[Federal Register Volume 60, Number 206 (Wednesday, October 25, 1995)]
[Proposed Rules]
[Pages 54651-54657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26427]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1845 and 1852
Revision to NASA FAR Supplement Coverage on Government Property
agency: Office of Procurement, Contract Management Division, National
Aeronautics and Space Administration (NASA).
action: Notice of proposed rulemaking.
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summary: This rule proposes to amend the regulations pertaining to
government property reporting by contractors, due to revisions of the
reporting form, to clarify and simplify the reporting requirements and
instructions, and make necessary changes to affected provisions and
clauses. NASA has made extensive changes to its process of financial
reporting of Government-Owned/Contractor-Held property. These changes
were made necessary by the Chief Financial Officers Act of 1990,
streamlining required by the National Performance Review, the need for
more uniformity in reporting requirements between NASA and the
Department of Defense (DOD), and changing internal management needs for
information within NASA.
[[Page 54652]]
dates: Comments must be received on or before December 26, 1995.
addresses: Submit comments to Larry G. Pendleton, Contract Management
Division (Code HK), Office of Procurement, NASA Headquarters,
Washington, DC 20546. Comments on the paperwork burden should also be
addressed to the Office of Information and Regulatory Affairs of OMB,
Attention: Desk Officer for NASA, Washington, DC 20503.
for further information contact: Mr. Larry G. Pendleton, (202) 358-
0487.
SUPPLEMENTARY INFORMATION:
Background
The Chief Financial Officers (CFO) Act requires, among other
things, that Federal agencies produce audited annual financial
statements. At NASA, CFO Act audits have been performed by the Office
of the Inspector General. Experience over the last three years with
this process has led to changes in the reporting period and due date
for receipt of contractor and grantee property reports, and
identification of other necessary or desirable changes to property
reporting. Other broad policy changes are being considered elsewhere,
such as the work being done by the Federal Accounting Standards
Advisory Board on accounting for Property, Plant and Equipment, and the
rewrite of Federal Acquisition Regulation (FAR) Part 45 by a team led
by the DOD. To the extent possible, these efforts have been considered
in formulating changes to NASA regulations. Of primary concern has been
the need to obtain timely, accurate financial information on NASA
property in the custody of contractors in a way that minimizes impact
on reporting entities.
Changes Highlights
Revisions to NASA Form (NF) 1018 and related regulations
incorporate the following:
A. The Annual List of Selected Items of Space Hardware has been
eliminated. The term ``space hardware'' is replaced by ``agency-
peculiar property'' (APP) to be consistent with the Federal Acquisition
Regulation, and contractors will report all property in their
possession meeting the NASA FAR Supplement (NFS) definition of APP.
B. Schedule II, Space Hardware Reportable Items, of the current NF
1018 has been eliminated as unnecessary. The NF 1018 will be a single
page, with instructions on the back, rather than the present three-page
form, and instructions.
C. The NF 1018 title and format have been changed to make them more
consistent with the DD Form 1662. Use of the DD Form 1662 only was
considered, but NASA information requirements precluded this option.
D. The requirement for a breakout of contractor-acquired property
by funding classification has been eliminated.
E. A requirement to report quantities by property category has been
added to provide necessary management information.
F. A requirement to breakout plant equipment by items over and
under $5,000 has been added. Accounting information is required for
items over $5,000 as this is the NASA capitalization threshold,
consistent with General Accounting Office standards. Property
management information is needed, however, for all plant equipment.
G. A category for ``Construction in Progress'' has been added to be
consistent with the Government-wide Standard General Ledger and NASA
financial statements.
H. The term ``disposals'' has been changed to ``deletions'' to be
consistent with the DD Form 1662. Specific categories have been
provided on the NF 1018 to make it simpler for contractors to classify
the type of deletion, and for property management purposes.
I. The lower section of the form has been revised to provide better
information on contact persons and on contractor property system
reviews.
J. Reporting instructions on the NF 1018 have been revised to
eliminate duplication with regulatory language in the NFS.
K. Regulations have been changed to eliminate the optional use of
monthly or quarterly reporting in accordance with the Presidents
Memorandum of April 21, 1995, on regulatory reform and reduction of
reports.
L. Contract clauses have been changed to:
(1) Make clear that NF 1018 submissions must be received by the
cognizant NASA offices not later than October 31 of each reporting
year; and
(2) Provide for withholding of payment on invoices when required NF
1018 reports are not received.
Regulatory Flexibility Act
NASA certifies that these regulation changes will not have a
significant economic impact on a substantial number of small entities
under Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
Paperwork Reduction Act
This rule proposes to change the following report that was approved
by the Office of Management and Budget (OMB) and assigned OMB Control
Number 2700-0017. A copy of the proposed rule has been submitted to OMB
for review under section 3507(d) of the Paperwork Reduction Act.
Title: Report of Government-Owned/Contractor-Held Property.
Summary: This report collects information on Government-owned/
contractor-held property accountable under NASA contracts.
Description of the need for the information and proposed use of the
information: NASA is required to account for Government-owned/
contractor-held property. The NASA Form 1018 submitted by contractors
provides data necessary to ensure that the Agency's assets are
accurately reflected on its audited financial statements, as well as
essential property management information.
Description of the likely respondents, including the estimated
number of likely respondents, and proposed frequency of response to the
collection of information: NASA contractors whose contracts contain the
clause entitled ``Financial Report of NASA Property in the Custody of
Contractors'' will be required to submit NASA Form 1018 annually. The
number of respondents is estimated to be 1,900.
Estimate of the total annual reporting and recordkeeping burden
that will result from the collection of information: FAR part 45
requires that contractors maintain the official Government property
records for Government property in their possession. The NASA Form 1018
provides a means for an annual collection of summary data derived from
these records. The annual recordkeeping and reporting burden related to
preparation and submission of NASA Form 1018 is estimated to be 5,700
hours.
Notice: Comments may be submitted to the OMB address shown under
ADDRESSES.
Time period within which the agency is requesting OMB to approve or
disapprove the collection of information: NASA is requesting that OMB
approve the proposed revisions to the collection of information within
the next 60 days.
In addition, comments may be submitted to NASA and OMB in order to
help NASA--
(i) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
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(ii) Evaluate the accuracy of the agency's estimate of the burden
of the proposed collection of information, including the validity of
the methodology and assumptions used;
(iii) Enhance the quality, utility, and clarity of the information
to be collected; and
(iv) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniquest
or other forms of information technology, e.g., permitting electronic
submission of responses.
List of Subjects in 48 CFR Parts 1845 and 1852
Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
Accordingly, 48 CFR Parts 1845 and 1852 are proposed to be amended
as follows.
1. The authority citation for 48 CFR Parts 1845 and 1852 continues
to read as follows:
Authority: 42 U.S.C. 2473(c)(1).
PART 1845--GOVERNMENT PROPERTY
Subpart 1845.1--General
1. In section 1845.102-70, paragraph (a)(3) is revised to read as
follows:
1845.102-70 Procedures.
(a) * * *
(3) Requirement that additional facilities that the offeror
requests to be provided by the Government be described and identified
by classification such as ``Land,'' ``Buildings,'' and ``Equipment''
(see subpart 1845.71); and
* * * * *
2. In section 1845.106-70, paragraph (d) is revised, paragraph (i)
is removed and paragraphs (j) and (k) are redesignated as (i) and (j)
to read as follows:
1845.106-70 NASA contract clauses and solicitation provision.
* * * * *
(d) The contracting officer shall insert the clause at 1852.245-73,
Financial Reporting of NASA Property in the Custody of Contractors, in
all cost reimbursement contracts or in all other types of contracts
when it is known at the time of award that property will be provided to
the contractor or that the contractor will acquire property, title to
which vests in the Government prior to delivery of the contract
products. Where all property to be provided is subject to the clause at
1852.245-71, Installation-Provided Government Property (see paragraph
(b) of this section), the clause at 1852.245-73 is not required. Where
the clause is not included in contracts at the time of award, if
Government property is subsequently provided to a contractor, or the
contractor is authorized to acquire property to which the Government
takes title, the clause shall be included in the contract at that time.
* * * * *
1845.301 [Amended]
3. In section 1845.301, the definition heading ``Space property''
is revised to read ``Agency-peculiar property''.
Subpart 1845.5--Management of Government Property in the Possession
of Contractors
4. Section 1845.501 is amended as follows:
(a) The definition heading ``Space property'' is revised to read
``Agency-peculiar property'', the word ``peculiar'' is revised to read
``unique'', and the last sentence is removed.
(b) In the definition ``Centrally reportable equipment (CRE)'', the
phrase ``space property'' is revised to read ``agency-peculiar
property.''
5. In section 1845.502-1, the title of the NASA Form 1018 ``Report
of Government-Owned/Contractor-Held Property'' is revised to read
``NASA Property in the Custody of Contractors''.
6. Section 1845.505-14 is revised to read as follows:
1845.505-14 Reports of Government property.
When required by the contract, the contractor shall submit a report
of NASA Property in the Custody of Contractors, NASA Form 1018, in
accordance with the instructions on the form, subpart 1845.71, and the
contract clause at 1852.245-73. The contractors property control system
shall distinguish Government furnished and contractor acquired property
for purposes of reporting the acquisition cost in the property
classifications shown in FAR 45.505-14(a) (1) through (5).
Subpart 1845.71--Forms Preparation
7. In Sec. 1845.7101 the last sentence is revised to read as
follows:
1845.7101 Instructions for preparing NASA Form 1018.
* * * This report provides information for NASA financial
statements and property management; accuracy and timeliness of the
report are, therefore, very important. Contractors shall retain
documents which support the data reported on NASA Form 1018 in
accordance with FAR subpart 4.7, Contractor Records Retention.
Classifications of property, related costs to be reported, and
reporting requirements are set forth in this subpart.
8. Section 1845.7101-1 is revised to read as follows:
1845.7101-1 Property classification.
(a) Contractors shall report costs in the classifications required
on NASA Form (NF) 1018, as described in this section. For Land,
Buildings, Other Structures and Facilities, and Leasehold Improvements,
contractors shall report the amount for all items with a unit cost of
$5,000 or more and a useful life of 2 years or more. For Plant
Equipment, Special Tooling, Special Test Equipment and Agency-Peculiar
Property, contractors shall separately report--
(1) The amount for all items with a unit cost of $5,000 of more and
useful life of 2 years or more and
(2) All items under $5,000, regardless of useful life.
(b) Contractors shall report the amount for all Materials,
regardless of unit cost.
(c) Land. Includes costs of land and associated costs incidental to
acquiring and preparing land for use, for example; appraisal fees,
clearing costs, drainage, grading, landscaping, plats and surveys,
removal and relocation of the property of others as part of a land
purchase, removal or destruction of structures or facilities purchased
but not used, and legal expenses.
(d) Buildings. Includes costs of buildings, improvements to
buildings, and fixed equipment required for the operation of a building
which is permanently attached to and a part of the building and cannot
be removed without cutting into the walls, ceilings, or floors.
Examples of fixed equipment required for the functioning of a building
include plumbing, heating and lighting equipment, elevators, central
air conditioning systems, and built-in safes and vaults.
(e) Other structures and facilities. Includes costs of acquisitions
and improvements of structures and facilities other than buildings; for
example, airfield pavements, harbor and port facilities, power
production facilities and distribution systems, reclamation and
irrigation facilities, flood control and navigation aids, utility
systems (heating, sewage, water and
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electrical) when they serve several buildings or structures,
communication systems, traffic aids, roads and bridges, railroads,
monuments and memorials, and nonstructural improvements, such as
sidewalks, parking areas, and fences.
(f) Leasehold improvements. Includes costs of improvements to
leased buildings, structures, and facilities, as well as easements and
right-of-way, where NASA is the lessee or the cost is charged to a NASA
contract.
(g) Equipment. Includes costs of commercially available personal
property for use in manufacturing supplies, performing services, or any
general or administrative purpose; for example, machine tools,
furniture, vehicles, computers, accessory or auxiliary items, and test
equipment.
(h) Construction in progress. Includes costs for work in process
for the construction of Buildings, Other Structures and Facilities,
Leasehold Improvements, and Equipment to which NASA has title.
(i) Special tooling. Includes costs of equipment and manufacturing
aids (and components and replacements of these items) that are of such
a specialized nature that, without substantial modification or
alteration, their use is limited to the development or production of
particular supplies or parts, or to the performance of particular
services. Examples include jigs, dies, fixtures, molds, patterns, taps
and gauges.
(j) Special test equipment. Includes costs of equipment used to
accomplish special purpose testing in performing a contract, and items
or assemblies of equipment.
(k) Material. Includes costs of NASA owned property held in
inventory that may become a part of an end item or be expended in
performing a contract. Examples include raw and processed material,
parts, assemblies, small tools and supplies. Do not include material
that is part of work in process.
(l) Agency-peculiar property. Includes actual or estimated costs of
completed items, systems and subsystems, spare parts and components and
work in process unique to NASA aeronautical and space programs.
Examples include aircraft, engines, satellites, instruments, rockets,
prototypes and mock-ups. The amount of property, title to which vests
in the Government as a result of progress payments to fixed price
subcontractors, shall be included to reflect the pro rata cost of
undelivered agency-peculiar property.
9. Section 1845.7101-2 is revised to read as follows:
1845.7101-2 Transfers of property.
The procedures in this section apply to all types of transfers.
Only Government installations may furnish Government property to a
contractor. Therefore, procurement, property, and financial
organizations at NASA installations must effect all transfers of
accountability, although physical shipment and receipt of property may
be made directly by contractors. Such transfers include shipments
between contractors of the same installation, contractors of different
installations, a contractor of one installation to another
installation, an installation to a contractor of another installation,
and a contractor to another Government agency to its contractor. So
that NASA may properly control and account for transfers, they shall be
adequately documented. The procedures described in this section shall
be followed in all cases, to provide an administrative and audit trail,
even if property is physically shipped directly from one contractor to
another. Contractors shipping property to NASA, another contractor, or
another Government agency shall continue to be accountable for NASA
Form (NF) 1018 reporting of that property, regardless of the method of
shipment, until evidence of receipt is in the possession of the
shipping entity. Property provided under fixed price repair contracts
remains accountable to the cognizant NASA installation and is not
reportable on NF 1018; property provided for repair under a cost-
reimbursable contract, however, is accountable to the contractor and
reportable on NF 1018.
(a) Approval and notification. The contractor must obtain the
approval of the contracting officer or designee for transfers of
property before shipment. Each shipping document must contain contract
numbers, shipping references, property classifications in which the
items are recorded, unit prices, and any other appropriate identifying
or descriptive data. Unit prices shall be obtained from records
maintained pursuant to FAR part 45 and part 1845 of this chapter.
Shipping contracting shall furnish a copy of the shipping document to
the cognizant property administrator. Shipping and receiving
contractors shall promptly notify the financial management office of
the NASA installation responsible for their respective contracts when
accountability for Government property is transferred to, or received
from, other contracts, contractors, NASA installations or Government
agencies. Copies of shipping or receiving documents will suffice as
notification in most instances.
(b) Reclassification. If the property is transferred to another
contract or contractor, the receiving contractor shall record the
property in the same property classification and amount appearing on
the shipping document. For example, when a contractor receives an item
from another contractor that is identified on the shipping document as
equipment, but that the recipient intends to incorporate into special
test equipment, the recipient shall first record the item in the
equipment account and subsequently reclassify it as special test
equipment. Reclassification of equipment, special tooling, special test
equipment, or agency-peculiar property requires prior notification to
the property administrator and approval of the contracting officer.
(c) Incomplete documentation. If contractors receive transfer
documents having sufficient detail to properly record the transfer
(e.g., omission of property classification, unit prices, etc.) they
shall request the omitted data directly from the shipping contractor or
through the property administrator as provided as in FAR 45.505-2.
Contractors may append a Government furnished property list to the NF
1018 report when unable to obtain the required data, provided that the
list includes--
(1) A description of the property;
(2) Quantity;
(3) Shipping document reference;
(4) Shippers identity;
(5) Dates shipped or received
(6) The dates data were requested and from whom (shipper or
property administrator); and
(7) The NF 1018 line item (classification) to be adjusted.
10. Sections 1845.7101-3, 1845.7101-4, and 1845.7101-5 are removed,
and section 1845.7101-6 is redesignated as section 1845.7101-3 and is
revised to read as follows:
1845.7101-3 Computing costs of fabricated special tooling, special
test equipment, and Agency-peculiar property.
(a) Costs shall be computed in accordance with accepted accounting
principles, be reasonably accurate, and be the product of any one or a
combination of, the following:
(1) Abstracts of cost data from contractor property or financial
records.
(2) Computations based on engineering and financial data.
(3) Estimates based on NASA Form 533 reports.
(4) Formula procedures (e.g., using a 50 percent factor for work in
process items, on the basis of updated Standard Form 1411 estimates or
the contractors approved estimating and pricing system).
[[Page 54655]]
(5) Other approved methods.
(b) Contractors shall report costs using records that are part of
the prescribed property or financial control system as provided in this
section, excluding fee. Fabrication costs shall be based on the
contractors approved estimating and pricing system and should include--
(1) Direct labor;
(2) Direct materials and purchased parts (costs of purchased items
shall be consistent with the contractors approved pricing methods);
(3) Other direct costs (e.g., computer costs, travel, and
transportation);
(4) Burden (a percentage factor or rate applied to the direct costs
or other applicable base); and
(5) Costs of Government furnished property applied (data available
from the Government shipping document or estimated, if necessary).
(c) The contractor shall redetermine the costs of items returned
for modification or rehabilitation to include the remaining portion of
original cost plus the cost of any improvements.
(d) The computation of work in process shall include the costs of
associated systems, subsystems, and spare parts and components
furnished or acquired and charged to work in process pending
incorporation into a finished item. These types of items make up what
is sometimes called production inventory and include programmed extra
units to cover replacement during the fabrication process (production
spares). Also included are deliverable items on which the contractor or
a subcontractor has begun work, and materials that have been issued
from inventory.
11. Sections 1845.7101-7, 1845.7101-8, and 1845.7101-9 are removed,
and section 1845.7101-10 is redesignated as section 1845.7101-4.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1852.245-73 [Amended]
12. In section 1852.245-73, the title, date, and paragraphs (a),
(c) and (d) to the clause are revised and the introductory text,
paragraph (e) and Alternates I and II to the clause are removed to read
as follows:
1852.245-73 Financial reporting of NASA property in the custody of
contractors.
As prescribed in 1845.106-70(d), insert the following clause:
FINANCIAL REPORTING OF NASA PROPERTY IN THE CUSTODY OF CONTRACTORS (XXX
199X)
(a) The Contractor shall submit annually a NASA Form (NF) 1018,
NASA Property in the Custody of Contractors, in accordance with
1845.505-14, the instructions on the form, and subpart 1845.71.
Subcontractor use of NF 1018 is not required by this clause;
however, the contractor shall include data on property in the
possession of subcontractors in the annual NF 1018.
* * * * *
(c) The annual reporting period shall be from October 1 of each
year to September 30 of the following year. The report shall be
submitted in time to be received by October 31. Failure to submit
the report when due may result in withholding of payment on invoices
for the month in which reports are to be submitted, based on
noncompliance with contract requirements.
(d) A final report is required within 30 days after disposition
of all property subject to reporting when the contract performance
period is complete.
(End of clause)
1852.245-78 [Removed]
13. Section 1852.245-78 is removed.
BILLING CODE 7510-01-M
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Appendix To The Proposed Rule NASA Form 1018--NASA Property In The
Custody Of Contractors
[GRAPHIC][TIFF OMITTED]TP25OC95.004
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[GRAPHIC][TIFF OMITTED]TP25OC95.005
[FR Doc. 95-26427 Filed 10-24-95; 8:45 am]
BILLING CODE 7510-01-C
