Finding 1168842 (2025-002)

Finding # 2025-002 Type: Material weakness over procurement Type: Noncompliance over procurement Assisting Listing Number: 43.001 Federal Agency: National Aeronautics and Space Administration Name of Federal Program: Science Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition The Organization does not have controls or a policy in place to ensure compliance with this requirement. Context The Organization will occasionally check to determine if vendors are suspended or debarred but they do not have a consistent process or controls to ensure that no vendors used for “covered transactions” are suspended or debarred. Of the three transactions examined, no vendors were identified that were suspended or debarred. In addition, there is not a competitive bid process over the defined thresholds for comparative pricing. Cause Management has not instituted controls or policy over this compliance requirement. Effect This could result in the Organization engaging in activities with a vendor that is suspended or debarred. It may also result in a contracted price that is not favorable to the Organization. Questioned Costs: None noted. Recommendation Management should establish a consistent procedure to verify that vendors are not suspended or debarred and implement controls that are documented to support this process. A procurement policy should also be implemented consistent with the aforementioned guidance. Management’s Response Management is developing a vendor procurement policy as well as procedures for setting up new vendors and retaining documentation for any vendor confirmations.