195,000      for the first   phase of
construction      of the laboratory which will   consist   of two
floors     rather  than the three approved by the Congress.

        The smaller    structure    resulted      primarily    because (1)
building    costs had increased        during     the period    of time be-
tween project      approval     and the release       of funds by NASA
Headquarters     and (2) air-conditioning            equipment    and an el-
evator were added to the revised             project      cost estimate,

       The first   phase of construction          will    provide    a facility
with structural      strength,     entrance    and elevator       lobby ar-
rangement,     and utility     systems adequate to accommodate six
future   floors.    The future      third   floor    will    be used for
computer-related        equipment   and the remaining         five floors
will   be used for offices.




                                       20
Heater     replacement.      3.5-foot     wind   tunnel

       This fiscal    year 1968 project     to replace   the heater
components of a 3.5-foot        hypersonic   wind tunnel with newly
designed components was authorized          by the Congress for the
Ames Research Center.        The estimated    cost of the project,
as submitted     to the Congress, was $3,170,000.          Between the
time the project      was approved and construction        was begun,
however, a change in the type and cost of materials              to be
used resulted      in the funding    for the project    being reduced
by NASA Headquarters       to $2,040,000.

         Revised   project    scope

        After      congressional       approval      of the project,       the Ames
Research Center,           in a memorandum dated November 24, 1969,
requested         NASA Headquarters'         approval      to modify the test
section       of the wind tunnel         and to provide         a new model sup-
port mechanism as part of the heater replacement                         project.
The memorandum stated that,                although      this modification        was
not part of the congressionally                   approved heater replacement
project,       it was related        to the approved project           in that the
heater replacement            provided     capabilities       which could not be
fully      exploited      without    provision       for larger    wind tunnel
models.        The memorandum also stated that the Center had
originally         planned to include          the test-section       modification
and model-support            mechanism in the construction             of facili-
ties project          but that they were deleted             during budget re-
views to reduce costs.

       On January 13, 1970, NASA Headquarters        granted ap-
proval     to use construction     of facilities funds for this
modification,     stating,     in part:

         "An analysis    of the original      project  write-up  in-
         dicates   that the requirement       to modify the test
         section   and to provide     a model support mechanism
         is within    the scope of the FY 1968 C of F Project
         2135, which provides      for alterations     to the
         3.5-foot    Wind Tunnel."

A construction contract   for the test-section   modification
and the new model-support    mechanism was awarded on
June 24, 1970, at a cost of $433,691.


                                        21
        In addition       to the modification         described  above, the
operator's      station     for the wind tunnel heater was being
moved from the equipment building               to the wind tunnel      test-
section    control      room.    In this case, however, Ames did not
request NASA Headquarters'            approval     on the use of funds for
the approved heater replacement              proj.ect     on the basis that:

      "Since NASA Hqrs ruled on Jan. 13, 1970 that the
      test-section  modifications   were within     [the]
      scope of Project    2135 - we are reassured      that
      the above work is also within     [the]   scope,"     _
The contract     for this modification   was awarded          on Febru-
ary 4, 1971,     in the amount of $33,500.

       Therefore   Ames used about $467,000     of the approved
construction     of facilities    funds for wind tunnel modifica-
tions which were outside       the scope of the project    authorized
by the Congress.




                                      22
USE OF CONSTRUCTION OF FACILITIES  FUNDS
FOR REHABILITATION AND MODIFICATION PROJECTS

         In its fiscal       year 1970 budget submission,                  NASA in-
cluded as a part of its construction                     of facilities         program
a category       entitled      "Modifications         and Rehabilitations            at
all Locations."            This project       category,       which in the fiscal
year 1971 budget.submission                was entitled        "Rehabilitation           and
Modification         of Facilities,"         provides      for major improvements,
rehabilitation,           and alteration        of facilities        at NASA instal-
 lations      and was to be funded from the construction                        of facil-
 ities     appropriation.         These projects         are not individually
justified       to the Congress or subject               to dollar       limitation.

         In approving    this budget classification,              the Congress
directed     NASA to confine        projects    in this category        to "major
structural      repair   work, deferred        maintenance,       and replace-
ment of installed        equipment."         In March 1970 NASA Headquar-
ters issued guidelines            to all NASA centers containing            crite-
ria for including        a project       in the rehabilitation         and modi-               ~,
fication     program.      The guidelines       contained      the following
definitions       of rehabilitation         and modification.

       "**   Rehabilitation is the restoration     of a facil-
       ity or the components thereof    to such a condition
       that it may be used effectively     for its designated
       purpose.  ***

       *'Modification     is the work rekuired          to modify,   ad-
       just,     or modernize    an existing    facility     so that it,
       can more effectively        be adapted or used for its
       designated     purpose provided       an internal     expansion
       or external     extension    is not involved."

        A rehabilitation           and modification       of facilities      project
at the Ames Research Center resulted                   in modifying      an exist-
ing three-story          facility     for use as a library           when the des-
ignated purpose of the facility                 had been to provide         office
space on two floors              and a library      on the top floor.        This
modification        also resulted         in an external     extension      of the
building.




                                            23
     Ames library

             On February    13, 1970, Ames requested         NASA Headquarters'
     approval    of a project        to expand the existing      library.         The
     project    provided    for the modification       of Building        N202 to
     house the expanded library‘          and for the renovation          of a por-
     tion of the first        and second floors      of Building      N203 to
     house the Fiscal       Division,     which  was  occupying      two   floors
     of Building      N202.        .

             The modification       of Building        N203 to house the Fiscal
     Division    required     construction         of new partitions,       flooring,
     ceilings,     lighting,     and air conditioning          at an estimated
?+   cost of $100,000.         The modification          of Building     N202 to
     house the expanded library             provided     for the renovation          of
     the three floors        of the building.           This renovation        involved
      (1) removal and relocation            of rest rooms, (2) construction
     of new partitions,        floors,      ceiling,     and lighting,      and (3)
     acquisition       of new library       equipment      and furnishings.          The
     estimated     cost, including        furnishings,       was about $260,000.

              Qn March 17, 1970, Ames submitted            to NASA Headquarters
     a sketch of an external          extension     to Building   N202 to pro-
II   vide for an entranceway,          elevator,      and rest rooms.       On
     April     9, 1970, NASA Headquarters          approved the initial       allo-
     cation      of funds for the rehabilitation           and modification
     project.       On June 25, 1970, a contract          was awarded for the
     modification       of both buildings        in the amount of $319,175,
     which was subsequently         increased      by seven amendments to
     $368,410.

           Funds totaling    about $468,000--consisting    of approxi-
     mately $361,000 of construction       of facilities funds, $100,000
     of research   and development   funds, and $7,000 of research
     and program management funds --had been used on this project.
     The research   and development    funds were used primarily     to
     buy furniture    and equipment  for the library.    The research
     and program management funds were used primarily        to design
     space to be occupied by the Fiscal        Division.

             According   to NASA's      guidelines,      the modifications       of
     the two buildings        should    not have been considered           a rehabil-
     itation     and modification       project     because they resulted        in a
     change in the designated           purpose of the buildings           and in an


                                              24
external     extension    of one of the buildings,           The space in
Building     N203 to house the Fiscal         Division     was changed from
office     and laboratory      space to office       space only,    Two
floors     of Building    N202 were converted         from office   space to
library     space; in addition,       the building       was expanded exter-
nally    to house an entranceway,         elevator,      and rest rooms.
Therefore     the modification      project     should have been submit-
ted to the Congress for review and approval                 as a construc-
tion of facilities        project.

IURN-KEY CONCEPT

        The legislative       history     indicates         that,       in estimating
the cost of a construction             of facilities           project,         the Con-
gress expects NASA to include               the total         estimated        costs nec-
essary to provide         for a fully       operable        facility.           In addi-
tion,    NASA's policies        and procedures          provided          that each fa-
cility    project      be planned and managed as a turn-key                        project--
that is, each facility           project      presented        for approval            within
NASA and to the Congress for authorization                          and appropriation
shall    include     the estimated       cost of any collateral                   equip-
ment and all other reasonably               identifiable            elements of cost,
Thus upon completion          of a facility          project,         the user should
be able to "turn         a key" and enter a fully                 operable        facility
in terms of the function             and capacity         intended          for the fa-
cility,

        NASA defines        collateral       equipment       as:

       'I*** all that non-integral,                    severable      equipment
       which is acquired              for use, or used, in a facil-
        ity.      'Collateral         equipment'        is not required          to
       make the structure               or building        useful     and oper-
       able as a structure               or building,          but imparts       to
       the facility           its particular           character      at the time,
       e.g.,     furniture         in an office         building,       laboratory
       equipment        in a laboratory            building,      test equipment
       in a test stand, machine tools in a manufacturing
       facility,        electronic         computers        in a computer fa-
       cility,      etc.        'Collateral         equipment'      is placed
       in use in a facility                but is not permanently              at-
       tached thereto            except for operating             purposes and
       is removable without                significant         damage to the
       real property."


                                             25
        We found that the estimated        costs of some equipment
needed to make a facility        fully    operable     had not always been
included     in the estimated    cost of a construction         of facili-
ties project.        We found also that there was a degree of un-
certainty       on NASA's part or disagreement         between the Con-
gress and NASA with regard to what constituted                a fully    op-
erable    facility    and what equipment costs should be included
in the estimated       cost of a facility      project.

         We found that,      for two congressionally     approved proj-
ects, NASA used research          and development    and/or research
and program management funds to supplement             the authorized
construction      of facilities     funds to acquire     fully   operable
facilities.       These projects      are discussed   below.




                                     26
Space Science     Research    Laboratory

         As part of NASA's fiscal      year 1968 construction       of fa-
cilities    program, the Congress authorized        the construction
of a Space Science Research Laboratory          at the Ames Research
Center.     The project    was estimated    to cost $2,195,000,      of
which $332,000 was for equipment.           The purpose of the facil-
ity was to provide      adequate laboratory,     equipment,      and en-
gineering    space to consolidate      space science personnel       and
to.house    over $2 million    worth of existing      equipment.

          At the time of our review,         Ames planned to use all of
the construction       of facilities      funds for construction.          In
addition,      Ames used $29,000 of research         and program manage-
ment funds for the construction             of access roads and a park-
ing lot for the building.            The project,    as approved by the
Congress, p rovided      for the use of construction         of facilities
funds for the construction           of the access roads and parking
lot.

         On February     4, 1970, an Ames' official     in the Space
Sciences Division         stated in a memorandum for the Chief,      Re-
search Facilities        and Equipment Division,    that part of the
laboratory    would have to be extended before existing         equip-
ment could be installed,           He stated also that the extension
of part of the laboratory          could be done as a future   minor
construction     project.

       Ames has not used construction     of facilities      funds
for the purchase of the equipment     described      to the Congress
in the budget justification,     Ames used research        and devel-
opment funds of about $469,000 for the purchase of at least
20 pieces of equipment,

        As shown below, we were able to identify      costs of
$2,638,000    incurred in connection with constructing      and
equipping   the Space Science Research Laboratory      which as of
March 1971 had not been completed,




                                      27
                                         Estimated
                                          project
                                            costs
                                         submitted
                                          to the      Incurred     Increase    or
                                         Congress         costs
                                                         I__-      decrease(-)
                                                                   ----
  Construction      of facili-
    ties funds:
       Construction            $1,863,000            $2,140,000      $277,000
       Equipment                     332,000                -        -332,000
  Research and development
    funds:
       Equipment                                         469,000       469,000
  Research and program man-
    agement funds:
       Construction             ---I__               -    29,000     -- 29,000
            Total                       $2,195,000   $2,638,000
                                                      -----   --     WG.2B!2
  Systems Engineering       Facility

          As part of NASA's fiscal       year 1966 construction          pro-
  gram, the Congress authorized        the construction     of      a Systems
  Engineering     Facility at the Ames Research Center.              The fa-
  cility    was to provide  about 58,000 square feet of             space at
  an estimated     cost of $2,749,000,      of which $940,800        was for
  equipment.

          Increase
         ----        in square         foota@
                                         ---
           The proposal     for the Systems Engineering        Facility    as
  approved by the Congress stated that 57,925 square feet of
  laboratory     and equipment     space would be constructed.          On
  March 16, 1967, a month before the occupancy date of
  April    17, 1967, Ames informed         NASA Headquarters    that the fa-
  cility     had been increased      by 21,839 square feet.        We were
  informed,     however,    that NASA Headquarters       had been notified
  of the increased       size of the facility       by memorandum dated
  August 25, 1965.        This memorandum forwarded         the final   design
v drawings for a facility         containing    about 80,000 square feet.




                                           28
        Purchase      of equipment with
        research      and development   funds

          Of the equipment housed in               the Systems-Engineering
Facility,      we were able to readily               identify     items--acquired
at a cost of $783,677--which         were            purchased with research
and development       funds in addition              to equipment purchased         at
a cost of $744,448 with construction                     of facilities       funds.
A list     of the equipment purchased                with research       and develop-
ment funds follows.

                              Item                                  cost

                   Spin table                                  $ 79,100
                   Digital     components:
                         Central   processor                    205,092
                         Card reader                             11,568
                         Recorder reproducer                     49,359
                         Digital   recorder                       2,285
                   Solar concentrator                            82',951
                   Analog computer                              353,322

                            Total                              $783,677

         A comparison of the estimated cost of the project                        as
provided     to the Congress with the actual  costs readily                       iden-
tifiable     with the project is shown below.

                                                    Estimated   cost
                                                     of project    as         Project
                                                       provided  to            costs
                                                     the Congress          identified

Construction      of facilities
  funds:
     Construction                                      $1,808,200          $2,090,818
     Equipment                                             940,800             744,448
Research and development             funds:
     Equipment                                                                 783,677

           Total                                       $2,749,000          $3,618,943




                                              29
MATTERS FOR
         -- CONSIDERATION
                        -- BY THE COMMITTEE
         The Committee may wish to identify         in the authoriza-
tion acts for NASA the specific            projects   that are to be
constructed.       This identification        would restrict    the avail-
ability     of funds appropriated        under the construction     of
facilities     appropriations       to the projects     and amounts
identified     in the authorization        acts.

        In addition,    the Committee may wish to consider               re-
quiring    NASA to include        in the amounts requested        for future
major facilities      all costs required          to construct    and equip
a fully    operable   facility      and to notify     the Congress if the
need for additional         construction      or equipment     is identified
subsequent     to congressional         approval.




                                      30
                                  CHAPTER3

            MINOR CONSTRUCTION AND MINOR ALTERATIONS

TURN-KEY CONCEPT--MINOR CONSTRUCTION

         NASA is authorized      to use research and development
funds for minor construction           projects     having an estimated
cost (including       collateral    equipment)       of $250,000 or less
for additions,       extensions,    and expansions        of existing     facil-
ities.      NASA is authorized      also to use research          and program
management funds for new construction               having an estimated
cost (including       collateral    equipment)       of $100,000 or less,
In addition,      NASA has unilaterally         applied    the $100,000
limitation      to the use of research        and development        funds for,
new construction,

        We found that there was a degree of uncertainty                     on
NASA's part,        or disagreement     between the Congress and NASA,
with respect to what constituted              a fully      operable   facility
and what equipment          costs were to be included           in the esti-
mated cost of a construction            project     in determining       whether
the project       should be considered        a major or minor project.
Therefore     the estimated        cost of all equipment needed to make
a facility      fully     operable   has not always been included              in
the estimated         cost of a project;      therefore,       NASA has con-
structed     some major facilities         pursuant      to its minor con-
struction     authority.

        We noted that two major facilities            were constructed
without    congressional      approval     because the estimated        cost of
the projects     did not include        the estimated     cost of the col-
lateral    equipment.      The failure      to include    the cost of the
equipment resulted       in the construction         of the facilities       as
minor construction       projects      by using research      and develop-
ment funds and research         and program management funds rather
than as major facilities          by using construction        of facilities
funds.




                                       31
Addition   of two bays to the high bay area
of the Life Sciences Research Laboratory

         This construction        project     was for the addition       of two
bays to the high bay area of the Life Sciences Research Lab-
oratory       at the Ames Research Center to house a lunar labo-
ratory      to be used in analyzing           rock samples returned       to
earth by the Apollo moon missions.                  Ames estimated     that the
cost of constructing           the two bays would be $260,000.
Although       this cost estimate         exceeded the authorized        $250,000
limitation,         NASA Headquarters        approved'the   construction      of
the project         on May 26, 1967.         Our review showed that the
construction         and equipment costs amounted to $1,049,481               to
obtain      a fully    operable     lunar laboratory.

       Construction costs substantially
       exceeded the estimated  costs

        Two contracts    were awarded for construction         of this
project.      The first    contract   was awarded on September 5,
1967, for the construction          of the two bays.    The construc-
tion was completed       on August 30, 1968, at a final          cost of
$241,710.      The second contract       was awarded on June 28, 1968,
for the mechanical,       plumbing,    and electrical   installation
within    the bays.     This contract     was completed   on Septem-
ber 27, 1969, at a final          cost of $191,862.

      Cost of equipment        not included      in
      estimated pro.ject       costs

       Ames purchased equipment for the lunar laboratory        at a
cost of $615,909.     However, the cost of this equipment,       nec-
essary to make the laboratory      fully operational,    was not in-
cluded in the estimated      cost of the project,     Ames' proposal
to NASA Headquarters    stated that the equipment required       to
perform experiments    on the lunar rock samples was available
in the Life Sciences Research Laboratory.

      An Ames' revised proposal   dated October 5,               1967, and a
statement   by its Chief of the Exobiology   Branch              indicated
that the necessary equipment was not available                  at Ames.
The revised   proposal  included an itemized   list             of equipment
needed for lunar rock analysis    at an estimated               cost of


                                       32
$685,700.       We were told by the Chief of the Exobiology
Branch that a major portion       of the equipment    listed   in the
revised     proposal   had to be purchased to provide      the capa-
bility    to perform the required     chemical and biological     anal-
yses.     The actual    cost of equipment was $615,909.

       Thus the total     cost necessary     to make the lunar labora-
tory fully    operational     was $1,049,481     ($433,572 for the two
construction    contracts     and $615,909 for the equipment)      com-
pared with the $260,000 originally           approved for the project.

Closed      Optical   Test Pad

       In September 1964 the Facilities        Engineering      Division
of the Goddard Space Flight        Center prepared      a project       pro-
posal for the construction       of a 36-inch     telescope     facility
at an estimated      cost of $280,000 which included         $73,000 for
design and construction       and $207,000 for a 36-inch          tele-
scope.    The proposal,    however, was not approved by the Cen-
ter director      and was not s,ubmitted to NASA Headquarters.
The project    file   did not contain    an explanation      of why the
proposal    was not approved.

        In December 1964 the Director,        Goddard Space Flight
Center,    approved a minor construction         project    for a Closed
Optical    Test Pad to provide      for "protection       of optical
equipment mounted on two (2) isolated            concrete     pads."   The
roof of this facility       was to be constructed         in two sections
and was to be completely       removable.      Goddard estimated       the
cost of this facility       to be $75,000 and there was no men-
tion in the project      proposal     of any equipment      to be housed
in the facility.      This project      was not submitted       to NASA
Headquarters     for approval    because the Center had the au-
thority    to approve the construction        of new facilities      esti-
mated to cost $75,000 or less.

         Construction      of the Closed Optical       Test Pad was com-
pleted      in November 1965 at a cost of $71,550.               Administra-
tive     operations     funds now designated        as research    and pro-
gram     management funds were used for this construction.
This     facility     houses a 36-inch     telescope    and camera which
were     purchased with research         and development      funds at a
cost     of $266,311,       Thus the total      cost for the fully       oper-
able     new facility      was $337,861.

                                        33
          Although      the physical        shape of the facility                 differed
from that described               in the September 1964 proposal,                      its pur-
pose did not change.                A NASA official,               who was involved            in
determining         the need for the 36-inch                    telescope      and related
facility,        stated that the Closed Optical                        Test Pad, rather
than the 36-inch             telescope      facility          originally       proposed,
was constructed            to avoid creating              a single-purpose            building.
He indicated          that providing          for equipment              in the project
justification           for the telescope             facility        would have limited
the use of the facility.                  He indicated             also that Goddard
was somewhat uncertain               as to where the telescope                    was to be
located.         He indicated        further        that,       in his opinion,          these
factors       were adequate justification                     for not providing            for
equipment        in the proposal          for the Closed Optical                  Test Pad.

        We found, however, that,2           days after       the construction
of the Closed Optical          Test Pad had begun on June 23, 1965,
a contract      was awarded for the purchase and installation                     of
a 36-inch     telescope.       The contract       stipulated       that the con-
tractor    ship and fully       install     the equipment        at the NASA
Goddard Space Flight          Center Closed Optical            Test Pad.       In
addition,     the NASA official         presently      responsible      for the
operation     of the Closed Optical           Test Pad indicated          that to
his knowledge this facility             had always been intended             to
house the 36-inch        telescope.




                                               34
TURN-KEY CONCEPT--ALTERATIONS
         An alteration        is defined      by NASA as the modification                  or
modernization         of an existing        facility          which may or may not
affect      the function,       capability,         utility,        structure,     stabil-
ity,     safety,     or efficiency        of the facility             but does not,
for practical         purposes,      affect    its external            dimensions.        An
alteration       may involve       the removal,            relocation,       or installa-
tion of existing          or additional        interior          walls or ceilings,
doors, windows, collateral                equipment,          and utilities.

         NASA is authorized          to use research        and development
funds or research           and program management funds for altera-
tions without        dollar     limitation        and without    obtaining      con-
gressional      approval.         On the basis of the legislative               his-
tory of NASA's facility              funding,      however, we believe        that
the Congress has been led to understand                     that it would be
notified     in those cases where the estimated                  cost of an al-
teration     project      (including       collateral      equipment)     exceeded
$250,000.

      During our review,' we noted                 three cases in which the                     .
total  cost of alteration  projects                  exceeded $250,000 and the
Congress was not notified.

Alteration     of a 40- by
80-foot    wind tunnel
                                                                                                Q
        Ames Research Center submitted         a proposal      to NASA Head-
quarters     for approval     of an alteration     of a 40- by 80-foot
wind tunnel,       at an estimated     cost of $96,000,      to house a new
automatic      data processing     system at the Center.          Although
the alteration        was to house new automatic        data processing
equipment      estimated    to cost $364,000,    there was no mention
of this cost in the proposal           for the alteration        of the wind
tunnel.

        In September 1968, about a year prior      to submitting    the
proposed project     to NASA Headquarters     for approval,    Ames es-
timated    the cost of the automatic     data processing    system at
$364,000.     The description  of the project     submitted    to NASA
Headquarters     on August 15, 1969, stated that:




                                             35
         'I*** The decision       to procure a dedicated    data pro-
         cessor for the 40-         by SO-Foot Wind Tunnel and the
         required    space for      the computer dictated   the need
         for modifications        to the second, third,   and fourth
         floor    of the wind     tunnel  test chamber. ***'I
                *            *           *            *            *

         II** Addition  of the proposed rooms will    accomodate
         the new equipment   and allow for some future    expan-
         sion of the data processing   equipment."

            The project    was approved by NASA Headquarters          on Sep-
  tember 5, 1969.          The construction      contract    for the chamber
  modifications         was awarded on September 24, 1969, and was
  completed        on July 17, 1970, at a cost of $98,142.            A contract
  for computer equipment was awarded on October 16, 1969, less
  than a month after          the construction     contract     was awarded.
  The equipment was shipped to Ames on June 18, 1970, and its
   installation        was completed    on December 18, 1970.        Ames 1
  present       estimate   of the cost to complete the new automatic
  data processing         system is approximately         $493,000,   If this
  estimate       is accurate,     the alteration     project    will cost
  $591,142 ($493,000          plus $98,142),     as opposed to the estimated
  cost of $96,000 for the project.               Research and development
  funds and research          and program management funds have been
4 used to fund this project.

  Alterations        to Photographic
  Technology        Laboratory

          On June 19, 1969, NASA Headquarters            approved a project
  for alterations        to approximately        4,000 square feet in Build-
   ing 8 at the Manned Spacecraft              Center to accommodate five
  film processors        and related       equipment.   The project   consisted
  of five alteration        projects      which were combined into one
  project     by NASA Headquarters          because all five projects     per-
  tained    to alterations       in Building      8 in support of the
  photographic-processing          effort,       NASA's estimated   cost of
  the project     was $325,800 which was funded with research              and
  development      funds,

         The estimated    cost for this      project   included   $87,000
  for   equipment   but did not include       the estimated     cost of

                                        36
$134,000 for additional     equipment purchased      for the project
during  fiscal  year 1969 and the estimated        cost of $50,000
for modifying   existing  equipment.     Therefore     the total  es-
timated   cost of this project    should have been $509,800
rather  than $325,800.
           The estimated   costs for the consolidated      project
 (listed      by the project    numbers before consolidation),     to-
gether       with the excluded    equipment   costs, are presented     be-
low.

                  Estimated    Costs After       Consolidation

                 Construc-                                                  Equip-
                 tion and        Design                                    ment im-
                   modifi-     and engi-         Equip-                    properly
Proiect            cation       neering           ment            Total    excluded
                     \
72-9035          $ 22,640       $ 2,260          $ -        $ 24,900       $ 50,000
72-9036              70,320       7,040                           77,360      9,000
72-9059              21,700       2,170                           23,870
72-9060              81,050       8,100           87,000         176,150    125,000
72-9106              22,600          900                          23,500

       Total     $218,310       $20,470          $87,000    $325,780       $184,000

Installation         of film   processors

       On January 15, 1970, the Manned Spacecraft               Center pre-
pared for submittal       to NASA Headquarters         a proposal     for ap-
proval    of a project    for the acquisition        and installation         of
two film processors,        including      support equipment,       and for
the modification       of about 1,000 square feet of Building               8
to accommodate this equipment             at an estimated    cost of
$447,000.      The estimated      cost consisted     of (1) facility
construction     and modification,         $140,000,    (2) equipment,      in-
strumentation,      and support       systems, $290,000,     and (3) de-
sign and engineering        services,      $17,000.    The project     was to
be funded with research          and development      funds.

       The January 15, 1970, proposed project   was not sub-
mitted   to NASA Headquarters.   Rather,  the Center revised
the proposal    to exclude the cost of all equipment   and on



                                            37
May 6, 1970,     submitted  it for approval  to NASA Headquarters.
The estimated     cost of the project   was $247,500.

      The revised     proposal     provided     for the installation        of
the film processors       and related       equipment   and the modifica-
tion of the building       to accommodate this equipment but con-
tained no explanation        as to why the cost of the two proces-
sors and related      equipment were not included            in the esti-
mated cost of the project          except to note that the Center
had ordered the processors           at a cost of $140,000.          Although
the proposal    recognized      the need for $209,500 for support-
ing equipment,     this amount was not included            in the esti-
mated cost of the project.            Therefore     the project     cost esti-
mate did not include       estimated      equipment    costs of $349,500.

        On May 28, 1970, NASA Headquarters        agreed      with    the need
for installing       the film processors    and instructed         the Manned
Spacecraft     Center to proceed with the design of             the project.
NASA Headquarters       indicated,  however,   that the       Center's    cost
estimates     were low and requested     the Center to        provide    more
current    estimates.

         On September 25, 1970,      the Center recommended that the
installation      of an existing     color photo processor    be in-
cluded in the project        at an   estimated  cost of $50,000.     The
color processor      was on order      under a contract   at a cost of
about $58,500.       The contract      provided for delivery   of the
processor     about January 15,      1971.

        On November 6, 1970, the Center submitted          to NASA
Headquarters     a revised   cost estimate    of $270,000 for the
project    on the basis of a design that was 80 percent          com-
plete,     The estimated    cost of $270,000 covered the altera-
tion of Building      8, the cost of installing      two film proces-
sors, the color processor,        and related   equipment.

       We were advised by a Center official       that NASA Head-
quarters    requested    the Center to reduce the estimated         cost
of the project       from $270,000 to $250,000 or less so that
the project     could remain a minor alteration      project.       On
November 16, 1970, the Center submitted         a revised     project
cost estimate      of $250,000 to NASA Headquarters.         On Decem-
ber 8, 1970, NASA Headquarters       approved the project        at a


                                     38
cost of $248,000     to be funded     with   research   and development
funds.

      The inclusion  of the estimated   cost of the equipment
purchased   for this project would have resulted    in an esti-
mated cost for the project   of $656,000 as shown below.

      Construction     and installation       costs      $248,000
      Two film processors                                 140,000
      Color processor                                      58,500
      Related    equipment                                209,500

           Total                                         $656,000




                                     39
CONSTRUCTION OF FACILITIES PROJECTS
COMPLETED UNDER MINOR CONSTRUCTION AUTHORITY

        During our review we noted two cases in which minor
construction       authority       had been used to complete congres-
sionally     authorized      facilities.       In one case minor construc-
tion authority        had been used illegally           to complete an au-
thorized     construction       of facilities      project.       In the other
case minor construction              authority   was used to completely
build a construction           of facilities      project    which had been
previously      authorized      but subsequently        canceled.

Basement    of Administrative        Management     Building

          The Congress authorized       the construction         of the Admin-
 istrative      Management Building       as part of the Ames Research
 Center's     fiscal  year 1965 construction          of facilities       program.
 NASA Headquarters      allotted     $1,218,000     for its construction.
 On October 14, 1964, a contract            was awarded for the construc-
 tion of the building         in the amount of $1,109,000,            which un-
 der nine modifications          was increased    to $1,204,964,

         The basement of the building as proposed to and ap-
 proved by the Congress was to provide     space for the Repro-
 duction    Department.  The basement remained unfinished  on
&November 15, 1965, when the building    was occupied.

       On December 23, 1965, Ames approved a job order for an
estimated   $64,000 to complete the basement as originally
planned,    On May 2, 1966, the job order was revised      to in-
crease the estimated   cost to $91,500.   The job order stated
that NASA personnel   would do the work.   The final  construc-
tion cost was $93,164 and was paid for with research         and
program management funds.

      Therefore    Ames used research      and program management mi-
nor construction     authority      to complete a previously autho-
rized construction      of facilities     project.
        Funds are available     under the minor construction            au-
thority     only when the total     cost of the facility       or project
does not exceed the authorized          minor construction       limita-
tion,     Thus minor construction       funds may not be used to sup-
plement funds appropriated        for and used to construct           a fa-
cility    under the construction      of facilities     appropriation

                                       40
                                                  ,,,m,,,~n~~.mmm,a~     9,800   SQUARE   FOOT   ADDITION   ’
                                                                                                            P,~. *-   ,..:. ,‘
                                                                                                              ~ 1
                                                  mm t D     I m   I e   5,000   SQUARE   FOOT   ADDITION




P
Y




                   ADDITIONS    TO TME
    .."   FABRlCATlON      SERViGEb    5UILDING
           JET PROPULSION        LABORATORY
where the total       cost of such facility          exceeds $250,000 or
$100,000,    whichever     is appropriate.          Consequently,     the
funding   action    taken in this example           was clearly   illegal.

Additions     to Fabrication
Services     Building

          The first     phase of the FabricationServicesBuilding                  at
the Jet Propulsion           Laboratory      was completed        in January 1963
and consisted          of a machine shop, inspection              area, metrology
laboratory,         and offices.       In August 1962 the Congress au-
thorized      a construction         of facilities        project    for the second
phase of the building            to add a weld shop, sheet metal shop,
and metal        stores area as a part of the Jet Propulsion                  Lab-
oratory's        1963 construction        program.        The addition     to the
building      was estimated        to cost $605,000 and was to provide
about 18,000 square feet of space.                      In March 1963 the proj-
ect was canceled          and the funds were used for the constmc-
tion of an addition           to another        building     which had a higher
priority.

       Later the Jet Propulsion       Laboratory    requested    NASA to
approve two minor construction         projects.      These two projects
substantially     satisfied     the 1963 requirement     for the 18,000-
square-foot    addition     to the Fabrication    Services    Building
previously    authorized      by the Congress.

        On February    8, 1967, NASA approved an addition   to the
building    to provide     about 9,800 square feet of space for use
as a weld shop and a sheet metal shop at an estimated         cost
of $250,000.       The addition   was constructed  in 1969 as a mi-
nor construction      project.    We were advised by NASA that the
actual    cost of the project     was $234,165.

        On May 25, 1970, NASA approved another addition              to the
building    to provide    about 5,000 square feet of space for
use as a metal stores area at an estimated              cost of $146,000.
This addition      was constructed    in 1971 as a minor construc-
tion project.       NASA advised us that the actual            cost of the
project    was $136,860,
B
        Thus the Jet Propulsion      Laboratory     acquired     a major fa-
cility    addition   to the Fabrication      Services     Building   through
two minor construction      projects   which had been previously     '
authorized    by the Congress to be constructed       with construc-
tion of facilities     funds.     The cost of constructing   the two
additions  was $371,025.

      NASA's actions       in this instance were not in violation
of law.   However, the Committee may wish to decide whether
NASA's actions    in cases such as this are in accordance         with
the Committee's     intent.

MATTERS     FOR    CONSIDERATION BY THE COMMITTEE

         In our opinion,          the question     of whether the estimated
cost of a proposed project                should include        the cost of eguip-
ment needed to make the completed                  facility       fully       operable
needs resolution.             Generally     NASA's minor construction                   au-
thority     is limited        to facilities       estimated       to cost less than
$250,000 including            collateral      equipment.        NASA, however,             has
not always included             the estimated       cost of all identifiable
equipment       in the estimated          cost of a project.             As a result
facilities        costing     in excess of the dollar             limitation           have
been constructed            as minor construction           projects.           If the
Committee is to have assurance                 thatallmajor           facilities          are
presented      for approval,          the estimated        cost of proposed fa-
cilities      projects       should include       all reasonably            identifiable
costs necessary           to achieve a fully          operable      facility.           There-
fore the Committee may wish to consider                      requiring          NASA to
include     in the estimated            cost of proposed projects                 all. rea-
sonably     identifiable          costs.

       Because NASA has constructed                a major facilities      proj-
ect under its minor construction                 authority,    the Committee
may wish to consider           the propriety        of NASA's use of minor
construction       funds to construct          authorized    major facilities.
Also, because NASA is authorized                 to fund alteration      proj-
ects without       dollar    limitation       or without    obtaining    congres-
sional    approval,       the Committee may wish to impose a limita-                             a
tion on the use of research               and development      funds and re-
search and program management funds for alteration                    projects
and require     that projects          exceeding     this limitation     be sub-
mitted    for review and approval.




                                              43
                                   CHARTER 4

                               AGl3.NC.YCOMMENTS

       NASA's comments on our draft   report were furnished    in a
letter    dated May 13, 1971 (see app. II>,   by the Associate
Administrator    for Organization  and Management.

        The Associate      Administrator       stated that NASA was pres-
atly     engaged in a review to help improve the management
processes and controls          over facilities         planning      and related
operating       procedures   and that the matters           included     in the
draft    report     would be considered       and any conclusions           would
be included        with the information       provided      to the Administra-
tor along with the recommendations                developed      during the
broader NASA review.

       The Associate    Administrator       said that the recommenda-
tions approved by the Administrator             would be presented  to
the Senate Committee on Aeronautical             and Space Sciences as a
means of developing       a complete understanding        with the Com-
mittee   and its staff.      He stated therefore       that NASA was not
able to furnish      at this time separate        comments to us on the
matters   covered in the draft        report.




                                       44
             .




APPENDIXES




 45
                                                                                                   APPENDIX I




                                                        February              24,   1971




The Honorable         Elmer     63, Staats
Comptroller       General     of the United            States
General     Accounting      Office
Washington,       D, C, 20548

Dear    Mr,      Staats:

            The National           Aeronautics         and Space Administration              is    constructing
an engineering           building       which     was authorized          in fiscal    year     1967 at the
Manned        Spac;craft         Center,        1 would     like to have the Genera1             Accounting
Office     review      this project          and determine:          (1) the extent,      if any, that it
differs     from     the one described              to the Congress,          and (2) NASA’s          legal
authority       to revise        such a project         after    it has been authorized            by the
Congress0          I would        appreciate       receiving       your report       on these      matters      by
April     1,

             Subsequently,          I would    like to have a more             comprehensive           report    on
 similar      facilities      built   with construction          of facilities      funds as well        as major
 or new facilities           funded    with   either    research         and development,            equipment,
 or research           and program        management          funds,    or various        combinations
thereof.         The Authorization           Act each year authorizes                 minor    construction
with     research         and development          and research        and program           management
appropriations,              When the cost exceeds              a specified       dollar    amount,       however,
NASA       must notify         the Congress.          I would     Like your staff to review              NASA’s
implementation              of this provision.

              Your   assistance       to the    Committee           is    appreciated.




                                                         Clinton         P.     Anderson
                                                         Chairman




                                                          47
                                                                                            .
                                                                                                L

APPENDIX    II


                     NATIONAL   AERONAUTICS         AND SPACE ADMINISTRATION
                                       WASPINGTON     D.C   20546




                                                                    MAY 13 1971

 Mr. Klein Spencer
 Assistant  Director,  Civil Division
 U. S. General Accounting Office
 Washington, D. C!. 20548

 Dear Mr. Spencer:

 This letter   is in response to your letter          of May 6, 1971, which enclosed
 a restricted    draft report to the Chairman of the Senate Committee on
 Aeronautical    and Space Sciences covering your review of NASA's financial
 management of construction       and related    activities     -- including    major
 construction,    minor construction,      maintenance,     repair,   and alterations.

 This is the more comprehensive          report requested by Chairman Clinton P.
 Anderson in his letter         of February 24, lfll      (included     as APPENDIX I of
 the draft report),       which also requested your report on the Engineering
 Building    at the Manned Spacecraft        Center by April 1. As a general
 reaction,    we believe     that your restricted      report on the MSC Engineering
 Building    (B-165118, March 29, 1971) identified             substantially   the same
 basic issues and about the same GAO suggestions                as those in draft report
 now with us for review.          However, this draft report covers many dif-
 ferent projects,      with particular      circumstances      and significant    management
 considerations     pertaining     to each of them.

 NASA is engaged in a review to help improve the management processes and
 controls  over facilities     planning and related      operating    procedures.      In
 this connection,    we will consult with the staffs of our authorizing
 committees to identify      congressional    needs and we will solicit        the views
 of NASA's top managers, including         Center Directors,     on the intrinsic
 needs of a research and development agency.             From this review,       we ex-
 pect to formulate      recommendations to the Administrator        within the next
 60 days or so.
 During the review we will,     of course, consider the projects      and situa-
 tions mentioned in your May 6 draft report,        However, these will require
 a thorough evaluation     and any conclusions   on these matters will be pre-
  sented to the Administrator    along with the other information      and recom-
 mendations developed during the broader NASA review.          Thereafter,    the
 recommendations   approved by the Administrator      will be presented to the
 Senate Committee on Aeronautical      and Space Sciences as a means of de-
 veloping  a complete understanding     with the Committee and its staff.


                                          48
                                                               APPENDIX II

   We appreciate  the opportunity  to review your findings   and suggestions    in
   draft form but, in view of the above-mentioned    arrangements  for handling
   NASA's review,   we are not now able to furnish  separate comments to GAO in
   connection with this particular    draft report.




  Associate'Administrator     for
' Organization     and Management




U.S.   GAO.   Wash..   D.C.

                                       49