It's All About the Benjamins

(*This article was published on LinkedIn May 29, 2025.)

Listening to yesterday’s talk by GSA leadership on consolidation and the other responsibilities places on them, Jeff Koses noted how they must consider how the agency will finance these new and existing responsibilities. 

The topic of acquisition program funding structures came up earlier this week when meeting with an area executive.  He asked the question “Doesn’t NASA take fees from their SEWP Program?”.  When he asked, I started to laugh because this was the same false assumption expressed by an area interest group when speaking of NASA and their GWAC operations.

On a program that aired on April 4th a group of former GSA Executives spouted on about how NASA uses their SEWP program fees and implying that they use it as a slush fund.  When I heard this, I went through some emotions; first anger and indignation (my initial interpretation was gaslighting), then laughter and pity (Man, I thought, this is how these people really think it works over there.  They think NASA is drawing from their SEWP program to fund reusable rockets?).  After sharing this with an area govcon attorney their response was “Jon, a shrink would have a field day with them on a couch.  This sounds like latent expressions of their own behaviors.”

So, let’s set the record straight concerning how NASA has stewarded their responsibility.  NASA’s SEWP program is a working capital fund model.  It was the creation of a fiscally conservative and brilliant civil servant who is a Sr. Deputy Director of the program, a fiscal hawk and accounting savant.  She created a working capital fund model that within its charter stipulated that the fee recovery associated with their program will be exclusively for their operations.  Any remaining funds goes to the Treasury Department, not NASA.  This is a program that has had their finances audited repeatedly and can actually lay the claim to be the only government-wide working capital fund operations that passed a clean audit. 

During the above-mentioned conversation these area govcon experts thought that NASA operates and functions under the same fiscal premise as GSA.  Now to be fair, NASA’s program does pay NASA for the infrastructure and federal positions that are directly in support of the program and its operations.  They pay Goddard for their infrastructure costs, and they pay NASA HQ for the contracting officers and program personnel required to run the operation.  This, however, is entirely different than the GSA model.

You see, the GSA model (generally speaking) was to allow 50% of their contract fees recovered by each program to go to the program for their operations, and the rest is used and redistributed for leadership’s purposes.  Sometimes that would go to other programs who were not able to recover their costs (18F), sometimes it would go to support initiatives (IT Vendor Management Office), and sometimes it would go to program or technology experiments (Login.gov).

This is one of the admitted concerns that GSA now has.  How are they going to fund things?  I am sure the new ‘purchasing-on-behalf’ functions that they are now responsible for will include a ‘service charge’ (and they have a successful model in the FedSim Program to help satisfy that need).  They will use their own vehicles, so that will be another revenue source for them (side bar fun fact…GSA is in the top 20 of federal users of NASA’s SEWP program).  Of course they are also an agency that receives appropriated funds, so they have that too. (Try to find out information on GSA working capital fund expenditures and their appropriate expenditures.  The money is hard to follow at GSA).

Obviously having a workable structure in government like NASA’s SEWP program threatens their revenue stream.  But it shouldn’t.  Want to know another little dirty secret?  NASA’s program is required to pay the General Services Administration $2M annually to fund an “acquisition education fund” (think it is around $500k), and (drumroll please…) about $1.5M to support their IT Vendor Management Office - an artificial construct put in place to 'manage' the GWAC community.  So, the program not only runs the most efficient and effective vehicle in government but are also required to pay a ‘tax/fee’ for the privilege of operations and all the ‘help’ they have been receiving from GSA.

Fat Tony would be proud. Everyone else...watch your wallets.