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National Aeronautics and Space Administration

MANAGEMENT REVIEW OF THE AMES RESEARCH CENTER

August 1992

This report is UNCLASSIFIED and does not contain privacy information.

FOREWORD

The end of the cold war has resulted in a fundamental change in the
character of global competition from military to economic.
Espionage, as we traditionally view it, has changed as well.  While
our defense secrets continue to be of interest to several nations,
numerous nations are now conducting industrial and economic espionage
operations against the United States.  High technology activities in
the aerospace and electronics sectors are often targeted.  The
multinational scope of these business sectors coupled, with their
mobile, multinational workforces, make them especially enticing
targets to nations desiring access to cutting edge high technology.

NASA, as a leader in the development of key aerospace and electronics
technologies, is at least as vulnerable to economic espionage as
industry.  This, coupled with the change to global economic
competition, necessitates a reexamination of the traditional NASA
desire to share technology internationally.  The Administrator's
recently stated goal to support the U.S. bottom line as the highest
priority of NASA is a positive step in this direction.

This management review found deficiencies in the culture and
environment at the Ames Research Center that could lead to a
significant loss of commercially valuable/sensitive technologies.  It
recommends corrective actions and also identifies steps which could
further improve NASA's ability to protect commercially
valuable/sensitive technology for first use by U.S. industry.

I.    EXECUTIVE SUMMARY

In July, 1992, the NASA Administrator chartered a Management Review
Team (MRT) to conduct a comprehensive review of management policies
and practices related to the protection and handling of classified
and sensitive technological information at the NASA/Ames Research
Center (ARC) located in Mountainview, California.  The resultant
review took place during the period July 31 to August 12, 1992.

The MRT was established after a classified briefing was presented to
NASA Headquarters management by ARC management.  The briefing
identified potential national security problems.  The NASA
Administrator determined that the situation at ARC was potentially so
serious that it warranted a special, one time review to determine
whether the issues and problems existed and, if so, what type of
corrective action should be taken.  The Federal Bureau of
Investigation (FBI) was consulted on the national security and
foreign counterintelligence aspects of the problems identified.  A
management review plan was developed to address the following issues:

-  What is the risk of a hostile intelligence operation at Ames?
   NASA?

-  The possible mismanagement of the protection of national security
   information and sensitive NASA and industry technology at Ames.

-  Whether appropriate NASA management and contract administration
   policies and practices existed and were in use at Ames.

-  The possible damage to NASA credibility with NASA customers,
   namely the U. S. taxpayer, U. S. industry, and U. S. colleges and
   universities.

-  The resolution of conflict between NASA's desire to share
   technological information internationally, and the Administrator's
   goal to support America's economic interests.

The results of the MRT lead to the following conclusions concerning
the above issues.

ARC is considered "high risk" for hostile intelligence operations.
ARC exacerbated a marginally effective security posture by not
focusing appropriate management attention on the handling of
sensitive technology.  Structural and functional weaknesses existed
in the way the Ames security office worked in relation to other
center operations.  In addition to security concerns, processes and
practices in the areas of personnel, legal, procurement, and data and
technology protection are contributing to the potential risk rather
than serving as controls over the risk.

The ARC culture and environment were found to be the underlying cause
of NASA's vulnerability; the culture is strongly biased toward
maintaining an academic reputation rather than meeting U. S. industry
and national needs.  Generally accepted management controls, as well
as security, legal, personnel, and procurement policies, are often
viewed as impediments and are sometimes sidetracked or avoided.  Lax
procedures and attitudes were identified that set the stage for
widespread dissemination of commercially valuable technology being
developed by ARC personnel.

ARC's credibility with U. S. aerospace industry has been damaged as a
result of these problems.  Some of NASA's customers and partners are
reluctant to share important data with NASA for fear it will be
disseminated with little or no regard for its sensitivity.  In order
to regain credibility, specific processes for the identification and
handling of sensitive and commercially valuable technologies at ARC
must be developed and fully implemented by ARC employees.

To resolve the conflict between NASA's desire to share technology
internationally and the need to place U. S. interests first, an
environment and culture must be developed at ARC, and elsewhere at
NASA, which focuses NASA's attention on the needs and expectations of
U. S. industry and the taxpayer.  Basic science efforts actively
involve and will continue to involve the international community, but
applied technology, developed at U. S. taxpayer expense, must be
protected for U. S. industry use in accordance with applicable laws
and regulations.  NASA must work internally, and externally with
appropriate members of the Administration and Congress, to address
the problems and develop long-term solutions.

The MRT also found a number of specific discrepancies in the areas of
procurement, misuse of government equipment, and apparent violations
of the law and/or NASA policy.  The MRT referred this information, as
appropriate, to the NASA Office of Inspector General (OIG) and the
FBI, who has jurisdiction over foreign counterintelligence issues
resulting from this review.  Cases were opened up by the OIG and FBI.
It is anticipated that the OIG effort will be completed in December
1992.

The MRT developed findings and recommendations, including: developing
specific processes for identifying and handling sensitive and
commercially valuable technologies at ARC, establishing an agency-
wide process and database for acquiring and sharing crucial security
risk information, reducing security clearances to a minimum,
disciplining individuals involved in irregularities, improving the
overall posture of computer security, and providing improved
management development programs.

II.   MEMBERSHIP

The Management Review Team (MRT) membership included:
  Thomas C. Betterton (Leader)
  Cecil C. Rosen, III (Aeronautics)
  Vince Rausch (NASP)
  Matt Donlon (Security)
  Pam von Soosten (Legal)
  Carl Eichenlaub (Procurement)
  John Pennington (Human Resources)

III.  SCOPE AND CONDUCT

Scope

The review was planned during mid-July 1992, at NASA Headquarters.
The first phase, a security review of six selected building at ARC
and the initiation of procurement, human resources and legal
activities, was conducted over the weekend of July 31, 1992, through
August 2, 1992.  The second phase was initiated on Monday, August 3,
1992.  It consisted of several parallel activities including:

  * Management Team discussions with key ARC management personnel;
  * Individual evaluations, interviews and data gathering in the
    procurement, human resources, security, and legal areas;
  * Interviews to address issues discovered during Phase I and other
    interviews where appropriate;
  * Interviews of selected individuals with emphasis on those holding
    security clearances to explore practices and gather information;
    and
  * Interviews with representatives of three firms which provide
    technical support services at ARC.

The second phase concluded on Wednesday, August 12, 1992.  The
remainder of the month was devoted to the development of the team's
report, the provision of relevant information to the appropriate
organizations for further action as necessary, follow-up data
gathering and actions, and addressing unanticipated issues arising
from the review itself.

Conduct

_Planning_

During mid-July 1992, the MRT planned the review.  NASA top
management was regularly informed of the status of MRT planning and
of all issues.  On July 27, 1992, NASA management reviewed the MRT
planning.  Employee rights vis-a-vis the security review and
interviews were thoroughly covered, as was the potential reaction of
employees.  The plan and approach were endorsed with minor changes.

On July 28, 1992, the NASA Associate Administrator for Public Affairs
was notified about the review.  He suggested that initial public
affairs would best be handled on site by the ARC public affairs focal
point, and that he would discuss follow on public affairs aspects
with the ARC focal point upon initiation of the review.

On July 29, 1992, the proposed plan was briefed to the Chief of
Staff, ARC Center Director, Inspector General, General Counsel,
Associate Administrator for OAST, and a representative of the FBI.
The Chief of Staff approved the plan with a few changes.

The MRT traveled to the ARC local area on July 30, 1992.

_Execution_

- Entry Meeting at ARC

The MRT conducted an entry meeting with the ARC Director and selected
members of his staff at 3:30 pm on July 31, 1992.  The Center
Director designated the Chief of the Acquisition Division as the MRT
liaison.  Follow-up meetings for 4:30 pm were scheduled by the Center
Director with representatives from Procurement, Personnel, Legal and
Public Affairs.  The MRT discussed areas of interest and outlined
specific needs in the following key areas:

  * Procurement
  * Human Resources
  * Legal
  * Security

The MRT requested the Center Director send a memorandum explaining
the review to employees.  Instead, a brief announcement was signed by
the ARC Director and left on affected employees' desks during the
weekend review.  The announcement included a phone number at which
employees could contact the MRT.

- Phase I Review (7/31/92-8/2/92)

The Phase I review was initiated Friday evening on July 31, 1992.
Physical building lock-up and computer isolation of six ARC buildings
were performed.  The six buildings were selected based on the number
of individuals holding security clearances and on an assessment of
the importance of work being performed.  Personnel (no more than six
total) still in the buildings were asked to leave.  Two-person teams,
all of which included at least one NASA employee (assisted by
security experts), conducted all lock-up, computer isolation and
subsequent searches with one person performing an activity and the
other witnessing.

On the morning of August 1, the MRT legal representative again
briefed team members on the extent of their authority to conduct
searches.  The announcement signed by the Center Director was to be
posted on doors and left in employee offices concerning the conduct
of the inspection.  On August 1, the team requested the Center's
assistance in reconnecting personal computers in offices in which
searches were complete, in order to minimize the disruption Monday
morning.

A preliminary screening of information and findings was performed at
the end of the day on both August 1st and 2nd.  The MRT used this
data to plan Phase II activities.

Physical and computer restoration began at 1:00 pm on Sunday, August
2, 1992, and was completed at 11:45 pm.  It should be noted that
while there were a few problems with computer connections, every
effort was made by the MRT to minimize any adverse impact on the ARC
workforce, including conducting this portion of the review over the
weekend.  The MRT received several phone calls about incorrect
computer connections.  The MRT provided callers with instructions on
how to correct the computer connections.

During the late afternoon and evening of Sunday, August 2, 1992, the
MRT reviewed and assessed the data that had been gathered.  It was
determined that of the several hundred personnel occupying the six
buildings involved in the review, there was sufficient reason to
warrant the denial of access of ten individuals to their
workspace/offices and computers while additional information was
being gathered or questions resolved.  Notices were placed at each of
the affected individual's offices/workspaces to report to the ARC MRT
liaison for further instructions upon arrival at work on Monday,
August 3, 1992.  It should be noted that there were additional
individuals about whom the team had concerns.  However, the team
determined that it was not necessary in these cases to restrict the
individual's access to his/her office/workspace and computer while
additional information was being gathered or questions resolved.

- Phase II (8/3/92-8/12/92)

Phase II was initiated on Monday, August 3, 1992.  Several parallel
activities had been planned to facilitate the review:

  * Management team information-gathering discussions with key ARC
    management personnel.
  * Individual interviews, evaluations and data-gathering in the
    procurement, human resources, security, and legal areas.
  * The formation of teams to interview the individuals identified
    during Phase I and other individuals as required.
  * The formation of teams to interview selected individuals with
    emphasis on those holding security clearances to explore
    practices and gather information.

On Monday, August 3, 1992, the ARC liaison and MRT legal and human
resources representatives met with the ten individuals who were
denied access to their offices/workspaces and computers.  The group
met with each person individually.  The ARC liaison, as the
representative for the Center Director, informed each civil servant
that a Management Review Team was conducting a review of a number of
issues at the Center, and that the review was not complete in their
area.  Accordingly, it was explained that civil servants were placed
on administrative leave.  It was made clear that this was not a
disciplinary action, and that the employee was not being suspended.
The five employees of universities or private companies were told
that they were not to work in their office.  If the individual had
questions, the group provided whatever information was available.
The individuals were also asked to provide a list of all passwords
and accounts by which they had access to NASA computers.  They were
told that the team would be contacting them to either inform them
that they could return to work or to set up a time for an interview.
Anyone who wished to was permitted to retrieve personal items from
their office.

The Management Team conducted information-gathering discussions with
key ARC management personnel between August 3 and August 10.  Each
discussion lasted approximately one hour.  Twelve ARC management
personnel were contacted.  Management Team discussions centered
around the processes and practices related to the protection of
commercially valuable/sensitive technological information.  Typical
questions and discussions included:

  * Organizational description (type of work, size of staff, mix of
    civil service and non-civil service personnel, customers);
  * Amount and kind of classified work and competitively valuable
    Research & Technology (and processes and approaches used to
    handle);
  * Customer interfaces and involvement in planning and handling
    data;
  * Access of foreign entities to commercially valuable technologies
    and data;
  * Process for transfer of computer codes to non-government
    organizations;
  * Current promotion process and career path rewards international
    recognition verses the protection of commercially
    valuable/sensitive technology;
  * Accountability/responsibility for determining what is
    commercially valuable/sensitive information and controlling it;
  * Work environment at ARC and managerial qualifications; and
  * Basic science versus technology.

On August 3, 1992, the interview teams developed a schedule for
interviews of nine individuals who had been denied access to their
office/workspace and other individuals as appropriate.  (The team
determined that one company employee did not have to be interviewed.)
Interviews of the nine individuals were planned to be conducted on
Tuesday, August 4 and Wednesday, August 5.  The schedule for the nine
individuals was passed to the ARC liaison who notified the
individuals concerned.  Subsequent adjustments to the schedule were
necessary because interviews took longer than anticipated for two
people and additional individuals to be interviewed were added.

By August 10, 1992, all the individuals who had originally been
denied access to their offices/workspaces had returned to work.  The
first individual returned to work on the afternoon of August 4 after
the apparent discrepancy was quickly resolved during the interview.

In addition, between August 3 and August 6, teams of two people (at
least one of which was a NASA employee) conducted 62 informal, short
interviews with individuals holding security clearances who occupied
the six buildings involved in the security review.  The teams asked
how often individuals handled classified information, participated in
classified programs or tests, and were trained on security
procedures.

The MRT security representative reviewed overall practices and
procedures in the handling of classified information, proprietary
data, and commercially valuable/sensitive technologies within
selected ARC organizations.  This review consisted of facility
inspections, a classified holdings audit and personnel interviews.
The Human Resources assessment focused on ARC employment practices
associated with staffing professional positions, ARC policy and
procedures for determining position sensitivity, and ARC policy and
procedures for dealing with employee suitability (suitability for
government employment) issues.  In addition to the review of selected
personnel files, suitability files, and merit staffing records, the
MRT human resources representative conducted five interviews related
to the human resources assessment.  During Phases I and II, 14
government employees were interviewed by the MRT procurement
representative.  The MRT legal representative spoke with four ARC
employees about legal involvement in decision making and the
consortium agreement (discussed in the "Findings" and
"Recommendations" sections.)

Each evening, the team members reported significant findings, and
discussed what actions should be taken the following day.  Daily
meetings were held with the ARC Director and/or liaison through
August 7 and on August 10 to ensure they were fully appraised of MRT
status and actions.

On Tuesday, August 4, 1992, the MRT was alerted to the perception by
the ARC Asian-American community that it had been targeted by the
MRT.  The MRT conducted several discussions with members of the ARC
Asian-American community to understand the situation, to show MRT
concern, to calm concerns, and to assure them that the MRT was not
unfairly focusing on the Asian-American community.

_Reporting_

NASA Headquarters was briefed daily on MRT status and actions.

Between July 31 and August 11, several members of Congress and their
staffs were notified about the MRT activities at ARC.

IV.   FINDINGS

1.   The MRT identified cases of computer code and export control
     data being given to unauthorized recipients.  The overall
     security posture of ARC, as reflected in the protection of
     national security information, is marginally effective.  There
     are a number of structural and functional weaknesses which lead
     to an assessment of high security risk potential.

     * Security organization's role at ARC is very limited and
       functions are not an integral part of the Center's operations.
       - Security does not actively participate throughout the
         personnel and position sensitivity decision-making process.
       - Computer security handled in a separate organization.

     * Risk of some form of espionage activity at ARC is high.
       - Broad spectrum of technologies under development.
       - High number of on-site non-government personnel.
       - Significant lack of management attention and control.

     * Loose personnel practices and suitability standards increase
       risk.
       - Current practices to augment the government work force pose
         a significant risk to proper protection of commercially
         valuable/sensitive information.
       - Civil servants were allowed to remain in the same job
         capacity after they were found to have disqualifying
         background information and denied a national security
         clearance.
         - In one case, an individual who had been denied a security
           clearance supervised employees with national security
           clearances performing classified work.

     * Risk of disclosure of technology, subject to export controls,
       without export licenses.

     * Large number of security clearances held by employees and
       supported by management due to the possibility for future
       need.
       - Center could operate with significantly reduced number of
         security clearances with little or no impact on current
         roles and mission.

     * Lax procedures for handling classified materials.

     * Some of these findings were previously identified in a NASA IG
       Report dated 1988 on Security Operations at ARC.

2.   General policies exit for handling commercially
     valuable/sensitive technologies, but there is limited management
     attention or interest with regard to effective and consistent
     implementation.

     * No routine implementation of processes for identification and
       handling.

     * No involvement of customers in identification of, in
       developing handling plans for, or in evaluating transition
       effectiveness of commercially valuable/sensitive technologies.

     * No apparent ownership in many elements of the management
       chain.

     * Internal processes for initiation, approval and transfer of
       technical papers and computer programs are in place.
       - Not well understood; execution practices vary widely.
       - Common practice to bypass rules.
       - No training or education programs for workforce.

     * Several technical people stated that they view the U.S.
       aerospace industry as their competitor, not their customer.
       - "Need to protect our ideas and information so that industry
         outsiders will not steal them and get credit for them."

3.   The management and environment at Ames Research Center (ARC) are
     strongly biased toward maintaining a reputation in the academic
     and scientific research community.  There is a noticeable lack
     of sensitivity for policies and practices more responsive to the
     protection of U.S. technologies.

     * Current management resistant to change.
       - Long tradition of success and accomplishment at ARC argues
         for status quo.
       - Major recent changes in global environment mandate changes
         to processes for handling commercially valuable/sensitive
         technology.
       - ARC must be responsive to changes in nation's needs.

     * Team orientation and goals are not apparent at any level
       within the Center.
       - No evidence of incentives or meaningful rewards for
         teamwork.
       - Individual versus team focus.

     * Lack of appreciation for the importance of non-technical
       Center functions.
       - Security, procurement, legal, and personnel functions are
         not well integrated into overall processes and products.

     * Cooperation between and among organizations is the exception
       rather than the norm; cooperation with other Centers is not
       encouraged.

     * Promotion criteria incentivize international scientific
       reputation over national interests and domestic customers.
       - Changes would be required to incentivize different goals and
         behaviors for technical and managerial personnel and to
         emphasize U.S. Interests and customer value/payoff.

4.   Generally accepted management controls, as well as security,
     personnel, legal, and procurement policies are often viewed as
     impediments to the proper conduct of scientific research.

     * Inadequate internal oversight or self-checking processes for
       identifying and assessing risks, security concerns or
       technology transfer issues.
       - Foreign correspondence is heavy and often sidetracks
         official channels and rules.
       - Computer correspondence is unchecked and unbounded.
       - NASA NMI (1371.3b) on foreign access to NASA facilities and
         information does not include contractors, grantees, NRC
         associates, etc.

     * Reluctance to handle issues at the appropriate management
       level.
       - Resistance to appropriate policy and guidance.
       - Failure to accept responsibility.

     * Major Center leadership void and communication breakdown
       during management review.
       - No perceptible communication when it most mattered.
         -- Several key Code R managers went on travel.
         -- No organizational meetings until 8/6-7 (RT & RF).
         -- No communique from Center Director until 8/10.
       - While management says employees have "major problems and
         concerns", there is no visible Center management action.
       - Major push required from MRT to get ARC Center management
         action on communication with employees, the delay in action
         resulted in much damage.
       - After completion of the review, some senior ARC managers
         encourage continued controversy.

     * Promotion policies and practices are viewed as a major
       problem.
       - Primary focus on international recognition and publication
         to obtain highest GS/GM levels.
       - Promotions to highest GS/GM levels are accomplished "outside
         the system."
         -- Direct request to Center Director.
       - Promotion to managerial levels is based on technical
         accomplishments, not on supervisory, managerial or
         leadership skills or potential.

5.   A number of ARC civil servants and employees of firms receiving
     cooperative agreements appear to have violated the law and/or
     NASA policies on a broad range of subjects.

     * Supervisors engaged in financial investments with subordinates
       for whom they approve performance appraisals and promotions.

     * Employee makes extensive use of government computers for
       mutual personal investments for himself and supervisor.

     * Extensive use of government computers for non-official
       activities.

     * A number of civil servants were routinely providing computer
       access to unauthorized individuals.

     * Significant amounts of lost or missing equipment reported with
       no corrective action taken.

     * Falsification of employment information and security clearance
       requests.
       - ARC management has repeatedly determined individuals to be
         suitable for continued employment notwithstanding knowledge
         of falsified information.  No action taken to either
         discipline individuals or process their termination's as
         civil servants.

     * Civil servants knowingly ignored Center Director's order not
       to correspond with or contact a named individual.

     * Civil servant assisted private sector company in preparing
       proposal for submission for NASA funding.

     * Civil servants directing firms receiving cooperative
       agreements to employ specific individuals at stated salaries
       by certain dates.

     * Civil servant directed president of firm to prepare
       modifications to his own cooperative agreement.

     * Center used cooperative agreements (issued by Procurement
       Office) or Joint Research Interchanges (issued by External
       Affairs) rather than contracts or personnel actions to obtain
       services.

6.   There is significant misuse of ARC's computational capability.
     Present computer network technology essentially precludes
     detection of unauthorized access from remote locations once the
     official account has been compromised.

     * Widespread access to major computer systems by unauthorized
       individuals through password sharing including routine foreign
       access.

     * Significant use of government computers and equipment for
       personal activities and interests.

     * Programs in place to monitor unauthorized use are ineffective.

     * Numerical Aerodynamic Simulation (NAS) program represents
       excellent capability guided by appropriate management
       philosophy.
       - Questionable or inappropriate access often sponsored by ARC
         research organizations.

7.   The procedures for making and documenting position sensitivity
     determinations are in place, but are not well understood and
     implemented by management and support staff.  The processes for
     adverse suitability determinations are ad hoc and informal.
     Line personnel and support staff are not trained sufficiently.

     * Position sensitivity designation changed for purpose of hiring
       or if individual unable to obtain clearance.

     * Condition of employment agreement circumvented.

     * Substantial time lapse (greater than one year) between
       appointment and receipt of negative suitability information
       from OPM.

     * Failure to take strong disciplinary action against employees
       for falsifying employment applications.
       - Frustration with Merit System Protection Board stated as
         reason.

8.   There are a large variety of non-competitive special feeder
     programs, hiring mechanisms and appointing authorities in place
     at ARC.  These have been used to create a sizable research
     support staff on-site at ARC which has resulted in a high
     incidence of on-site mixing of civil service and non-civil
     service workers.

     * Over 50 existing programs and mechanisms for bringing non-
       civil servants on board (contractors, grantees, university
       faculty, students, and employees working under cooperative
       agreements).

     * Varying procedures, eligibility requirements, and performance
       standards, lead to an unmanageable situation.

     * No clear distinction in work assignment or supervisory
       channels.

     * Two organizations involved; multiple methods.
       - Office of External Affairs

         University Consortium and Joint Research Interchanges.
         -- Awarded by Public Affairs and administered by San Jose
            State University.
         -- Involve "collaboration" between ARC scientist and
            University scientist in preparation of proposal and
            conduct of research.
         -- Subject to the terms of the Space Act (not the Federal
            Acquisition Regulation or the NASA Grant Handbook).

       - Office of Procurement

         Contracts
         -- To be announced competitively in accordance with Federal
            Acquisition Regulation.

         Grants
         -- Awarded to universities and other non-profit
            organizations in response to unsolicited proposals for
            research.  Must comply with NASA Grant Handbook.

         Cooperative Agreements
         -- Similar to grants except there will be "substantial
            involvement" between recipient and the government.

     * ARC Code R Awards from FY89 to Present:
       UNIVERSITY CONSORTIUM INTERCHANGES -- 113
                                CONTRACTS --  88
                   COOPERATIVE AGREEMENTS --  51
                                   GRANTS --  36

9.   NASA employee involvement in the negotiation of overhead rates
     with profit and non-profit organizations is very limited.

10.  There are a number of procurement irregularities which represent
     serious problems.

     * Misuse of funds, improper payments, and possible case of fraud
       in overhead charges to NASA by several firms working under
       contracts and cooperative agreements.

     * Potential inclusion of classified material in unclassified
       proposals and reports.

     * Inadequate protection of government property.

     * Suspected operation of their own businesses, using Ames
       provided offices, by employees working under cooperative
       agreements.

     * Suspected operation of a company as a front or pass-through
       operation.

     * Cases of NASA employees directing firms to hire certain
       employees.

V.    RECOMMENDATIONS

1.   Develop and implement specific processes for the identification
     and handling of commercially valuable/sensitive technologies at
     ARC.

     * Goals and essential criteria of processes should include:

       - World class in developing _and_ handling technology;
       - Ownership and accountability at every management level;
       - Broader internal and external communication (why and how);
       - Customer involvement in identifying commercially
         valuable/sensitive technologies, developing handling plans
         and transitioning technology to the user; and
       - Education, training and involvement required to ensure that
         people understand processes.

     * NASA HQ and Centers review existing policy framework and
       modify as necessary (1/15/93).

     * NASA HQ and Research Centers jointly develop implementation
       plans and processes (3/15/93).

     * NASA HQ delegate responsibility and authority for approval of
       certain items to the Centers.
       - Report distribution, papers for international forums,
         foreign travel and foreign visitors.
       - Accountability to and review by Headquarters.

     * NASA HQ and Centers establish a process action team to review
       the effectiveness of the Computer Software and Management
       Information Center (COSMIC) process and recommend changes.

     * NASA HQ seek Administration support for legislative relief for
       responding to FOIA requests for commercially
       valuable/sensitive technology.

2.   Code J, in coordination with the Centers, establish an agency-
     wide process and database for acquiring and sharing crucial
     security risk information.

3.   Establish a management environment and culture at ARC that fully
     supports evolving Agency policies and emphasis.

     * Increase Center management emphasis on the overall NASA and
       ARC team.
       - Human resources, procurement, security, legal and technical.
       - Effective integration and utilization of all elements.
       - Increased emphasis on and rewards for team accomplishments.

     * Design and implement a proactive oversight process to identify
       emerging issues for Center management action.

     * Strengthen personal communications between top management and
       the Center workforce.
       - Specifically, hopes, goals, values and expectations.

     * NASA HQ and the Centers jointly revise promotion criteria for
       technical and managerial ranks to reflect changing global
       environment.
       - New incentives (U.S. Interests and customer payoff & value)
       - Managerial skills and customer understanding & experience
         required for consideration in managerial ranks.

4.   Significantly reduce the number of security clearances at ARC.
     Maintain only the minimum number required to meet commitments.

5.   Initiate appropriate management or disciplinary action in those
     cases that were identified during the review.

     * Legal irregularities referred to NASA OIG for further
       investigation/action.

6.   Initiate management action to investigate and correct the
     procurement irregularities that were identified during the
     review.

     * Details on all procurement related irregularities have been
       referred to the NASA OIG.

7.   Headquarters and the Centers form a process action team to
     examine the alternatives for the organization of security
     responsibilities and structure (to include computer and
     communication security) and elevation to a level that allows
     effective input and influence on appropriate management
     decisions.

8.   NASA Headquarters and ARC establish a process action team to
     develop and implement a plan to improve the overall posture of
     computer security given the unique capability and connectivity
     at ARC.  User education and periodic audits of compliance should
     be integral elements.  The plan should be reviewed by an
     external NASA team.

9.   Develop and implement an Agency-wide management development
     program which emphasizes "customer experiences."

     * Essential elements would include:
       - Prestigious program with high demand;
       - Aspiring managers spend one year in customer organizations
         in flight centers, industry, DoD or other;
       - Required for certain level of management; and,
       - Opportunity for developing cultural diversity.

     * Headquarters and Center employee development organizations
       develop a proposal for review with NASA senior management
       (Headquarters and Centers) by 1/31/93.

     * NASA top management (Headquarters and Centers) develop new
       measures to incentivize greater mobility in the executive
       ranks.
       - People with new and different ideas.
       - Emphasis on leadership and management, not only on technical
         credentials.

10.  Train ARC personnel on determination of position sensitivity.
     Document and enforce policies and procedures for suitability
     determinations.  Identify alternate processes to provide timely
     personnel suitability information on an agency-wide basis.

11.  Review all personnel feeder programs and hiring mechanisms at
     ARC, with the objective of significant consolidation and/or
     elimination of programs.

     * Transfer Consortium Agreement to Procurement and consider
       discontinuing by:
       - Allowing active Joint Research Interchange (JRI's) to
         expire.
       - Not entering into any new JRI's.
       - Terminating Consortium Agreement.
         -- Six month notice to all participating universities.
         -- Responsible for costs incurred to date.
         -- If funds are not available, no notice required.
       - Using other authority for work with academic community.
         -- Intergovernmental Personnel Act
         -- Proper grants and cooperative agreements
         -- Proper research contacts

     * Review cooperative agreements for personal services.

12.  Conduct a NASA-wide assessment of overhead rates which were
     negotiated by NASA personnel with profit and non-profit
     organizations to evaluate and determine NASA vulnerabilities to
     overcharging.

13.  Reinforce the communications between the Office of Inspector
     General and the Center Director (or appropriate management) to
     facilitate early identification and resolution of areas of
     vulnerability determined during ongoing audits and
     investigations.

