[Federal Register Volume 64, Number 221 (Wednesday, November 17, 1999)]
[Rules and Regulations]
[Pages 62600-62603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29910]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1845 and 1852
Revisions to the NASA FAR Supplement on Property Reporting
Requirements
AGENCY: National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: This final rule amends the NASA FAR Supplement (NFS) to comply
with OMB Bulletin 97-01 and makes other changes to NASA property
reporting requirements. Specific changes include: raising the reporting
threshold for certain property categories from $5,000 to $100,000;
adding a requirement to report Federal Supply Classification group
codes for equipment, unit acquisition costs, and acquisition dates on
shipping documents; and adding a statement that contractors are
required to furnish, in addition to the information required by NASA
Form (NF) 1018, any information specified in supplemental instructions
issued by NASA for the current reporting period.
EFFECTIVE DATE: November 17, 1999.
FOR FURTHER INFORMATION CONTACT: James H. Dolvin, NASA Headquarters,
Code HK, Washington, DC 20546, (202) 358-1279,
jdolvin1@mail.hq.nasa.gov.
SUPPLEMENTARY INFORMATION:
A. Background
Federal Financial Accounting Standards Number 6, as implemented by
OMB Bulletin 97-01, provides for new financial accounting requirements
involving depreciation of Government property. Additional guidance is
being added to NFS Section 1845.7101, Instructions for preparing NASA
Form 1018, to explain this change and to say that contractors will now
be required to submit supplemental information with the form, and that
this information may change from year to year, depending on OMB
requirements.
A proposed rule was published in the Federal Register at 64 FR
26721-23, dated May 17, 1999. Revisions in this final rule consist of
minor editorial changes in 1845.7101-1(b), 1845.7101-2(a), 1845.7101-
3(e), and 1852.245-73 (b) and (d). Comments were received from the
Aerospace Industries Association and the University of California at
Berkeley. All comments were considered in the development of this final
rule.
B. Regulatory Flexibility Act
NASA certifies that this final rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
[[Page 62601]]
because less than three per cent of NASA contracts with small
businesses have property reporting requirements.
C. Paperwork Reduction Act
The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., applies to
this proposed rule because it contains information collection
requirements. Approval for the additional requirements has been
obtained under OMB Control No. 2700-0017, approving an increase in
burden hours from 5,700 to 8,144.
List of Subjects in 48 CFR Parts 1845 and 1852
Government procurement.
Tom Luedtke,
Associate Administrator for Procurement.
Accordingly, 48 CFR Parts 1845 and 1852 are 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
2. Sections 1845.7101, 1845.7101-1, 1845.7101-2, 1845.7101-3,
1845.7101-4, and 1845.7101-5 are revised to read as follows:
Subpart 1845.71--Forms Preparation
1845.7101 Instructions for preparing NASA Form 1018.
NASA Form 1018 (see 1853.3) provides critical information for NASA
financial statements and property management. Accuracy and timeliness
of the report are very important. NASA must account for and report
assets in accordance with 31 U.S.C. 3512 and 31 U.S.C. 3515, Federal
accounting standards, and Office of Management and Budget (OMB)
instructions. Since contractors maintain NASA's official records for
its assets in their possession, NASA must obtain annual data from those
records to meet these requirements. Changes in Federal accounting
standards and OMB reporting requirements may occur from year to year,
requiring contractor submission of supplemental information with the NF
1018. Contractors shall retain documents which support the data
reported on NF 1018 in accordance with FAR subpart 4.7, Contractor
Records Retention. Classifications of property, related costs to be
reported, and other reporting requirements are discussed in this
subpart.
1845.7101-1 Property Classification.
(a) General. Contractors shall report costs in the classifications
on the 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
acquisition cost of $100,000 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 acquisition cost of
$100,000 or more and a useful life of 2 years or more; and
(2) All items under $100,000, regardless of useful life.
(b) Materials. Contractors shall report the amount for all
Materials in inventory, regardless of unit acquisition cost.
(c) Land. Includes costs of land and improvements to land.
(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 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 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 NASA-funded 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 capable of stand-alone use in manufacturing supplies,
performing services, or any general or administrative purpose (for
example, machine tools, furniture, vehicles, computers, test equipment,
including their accessory or auxiliary items).
(h) Construction in Progress. Includes costs of work in process for
the construction of Buildings, Other Structures and Facilities, and
Leasehold Improvements to which NASA has title.
(i) Special Tooling. Includes costs of equipment and manufacturing
aids (and their components and replacements) of such a specialized
nature that, without substantial modification or alteration, their use
is limited to development or production of particular supplies or
parts, or 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. Material that is part of
work-in-process is not included.
(l) Agency-Peculiar Property. Includes costs of completed items,
systems and subsystems, spare parts and components unique to NASA
aeronautical and space programs. Examples include research 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.
(m) Contract Work-in-Process. Includes costs of all work-in-
process; excludes costs of completed items reported in other
categories.
1845.7101-2 Transfers of property.
A transfer is a change in accountability between and among prime
contracts, centers, and other Government agencies (e.g., between
contracts of the same center, contracts of different centers, a
contract of one center to another center, a center to a contract of
another center, and a contract to another Government agency or its
contract). To enable NASA to properly control and account for
transfers, they shall be adequately documented. Therefore, procurement,
property, and financial organizations at NASA centers must effect all
transfers of accountability, although physical shipment and receipt of
property may be made directly by contractors. The procedures described
in this section shall be followed to provide an administrative and
audit trail, even if
[[Page 62602]]
property is physically shipped directly from one contractor to another.
Property shipped between September 1 and September 30, inclusively,
shall be reported by the shipping contractor, regardless of the method
of shipment, unless written evidence of receipt at destination has been
received. Repairables provided under fixed price repair contracts that
include the clause at 1852.245-72, Liability for Government Property
Furnished for Repair or Other Services, remain accountable to the
cognizant center and are not reportable on NF 1018; repairables
provided under a cost-reimbursement contract, however, are accountable
to the contractor and reportable on NF 1018. All materials provided to
conduct repairs are reportable, regardless of contract type.
(a) Approval and Notification. The contractor must obtain 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 (including Federal Supply Classification group (FSC) codes for
equipment), unit acquisition costs, original acquisition dates for
items with a unit acquisition cost of $100,000 or more and a useful
life of two years or more, and any other appropriate identifying or
descriptive data. Where the DD Form 250, Material Inspection and
Receiving Report, is used, the FSC code will be part of the national
stock number (NSN) entered in Block 16 or, if the NSN is not provided,
the FSC alone shall be shown in Block 16. The original acquisition date
shall be shown in Block 23, by item. Other formats, such as the DD Form
1149, Requisition and Invoice/Shipping Document, should be clearly
annotated with the required information. Unit acquisition costs shall
be obtained from records maintained pursuant to FAR part 45 and this
part 1845, or, for uncompleted items where property records have not
yet been established, from such other record systems as are appropriate
such as manufacturing or engineering records used for work control and
billing purposes. Shipping contractors 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 center responsible for their respective contracts
when accountability for Government property is transferred to, or
received from, other contracts, contractors, NASA centers, or
Government agencies. Copies of shipping or receiving documents will
suffice as notification in most instances.
(b) Reclassification. If 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 approval of the
contracting officer or a designee.
(c) Incomplete documentation. If contractors receive transfer
documents having insufficient detail to properly record the transfer
(e.g., omission of property classification, FSC, unit acquisition cost,
acquisition date, etc.) they shall request the omitted data directly
from the shipping contractor or through the property administrator as
provided in FAR 45.505-2.
1845.7101-3 Unit acquisition cost.
(a) The unit acquisition cost shall include all costs incurred to
bring the property to a form and location suitable for its intended
use. For example, the cost may include the following, as appropriate,
for the type of property:
(1) Amounts paid to vendors or other contractors.
(2) Transportation charges to the point of initial use.
(3) Handling and storage charges.
(4) Labor and other direct or indirect production costs (for assets
produced or constructed).
(5) Engineering, architectural, and other outside services for
designs, plans, specifications, and surveys.
(6) Acquisition and preparation costs of buildings and other
facilities.
(7) An appropriate share of the cost of the equipment and
facilities used in construction work.
(8) Fixed equipment and related installation costs required for
activities in a building or facility.
(9) Direct costs of inspection, supervision, and administration of
construction contracts and construction work.
(10) Legal and recording fees and damage claims.
(11) Fair values of facilities and equipment donated to the
Government.
(12) Material amounts of interest costs paid.
(13) Where appropriate, for Special Test Equipment, Special
Tooling, Agency-Peculiar Property and Contract Work-In-Process, related
fees, or a prorata portion of fees, paid by NASA to the contractor.
Situations where inclusion of fees in the acquisition cost would be
appropriate are those in which the contractor designs, develops,
fabricates or purchases property for NASA and part of the fees paid to
the contractor by NASA are related to that effort.
(b) The use of weighted average methodologies is acceptable for
valuation of Material.
(c) Contractors shall report unit acquisition costs using records
that are part of the prescribed property or financial control system as
provided in this section. Fabrication costs shall be based on approved
systems or procedures and include all direct and indirect costs of
fabrication.
(d) The contractor shall redetermine unit acquisition costs of
items returned for modification or rehabilitation. If an item's
original acquisition cost is $100,000 or more, only modifications that
improve that item's capacity or extend its useful life two years or
more and that cost $100,000 or more shall be added to the original
acquisition cost reported on the NF 1018. The costs of any other
modifications will be considered to be expensed. If an item's original
unit acquisition cost is less than $100,000, but a single subsequent
modification costs $100,000 or more, that modification only will be
reported as an item $100,000 or more on subsequent NF 1018s. The
original acquisition cost of the item will continue to be included in
the under $100,000 total. The quantity for the modified item will
remain ``1'' and be reported with the original acquisition cost of the
item. If an item's acquisition cost is reduced by removal of components
so that its remaining acquisition cost is under $100,000, it shall be
reported as under $100,000.
(e) The computation of work in process shall include all direct and
indirect costs of fabrication, including 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 issued from inventory.
[[Page 62603]]
1845.7101-4 Types of deletions from contractor property records
Contractors shall report the types of deletions from contract
property records as described in this section.
(a) Adjusted. Changes in the deletion amounts that result from
mathematical errors in the previous report.
(b) Lost, Damaged or Destroyed. Deletion amounts that result from
relief from responsibility under FAR 45.503 granted during the
reporting period.
(c) Transferred in Place. Deletion amounts that result from
transfer of property to a follow-on contract with the same contractor.
(d) Transferred to Center Accountability. Deletion amounts that
result from transfer of accountability to the center responsible for
the contract, whether or not items are physically moved.
(e) Transferred to Another NASA Center. Deletion amounts that
result from transfer of accountability to a center other than the one
responsible for the contract, whether or not items are physically
moved.
(f) Transferred to Another Government Agency. Deletion amounts that
result from transfer of property to another Government agency.
(g) Purchased at Cost/Returned for Credit. Deletion amounts that
result from contractor purchase or retention of contractor acquired
property as provided in FAR 45.605-1, or from contractor returns to
suppliers under FAR 45.605-2.
(h) Disposal Through Plant Clearance Process. Deletions other than
transfers within the Federal Government, e.g., donations to eligible
recipients, sold at less than cost, or abandoned/directed destruction.
1845.7101-5 Contractor's privileged financial and business information
If a transfer of property between contractors involves disclosing
costs of a proprietary nature, the contractor shall furnish unit
acquisition costs only on copies of shipping documents sent to the
shipping and receiving NASA centers. Transfer of the property to the
receiving contractor shall be on a no-cost basis.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
3. Section 1852.245-73 is revised 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
(Month/Year)
(a) The Contractor shall submit annually a NASA Form (NF) 1018,
NASA Property in the Custody of Contractors, in accordance with the
provisions of 1845.505-14, the instructions on the form, subpart
1845.71, and any supplemental instructions for the current reporting
period issued by NASA. 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.
(b)(1) The Contractor shall mail the original signed NF 1018
directly to the Center Deputy Chief Financial Officer, Finance.
(2) Three copies shall be submitted (through the Department of
Defense (DOD) Property Administrator if contract administration has
been delegated to DOD) to the following address: [Insert name and
address of appropriate Center office.], unless the Contractor uses
the NASA NF 1018 Electronic Submission System (NESS) for report
preparation and submission.
(c) The annual reporting period shall be from October 1 of each
year through September 30 of the following year. The report shall be
submitted in time to be received by October 31. The information
contained in these reports is entered into the NASA accounting
system to reflect current asset values for agency financial
statement purposes. Therefore, it is essential that required reports
be received no later than October 31. The Contracting Officer may,
in the Government's interest, withhold payment until a reserve not
exceeding $25,000 or 5 percent of the amount of the contract,
whichever is less, has been set aside, if the Contractor fails to
submit annual NF 1018 reports when due. Such reserve shall be
withheld until the Contracting Officer has determined that the
required reports have been received by the Government. The
withholding of any amount or the subsequent payment thereof shall
not be construed as a waiver of any Government right.
(d) A final report shall be submitted within 30 days after
disposition of all property subject to reporting when the contract
performance period is complete in accordance with (b)(1) and (2) of
this clause.
(End of clause)
[FR Doc. 99-29910 Filed 11-16-99; 8:45 am]
BILLING CODE 7510-01-P
