[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Rules and Regulations]
[Pages 14016-14035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7075]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1803, 1805, 1812, 1815, 1835, 1842, 1843, 1844, 1846,
1847, 1848, 1849, 1850, 1851, and 1852
Rewrite of the NASA FAR Supplement (NFS)
AGENCY: Office of Procurement, National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
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SUMMARY: Parts 1842 through 1851, except 1845, and clauses affected by
these parts are revised in their entirety. Part 1815, Contracting by
Negotiation, is revised by relocating the existing coverage on source
selection evaluation plans from 1815.612-70(g) to a new separately
titled section 1815.605-71, and by establishing a new section 1815.612,
Formal source selection. The revision to part 1842 also incorporates
the changes published as a proposed rule (61 FR 55264-55266, October
25, 1996). No public comments were received in response to the proposed
rule, and the proposed changes are adopted as final except for the
deletion of extraneous paragraph 1842.7201(d). Also included in this
final rule are editorial changes to 1803 and 1815; a revision to
1805.402 to reflect the prohibition in FAR 15.1005(f) on preaward
disclosure of the identify of offerors; a change to 1812 to authorize
use of an NFS contract clause in commercial acquisitions; and the
adoption as final rule the proposed changes to 1852.223-70 and
1852.247-73 described in the proposed rule to eliminate non-statutory
contractor certification requirements (61 FR 66643-66646).
EFFECTIVE DATE: March 25, 1997.
FOR FURTHER INFORMATION CONTACT:
Tom O'Toole, (202) 358-0478.
SUPPLEMENTARY INFORMATION:
Background
The National Performance Review urged agencies to streamline and
clarify their regulations. The NFS rewrite initiative was established
to pursue these goals by conducting a section by section review of the
NFS to verify its accuracy, relevancy, and validity. The NFS will be
rewritten in blocks of parts. Upon completion of all parts, the NFS
will be reissued in a new edition.
Impact
NASA certifies that this regulation will not have a significant
impact on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 602 et seq.). This rule does not impose any
reporting or record keeping requirements subject to the Paperwork
Reduction Act.
List of Subjects in 48 CFR Parts 1803, 1805, 1812, 1815, 1835,
1842, 1843, 1844, 1846, 1847, 1848, 1849, 1850, 1851, and 1852
Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
Accordingly, 48 CFR Parts 1803, 1805, 1812, 1815, 1835, 1842, 1843,
1844, 1846, 1847, 1848, 1849, 1850, 1851, and 1852 are amended as
follows:
1. The authority citation for 48 CFR 1803, 1805, 1812, 1815, 1835,
1842, 1843, 1844, 1846, 1847, 1849, 1850, 1851, and 1852 continues to
read as follows:
Authority: U.S.C. 2473(c)(1).
PART 1803--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
1803.101-1 [Amended]
2. The first sentence in section 1803.101-1 is revised to read as
follows:
1803.101-1 General.
The statutory prohibitions and their application to NASA personnel
are discussed in the Standards of Ethical Conduct for Employees of the
Executive Branch, 5 CFR part 2635, and the Supplemental Standards of
Ethical Conduct for Employees of the National Aeronautics and Space
Administration, 5 CFR part 6901.* * *
1803.101-2 [Amended]
3. In section 1803.101-2, the phrase ``(See Standards of Conduct
for NASA Employees, NHB 1900.1.)'' is removed.
1803.104-5 [Amended]
4. In paragraph (d)(1)(A) of section 1803.104-5, the phrase ``under
1870.303, App. I,'' is revised to read ``(see 1815.612-70)''.
PART 1805--PUBLICIZING CONTRACT ACTIONS
1805.402 [Amended]
5. Section 1805.402 is revised to read as follows:
1805.402 General public. (NASA paragraphs (1) and (2))
(1) Unless the head of the contracting activity determines that
disclosure would be prejudicial to the interests of NASA, the following
information on NASA acquisitions may be released:
(i) The names of firms invited to submit offers, and
[[Page 14017]]
(iii) The names of firms that attended any pre-bid or pre-proposal
conferences.
(2) Other requests for information under the Freedom of Information
Act shall be processed in accordance with FAR 24.2 and 1824.2.
PART 1812--ACQUISITION OF COMMERCIAL ITEMS
1812.301 [Amended]
6. In section 1812.301, a new paragraph (f)(i)(J) is added to read
as follows:
1812.301 Solicitation provisions and contract clauses for the
acquisition of commercial items. (NASA Supplement paragraph (f))
(f)(i) * * *
(J) 1852.246-72, Material Inspection and Receiving Report. * * *
PART 1815--CONTRACTING BY NEGOTIATION
1815.605-71 [Added]
7. Section 1815.605-71 is added to read as follows:
1815.605-71 Source selection evaluation plan.
(a) A source selection evaluation plan shall be prepared for each
source selection. The plan shall include, as a minimum the general and
specific evaluation guidelines (and special standards of
responsibility, where applicable) established to assess each offeror's
proposal against the RFP evaluation factors, subfactors, and elements.
The evaluation guidelines are designed to focus the evaluators'
assessment. They are not weighted and are not listed in the RFP.
However, the substance of the guidelines may be included in a narrative
description of the subfactors and elements. In addition, the plan
includes the system used in conducting the evaluation (and scoring, if
applicable) of each offeror's proposal.
(b) The source selection evaluation plan shall be approved by the
source selection authority or other personnel designated in accordance
with installation procedures before the formal RFP is issued.
(c) For formal source selections, see 1815.612(c).
1815.612 [Added]
8. Section 1815.612 is added to read as follows:
1815.612 Formal source selection. (NASA supplements paragraph (c))
(c) The requirement for a source selection evaluation plan may be
satisfied by incorporating the information required by 1815.605-71 into
the source selection plan. The consolidated plan shall be approved by
the source selection authority.
1815.612-70 [Amended]
9. In section 1815.612-70, the designated paragraph (g) is removed,
and the designated paragraphs (h) through (k) are redesignated as
paragraphs (g) though (j).
PART 1835--RESEARCH AND DEVELOPMENT CONTRACTING
1835.016-70 [Amended]
10. In paragraph (b)(2) of section 1835.016-70, the citation
``1815.201'' is revised to read ``1805.201''.
11. Part 1842 is revised to read as follows:
PART 1842--CONTRACT ADMINISTRATION
Subpart 1842.1--Interagency Contract Administration and Audit Services
1842.101 Policy.
1842.102 Procedures.
1842.102-70 Review of administration and audit services.
1842.170 Assignment of NASA personnel at contractor plants.
Subpart 1842.2--Assignment of Contract Administration
1842.202 Assignment of contract administration.
1842.203 Retention of contract administration.
1842.270 Contracting officer technical representative (COTR)
delegations.
1842.271 NASA clause.
Subpart 1842.5--Postaward Orientation
1842.503 Postaward conferences.
Subpart 1842.7--Indirect Cost Rates
1842.705 Final indirect cost rates.
1842.705-1 Contracting officer determination procedure.
1842.708 Quick-closeout procedure.
1842.708-70 NASA quick-closeout procedure.
Subpart 1842.8--Disallowance of Costs
1842.803 Disallowing costs after incurrence.
Subpart 1842.12--Novation and Change-of-Name Agreements
1842.1203 Processing agreements.
1842.1203-70 DOD processing of novation and change-of-name
agreements on behalf of NASA.
Subpart 1842.13--Suspension of Work, Stop-Work Orders, and Government
Delay of Work
1842.1305 Contract clauses.
Subpart 1842.14--Traffic and Transportation Management
1842.1405 Discrepancies incident to shipment of supplies.
Subpart 1842.70--Additional NASA Contract Clauses
1842.7001 Observance of legal holidays.
1842.7002 Travel outside of the United States.
Subpart 1842.71--Submission of Vouchers
1842.7101 Submission of vouchers.
Subpart 1842.72--NASA Contractor Financial Management Reporting
1842.7201 General.
1842.7202 Contract clause.
Subpart 1842.73--Audit Tracking and Resolution
1842.7301 NASA external audit follow-up system.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1842.1--Interagency Contract Administration and Audit
Services
1842.101 Policy. (NASA supplements paragraph (a))
(a)(i) The Defense Contract Audit Agency (DCAA) has been designated
as the DOD agency responsible for the performance of audit functions
for NASA contracts, except those awarded to educational institutions
for which other agencies have audit cognizance under OMB Circular No.
88, those with Canadian contractors, and those for which NASA will
perform audits.
(ii) Cross-servicing arrangements are the responsibility of the
Headquarters Office of External Relations (Code ID). Contracting
officers should direct questions to the Headquarters Office of
Procurement (Code HS).
1842.102 Procedures.
1842.102-70 Review of administration and audit services.
(a) NASA installations shall assess their delegations to DOD
semiannually to determine changes in delegation patterns that could (1)
result in significant changes in DOD manpower requirements or (2) have
other important impacts on DOD contract administration activities.
Events such as major program cutbacks or expansions, changes in
locations of major programs, and sizable new acquisitions should be
considered in the assessment.
(b) A summary of significant changes shall be submitted to the
Headquarters Office of Procurement (Code HK). The summary shall
include--
(1) A description of the change in work requirements or delegation
pattern;
(2) The estimated duration of the impact;
[[Page 14018]]
(3) The results of discussions with affected DOD contract
administration offices including agreement and disagreements on the
predicted impact on DOD in terms of changes in manpower requirements or
other costs; and
(4) Any other significant impact on DOD or NASA resources or
contract performance risk.
1842.170 Assignment of NASA personnel at contractor plants.
(a)(1) NASA personnel normally shall not be assigned at or near a
contractor's facility to perform any contract administration functions
listed in FAR 42.302(a). Before such an assignment is made, a written
request shall be forwarded to the cognizant program director for
approval with the concurrence of the Associate Administrator for
Procurement (Code HS). The following supporting information shall be
forwarded with the request to make the assignment:
(i) A statement of the special circumstances that necessitate the
assignment.
(ii) The contract administration serves to be performed.
(iii) A summary of any discussions held with the cognizant contract
administration organization.
(iv) A staffing plan covering three years or such shorter period as
may be appropriate.
(2) The provisions of this paragraph (a) do not apply to NASA audit
personnel assigned to the field installations, to NASA technical
personnel covered by 1842.101 and paragraph (b) of this section, unless
they are performing any contract administration functions listed in FAR
42.302(a), or to personnel assigned to contractors' plants on NASA or
other Federal installations.
(b) NASA may assign technical personnel (such as quality assurance,
reliability, or engineering representatives) to contractors' plants or
laboratories to provide direct liaison with NASA and technical
assistance and guidance to the contractor and DOD. The duties and
responsibilities of these technical representatives shall be clearly
defined and shall not conflict with, duplicate, or overlap with
functions delegated to DOD personnel. NASA shall advise appropriate DOD
and contractor organizations of the duties and responsibilities of NASA
technical personnel.
(c) When a NASA resident office, including any assigned technical
personnel, and a DOD contract administration office are performing
contract administration functions for NASA contracts at the same
contractor's facility, the two offices shall execute a written
agreement clearly establishing the relationship between the two
organizations and the contractor. The agreement should eliminate
duplication in the performance of contract administration functions and
minimize procedural misunderstandings between the two organizations.
Such agreements shall be consistent with existing delegations to the
contract administration offices concerned and shall specify the
relationship of NASA nonprocurement resident personnel to their DOD and
contractor counterparts if such personnel will be involved in any
aspect of contract administration.
Subpart 1842.2--Assignment of Contract Administration
1842.202 Assignment of contract administration. (NASA supplements
paragraphs (b) and (d))
(b) Withholding normal functions. (1) The following functions are
normally retained by the contracting office.
(A) Approval of the final voucher (FAR 42.302(a)(7)).
(B) Countersigning NASA Form 456, Notice of Contract Costs
Suspended and/or Disapproved (FAR 42.302(a)(8)).
(C) Issuance of decisions under the disputes clause (FAR
42.302(a)(10)).
(D) Contract payment (FAR 42.302(a)(13)).
(E) Execution of supplement agreements involving spare parts or
other items selected through provisioning procedures. However,
delegation of the negotiation of supplemental agreements for spare
parts and other items and forwarding for approval and signature of the
NASA contracting officer is permitted (FAR 42.302(a)(22)).
(F) Executive of supplemental agreements definitizing change orders
(see FAR 42.302(b)(1)).
(G) Issuing termination notices and executing supplemental
agreements for settlement of termination for default or for convenience
of the Government. However, delegation of the negotiation of
termination settlements and forwarding for approval and signature of
the NASA contracting officer is permitted using NASA Form 1432 (FAR
42.302(a)(23)).
(H) Consent to placement of subcontracts under FAR 42.302(a)(51).
(See 1844.202-1(a)).
(d) Transmittal and documentation. In addition to the instructions
at FAR 42.202(d) (1) through (4), contracting officers shall--
(i) Send delegations to DOD contract administration offices in
accordance with the instructions in the DOD Directory of Contract
Administration Services Components (DLAH 4105.4).
(ii) At time of contract award, prepared and forward NASA Form
1430, Letter of Contract Administration Delegation, General, to the
contract administration office. NASA Form 1430A, Letter of Contract
Administration, Special Instructions, will supplement the NASA Form
1430, to modify previously delegated functions and provide additional
or particular information considered necessary to ensure clear
understanding of all delegated functions.
(iii) Forward NASA Form 1431, Letter of Acceptance of Contract
Administration, with each NASA Form 1430 or 1430A. Contracting officers
shall use the returned NASA Form 1431 as contract file documentation
that the delegation has been accepted, modified or rejected by the
contract administration office and as a reference for points of
contract for each of the functional areas delegated.
(iv) Use NASA Form 1433, Letter of Audit Delegation, to delegate
the audit function and to amend previous delegations. Distribute copies
of the contract and NASA Form 1433 as follows:
(A) Audit office: One copy of the contract and three NASA Forms
1433. When the Department of Health and Human Services is designated as
the audit office, item 12 on NASA Form 1433 shall be marked ``Not
applicable.''
(B) Contractor: One NASA Form 1433.
(C) Cognizant NASA fiscal or financial management office: One NASA
Form 1433.
(v) For contracts with the Canadian Commercial Corporation (CCC),
audits are automatically arranged by the Department of Defense
Production (Canada) (DDP) in accordance with agreements between NASA
and DDP. Upon advice from DDP, CCC will certify the invoice and forward
it with Standard Form 1034, Public Voucher, to the contracting officer
for further processing and transmittal to the fiscal or financial
management officer.
(vi) For contracts placed directly with Canadian firms, audits are
requested by the contracting officer from the Audit Services Branch,
Comptroller of the Treasury, Department of Finance, Ottawa, Ontario,
Canada. Invoices are approved by the auditor on a provisional basis
pending completion of the contract and final audit. These invoices,
accompanied by SF 1034, are forwarded to the contracting officer for
further processing and transmittal to the fiscal or financial
management officer. Periodic advisory audit reports are
[[Page 14019]]
furnished directly to the contracting officer.
1842.203 Retention of contract administration. (NASA supplements
paragraph (a))
(a) The assignment of contract administration is optional for the
following contracts:
(i) Research and development study contracts not involving
deliverable hardware or Government furnished property.
(ii) Contracts with delivery schedules for 90 days or less.
(iii) Purchase orders without Government source inspection
requirements.
(iv) Contracts requiring only on-site performance.
(v) Contracts requiring work in the vicinity of the awarding center
where DOD contract administration services are not reasonably
available.
1842.270 Contracting officer technical representative (COTR)
delegations.
(a) Contracting officers may appoint a qualified Government
employee to act as their technical representatives in managing the
technical aspects of a particular contract. If necessary, the
contracting officer may appoint an alternate COTR to act during short
absences of the COTR. Technical organizations are responsible for
ensuring that the individual they recommend to the contracting officer
possesses training, qualifications and experience commensurate with the
duties and responsibilities to be delegated and the nature of the
contract.
(b) NASA Form 1634, Contracting Officer Technical Representative
(COTR) Delegation, shall be used to appoint COTRs. A COTR's duties and
responsibilities may not be redelegated by the COTR and the COTR may be
held personally liable for unauthorized acts. However, this does not
prohibit the COTR from receiving assistance for the purpose of
monitoring contractor progress and gathering information. When an
individual is appointed as a COTR on more than one contract, separate
delegations shall be issued for each contract. A separate NASA Form
1634 will be used to appoint an alternate COTR.
(c) A COTR delegation remains in effect throughout the life of the
contract unless canceled in writing by the cognizant contracting
officer or at any level above that contracting officer. The contracting
officer may modify the delegation only by issuance of a new delegation
canceling and superseding the existing delegation.
(d) A COTR shall not be authorized to initiate procurement actions
or in any way cause a change to the contract or increase the
Government's financial obligations. However, delegations may be made to
construction contract COTRs to sign emergency on-site change orders
with an estimated value not to exceed the value specified in writing by
the contracting officer in the NASA Form 1634 but in no event to exceed
$25,000.
(e) Each COTR shall acknowledge receipt and accept the delegation
by signing the original delegation letter. The original of the COTR
delegation letter shall be filed in the applicable contract file.
Copies of the signed COTR delegation letter shall be distributed to the
COTR, the contractor, and each cognizant contract administration
office. Acknowledgment and distribution for terminations of COTR
delegations and COTR delegations which revise authority, duties and
responsibilities shall follow the same rules.
(f) Mandatory training for COTRs and their alternates shall include
the following core topic areas: contracting authority; procurement
integrity; performance-based contracting; contract modifications;
surveillance plans; contracting for inherently governmental functions,
personal services, and NASA policy on the acquisition of services; the
Service Contract Act; the Anti-Deficiency Act; contract financial
management; the ``Changes'' clause; the ``Disputes'' clause; the
``Inspection'' clause; Government property and policy procedures; and
the ``Limitation of Funds'' and ``Limitation of Cost'' clauses.
Procurement officers are responsible for assuring that the course(s)
utilized by their installation address the mandatory core topics in
sufficient detail for the purpose of COTR training.
(g) The contracting officer shall verify that the COTR has received
the mandatory training before signing NASA Form 1634. If an urgent need
arises for the appointment of a COTR and no trained and otherwise
qualified individual is available, then the procurement officer may
make a temporary COTR appointment not to exceed six months. Temporary
appointments must be so identified and clearly reflect the appointment
expiration date.
(h) No technical direction may be issued by a COTR relative to
performance-based contract requirements or when serving under a
temporary appointment.
1842.271 NASA clause.
Insert the clause at 1852.242-70, Technical Direction, when
paragraph 3(m) of the NASA Form 1634 specifically authorizes a COTR to
issue technical direction.
Subpart 1842.5--Postaward Orientation
1842.503 Postaward conferences. (NASA paragraphs (1) and (2))
(1) A postaward conference shall be held with representatives of
the contract administration office when--
(i) A contract is expected to exceed $10,000,000;
(ii) Contract performance is required at or near a NASA
installation or NASA-controlled launch site;
(iii) The delegation will impose an abnormal demand on the
resources of the contract administration office receiving the
delegation; or
(iv) Complex contract management problems are expected.
(2) Procurement officer approval is required to waive a post-award
planning conference for contracts meeting any of the criteria in
paragraph (1) of this section. The request for procurement officer
approval to waive a post-award conference shall address action taken
and planned to ensure effective communication with the contract
administration office during the performance of the contract.
Subpart 1842.7--Indirect Cost Rates
1842.705 Final indirect cost rates.
1842.705-1 Contracting officer determination procedure. (NASA
supplements paragraph (a))
(a) Applicability and responsibility. (i) Since many NASA
contractors are under DOD's final overhead rate determination
procedure, NASA's policy is to participate jointly with DOD for those
companies where NASA has a major financial interest. The NASA
participant shall be a representative from that installation having the
predominance of NASA work.
(ii) When NASA has been assigned the final indirect cost rate
determination authority, settlement of indirect costs shall be
conducted by the cognizant NASA contracting officer (normally from the
installation providing the preponderance of NASA funding).
1842.708 Quick-closeout procedure. (NASA supplements paragraph (a))
(a)(2)(ii) The 15 percent parameter does not apply to NASA
contracts. Instead, quick-closeout may be used if an individual
contract's value, excluding fee, is not greater than $2,000,000. Quick
closeout may be used for contracts above $2,000,000 with the prior
approval of the installation procurement officer.
[[Page 14020]]
1842.708-70 NASA quick-closeout procedures.
After a decision is made that the use of quick closeout is
appropriate, the contracting officer shall:
(a) Obtain a written agreement from the contractor to participate
in the quick-closeout process under FAR 42.708 for the selected
contract(s).
(b) Require the contractor to submit a final voucher and a summary
of all costs by cost element and fiscal year for the contract(s) in
question, as well as a copy of the contractor's final indirect cost
rate proposal for each fiscal year quick closeout is involved.
(c) Notify the cognizant audit activity in writing, identify the
contract(s), and request: (1) the contractor's indirect cost history
covering a sufficient number of fiscal years to see the trend of
claimed, audit questioned, and disallowed costs; and (2) any other
information that could impact the decision to use quick-closeout
procedures. Indirect cost histories should be requested from the
contractor only when the cognizant audit activity is unable to provide
the information.
(d) Review the contract(s) for indirect cost rate ceilings and any
other contract limitations, as well as the rate history information.
(e) Establish final indirect cost rates using one of the following
rates:
(1) The contract's ceiling indirect cost rates, if applicable, and
if less than paragraphs (e)(2) through (e)(6) of this section.
(2) The contractor's claimed actual rates adjusted based on the
contractor's indirect cost history, if less than paragraphs (e)(3)
through (e)(6) of this section.
(3) Recommended rates from the cognizant audit agency, the local
pricing office, another installation pricing office, or other
recognized knowledgeable source.
(4) The contractor's negotiated billing rates, if less than
paragraphs (e)(5) or (e)(6) of this section.
(5) The previous year's final rates.
(6) Final rates for another fiscal year closest to the period for
which quick-closeout rates are being established.
(f) If an agreement is reached with the contractor, obtain a
release of all claims and other applicable closing documents.
(g) For those contracts where the indirect cost rate negotiation
function was delegated or falls under the cognizance of another agency,
send a copy of the agreement to that office.
Subpart 1842.8--Disallowance of Costs
1842.803 Disallowing costs after incurrance. (NASA supplements
paragraph (b))
(b) Auditor receipt of vouchers. (1) NASA has designated the
contract auditor as the contracting officer's representative for--
(A) Reviewing vouchers received directly from contractors;
(B) Approving vouchers for provisional payment and sending them to
the disbursing office;
(C) Reviewing completion/final vouchers and sending them to the
designated contracting officer for approval.
(2)(A) When contract costs are questioned, the auditor shall
prepare and send to the cognizant contracting officer NASA Form 456,
Notice of Contract Costs Suspended and/or Disapproved.
(B) After coordination with other NASA and Federal agency
contracting officers administering contracts with the same contractor
under which a NASA Form 456 or a DCAA Form 1 has been issued for the
same items of cost, the NASA contracting officer shall take one of the
following actions:
(a) Assign a notice number and sign the NASA Form 456.
(b) Issue a new NASA Form 456 suspending the costs rather than
disapproving them pending resolution of the issues.
(c) Return the unsigned NASA Form 456 to the auditor with a
detailed explanation of why the suspension or disapproval is not being
signed, and process the contractor's claim for payment.
(C) When more than one NASA contract is affected by a notice, the
NASA contracting officer with the largest amount of contract dollars
affected is responsible for coordination of the NASA Form 456 with the
other contracting officers, including those of other Federal agencies,
listed in the notice.
(D) An original and three copies (which includes two acknowledgment
copies, one each for return to the contracting officer and the auditor)
of the NASA Form 456 shall be sent to the contractor by certified mail,
return receipt requested; one copy shall be attached to the Standard
Form 1034 and each copy of the Standard Form 1034A on which the
deduction for the suspension/disapproval is made.
(E)(a) If the amount of the deduction is more than the amount of
the public voucher, the installment method of deduction shall be
applied to the current and subsequent public vouchers until the amount
is fully liquidated. The deductions on any voucher may not exceed the
voucher amount to avoid processing of a voucher in a credit amount.
Public voucher(s) with zero amounts must be forwarded to the fiscal or
financial management office for appropriate action.
(b) If deductions are in excess of contractor claims, recovery may
be made through a direct refund from the contractor, in the form of a
check payable to NASA, or by a set-off deduction from the voucher(s)
submitted by the contractor under any other contract unless those
contracts contain a ``no set-off'' provision. If a set-off is affected,
the voucher(s) from which the deduction is made should be annotated to
identify the contract and appropriation affected and the applicable
NASA Form 456.
Subpart 1842.12--Novation and Change-of-Name Agreements
1842.1203 Processing agreements. (NASA supplements paragraphs (b) and
(f))
(b) The installation shall immediately notify the Headquarters
Office of Procurement (Code HS) of the request to execute a novation
(successor-in-interest) or change-of-name agreement.
(f) The contracting officer shall forward one copy of the agreement
to the Code HS.
1842.1203-70 DOD processing of novation and change-of-name agreements
on behalf of NASA.
(a) Appendix E of the NASA/DOD Agreement for Contract
Administration and Contract Audit Services authorizes DOD to process
novation and change-of-name agreements on behalf of NASA. Copies of
agreements executed by DOD on behalf of NASA are maintained by the
Headquarters Office of Procurement (Code HS).
(b) Code HS is the Agency point of contact for issues related to
proposed novation agreements. With the concurrence of Code HS, an
installation may execute a separate agreement with the contractor.
Subpart 1842.13--Suspension of Work, Stop-Work Orders, and
Government Delay of Work
1842.1305 Contract clauses. (NASA supplements paragraph (b))
(b) FAR 52.242-15, Stop-Work Order, shall not be used in
solicitations or contracts for research performed by educational or
other nonprofit institutions.
[[Page 14021]]
Subpart 1842.14--Traffic and Transportation Management
1842.1405 Discrepancies incident to shipment of supplies. (NASA
supplements paragraph (a))
(a) NASA personnel shall also report discrepancies and adjust
claims for loss of and damage to Government property in transit in
accordance with NHB 6200.1, NASA Transportation and General Traffic
Management.
Subpart 1842.70--Additional NASA Contract Clauses
1842.7001 Observance of legal holidays.
(a) The contracting officer shall insert the clause at 1852.242-72,
Observance of Legal Holidays, in contracts when work will be performed
at a NASA installation.
(b) The clause shall be used with its Alternate I in cost-
reimbursement contracts when it is desired that contractor employees
not have access to the installation during Government holidays. This
alternate may be appropriately modified for fixed-price contracts.
(c) The clause may be used with its Alternate II in cost-
reimbursement contracts when Alternate I is used and it is desired that
administrative leave be granted contractor personnel in special
circumstances, such as inclement weather or potentially hazardous
conditions.
1842.7002 Travel outside of the United States.
The contracting officer shall insert the clause at 1852.242-71,
Travel Outside of the United States, in cost-reimbursement
solicitations and contracts where a contractor may travel outside of
the United States and it is appropriate to require Government approval
of the travel.
Subpart 1842.71--Submission of Vouchers
1842.7101 Submission of vouchers.
(a) Vouchers shall be submitted in accordance with the clause at
1852.216-87, Submission of Vouchers for Payment.
(b) The auditor shall retain an unpaid copy of the voucher.
(c) When a voucher submitted in accordance with the clause at
1852.216-87 contains one or more individual direct freight charges of
$100 or more, an additional copy of Standard Form 1034A and Standard
Form 1035A shall be submitted and marked for return to the contractor
after payment. This copy shall be transmitted quarterly by the
contractor with the freight bills to the General Services
Administration. When a voucher is identified as the ``Completion
Voucher,'' an additional copy shall be submitted for transmittal to the
NASA contracting officer.
Subpart 1842.72--NASA Contractor Financial Management Reporting
1842.7201 General.
(a) Contracting officer responsibilities. (1) Contracting officers
must ensure contracts require cost reporting consistent with both
policy requirements and project needs. Contracting Officers shall
monitor contractor cost reports on a regular basis to ensure cost data
reported is accurate and timely.
Adverse trends or discrepancies discovered in cost reports should
be pursued through discussions with financial and project team members.
(2) Whenever cost performance threatens contract performance,
contracting officers shall require corrective action plans from the
contractors.
(b) Reporting requirements. (1) Use of the NASA Contractor
Financial Management Reports, the NASA form 533 series, is required on
cost-type, price redetermination, and fixed-price incentive contracts
when the following dollar, period of performance, and scope criteria
are met:
----------------------------------------------------------------------------------------------------------------
Contract value/scope Period of performance 533M 533Q
----------------------------------------------------------------------------------------------------------------
$500K to $999K...................... 1 year or more......... Required................ Optional.
$1,000,000 and over................. Less than 1 year....... Required................ Optional.
$1,000,000 and over................. 1 year or more......... Required................ Required.
----------------------------------------------------------------------------------------------------------------
(2) When it is probable that a contract will ultimately meet the
criteria in paragraph (b)(1) of this section through change orders,
supplemental agreements, etc., the reporting requirement must be
implemented in the contract based on the estimated final contract value
at the time of award.
(3) NF 533Q reporting may be waived by the contracting officer,
with the concurrence of the center chief financial officer and
cognizant project manager, for support service or task order contracts,
when NF 533M reports and other data are sufficient to ensure accurate
monthly cost accruals, evaluation of the contractor's cost performance,
and forecasting of resource requirements.
(4) Where a specific contractual requirement differs from the
standard system set forth in NPG 9501.2, NASA Contractor Financial
Management Reporting, but is determined to be in the best interests of
the Government and does not eliminate any of the data elements required
by the standard NF 533 formats, it may be approved by the contracting
officer with the concurrence of the center chief financial officer and
the project manager. Such approval shall be documented and retained,
with the supporting rationale, in the contract file.
(5) The contractor's internal automated printout reports may be
substituted for the 533 reporting formats only if the substitute
reports contain all the data elements that would be provided by the
corresponding 533's. The contracting officer shall coordinate any
proposed substitute with the installation financial management office.
(c) Contract requirements. (1) Reporting requirements, including a
description of reporting categories, shall be detailed in the
procurement request, and reports shall be required by inclusion of the
clause prescribed in 1842.7202. The contract schedule shall include
report addressees and numbers of copies. Reporting categories shall be
coordinated with the center financial management office to ensure that
data required for agency cost accounting will be provided by the
reports. Reporting dates shall be in accordance with NPG 9501.2, except
that earlier submission is encouraged whenever feasible. No due date
shall be permitted which is later than the date by which the center
financial management office needs the data to enter an accurate monthly
cost accrual in the accounting system.
(2) The contractor shall be required to submit an initial report in
the NF 533Q format, time phased for the expected life of the contract,
within 30 days after authorization to proceed has been granted. NF 533M
reporting will begin no later than 30 days after incurrence of cost. NF
533Q reporting begins with the initial report.
1842.7202 Contract clause.
The contracting officer shall insert the clause at 1852.242-73,
NASA
[[Page 14022]]
Contractor Financial Management Reporting, when any of the NASA Form
533 series of reports are required from the contractor.
Subpart 1842.73--Audit Tracking and Resolution
1842.7301 NASA external audit follow-up system.
(a) This section implements OMB Circular No. A-50, NASA Management
Instruction (NMI) 9970.1A, Audit Follow-up, and NASA Audit Follow-up
Handbook 9970.2, which provide more detailed guidance. Recommendations
for external audits (contracts and OMB Circulars No. A-128, Audits of
State and Local Governments, and A-133, Audits of Institutions of
Higher Learning and Other Non-Profit Institutions) shall be resolved by
formal review and approval procedures analogous to those at 1815.807-
71.
(b) The external audit follow-up system tracks all contract and OMB
Circular A-128 or A-123 audits where NASA has resolution and
disposition authority. The objective of the tracking system is to
ensure that audit recommendations are resolved as expeditiously as
possible, but a maximum, within 6 months of the date of the audit
report.
(c) (1) The identification and tracking of contract audit reports
under NASA cognizance are accomplished in cooperation with DCAA by
means of the DCAA form, Contract Audit Follow-up Summary Sheet. The use
of this form by DCAA and NASA is covered in Chapter 6 of the NASA Audit
Follow-up Handbook.
(2) Identification and tracking of A-128 and A-133 audit reports
are accomplished in cooperation with the NASA Office of the Inspector
General (OIG) by means of a transmittal memorandum. A transmittal
memorandum is sent by the OIG to the procurement officer of each NASA
field installation having an award (contract, grant, or other
agreement) covered by the audit report. The transmittal memorandum will
identify whether there were any audit findings.
(d)(1) Chapter 6 of the NASA Audit Follow-up Handbook identifies
which contract audit reports are reportable semiannually to the
Headquarters Office of Procurement (Code HC).
(2) Only trackable A-128 and A-133 audit reports involving the
following shall be reported semiannually to Code HC--
(i) A significant management control issue; or
(ii) For an individual NASA award, either the lower of 10 percent
or $10,000 of the costs incurred in the period covered by the audit are
questioned; or for institution-wide issues, the lower of 10 percent or
$10,000 of the total costs incurred involving Government funds for the
period covered by the audit are questioned.
(e)(1) The resolution and disposition of contract audits is covered
by Chapter 6 of the NASA Audit Follow-up Handbook.
(2) The resolution and disposition of A-128 and A-133 are handled
as follows:
(i) Audit findings pertaining to an individual NASA award are the
responsibility of the procurement officer administering that award.
(ii) Audit findings having an institution-wide impact are the
responsibility of the cognizant Federal agency or the agency
responsible for oversight. OMB's January 6, 1986, Federal Register
Notice (51 FR 552), titled ``Federal Agencies Responsible for Cost
negotiation and Audit of State and Local Governments,'' provides
cognizant agency assignments for OMB Circular A-128. For organizations
subject to OMB Circular A-133, there is either a cognizant agency or an
oversight agency. The cognizant agency is the Federal agency that
provides the predominant amount of direct funding to the recipient
organization unless OMB makes a specific agency cognizant, in which
case a notice will be published in the Federal Register. To provide for
the continuity of cognizance, the determination of the predominant
amount of direct funding will be based on the direct Federal awards
expended in the recipient's fiscal years ending in 1996, 2000, and
every fifth year thereafter. If there is no cognizant Federal agency,
there is an agency responsible for oversight. The oversight agency is
that agency which provides the predominant amount of direct funding.
When there is no direct funding, the Federal agency with the
predominant indirect funding is to assume the oversight
responsibilities. In cases where NASA is the cognizant or oversight
Federal agency, audit resolution and disposition is the responsibility
of the procurement officer for the field installation having the
largest amount of direct funding, or, if there is no direct funding,
the largest amount of indirect funding for the audited period. A copy
of the memorandum disappointing the findings shall be provided by each
field installation having resolution responsibility for the particular
report to the OIG Center office within whose geographic area of
responsibility the audited organization is located.
12. Part 1843 is revised to read as follows:
PART 1843--CONTRACT MODIFICATIONS
Subpart 1843.2--Change Orders
Sec.
1843.205 Contract clauses.
1843.205-70 NASA contract clause.
Subpart 1843.70--Undefinitized Contract Actions
1843.7001 Definitions.
1843.7002 Policy.
1843.7003 Procedures.
1843.7004 Exceptions.
1843.7005 Definitions.
Subpart 1843.71--Shared Savings
1843.7101 Shared Savings Program.
1843.7102 Solicitation provision and contract clause.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1843.2--Change Orders
1843.205 Contract clauses.
As authorized in the prefaces of clauses FAR 52.243-1, Changes--
Fixed Price; FAR 52.243-2, Changes--Cost Reimbursement; FAR 52.243-3,
Changes--Time-and-Material or Labor-Hours; and FAR 52.243-4, Changes,
the period within which a contractor must assert its rights to an
equitable adjustment may be varied not to exceed 60 calendar days.
1843.205-70 NASA contract clause.
(a) The contracting officer may insert in contracts a clause
substantially the same as 1852.243-70, Engineering Change Proposals,
when ECPs are expected. Paragraphs (c) and (d) of the basic clause and
Alternate I of the clause shall be changed to reflect the specific type
of contract. A local format may be substituted for the MIL-STD-973
format.
(b) If it is desirable to preclude a large number of small-dollar,
contractor-initiated engineering changes and to reduce the
administrative cost of reviewing them, the contracting officer shall
use the clause with its Alternate I.
(c) If the contract is a cost-reimbursement type, the contracting
officer shall use the clause with its Alternate II.
Subpart 1843.70--Undefinitized Contract Actions
1843.7001 Definitions.
Undefinitized contract action (UCA) means a unilateral or bilateral
contract modification or delivery/task order in which the final price
or estimated cost and fee have not been negotiated and mutually agreed
to by NASA and the contractor. (Issuance of letter contracts
[[Page 14023]]
and their modifications are governed by subpart 1816.6.)
1843.7002 Policy.
Undefinitized contract actions shall be executed by contracting
officers on an exception basis and shall be limited to the minimum
urgent requirements. The contract file for all UCAs shall be documented
to justify issuance and shall include a Government estimate for the
changed requirements.
1843.7003 Procedures.
(a) Issuance of undefinitized contract actions with a Government
estimated cost or price over $1,000,000 must be approved in writing by
the Center Director. This approval authority is not delegable. Issuance
of undefinitized contract actions with a Government estimated cost or
price less than or equal to $1,000,000 shall also be minimized but may
be approved on an exception basis in accordance with installation
procedures.
(b) (1) Undefinitized contract actions exceeding $1,000,000
approved by the Center Director shall be issued as bilateral agreements
setting forth a ceiling price or ``not to exceed'' estimated cost
figure for the changed contractual requirements. For fixed price
contracts the negotiated price for the changed contract requirements
shall not exceed the established ceiling price. In the case of cost
type contracts any costs eventually negotiated for the changed
requirements in excess of the ``not to exceed'' estimated cost figure
shall be non-fee bearing. The ceiling price or ``not to exceed''
estimated cost figures shall be separately identified in the UCA
instrument from the pricing structure of the basic contract.
(2) The Center Director may waive the ceiling price or ``not to
exceed'' estimated cost figure and bilateral agreement requirements
prior to UCA issuance on the basis of urgency. This waiver authority is
not delegable. Any waivers shall be documented in the contract file.
(c) The changed contractual requirements set forth in the UCA shall
be clearly defined and shall be limited to the minimum effort required
to satisfy urgent program requirements while a cost proposal is
prepared, analyzed and negotiated.
(d) For undefinitized contract actions with a Government estimate
greater than $1,000,000 and not excepted under subpart 1843.7004, a 180
day funding profile shall be obtained from the contractor prior to
execution of the undefinitized contract action.
(e) Undefinitized contract actions with a Government estimated cost
or price greater than $1,000,000 shall include a requirement that the
change shall be separately accounted for by the contractor to the
degree necessary to provide the contracting officer visibility into
actual costs incurred pending definitization. The contracting officer
may waive this requirement for individual actions if there is a
documented finding that such accounting procedures would not be cost
effective. Any such waiver shall not affect existing NASA Form 533 or
other financial reporting requirements set forth in the contract.
1843.7004 Exceptions.
(a) Exceptions to the requirement for Center Director approval for
issuance of undefinitized contract actions are--
(1) Modifications to facilities contracts;
(2) Modifications to construction contracts using Construction of
Facilities funding;
(3) Urgent modification resulting from Shuttle manifest changes or
that involve immediate issues of safety or damage/loss of property;
(4) Modifications to decrease the contract value; or
(5) Modification to letter contracts.
(b) The contract file for any of the modifications in paragraph (a)
of this section shall cite the exception and include complete
supporting rational for its applicability.
1843.7005 Definitization.
(a) Undefinitized contract actions should be sufficiently complete
and detailed as to enable the contractor to begin immediate preparation
of a cost proposal for the changed requirement. The NASA goal is to
definitive UCAs within 180 from date of issuance.
(b) Whenever possible, pre-change study efforts or engineering
change proposals (ECPs) shall be utilized to negotiate and definitize
changes prior to issuance.
Subpart 1843.71--Shared Savings
1843.7101 Shared Savings Program.
This subpart establishes and describes the methods for implementing
and administering a Shared Savings Program. This program provides an
incentive for contractors to propose and implement, with NASA approval,
significant cost reduction initiatives. NASA will benefit as the more
efficient business practices that are implemented lead to reduced costs
on current and follow-on contracts. In return, contractors are entitled
to share in cost savings subject to limits established in the contract.
The contracting officer may require the contractor to provide periodic
reporting, or other justification, or to require other steps (e.g.,
cost segregation) to ensure projected cost savings are being realized.
1843.7102 Solicitation provision and contract clause.
The contracting officer shall insert the clause at 1852.243-71,
Shared Savings, in all solicitations and contracts expected to exceed
$1,000,000, except those awarded under FAR part 12, NRA and AO
procedures, or the SBIR and STTR programs.
13. Part 1844 is revised to read as follows:
PART 1844--SUBCONTRACTING POLICIES AND PROCEDURES
Subpart 1844.2--Consent to Subcontracts
Sec.
1844.201 Consent requirements.
1844.201-1 Fixed-price prime contracts.
1844.201-2 Cost reimbursement and letter prime contracts.
1844.202 Contracting officer's evaluation.
1844.202-1 Responsibilties.
1844.204 Contract clauses.
1844.204-70 NASA contract clause.
Subpart 1844.3--Contractors' Purchasing Systems Reviews
1844.302 Requirements.
1844.302-70 DCMC-conducted contractor purchasing system reviews.
1844.302.71 NASA-conducted contractor purchasing systems reviews.
1844.304 Surveillance.
1844.304-70 Contracting officer surveillance.
1844.305 Granting, withholding, or withdrawing approval.
1844.305-70 Review of CPSR report.
Authority: 42 U.S.C. 2473(a)(1).
Subpart 1844.2--Consent to Subcontracts
1844.201 Consent requirements.
1844.201-1 Fixed-price prime contracts. (NASA supplements paragraph
(b))
(b)(2) (A) In determining special surveillance consent
requirements, the contracting officer should consider specific
subcontract awards, as well as any individual systems, subsystems,
components, technologies, and services that should have contracting
officer consent prior to being subcontracted.
(B) For each planned contract award expected to exceed $1 million
in total estimated value (inclusive of options), the contracting
officer should consider such factors as the following to determine
whether certain subcontractors require special surveillance:
(a) The degree of subcontract pricing uncertainties at the time of
contract award;
[[Page 14024]]
(b) The overall quality of the contractor's approach to pricing
subcontractors;
(c) The extent of competition achieved, or to be achieved, by the
contractor in the award of subcontracts;
(d) Technical complexity and the critically of specific supplies,
services, and technologies on the successful performance of the
contract; and
(e) The potential impact of planned subcontracts on source
selection or incentive arrangements.
(C) The contracting officer shall document results of the review in
the contract file. For contract modifications and change orders, the
contracting officer shall make the determination required by paragraph
(b)(2)(B) of this section whenever the value of any subcontract
resulting from the change order or modification is proposed to exceed
$100,000 or is one of the number of subcontracts with a single
subcontractor for the same or related supplies or services that are
expected cumulatively to exceed $100,000.
1844.201-2 Cost reimbursement and letter prime contracts. (NASA
supplements paragraph (c))
(c)(2) The policy in 1844.201-1(b)(2) shall be followed to
determine whether certain subcontracts require special surveillance. In
addition, any subcontract under a cost type prime contract shall be
identified for special surveillance if consent was not provided at the
time of contract award and cost of pricing data would be required in
accordance with FAR 15.806-2(a) (1) or (2).
1844.202 Contracting officer's evaluation.
1844.202 Responsibilities. (NASA supplements paragraph (a))
(a) NASA contracting officers shall retain consent to subcontract
authority unless delegation is approved in writing by the procurement
officer.
1844.204 Contract clauses.
1844.204-70 NASA contract clause.
The contracting officer shall insert the clause at 1852.244-70,
Geographic Participation in the Aerospace Program, in all research and
development solicitations and contracts of $500,000 or over that will
be performed within the United States.
Subpart 1844.3--Contractors' Purchasing Systems Reviews
1844.302 Requirements.
1844.302-70 DCMC-conducted contractor purchasing system reviews.
For contracts within their cognizance, NASA contracting officers
shall be aware of purchasing system approval status and should become
actively involved with the Defense Contract Management Command (DCMC)
in the Contractor Purchasing System Review (CPSR) process. Involvement
should include the following:
(a) Verifying that CPSRs are being conducted as required for each
contractor meeting the thresholds in FAR 44.302.
(b) Ensuring that purchasing system review specifically includes
the business unit performing the NASA contract.
(c) Actively participating as a team member, or arranging NASA
representation, on DCMC CPSRs to review areas of NASA-specific
interest. At a minimum, such participation or representation shall be
arranged when the DCMC CPSR review involves--
(1) Contractors with major NASA programs;
(2) Contractors' business units where the total dollar value of
NASA contracts is substantial; or
(3) Any contractor system where the contracting officer has special
concerns.
(d) Ensuring that the selected CPSR sample to be reviewed reflects
the level of NASA business in the contractor's purchasing organization.
(e) Providing to the cognizant DCMC CPSR team leader any areas of
special emphasis regarding the contractor's purchasing system to ensure
that the review is tailored to address any NASA concerns.
1844.302-71 NASA-conducted contractor purchasing system reviews.
If a NASA activity is the cognizant contract administration
officer, or after coordination with the cognizant DCMC CPSR office it
is determined that a CPSR is required but cannot be accomplished by
DCMC, then a CPSR should be conducted by NASA personnel. The NASA CPSR
team leader:
(a) May use the DOD FAR Supplement, Contractor Purchasing System
Review (CPSR) guidance, as a general guide to conducting the CPSR.
(b) May vary the scope of review depending on the contractor and
contracts involved.
(c) Shall maintain close coordination with the cognizant ACO during
CPSRs at contractors under DOD cognizance.
1844.304 Surveillance.
1844.304-70 Contracting officer surveillance.
(a) In the period between complete CPSRs, NASA contracting officers
shall maintain a sufficient level of surveillance to ensure contractor
purchasing efforts in support of NASA contracts are accomplished in an
appropriate manner and protect the interests of the Agency.
(b) Surveillance shall be accomplished primarily through
performance of subcontract consent reviews. Other methods of
surveillance, including periodic reviews of contractor purchasing
records, may also be conducted. Contracting officers shall document the
results of subcontract consent reviews and periodic reviews,
maintaining a record of contractor subcontract or purchase order award
performance on NASA contracts. Contractor performance shall be
summarized on an annual basis and provided to the ACO cognizant of the
contractor's purchasing system. Annual reports should summarize the
number of consent reviews and other reviews conducted during the year
by NASA representatives, and summarize the types and quantity of
deficiencies identified during reviews, the need for special reviews,
and recommended areas of emphasis during future CPSRs.
1844.305 Granting, withholding, or withdrawing approval.
1844.305-70 Review of CPSR reports.
ACO actions related to purchasing system approval have a potential
impact on NASA contracting officer consent requirements. Accordingly,
NASA contracting officers shall review system deficiencies documented
in CPSR reports and when results of consent reviews and other sources
conflict with CPSR or DOD surveillance conclusions, formally
communicate such concerns to the ACO having cognizance of purchasing
system approval. Significant issues or significant conflicts with DOD
CPSR results should be formally referred to the Office of Procurement
(Code HS).
14. Part 1846 is revised to read as follows:
PART 1846--QUALITY ASSURANCE
Subpart 1846.3--Contract Clauses
Sec.
1846.370 NASA contract clauses.
Subpart 1846.4--Government Contract Quality Assurance
1846.470 Contract clause.
Subpart 1846.6--Material Inspection and Receiving Reports
1846.670 Introduction.
1846.670-1 General.
1846.670-2 Applicability.
1846.670-3 Use.
1846.670-4 Multiple shipments.
1846.670-5 Forms.
1846.671 Contract quality assurance on shipments between
contractors.
[[Page 14025]]
1846.672 Preparing DD Forms 250 and 250c.
1846.672-1 Preparation instructions.
1846.672-2 Consolidated shipments.
1846.672-3 Multiple consignee instructions.
1846.672-4 Correction instructions.
1846.672-5 Invoice instructions.
1846.672-6 Packing list instructions.
1846.672-7 Receiving instructions.
1846.673 Distribution of DD Forms 250 and 250c.
1846.674 Contract clause.
Subpart 1846.7--Warranties
1846.703 Criteria for use of warranties.
1846.703-70 Additional criteria.
1846.704 Authority for use of warranties.
1846.770 Administration.
Authority: U.S.C. 2473(c)(1).
Subpart 1846.3--Contract Clauses
1846.370 NASA contract clauses.
(a) The contracting officer shall insert the clause at 1852.246-70,
Mission Critical Space System Personnel Reliability Program, in
solicitations and contracts involving critical positions designated in
accordance with 14 CFR 1214.5, Mission Critical Space System Personnel
Reliability Program.
(b) The contracting officer shall insert the clause at 1852.246-73,
Human Space Flight Item, in solicitations and contracts for human space
flight hardware and flight-related equipment if the highest available
quality standards are necessary to ensure astronaut safety.
Subpart 1846.4--Government Contract Quality Assurance
1846.470 Contrct clause.
The contracting officer may insert a clause substantially as stated
at 1852.246-71, Government Contract Quality Assurance Functions, in
solicitations and contracts to specify the location(s) of quality
assurance functions.
Subpart 1846.6--Material Inspection and Receiving Reports.
1846.670 Introduction.
1846.670-1 General.
(a) This Subpart contains procedures and instructions for use of
the Material Inspection and Receiving Report (MIRR) (DD Form 250
series) and commercial shipping/packing lists used to evidence
Government contract quality assurance (CQA).
(b) MIRRs are used to document CQA, acceptance of supplies and
services, and shipments. MIRRs are not used for--
(1) Shipments by subcontractors not made to the Government;
(2) Shipment of contractor inventory (see FAR 45.601); or
(3) Movement of Government property unless for original
acquisition.
1846.670-2 Applicability.
(a) This subpart applies to all deliveries of supplies or services
acquired by or for NASA except:
(1) Acquisitions under FAR part 13;
(2) Negotiated subsistence acquisitions; or
(3) Contracts for which the end item is a technical or scientific
report.
(b) The DD Form 250 may be used for imprest fund purchases,
purchase orders, delivery orders placed against Federal Supply Schedule
contracts, delivery orders placed against indefinite-delivery
contracts, or delivery orders placed against blanket purchase
agreements, or when the purchasing, requisitioning, or ordering
document provides for inspection and/or acceptance.
(c) When NASA provides CQA and/or acceptance services for non-NASA
activities, the MIRR shall be prepared in accordance with the
instructions of this subpart unless the contract specifies otherwise.
1846.670-3 Use.
The DD Form 250 is a multipurpose report used for--
(a) Providing evidence of CQA at origin or destination;
(b) Providing evidence of acceptance at origin or destination;
(c) Packing list documentation;
(d) Receiving;
(e) Shipping;
(f) Contractor invoice; and
(g) Contractor invoice support.
1846.670-4 Multiple shipments.
(a) If the ``shipped to,'' ``marked for,'' ``shipped from,''
``CQA,'' and ``acceptance'' data are the same for more than one
shipment made on the same day under the same contract in a single car,
truck, or other vehicle, one MIRR shall be prepared to cover all such
shipments.
(b) If the volume of the shipments precludes the use of a single
car, truck, or other vehicle, a separate MIRR shall be provided for
each vehicle.
1846.670-5 Forms.
(a) Contractors may obtain MIRR forms from the contracting office
at no cost.
(b) Contractors may print forms, provided their format and
dimensions are identical to the MIRR forms printed by the Government.
1846.671 Contract quality assurance on shipments between contractors.
(a) The supplier's commercial shipping document/packing list shall
indicate performance of required CQA actions at subcontract level.
The following entries shall be made on the document/packing list:
Required CQA of items has been performed.
----------------------------------------------------------------------
(Signature of Authorized Government Representative)
----------------------------------------------------------------------
(Date)
----------------------------------------------------------------------
(Typed Name and Office)
(b) Distribution for Government purposes shall be one copy each--
(1) With shipment;
(2) For the Government representative at consignee (via mail); and
(3) For the Government representative at consignor.
1846.672 Preparing DD Forms 250 and 250c.
1846.672-1 Preparation instructions.
(a) General. (1) Dates shall utilize seven spaces consisting of the
last two digits of the year, three-alpha month abbreviation, and two
digits for the day (e.g., 96SEP24).
(2) Addresses shall consist of the name, street address/P.O. box,
city, State, and ZIP code.
(3) The data entered in the blocks at the top of DD Form 250C shall
be identical to the comparable entries in Blocks 1, 2, 3, and 6 of the
DD Form 250.
(4) Overflow data of the DD Form 250 shall be entered in Block 16
or in the body of the DD Form 250c with block cross reference.
Additional DD Form 250c sheets solely for continuation of Block 23 data
shall not be numbered or distributed as part of the MIRR.
(b) Classified information. Classified information shall not appear
on the MIRR, nor shall the MIRR be classified.
(c) Block 1--PROC. INSTRUMENT IDEN. (CONTRACT). Enter the contract
number, with its identifying center prefix, as contained in the
contractual document, including any call/order number.
(d) Block 2--SHIPMENT NO. (1) The shipment number is a three-alpha
character prefix and a four-character numeric or alpha-numeric serial
number.
(i) The prefix shall be controlled and assigned by the prime
contractor and shall consist of three alpha characters for each
``shipped from'' address (Block 11). The prefix shall be different for
each ``Shipped From'' address and shall remain constant throughout the
contract period.
(ii) The serial number for the first shipment under a prime
contract from
[[Page 14026]]
each ``shipped from'' address shall be 0001; subsequent shipments under
that prime contract shall be consecutively numbered. Alpha-numerics
shall be used when more than 9,999 numbers are required. Alpha-numerics
shall be serially assigned, with the alpha in the first position,
followed by the three-position numeric serial number. The alpha-numeric
sequence shall be (the letters I and O shall not be used) A001 through
A999 (10,001 through 10,999); B001 through B999 (11,001 through
11,999); to Z999. When this series is completely used, numbering shall
revert to 0001.
(2) The shipment number of the initial shipment shall be reassigned
when a ``replacement shipment'' is involved (see paragraph (r)(4)(iv)
of this section).
(3) The prime contractor shall control deliveries and on the last
shipment of the contract shall suffix the shipment number with a ``Z''
in addition to that required for line items (see Block 17). If the
contract final shipment is from other than the prime contractor's
plant, the prime contractor may elect
(i) To direct the subcontractor to suffix the ``Z'' or
(ii), On receipt of the subcontractor final shipment information,
to correct the DD Form 250 covering the last shipment from the prime
contractor's plant by adding a ``Z'' to that shipment number.
(e) Block 3--DATE SHIPPED. Enter the date the shipment is released
to the carrier or the date of completion of services. If the shipment
will be released after the date of CQA and/or acceptance, enter the
estimated date of release. When the date is estimated, enter an ``E''
after it. Distribution of the MIRR shall not be delayed for entry of
the actual shipping date. Reissurance of the MIRR is not required to
show the actual shipping date.
(f) Block 4--B/L TCN. When applicable, enter the commercial or
Government bill of lading number after ``B/L''; and the Transportation
Control Number after ``TCN.''
(g) Block 5--DISCOUNT TERMS. (1) The Contractor may enter the
discount in terms of percentages on all copies of the MIRR.
(2) When the MIRR is used as an invoice, see 1846.672-5.
(h) Block 6--INVOICE. (1) The contractor may enter the invoice
number and actual or estimated date on all copies of the MIRR. When the
date is estimated, enter an ``E'' after the date. Do not correct MIRRs
other than invoice copies to reflect the actual date of invoice
submission.
(2) When the MIRR is used as an invoice, see 1846.672-5.
(i) Block 7--PAGE/OF. Consecutively number the pages comprising the
MIRR. On each page, enter the total number of pages of the MIRR.
(j) Block 8--ACCEPTANCE POINT. Enter an ``S'' for origin or ``D''
for destination as specified in the contract as the point of
acceptance. Enter an alphabetic ``O'' for other if the point of
acceptance is not specified in the contract.
(k) Block 9--PRIME CONTRACTOR. Enter the code and address.
(l) Block 10--ADMINISTERED BY. Enter the code and address of the
contracting office cited in the contract.
(m) Block 11--SHIPPED FROM/CODE/FOB. (1) Enter the code and address
of the ``shipped from'' location. If identical to Block 9, enter ``See
Block 9.''
(2) For performance of services that do not require delivery of
items upon completion, enter the code and address of the location at
which the services were performed. If the DD Form 250 covers
performance at multiple locations or if identical to Block 9, enter
``See Block 9.''
(3) Enter on the same line and to the right of ``FOB'' an ``S'' for
origin or ``D'' for destination as specified in the contract. Enter an
alphabetic ``O'' if the FOB point cited in the contract is other than
origin or destination.
(n) Block 12--PAYMENT WILL BE MADE BY. Enter the address of the
payment office cited in the contract.
(o) Block 13--SHIPPED TO/CODE. Enter the code and address from the
contract or shipping instructions.
(p) Block 14--MARKED FOR/CODE. Enter the code and address from the
contract or shipping instructions.
(q) Block 15--ITEM NO. Enter the item number used in the contract.
If four or fewer digits are used, position them to the left of the
vertical dashed line. Where a six-digit identification is used, enter
the last two digits to the right of the vertical dashed line.
(r) Block 16--STOCK/PART NO./DESCRIPTION. (1) Enter, as applicable,
for each item, using single spacing between each line item, the
following:
(i) The Federal Stock Number (FSN) or noncatalog number and, if
applicable, prefix or suffix. When a number is not provided or it is
necessary to supplement the number, include other identification such
as the manufacturer's name or Federal Supply Code (as published in
Cataloging Handbook H4-1), and part numbers. Additional part numbers
may be shown in parentheses. Also enter the descriptive noun of the
item nomenclature and, if provided, the Government-assigned management/
material control code. In the case of equal-kind supply items, the
first entry shall be the description without regard to kind (e.g.,
``Resistor''). Below this description, enter the contract item number
in Block 15 and stock/part number followed by the size or type in Block
16.
(ii) On the next printing line, if required by the contract for
control purposes, enter the make, model, serial number, lot, batch,
hazard indicator, and/or similar description.
(iii) On the next printing line, enter the FEDSTRIP requisition
number(s) when provided in the contract or shipping instructions.
(2) For service items, enter the word ``SERVICE'' followed by a
short description of less than 20 characters. Do not complete items 4,
13, and 14 when material is not shipped.
(3) For all contracts administered by the Defense Contract
Management Command, with the exception of fast pay procedures, enter
and complete the following:
Gross Shipping Wt.____(State weight in pounds only).
(4) Enter on the next line the following as appropriate (entries
may be extended through Block 20). When entries apply to more than one
item in the MIRR, enter them only once after the last item and
reference the applicable item numbers.
(i) Enter in capital letters any special handling instructions/
limits for material environmental control (e.g., temperature, humidity,
aging, freezing, and shock).
(ii) When an FSN is required by, but not cited in, a contract and
has not been furnished by the Government, shipment may be made at the
direction of the contracting officer. Enter the authority for the
shipment.
(iii) When Government-furnished property (GFP) is included with or
incorporated into the line item, enter ``GFP''.
(iv) When the shipment consists of replacements for supplies
previously furnished, enter in capital letters ``REPLACEMENT SHIPMENT''
(see paragraph (s)(3) of this section for replacement indicators.)
(v) For items shipped with missing components, enter and complete
the following: ``Item(s) shipped short of the following component(s):
FSN or comparable identification ________, Quantity ________, Estimated
Value ________, Authority ________.''
(vi) When shipment is made of components that were short on a prior
shipment, enter and complete the following: ``These components were
[[Page 14027]]
listed as shortages on Shipment Number ________, date
shipped________.''
(vii) When shipments involve drums, cylinders, reels, containers,
skids, etc., designated as returnable under contract provisions, enter
and complete the following: ``Return to ________, Quantity ________,
Item ________, Ownership (Government/contractor).''
(viii) Enter shipping container number(s), the type, and the total
number of the shipping container(s) included in the shipment.
(ix) The MIRR shall be used to record and report the waivers and
deviations from contract specifications, including the source and
authority for the waiver or deviation (e.g., the contracting office
authorizing the waiver or deviation and the identification of the
authorizing document).
(x) For shipments involving discount terms, enter ``DISCOUNT
EXPEDITE'' in at least one-inch outline-type letters.
(xi) When test/evaluation results are a condition of acceptance and
are not available before shipment, the following note shall be entered
if the shipment is approved by the contracting officer: ``Note:
Acceptance and payment are contingent upon receipt of approved test/
evalution results.'' The contracting officer shall advise (A) the
consignee of the results (approval/disapproval) and (B) the contractor
to withhold invoicing pending attachment to its invoice of the approved
test/evaluation results.
(xii) The copy of the DD Form 250 required to support payment for
destination acceptance (top copy of the four with shipment) or
Alternative Release Procedure (ARP) origin acceptance (additional copy
furnished to the Quality Assurance Representative (QAR)) shall be
identified by entering ``PAYMENT COPY'' in approximately one-half-inch
outline-type letters with ``FORWARD TO BLOCK 12 ADDRESS'' in
approximately one-quarter-inch letters immediately below. Do not
obliterate any other entries.
(xiii) A double line shall be drawn completely across the form
following the last entry.
(s) Block 17--QUANTITY SHIP/REC'D. (1) Enter the quantity shipped,
using the unit of measure indicated in the contract for payment. When a
second unit of measure is used for purposes other than payment, enter
the appropriate quantity directly below in parentheses.
(2) Enter a ``Z'' below the first digit of the quantity when the
total quantity of the item is delivered, including variations within
contract terms; and all shortages on items previously shipped short are
delivered.
(3) If a replacement shipment is involved, enter below the first
digit of the quantity the letter ``A'' top designate first replacement,
``B'' for second replacement, and so forth. The final shipment
indicator ``Z'' shall not be used when a final line item shipment is
replaced.
(t) Block 18 UNIT. Enter the abbreviation of the unit of measure
indicated in the contract for payment. When a second unit of measure is
indicated in the contract for purposes other than payment or is used
for shipping purposes, enter the abbreviation of the second unit of
measure directly below in parentheses. Authorized abbreviations are
listed in MIL-STD-129, Marking for Shipping and Storage.
(u) Block 19--UNIT PRICE. Enter the unit price on all NASA copies
whenever the MIRR is used for voucher or receiving purposes.
(v) Block 20--AMOUNT. Enter the extended amount when the unit price
is entered in Block 19.
(w) Block 21--CONTRACT QUALITY ASSURANCE. The words ``conform to
contract'' contained in the printed statements in Blocks A and B relate
to contract obligations pertaining to quality and to the quantity of
the items on the report. The statements shall not be modified. Notes
taking exception shall be entered in Block 16 or on attached supporting
documents with block cross reference.
(1) ``A. ORIGIN.''
(i) The authorized Government representative shall--
(A) Place an ``X'' when applicable in the appropriate CQA and/or
acceptance box(es) to evidence origin CQA and/or acceptance. When the
contract requires CQA at destination in addition to origin CQA, an
asterisk shall be entered at the end of the statement and an
explanatory note in Block 16;
(B) Sign and date; and
(C) Enter the typed, stamped, or printed name of the signer and
office code.
(2) ``B. DESTINATION.''
(i) When acceptance at origin is indicated in Block 21A, no entries
shall be made in Block 21B.
(ii) When acceptance of CQA and acceptance are at destination, the
authorized Government representative shall--
(A) Place an ``X'' in the appropriate box(es);
(B) Sign and date; and
(C) Enter the typed, stamped, or printed name of the signer and
office code.
(x) Block 22--RECEIVER'S USE. This block shall be used by the
receiving authority (Government or contractor) to denote receipt,
quantity, and condition. The receiving activity shall enter in this
block the date the supplies arrived. For example, when off-loading or
in-checking occurs subsequent to the day of arrival of the carrier at
the installation, the date of the carrier's arrival is the date
received for purposes of this block.
(y) Block 23--CONTRACTOR USE ONLY. This block is provided and
reserved for contractor use.
1846.672-2 Consolidated shipments.
When individual shipments are held at the contractor's plant for
authorized transportation consolidation to a single destination on a
single bill of lading, the applicable DD Forms 250 may be prepared at
the time of CQA or acceptance prior to the time of actual shipment (see
Block 3).
1846.672-3 Multiple consignee instructions.
The contractor may prepare one MIRR when the identical item(s) of a
contract is to be shipped to more than one consignee, with the same or
varying quantities, and the shipment requires origin acceptance.
Prepare the MIRR using the procedures in this subpart with the
following changes:
(a) Blocks 2, 4, 13, and, if applicable, 14--Enter ``See Attached
Distribution List.''
(b) Block 15--The contractor may group item numbers for identical
stock/part number and description.
(c) Block 17--Enter the ``total'' quantity shipped by item or, if
applicable, grouped identical items.
(d) Use the DD Form 250c to list each individual ``Shipped To'' and
``Marked For'' with--
(1) Code(s) and complete shipping address and a sequential shipment
number for each;
(2) Item number(s);
(3) Quantity;
(4) The FEDSTRIP requisition number and quantity for each when
provided in the contract or shipping instructions; and
(5) If applicable, bill of lading number and mode of shipment code.
1846.672-4 Correction instructions.
When, because of errors or omissions, it is necessary to correct
the MIRR after distribution, it shall be revised by correcting the
original master and distributing the corrected form. The corrections
shall be made as follows:
(a) Circle the error and place the corrected information in the
same block. If space is limited, enter the corrected information in
Block 16, referencing the error page and block.
[[Page 14028]]
(b) When corrections are made to Blocks 15 and 17, enter the words
``CORRECTIONS HAVE BEEN VERIFIED'' on page 1. The authorized Government
representative shall date and sign immediately below the statement.
This verification statement and signature are not required for other
corrections.
(c) MIRRs shall not be corrected for Block 19 and 20 entries.
(d) Clearly mark pages of the MIRR requiring correction with the
words ``CORRECTED COPY'', avoiding obliteration of any other entries.
Even though corrections are made on continuation sheets only, also mark
page 1 ``CORRECTED COPY''.
(e) Page 1 and only those continuation pages marked ``CORRECTED
COPY'' shall be distributed to the initial distribution. A complete
MIRR with corrections shall be distributed to new addressee(s) created
by error corrections.
1846.672-5 Invoice instructions.
The Government encourages, but does not require, contractors to use
copies of the MIRR as an invoice in lieu of a commercial form. If the
MIRR is used as an invoice, four copies shall be prepared and forwarded
to the payment office as follows:
(a) Complete Blocks 5, 6, 19, and 20.
(b) Mark, in letters approximately one inch high, the first copy
``ORIGINAL INVOICE'' and the remaining three copies ``INVOICE COPY''.
(c) Forward the four copies to the payment office (Block 12
address).
1846.672-6 Packing list instructions.
Copies of the MIRR may be used as a packing list. The packing list
copies shall be in addition to the copies of the MIRR required for
distribution (see 1846.673) and shall be marked ``PACKING LIST''.
1846.672-7 Receiving instructions.
When the MIRR is used for receiving purposes, procedures shall be
as prescribed by local directives. If acceptance or CQA and acceptance
of supplies are required upon arrival at destination, see Block 21B for
instructions.
1846.673 Distribution of DD Forms 250 and 250c.
(a) DD Forms 250 and 250c shall be distributed in accordance with
installation procedures.
(b) The contractor is responsible for distributing DD Forms 250 and
250c in accordance with the provisions of the contract or instructions
of the contracting officer.
1846.674 Contract clause.
The contracting officer shall insert the clause at 1852.246-72,
Material Inspection and Receiving Report, in solicitations and
contracts, except those using simplified acquisition procedures or
where the only deliverable items are technical or scientific reports.
Insert the number of copies to be prepared. Paragraph (a) may be
changed to specify advance copies or separate distribution of the DD
Form 250.
Subpart 1846.7--Warranties
1846.703 Criteria for use of warranties.
1846.703-70 Additional criteria.
In deciding whether to use a warranty clause, at least the
following factors shall be considered in addition to those at FAR
46.703:
(a) Cost of correction or replacement, either by the contractor or
by another source, in the absence of a warranty;
(b) The warranty as a deterrent against the furnishing of defective
or nonconforming supplies;
(c) Whether the contractor's quality program is reliable enough to
provide adequate protection without a warranty, or, if not, whether a
warranty would cause the contractor to institute an effective quality
program;
(d) Reliance on ``brand-name'' integrity; and
(e) Whether a warranty is regularly given for a commercial
component of a more complex end item.
1846.704 Authority for use of warranties. (NASA paragraphs (1), (2)
and (3))
(1) A warranty clause may be used when it is found to be in the
best interests of the Government, after an analysis of the factors
listed in 1846.703-70 and FAR 46.703.
(2) Except for the warranty of commercial items (see FAR 12.404 and
46.709), and warranties contained in Federal, military, or construction
specifications, the decision to use a warranty clause or to include a
warranty provision in a specification other than a Federal, military,
or construction specification shall be made only upon the written
authorization of the procurement officer or a designee. This decision
may be made either for individual acquisitions or classes of
acquisitions.
(3) Warranties required by applicable architect-engineer
specifications shall be included in construction contracts.
1846.770 Administration.
When notified of a defect in warranted items, the contracting
officer should ascertain whether the warranty is currently in effect
and ensure that the contractor is given proper and timely notice of the
defect.
15. Part 1847 is revised to read as follows:
PART 1847--TRANSPORTATION
Subpart 1847.2--Contracts for Transportation or for Transportation-
Related Services
Sec.
1847.200 Scope of subpart.
1847.200-70 Charter of aircraft.
Subpart 1847.3--Transportation in Supply Contracts
1847.304 Determination of delivery terms.
1847.304-3 Shipments from CONUS for overseas delivery.
1847.304-370 NASA export privilege.
1847.305 Solicitation provisions, contract clauses, and
transportation factors.
1847.305-10 Packing, marking, and consignment instructions.
1847.305-13 Transit arrangements.
1847.305-70 NASA contract clauses.
Subpart 1847.5--Ocean Transportation by U.S.-Flag Vessels
1847.506 Procedures.
Subpart 1847.70--Protection of the Florida Manatee
1847.7001 Contract clause.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1847.2--Contracts for Transportation or for Transportation-
Related Services
1847.200 Scope of subpart.
1847.200-70 Charter of aircraft.
When acquiring aircraft by charter, contracting officers shall
comply with NHB 7900.3, Aircraft Operations Management Manual.
Subpart 1847.3--Transportation in Supply Contracts
1847.304 Determination of delivery terms.
1847.304-3 Shipments from CONUS for overseas delivery.
1847.304-370 NASA export privilege.
NASA has export licensing privileges for moving commodities to
foreign destinations. Contracting officers shall request the advice of
the Center Export Administrator to ensure full and appropriate use is
made of these privileges.
1847.305 Solicitation provisions, contract clauses, and transportation
factors.
1847.305-10 Packing, marking, and consignment instructions.
In contracts providing for delivery f.o.b. origin and shipment
under Government bills of lading, consignment instructions may be
limited to the mail address of the
[[Page 14029]]
consignee (receiving activity), provided the contract instructions
state: ``Shipment other than mail shall be consigned as indicated on
the Government bill of lading furnished to the contractor.''
1847.305-13 Transit arrangements. (NASA supplements paragraph (a))
(a)(3)(ii) When the provision at FAR 52.247-56 is used, the
solicitation shall state that offers will be evaluated on the basis of
the lowest overall cost to the Government, including transportation
costs to NASA from point of origin to final destination, taking into
account any applicable transit privileges.
1847.305-70 NASA contract clauses.
(a) The contracting officer may insert a clause substantially as
stated at 1852.247-72, Advance Notice of Shipment, in solicitations and
contracts when the f.o.b. point is destination and special Government
assistance is required in the delivery or receipt of the items.
(b) The contracting officer may insert a clause substantially as
stated at 1852.247-73, Shipment of Government Bills of Lading, in
f.o.b. origin solicitations and contracts.
Subpart 1847.5--Ocean Transportation by U.S.-Flag Vessels
1847.506 Procedures. (NASA supplements paragraph (d))
(d)(i) The transportation officer in each installation shall
establish and maintain a register to reflect adherence to the Cargo
Preference Act. The register shall contain data related to shipments
made by the installation and by NASA contractors. Where no
transportation officer is available, it shall be maintained by the
contracting office. The register shall contain pertinent details of
ocean shipments including, but not limited to, the ports of origin and
destination of shipments, commodity descriptions, gross weight, freight
revenue, name of vessel, operator of vessel, and date of loading. The
register shall be maintained current and organized so that adherence to
the Cargo Preference Act can be ascertained at all times. To the
maximum practicable extent, compliance with the 50-percent minimum
requirements of the Cargo Preference Act shall be maintained on a
quarter-year basis; any deficiencies in maintaining compliance shall be
corrected by the end of the calendar year.
(ii) On the basis of the registers maintained under paragraph
(d)(i) of this section, the official maintaining the register shall
submit quarterly reports reflecting ocean shipments to the Division of
National Cargo, Office of Market Development, Maritime Administration,
Department of Transportation, Washington, DC, 20590. Negative reports
are required when applicable.
Subpart 1847.70--Protection of the Florida Manatee
1847.7001 Contract clause.
The contracting officer shall insert the clause at 1852.247-71,
Protection of the Florida Manatee, in solicitations and contracts when
deliveries or vessel operations, dockside work, or disassembly
functions under the contract will involve use of waterways inhabited by
manatees. The clause shall also be included in applicable subcontracts
(including vendor deliveries).
16. Part 1848 is revised to read as follows:
PART 1848--VALUE ENGINEERING
Subpart 1848.1--Policies and Procedures
Sec.
1848.102 Policies.
1848.103 Processing value engineering change proposals.
1848.104 Sharing arrangements.
1848.104-2 Sharing collateral savings.
Subpart 1848.2--Contract Clauses
1848.201 Clauses for supply or service contracts.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1848.1--Policies and Procedures
1848.102 Policies. (NASA supplements paragraphs (a) and (f))
(a) The Associate Administrator for Procurement (Code HS) is the
approval authority for exemptions.
(f) In calculating instant or future contract savings on firm-
fixed-price contracts when the parties have not set out a specific
figure for profit, the contracting officer shall use the total contract
price as the basis for calculating the savings.
1848.103 Processing value engineering change proposals. (NASA
supplements paragraph (a))
(a) Upon receipt of a VECP, the contracting officer shall promptly
forward it to the technical officer responsible for the contract with
the following information:
(i) Date of VECP receipt;
(ii) Date for notifying the contractor of VECP acceptance or
rejection;
(iii) Notification of the potential for awarding concurrent,
future, or collateral savings to the contractor if the VECP is
accepted;
(iv) Request for a technical evaluation, with complete rationale
for recommended acceptance or rejection, to include if acceptance is
recommended:
(A) An estimate of the type of savings, Government costs, etc.,
that can be expected from its acceptance;
(B) A procurement request setting forth the specification changes
to be used in any contract modification accepting the VECP in whole or
in part; and
(C) Additional funds if acceptance of the VECP results in negative
instant contract savings.
(v) Technical evaluation due date.
1848.104 Sharing arrangements.
1848.104-2 Sharing collateral savings.
The contracting officer is authorized to make the determination
that the cost of calculating and tracking collateral savings will
exceed the benefits to be derived.
Subpart 1848.2--Contract Clauses
1848.201 Clauses for supply or service contracts. (NASA supplements
paragraphs (a), (b), (c), and (d))
(a)(6) The Associate Administrator for Procurement (Code HS) is the
approval authority for exemptions.
(b) The contracting officer shall not insert the clause at FAR
52.248-1, Value Engineering, either with or without its Alternates, in
an R&D contract where the statement of work is essentially an
incorporation by reference of the prospective contractor's proposal. If
any other part of the statement of work in such a contract reflects a
Government specification that might benefit from application of VE
techniques, the contracting officer shall consider inserting the VE
incentive clause at FAR 52.248-1 with any applicable Alternate(s), and
establish the applicability of the clause to that part.
(c) Except as prescribed in paragraph (b) of this section, the
contracting officer shall insert the clause at FAR 52.248-1 with its
Alternate I in initial production contracts for major systems, and
major systems R&D contracts for full-scale development, unless the
contracting officer determines in writing that its use is
inappropriate. Use of Alternate I is appropriate for an R&D major
systems contract only if the contract specifications contain detailed
requirements that lend themselves to VE.
(d) The contracting officer shall insert the clause at FAR 52.248-1
with its Alternate II under the conditions prescribed in paragraph (c)
of this section
[[Page 14030]]
17. Part 1849 is revised to read as follows:
PART 1849--TERMINATION OF CONTRACTS
Subpart 1849.1--General Principles
Sec.
1849.101 Authorities and responsibilities.
1849.101-70 NASA authorities and responsibilities.
1849.101-71 Termination authority.
1849.102 Notice of termination.
1849.102-70 Prior clearance of significant contract terminations.
1849.105 Duties of termination contracting officer after issuance
of notice of termination.
1849.105-70 Termination docket checklist.
1849.110 Settlement negotiation memorandum.
1849.110-70 Memorandum contents.
1849.111 Review of proposed settlements.
Subpart 1849.5--Contract Termination Clauses
1849.505 Other termination clauses.
1849.505-70 NASA contract clause.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1849.1--General Principles
1849.101 Authorities and responsibilities.
1849.101-70 NASA authorities and responsibilities.
(a) Installations shall appoint a termination contracting officer
(TCO) (see FAR 2.101) to perform specific duties relating to contract
termination as one of that individual's primary functions. In addition
to the responsibilities described in this part and FAR part 49, such
duties should include--
(1) Reviewing NASA Forms 1412, Termination Authority;
(2) Reviewing the contract and related documents before issuing the
notice of termination, to ensure protection of the Government's rights
under the contract; and
(3) Issuing notices of termination, reinstatement, and recision to
contractors;
(b) Contracting offices shall utilize the services of the
Department of Defense and other Government agencies whenever possible
to administer and negotiate settlement of terminated contracts.
Delegation of the negotiation of termination settlement function shall
be made in accordance with FAR subpart 42.2 and 1842.2.
1849.101-71 Termination authority.
NASA Form 1412, Termination Authority, is prescribed for use by
NASA installations when initiating action to terminate a contract for
convenience or default. The project manager or the activity initiating
the procurement request should initiate the action by completing NASA
Form 1412 and submitting it to the contracting officer.
1849.102 Notice of termination.
1849.102-70 Prior clearance of significant contract terminations.
(a) Congressional notification is required for any termination
involving a reduction in employment of 100 or more contractor
employees. Proposed terminations must be cleared through the
Headquarters Office of Legislative Affairs (Code LB) before release of
the termination notice, or any information on the proposed termination,
to the contractor. Proposed terminations expected to result in a
reduction of fewer than 100 should be similarly cleared if the
installation believes it to be significant.
(b) The contracting officer shall submit the following information
to Code LB, and a copy to the Office of Procurement (Code HS), as soon
as possible after the decision to terminate is made. Until clearance is
obtained, this information shall be treated as ``For Official Use
Only'' unless the information is classified.
(1) Contract number.
(2) Date of award.
(3) Type of award.
(4) Name of company.
(5) Nature of contract or end item.
(6) Reasons for the termination.
(7) Contract price of items terminated.
(8) Total number of contractor employees involved, including the
Government's estimate of the number that may be discharged.
(9) Anticipated impact on the company and the community.
(10) Name of the community affected.
(11) Area labor category.
(12) Whether contractor is large or small business.
(13) Any known impact on disadvantaged employment programs.
(14) Total number of subcontractors involved and the impact in this
area, if known.
(15) Unclassified draft of suggested press release.
(c) To minimize termination costs, Code LB shall act promptly on
the request and provide a response not later than two working days
after receipt of the information in paragraph (b) of this section.
1849.105 Duties of termination contracting officer after issuance of
notice of termination.
1849.105-70 Termination docket checklist.
The termination contracting officer shall complete NASA Form 1413,
Termination Docket Checklist.
1849.110 Settlement negotiation memorandum.
1849.110-70 Memorandum contents.
The TCO shall include the following information in the settlement
negotiation memorandum. Contractors and subcontractors are encouraged
to use this format appropriately modified for subcontract settlements
submitted for review and approval.
(a) General information--(1) Identification. (i) Name and address
of the contractor and any pertinent affiliation between prime
contractors and subcontractors relative to the overall settlement.
(ii) Names and titles of contractor and Government personnel who
participated in the negotiation.
(2) Description of terminated contract.
(i) Contract number;
(ii) Date of award;
(iii) Contract type;
(iv) General description of contract items;
(v) Total contract price; and
(vi) Applicable contract termination provisions and clause.
(3) Termination notice.
(i) Date of the termination notice;
(ii) Effective date of termination;
(iii) Scope and nature of termination (complete or partial);
(iv) Items terminated;
(v) Unit prices;
(vi) Total price of items terminated for fixed-price contracts or
the estimated cost and fee applicable to items terminated for cost-
reimbursement type contracts;
(vii) Whether the termination notice was amended and, if so, why;
(viii) Whether the contractor stopped work on the termination
effective date (if it did not, furnish details) and whether
subcontracts were terminated promptly;
(ix) Any redirection of common items and return of goods to the
contractor's suppliers; and
(x) Extent of contract performance and timely deliveries by the
contractor.
(b) Contractor's settlement proposal--(1) Date and amount. Date and
location where the claim was filed and its gross amount (if interim
settlement proposals were filed, information shall be furnished for
each claim).
(2) Basis of claim. E.g., inventory, total cost, or other basis,
including an explanation of any approvals granted in connection with
submission on other than an inventory basis.
(3) Examination of proposal. Types of reviews made and by whom
(audit, engineering, legal, or other).
(c) Tabular summary of contractor's claim and the settlement. The
cost
[[Page 14031]]
elements/items, the amounts claimed, the Government recommended
position (including auditor, field, and technical personnel
recommendations), and the negotiated settlement amounts. This summary
shall include, if appropriate, previously reimbursed and unreimbursed
costs applicable to the prime contractor and subcontractor, previous
profit/fees paid and unpaid; settlement cost less disposal credit or
other credits, and a recapitulation of previous settlements. The
summary of the negotiated settlement shall include the amount claimed
and allowed for contractor and/or subcontractor changes, disposal,
prior payment credits, and contract price.
(d) Settlement narrative summary.
(1) Contractor's cost.
(2) Profit/Fee.
(3) Settlement expenses not included in the audit.
(4) Number and dollar amount of any subcontractor settlements
approved by the TCO and concluded by the contractor under delegation of
authority.
(5) Total amount of any partial payments.
(6) Total of unliquidated progress or advance payments.
(7) Claims of the Government against the contractor included in
settlement agreement reservations.
(8) Assignments, including the name and address of each assignee.
(9) Disposal credits.
(10) Status of plant clearance actions and all inventory sold,
retained, or otherwise properly disposed of in accordance with
applicable plant clearance regulations, including a consolidated
closing plant clearance report, if applicable.
(11) Status of Government property accountability.
(12) Disposition of any special tooling, if applicable.
(13) Proposed reservations of rights to the Government or to the
contractor.
(e) Recommendation. Amount of the gross settlement recommended and
TCO statement that it is fair and reasonable to the Government and the
contractor.
(f) TCO Signature and date.
1849.111 Review of proposed settlements. (NASA paragraphs (1) and (2))
(1) Settlements shall be reviewed in accordance with center-
prescribed procedures.
(2) The TCO may authorize the contract administration office
cognizant of a lower-tier subcontractor grant approval or ratification
of proposed subcontractor settlements described in FAR 49.108-3(c) that
are first reviewed and referred by the prime contractor to the TCO.
This procedure is not applicable to settlements between the contractor
and its first tier subcontractors.
Subpart 1849.5--Contract Termination Clauses
1849.505 Other termination clause.
1849.505-70 NASA contract clause.
The contracting officer shall insert the clause at 1852.249-72,
Termination (Utilities), in all solicitations and contracts for
utilities services.
18. Part 1850 is revised to read as follows:
PART 1850--EXTRAORDINARY CONTRACTUAL ACTIONS
Subpart 1850.2--Delegation of and Limitations on Exercise of Authority
Sec.
1850.202 Contract adjustment boards.
Subpart 1850.3--Contract Adjustments
1850.305 Processing cases.
1850.305-70 Submission of request to the Contract Adjustment Board.
1850.306 Disposition.
1850.306-70 Implementation of the Contract Adjustment Board's
decision.
Subpart 1850.4--Residual Powers
1850.403 Special procedures for unusually hazardous or nuclear
risks.
1850.403-1 Indemnification requests.
1850.403-170 Subcontractor indemnification requests.
1850.403-2 Action on indemnification requests.
1850.470 Lead NASA installation.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1850.2--Delegation of and Limitations on Exercise of
Authority
1850.202 Contract adjustment boards.
14 CFR part 1209, subpart 3, Contract Adjustment Board, establishes
the Contract Adjustment Board (CAB) as the approving authority to
consider and dispose of requests from NASA contractors for
extraordinary contractual actions.
Subpart 1850.3--Contract Adjustments
1850.305 Processing cases.
1850.305-70 Submission of request to the Contract Adjustment Board.
(a) After investigating the facts and issues relevant to the
contractor's request, the contracting officer shall forward the request
to the Associate General Counsel for General Law (Code GG), including
in the forwarding letter--
(1) The nature of the case;
(2) The recommended disposition; and,
(3) If contractual action is recommended, the contracting officer's
opinion that the action will facilitate the national defense.
(b) The forwarding letter shall enclose the contractor's request,
all supporting material submitted by the contractor, and any material
the contracting officer has obtained while investigating the facts and
issues relevant to the request. Any classified information in the
material forwarded shall be so identified.
(c) Electronic submittal is preferred for unclassified material.
1850.306 Disposition.
1850.306-70 Implementation of the Contract Adjustment Board's
decision.
(a) The contracting officer shall take action authorized in the
CAB's decision.
(b) Immediately upon execution, including any required Headquarters
approval, of a contract or contract modification or amendment
implementing the CAB decision, the contracting officer shall forward a
copy of the contractual document to the Associate General Counsel for
General Law (Code GG).
Subpart 1850.4--Residual Powers
1850.403 Special procedures for unusually hazardous or nuclear risks.
1850.403-1 Indemnification requests. (NASA supplements paragraph (a))
(a) The contractor shall also provide evidence, such as a
certificate of insurance or other customary proof of insurance, that
such insurance is either in force or is available and will be in force
during the indemnified period.
1850.403-170 Subcontractor indemnification requests.
Subcontractors shall submit requests for indemnification to the
prime contractor and through higher tier subcontractor(s), as
applicable. If the prime contractor agrees an indemnity clause should
be flowed down to the subcontractor, the prime contractor shall forward
its written request for subcontractor indemnification to the cognizant
contracting officer for approval in accordance with FAR 50.403-1. The
prime contractor's request shall provide information responsive to
1850.403-1, FAR 50.403-1, and FAR 50.403-2(a) (1), (2), (4), (5) and
(7). The agreed upon definition of the unusually hazardous risk to be
incorporated into the subcontract shall be the same as that
incorporated in the prime contract.
[[Page 14032]]
1850.403-2 Action on indemnification requests. (NASA supplements
paragraphs (a) and (d))
(a) If recommending approval, the contracting officer shall forward
the required information to the Associate Administrator for Procurement
(Code HS), along with the following:
(i) For contracts of five years duration or longer, a
determination, with supporting rationale, whether the indemnification
approval and insurance coverage and premiums should be reviewed for
adequacy and continued validity at points in time within the extended
contract period.
(ii) A recommended Memorandum of Decision. In addition to the
applicable requirements of FAR 50.306, the Memorandum of Decision shall
contain the following:
(A) The specific definition of the unusually hazardous risk to
which the contractor is exposed in the performance of the contract(s);
(B) A complete discussion of the contractor's financial protection
program; and
(C) The extend to, and conditions under, which indemnification is
being approved for subcontracts.
(d) If approving subcontractor indemnification, the contracting
officer shall document the file with a memorandum for record addressing
the items set forth in FAR 50.403-2(a) and include an analysis of the
subcontractor's financial protection program. In performing this
analysis, the contracting officer shall take into consideration the
availability, cost, terms and conditions of insurance in relation to
the unusually hazardous risk.
1850.470 Lead NASA installation.
(a) Contractors applying for indemnification shall determine which
NASA installation has the highest dollar amount of contracts for which
indemnification is requested. The indemnification request should be
submitted to the procurement officer for that installation, who will
then designate a cognizant contracting officer. Contractors shall
submit a single request and ensure duplicate requests are not submitted
by associate divisions, subsidiaries, or central offices of the
contractor.
(b) The receiving installation will become the lead installation
and will remain so indefinitely. Lead installation designation may
change to another installation if the affected procurement officers
agree to the change. Should a change occur in the lead installation,
all records related to indemnification of that contractor shall be
transferred to the gaining installation.
19. Part 1851 is revised to read as follows:
PART 1851--USE OF GOVERNMENT SOURCES BY CONTRACTORS
Subpart 1851.1--Contractor Use of Government Supply Sources
Sec.
1851.101 Policy.
1851.102 Authorization to use Government supply sources.
1851.102-70 Contractor acquisition of filing cabinets.
Authority: 42 U.S.C. 2473(c)(1).
Subpart 1851.1--Contractor Use of Government Supply Sources
1851.101 Policy.
Use of official Government mailing privileges by NASA contractors
is covered in NMI 1450.11, NASA Mail Management Program.
1851.102 Authorization to use Government supply sources. (NASA
supplements paragraph (e)).
(e) The contracting officer shall use substantially the following
format for letters authorizing contractor use of Government supply
sources:
SUBJECT: Authorization to Lease, Rent, or Purchase from General
Services Administration (GSA) Supply Sources
(Contractor's name)----------------------------------------------------
(Address)--------------------------------------------------------------
(1) You are hereby authorized to act for the Government in the
following matters:
(i) The acquisition of supplies and/or services under Contract
No. ________ available for purchase by Government agencies either
directly from GSA stock or under Federal Supply Schedules, including
GSA nonmandatory ADTS/ADP schedule contracts and GSA ADP
requirements contracts, subject to the limitations set forth in this
authorization.
(ii) The leasing or rental of equipment for use on Contract No.
________ available for lease or rental by Government agencies under
Federal Supply Schedules, including GSA nonmandatory ADTS/ADP
schedule contracts and GSA ADP requirements contracts, subject to
the limitations set forth in this authorization.
(iii) The issuance of tax exemption certificates in lieu of the
payment of State or other taxes for which the government is not
liable on supplies or services purchased under this authorization.
(2)(i) Purchase orders under GSA schedules and contracts shall
be placed in accordance with the terms and conditions of the GSA
schedule or contract and this authorization. A copy of this
authorization shall be attached to the order (unless a copy was
previously furnished to the GSA contractor) and shall contain the
following statement:
``This order is placed on behalf of the National Aeronautics and
Space Administration in furtherance of United States Government
Contract No. ________, pursuant to written authorization dated
________, a copy of which (is attached) (you have on file). In the
event of any inconsistency between the terms and conditions of this
order and those of the applicable GSA schedule/contract, the latter
will govern.''
(ii) Orders for items in the GSA Supply Catalog shall be placed
in accordance with the Catalog and this authorization and shall
include the address to which billings are to be sent. Bills are not
issued by GSA until after shipment has been made and should
therefore be paid promptly. Any necessary adjustments will be made
by GSA subsequent to payment. All orders shall contain the following
statement:
``This order is placed on behalf of the National Aeronautics and
Space Administration in furtherance of United States Government
Contract No. ________, pursuant to written authorization dated
________, a copy of which (is attached) (you have on file).''
(3) (Insert any other provisions and restrictions.)
(4) The authority hereby granted is not transferable or
assignable.
----------------------------------------------------------------------
(Contracting Officer)
(e)(3) Contracting officers shall use NHB 4100.1, NASA Materials
Inventory Management Manual, to obtain activity address codes to enable
use of FEDSTRIP and MILSTRIP.
1851.102-70 Contractor acquisition of filing cabinets.
(a) The Contractor officer must approve any planned contractor
acquisition of filing cabinets whose title will vest in the Government.
The contracting officer shall ensure that the contractor takes the
following actions before submitting a request for approval:
(1) Transfer inactive records to contractor storage areas;
(2) Dispose of unnecessary records in accordance with corporate
procedures;
(3) Use less expensive shelf filing methods; and
(4) Take other actions to reduce the need for filing cabinets.
(b) If after taking the actions in paragraphs (a)(1) through (4) of
this section, the contractor requires additional filing capacity, it
shall submit for contracting officer approval a request to order filing
cabinets. This request shall include a discussion of why sufficient
additional filing capacity is necessary and shall address the results
of the actions in paragraphs (a)(1) through (4) of this section. The
contracting officer shall review the request in consultation with the
Records Management Officer, the Property and Supply Officer, and the
project officer, is appropriate.
(c) If the need for filing cabinets is approved, the contracting
officer shall
[[Page 14033]]
attempt to fill the need by providing any available excess items of the
type required through appropriate property accountability channels.
Approved requests that cannot be filled from excess shall be returned
to the contractor with an authorization to obtain file cabinets,
preferably through GSA.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1852.211-72, 1852.211-74 [Removed]
20-21. Sections 1852.211-72 and 1852.211-74 are removed.
1852.223-70 [Amended]
22. In the clause to section 1852.223-70, the date ``(FEB 1996)''
is revised to read ``(MAR 1997)'', and in paragraph (g)(2) of the
clause the phrase ``A certification program'' is revised to read
``Qualification standards''.
1852.223-73 [Amended]
23. In the introductory text to section 1852.223-73, the citation
``1823.7001'' is revised to read ``1823.7001(c)'', and in the
introductory text to ALTERNATE I of section 1852.223-73, the citation
``1823-7001'' is revised to read ``1823.7001(d)''.
1852.243-70, 1852.243-71 [Amended]
24. Sections 1852.243-70 and 1852.243-71 are revised to read as
follows:
1852.243-70 Engineering change proposals.
As prescribed in 1843.205-70(a), insert the following clause,
modified to suit contract type:
ENGINEERING CHANGE PROPOSALS (MAR 1997)
(a) Definitions.
ECP means an Engineering Change Proposal (ECP) which is a
proposed engineering change and the documentation by which the
change is described, justified, and submitted to the procuring
activity for approval or disapproval.
MIL-STD-973 means a DOD publication entitled, Military Standard
Configuration Control--Egnineering Changes, Deviations and Waivers,
15 July 1988.
(b) Either party to the contract may originate ECPs. The
originator shall forward proposed ECPs to the Contracting Officer.
Unless another process has been approved by the Government or
specified by the Contracting Officer, the ECP formats, forms and
controls specified in MIL-STD-973 shall be used. Implementation of
an approved ECP may occur by either a supplemental agreement or, if
appropriate, as a written change order to the contract.
(c) Any ECP submitted to the Contracting Officer shall include a
``not-to-exceed'' ______ [price or estimated cost] increase or
decrease adjustment amount, if any, and the required [time of
delivery or period of performance] adjustment, if any, acceptable to
the originator of the ECP. If the change is originated within the
Government, the Contracting Officer shall obtain a written agreement
with the Contractor regarding the ``not-to-exceed'' ______ [price or
estimated cost] and [delivery or period of performance] adjustments,
if any, prior to issuing an order for implementation of the change.
(d) After submission of a Contractor initiated ECP, the
Contracting Officer may require the Contractor to submit the
following information:
(1) Cost or pricing data in accordance with FAR 15.804-6 if the
proposed change meets the criteria for its submission under FAR
15.804-2; or
(2) Information other than cost or pricing data adequate for
Contracting Officer determination of price reasonableness or cost
realism. The Contracting Officer reserves the right to request
additional information if that provided by the Contractor is
considered inadequate for that purpose. If the Contractor claims
applicability of one of the exceptions to submission of cost or
pricing data, it shall cite the exception and provide rationale for
its applicability.
(e) If the ECP is initiated by NASA, the Contracting Officer
shall specify the cost information requirements, if any.
(End of clause)
ALTERNATE I (SEPT 1990)
As prescribed in 1843.205-70(b), add the following paragraph
(e), modified to suit contract type, to the basic clause:
(e) If the ______ [price of estimated cost] adjustment proposed
for any Contractor-originated ECP is ______ [Insert a percent or
dollar amount of the contract price or estimated cost.] or less, the
ECP shall be executed with no adjustment to the contract ______
[price or estimated cost].
ALTERNATE II (SEPT 1990)
As prescribed in 1843.205-70(c), add the following sentence at
the end of paragraph (c) of the basic clause:
An ECP accepted in accordance with the Changes clause of this
contract shall not be considered an authorization to the Contractor
to exceed the estimated cost in the contract Schedule, unless the
estimated cost is increased by the change order or other contract
modification.
1852.243-71 Shared savings.
As prescribed in 1843.7102, insert the following clause:
SHARED SAVINGS (MAR 1997)
(a) The Contractor is entitled, under the provisions of this
clause, to share in cost savings resulting from the implementation
of cost reduction projects which are presented to the Government in
the form of Cost Reduction Proposals (CRP) and approved by the
Contracting Officer. These cost reduction projects may require
changes to the terms, conditions or statement of work of this
contract. Any cost reduction projects must not change the essential
function of any products to be delivered or the essential purpose of
services to be provided under the contract.
(b) Definitions:
(1) Cost savings, as contemplated by this clause mean savings
that result from instituting changes to the covered contract, as
identified in an approved Cost Reduction Proposal.
(2) Cost Reduction Proposal--For the purposes of this clause, a
Cost Reduction Proposal means a proposal that recommends
alternatives to the established procedures and/or organizational
support of a contract or group of contracts. These alternatives must
result in a net reduction of contract cost and price to NASA. The
proposal will include technical and cost information sufficient to
enable the Contracting Officer to evaluate the CRP and approve or
disapprove it.
(3) Covered contract--As used in this provision, covered
contract means the contract, including unexercised options but
excluding future contracts, whether contemplated or not, against
which the CRP is submitted.
(4) Contractor implementation costs--As used in this provision,
Contractor implementation costs, or ``implementation costs'', shall
mean those costs which the Contractor incurs on covered contracts
specifically in developing, preparing, submitting, and negotiating a
CRP, as well as those costs the Contractor will incur on covered
contracts to make any structural or organizational changes in order
to implement an approved CRP.
(5) Government costs--As used in this provision, the term
Government costs means internal costs of NASA, or any other
Government agency, which result directly from development and
implementation of the CRP. These may include, but are not limited
to, costs associated with the administration of the contract or with
such contractually related functions such as testing, operations,
maintenance and logistics support. These costs also include costs
associated with other Agency contracts (including changes in
contract price or cost and fee) that may be affected as a result of
the implementation of a CRP. They do not include the normal
administrative costs of reviewing and processing the Cost Reduction
Proposal.
(c) General. The Contractor will develop, prepare and submit
CRP's with supporting information as detailed in paragraph (e) of
this clause, to the Contracting Officer. The CRP will describe the
proposed cost reduction activity in sufficient detail to enable the
Contracting Officer to evaluate it and to approve or disapprove it.
The Contractor shall share in any net cost savings realized from
approved and implemented CRPs in accordance with the terms of this
clause. The Contractor's actual percentage share of the cost savings
shall be a matter for negotiation with the Contracting Officer, but
shall not, in any event, exceed 50 percent of the total cost savings
recognized by the Contracting Officer. The Contractor may propose
changes in other activities that impact performance on its contract,
including Government and other Contractor operations, if such
changes will optimize cost savings. A Contractor shall not be
entitled to share, however, in any cost savings that are
[[Page 14034]]
internal to the Government, or which result from changes made to any
contracts to which it is not a party even if those changes were
proposed as a part of its CRP. Early communication between the
Contractor and Government is encouraged. The communication may be in
the form of a concept paper or preliminary proposal. The Government
is not committed to accepting any proposal as a result of these
early discussions.
(d) Computation of cost savings. The cost savings to be shared
between the Government and the Contractor will be computed by the
Contracting Officer by comparing a current estimate to complete
(ETC) for the covered contract, as structured before implementation
of the proposed CRP, to a revised ETC which takes into account the
implementation of that CRP. The cost savings to be shared shall be
reduced by any cost overrun, whether experienced or projected, that
is identified on the covered contract before implementation of the
CRP. Although a CRP may result in cost savings that extend far into
the future, the period in which the Contractor may share in those
savings will be limited to no more than five years. Implementation
costs of the Contractor must be considered and specifically
identified in the revised ETC. The Contracting Officer shall offset
Contractor cost savings by any increased costs (whether implementing
or recurring) to the Government when computing the total cost
savings to be shared. The Contractor shall not be entitled, under
the provisions of this clause, to share in any cost reductions to
the contract that are the result of changes stemming from any action
other than an approved CRP. However, this clause does not limit
recovery of any such reimbursements that are allowed as a result of
other contract provisions.
(e) Supporting Information. As a minimum, the Contractor shall
provide the following supporting information with each CRP:
(1) Identification of the current contract requirements or
established procedures and/or organizational support which are
proposed to be changed.
(2) A description of the difference between the current process
or procedure and the proposed change. This description shall address
how proposed changes will meet NASA requirements and discuss the
advantages and disadvantages of the existing practice and the
proposed changes.
(3) A list of contract requirements which must be revised, if
any, if the CRP is approved, along with proposed revisions. Any
changes to NASA or delegated contract management processes should
also be addressed.
(4) Detailed cost estimates which reflect the implementation
costs of the CRP.
(5) An updated ETC for the covered contract, unchanged, and a
revised ETC for the covered contract which reflects changes
resulting from implementing the CRP. If the CRP proposes changes to
only a limited number of elements of the contract, the ETCs need
only address those portions of the contract that have been impacted.
Each ETC shall depict the level of costs incurred or to be incurred
by year, or to the level of detail required by the Contracting
Officer. If other CRPs have been proposed or approved on a contract,
the impact of these CRPs must be addressed in the computation of the
cost savings to ensure that the cost savings identified are
attributable only to the CRP under consideration in the instant
case.
(6) Identification of any other previous submissions of the CRP,
including the dates submitted, the agencies and contracts involved,
and the disposition of those submittals.
(f) Administration.
(1) The Contractor shall submit proposed CRPs to the Contracting
Officer who shall be responsible for the review, evaluation and
approval. Normally, CRP's should not be entertained for the first
year of performance to allow the Contracting Officer to assess
performance against the basic requirements. If a cost reduction
project impacts more than a single contract, the Contractor may,
upon concurrence of the Contracting Officers responsible for the
affected contracts, submit a single CRP which addresses fully the
cost savings projected on all affected contracts that contain this
Shared Savings Clause. In the case of multiple contracts affected,
responsibility for the review and approval of the CRP will be a
matter to be decided by the affected Contracting Officers.
(2) Within 60 days of receipt, the Contracting Officer shall
complete an initial evaluation of any proposed cost reduction plan
to determine its feasibility. Failure of the Contracting Officer to
provide a response within 60 days shall not be construed as approval
of the CRP. The Government shall promptly notify the Contractor of
the results of its initial evaluation and indicate what, if any,
further action will be taken. If the Government determines that the
proposed CRP has merit, it will open discussions with the Contractor
to establish the cost savings to be recognized, the Contractor's
share of the cost savings, and a payment schedule. The Contractor
shall continue to perform in accordance with the terms and
conditions of the existing contract until a contract modification is
executed by the Contracting Officer. The modification shall
constitute approval of the CRP and shall incorporate the changes
identified by the CRP, adjust the contract cost and/or price,
establish the Contractor's share of cost savings, and incorporate
the agreed to payment schedule.
(3) The Contractor will receive payment by submitting invoices
to the Contracting Officer for approval. The amount and timing of
individual payments will be made in accordance with the schedule to
be established with the Contracting Officer. Notwithstanding the
overall savings recognized by the Contracting Officer as a result of
an approved CRP, payment of any portion of the Contractor's share of
savings shall not be made until NASA begins to realize a net cost
savings on the contract (i.e., implementation, startup and other
increased costs resulting from the change have been offset by
cumulative cost savings). Savings associated with unexercised
options will not be paid unless and until the contract options are
exercised. It shall be the responsibility of the Contractor to
provide such justification as the Contracting Officer deems
necessary to substantiate that cost savings are being achieved.
(4) Any future activity, including a merger or acquisition
undertaken by the Contractor (or to which the Contractor becomes an
involved party), which has the effect of reducing or reversing the
cost savings realized from an approved CRP for which the Contractor
has received payment may be cause for recomputing the net cost
savings associated with any approved CRP. The Government reserves
the right to make an adjustment to the Contractor's share of cost
savings and to receive a refund of moneys paid if necessary. Such
adjustment shall not be made without notifying the Contractor in
advance of the intended action and affording the Contractor an
opportunity for discussion.
(g) Limitations. Contract requirements that are imposed by
statute shall not be targeted for cost reduction exercises. The
Contractor is precluded from receiving reimbursements under both
this clause and other incentive provisions of the contract, if any,
for the same cost reductions.
(h) Disapproval of, or failure to approve, any proposed cost
reduction proposal shall not be considered a dispute subject to
remedies under the Disputes clause.
(i) Cost savings paid to the Contractor in accordance with the
provisions of this clause do not constitute profit or fee within the
limitations imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 254(b).
(End of clause)
1852.244-70 [Amended]
25. In the introductory text to section 1852.244-70, the citation
``1844.170'' is revised to read ``1844.204-70''.
1852.246-70 [Amended]
26. Section 1852.246-70 is revised to read as follows:
1852.246-70 Mission Critical Space System Personnel Reliability
Program.
As prescribed in 1846.370(a), insert the following clause:
MISSION CRITICAL SPACE SYSTEM
PERSONNEL RELIABILITY PROGRAM (MAR 1997)
(a) In implementation of the Mission Critical Space System
Personnel Reliability Program, described in 14 CFR 1214.5, the
Government shall identify personnel
[[Page 14035]]
positions that are mission critical. Some of the positions as
identified may now or in the future be held by employees of the
Contractor. Upon notification by the Contracting Officer that a
mission-critical position is being or will be filled by one or more
of the Contractor's employees, the Contractor shall (1) provide the
affected employees with a clear understanding of the investigative
and medical requirements and, (2) to the extent permitted by
applicable law, assist the Government by furnishing personal data
and medical records.
(b) The standard that will be used in certifying individuals for
a mission-critical position is that they must be determined to be
suitable, competent, and reliable in the performance of their
assigned duties in accordance with the screening requirements 14 CFR
1214.5. If the Government determines that a Contractor employee
occupying or nominated to occupy a mission-critical position will
not be certified for such duty, the Contracting Officer shall (1)
furnish to the employee the specific reasons for its action; (2)
advise the employee that he/she may avail himself/herself of the
review procedures that are a part of the certification system; and
(3) furnish him/her a copy of those procedures upon request.
(c) If a Contractor employee who has been nominated for (but has
not yet filled) a mission-critical position is not certified, the
Contractor agrees to defer the appointment to the position until the
employee has had an opportunity to pursue the referenced procedures.
If the employee is an incumbent to the position, the Contractor
agrees, upon the request of the Government, to remove him/her from
the position temporarily pending an appeal of the action under the
review procedures. If any employee not certified elects not to take
action under the procedures, or, if having taken action, is not
successful in obtaining a reversal of the determination, the
Contractor agrees not to appoint the employee to the position, or if
already appointed, to promptly remove the employee.
(End of clause)
1852.246-71 [Amended]
27. In the introductory text to section 1852.246-71, the citation
``1846.470-2(a)'' is revised to read ``1846.470''.
1852.246-73 [Amended]
28. Section 1852.246-73 is revised to read as follows:
1652.246-73 Human Space Flight Item.
As prescribed in 1845.370(b), insert the following clause:
HUMAN SPACE FLIGHT ITEM (MAR 1997)
The Contractor shall include the following statement in all
subcontracts and purchase orders placed by it in support of this
contract, without exception as to amount or subcontract level:
``FOR USE IN HUMAN SPACE FLIGHT; MATERIALS, MANUFACTURING, AND
WORKMANSHIP OF HIGHEST QUALITY STANDARDS ARE ESSENTIAL TO ASTRONAUT
SAFETY.
IF YOU ARE ABLE TO SUPPLY THE DESIRED ITEM WITH A HIGHER QUALITY
THAN THAT OF THE ITEMS SPECIFIED OR PROPOSED, YOU ARE REQUESTED TO
BRING THIS FACT TO THE IMMEDIATE ATTENTION OF THE PURCHASER.''
(End of clause)
1852.246-74, 1852.246-75 [Removed]
29. Section 1852.246-74 and 1852.246-75 are removed.
1852.247-70 [Removed]
30. Section 1852.247-70 is removed.
1852.247-72 [Amended]
31. In the introductory text to section 1852.247-72, the citation
``1847.305-70(b)'' is revised to read ``1847.305-70(a)''.
1852.247-73 [Amended]
32. In the introductory text to section 1852.247-73, the citation
``1847.305-70(c)'' is revised to read ``1847.305-70(b)''.
33. In the clause to section 1852.247-73, the date ``(MARCH 1989)''
is revised to read ``(MAR 1997)'', and in paragraph (b), the word
``certificate'' is revised to read ``statement''.
[FR Doc. 97-7075 Filed 3-24-97; 8:45 am]
BILLING CODE 7510-01-M
