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GAO-01-1041R 1 (2001-08-13)

handle is hein.gao/gaocrptamuh0001 and id is 1 raw text is: SGAO Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 August 13, 2001 The Honorable Dana Rohrabacher Chairman, Subcommittee on Space and Aeronautics Committee on Science House of Representatives Subject: NASA's X-33 and X-34 Programs Dear Mr. Chairman: On June 29, 2001, you asked me to provide additional comments on several issues that I raised in my June 20, 2001, testimony before your Subcommittee on areas the National Aeronautics and Space Administration (NASA) needs to address in managing its Reusable Launch Vehicle Program. I am pleased to submit the following comments for your consideration. 1. What are your conclusions regarding the usefulness of cooperative agreements as a NASA contractual mechanism and should they be terminated? Cooperative agreements with commercial firms, such as the one used in the X-33 Program, can be useful in limiting the government's investment in a research and development project by providing for cost sharing with private industry. However, such agreements can pose risks to the government when the extent of private investment is based on assumptions about the potential commercial viability of a project. Under the Federal Grant and Cooperative Agreements Act of 1977,' a procurement contract is used when an agency's purpose is to acquire property or services for the direct benefit to the government. When the agency is merely transferring money to a commercial entity to carry out an activity with a public purpose, and there is substantial government involvement, the act generally requires the use of a cooperative agreement. This was the case for the X-33 Program. NASA's specific objective was to demonstrate the technical, operational, and business feasibility of a single-stage-to-orbit commercial reusable launch vehicle, and it sought to work with private industry in doing so. Given the purposes of the X-33 program, NASA's use of a cooperative agreement in this instance was in accordance with the act. GAO-01-1041R NASA Project Management '31 U.S.C. sec. 6301 et seg.,.