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GAO: NASA, DoD, NOAA Spent $43B on Cost-Reimbursement Contracts for Satellite Procurement Programs

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The Government Accountability Office assessed 19 satellite acquisition programs at NASA, Defense Department and the National Oceanic and Atmospheric Administration and found that the agencies obligated approximately $43.1 billion on cost-reimbursement contracts for such programs.

GAO said in a report published Friday that DoD, NOAA and NASA spent $9 billion on fixed-price-incentive and firm-fixed-price contracts and orders for satellite initiatives.

The congressional watchdog also reviewed 12 satellite programs and found that most of them included on-orbit incentives that “varied widely in terms of the amount at-risk for the contractor and the timing of payments.”

The report showed that the U.S. government’s potential to recover financial investments in the event of a satellite failure is “modest” due to small amounts of on-orbit incentives in contracts.

GAO also called on the government to implement best practices when developing satellites to address potential schedule delays and cost overruns as well as reduce financial losses in the event of a major satellite failure.

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