[Federal Register Volume 62, Number 235 (Monday, December 8, 1997)]
[Proposed Rules]
[Pages 64545-64546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31935]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1843 and 1852
Equitable Adjustments Under Contracts for Construction,
Dismantling, Demolishing, or Removing Improvements
AGENCY: Office of Procurement, Contract Management Division, National
Aeronautics and Space Administration (NASA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: This is a proposed rule amending the NASA Federal Acquisition
Regulation Supplement (NFS) to set forth a clause that may be used for
equitable adjustments under contracts for construction, and
dismantling, demolishing, or removing improvements that are
contemplated to be fixed-price and exceed the simplified acquisition
threshold.
DATES: Comments must be received on or before February 6, 1998.
ADDRESSES: Submit comments to Mr. Joseph Le Cren, NASA Headquarters,
Code HK, Washington, DC 20546.
FOR FURTHER INFORMATION CONTACT:
Mr. Joseph Le Cren, Telephone: (202) 358-0444.
SUPPLEMENTARY INFORMATION:
Background
Some NASA field installations have used clauses containing ceilings
on indirect costs and profit as a means for handling equitable
adjustments under construction contracts. Instead of each installation
using its own clause, there is a consensus that it would be in both
NASA's and the contractors' interests to have a standard clause to
establish greater consistency throughout the agency. The proposed
clause also would reduce the administrative burden associated with the
development of an equitable adjustment clause on an installation-by-
installation or contract-by-contract basis.
Neither the use of the proposed clause nor the language contained
in it would be mandatory. This flexibility is being provided so that
the clause is used only when it is considered appropriate and to allow
for differences, such as in terminology, that exist in the construction
industry in different parts of the United States. The ceiling indirect
cost and profit rates contained in the clause, although not mandatory,
are benchmarks as to what is generally considered reasonable. The rates
are considered reasonable based on NASA's experience with equitable
adjustments for construction. In addition, the ceiling rates contained
in the proposed clause are the same as those that have been used for
many years by both the General Services Administration and the
Department of Veterans Affairs. The rates used by these agencies have
significance since they have much larger construction budgets than
NASA.
Impact
NASA certifies that this proposed regulation will not have a
significant economic effect on a substantial number of small entities
under the Regulatory Flexibility Act (5 U.S.C. 601 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 1843 and 1852
Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
Accordingly, 48 CFR Parts 1843 and 1852 are amended as follows:
1. The authority citation for 48 CFR Parts 1843 and 1852 continues
to read as follows:
Authority: 42 U.S.C. 2473(c)(1).
PART 1843--CONTRACT MODIFICATIONS
1843.205-70 [Amended]
2. In section 1843.205-70, the designated paragraphs (a), (b), and
(c) are redesignated as paragraphs (a)(1), (2) and (3), and a new
paragraph (b) is added to read as follows:
1843.205-70 NASA contract clause.
* * * * *
(b) the contracting officer may insert a clause substantially as
stated at 1852.243-72, Equitable Adjustments, in solicitations and
contracts for--
(1) Dismantling, demolishing, or removing improvements; or
(2) Construction, when the contract amount is expected to exceed
the simplified acquisition threshold and a fixed-price contract is
contemplated.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1852.243-72 [Added]
3. Section 1852.243-72 is added to read as follows:
1852.243-72 Equitable Adjustments.
As prescribed in 1843.205-70(b), insert the following clause.
Equitable Adjustments
(a) The provisions of all other clauses contained in this
contract which provide for an equitable adjustment, including those
clauses incorporated by reference with the exception of the
``Suspension of Work'' clause (FAR 52.242-14), are supplemented as
follows:
Upon written request, the Contractor shall submit a proposal for
review by the Government. The proposal shall be submitted to the
contracting officer within the time limit indicated in the request
or any extension thereto subsequently granted. The proposal shall
provide an itemized breakdown of all increases and decreases in the
contract for the Contractor and each subcontractor in at least the
following detail: material quantities and costs; direct labor hours
and rates for each trade; the associated FICA, FUTA, SUTA, and
Workmen's Compensation Insurance; and equipment hours and rates.
[[Page 64546]]
(b) The overhead percentage cited below shall be considered to
include all indirect costs including, but not limited to, field and
office supervisors and assistants, incidental job burdens, small
tools, and general overhead allocations. ``Commission'' is defined
as profit on work performed by others. The percentages for overhead,
profit, and commission are negotiable according to the nature,
extent, and complexity of the work involved, but in no case shall
they exceed the following ceilings:
------------------------------------------------------------------------
Overhead Profit Commission
(percent) (percent) (percent)
------------------------------------------------------------------------
To Contractor on work performed by
other than its own forces.......... .......... .......... 10
To first tier subcontractor on work
performed by its subcontractors.... .......... .......... 10
To Contractor and/or subcontractors
on work performed with their own
forces............................. 10 10 ..........
------------------------------------------------------------------------
(c) Not more than four percentages for overhead, profit, and
commission shall be allowed regardless of the number of
subcontractor tiers.
(d) The Contractor or subcontractor shall not be allowed
overhead or commission on the overhead, profit, and/or commission
received by its subcontractors.
(e) Equitable adjustments for deleted work shall include
credits, limited to the same percentages for overhead, profit, and
commission in paragraph (b) of this clause.
(f) On proposals covering both increases and decreases in the
amount of the contract, the application of the overhead, profit, and
commission shall be on the net change in direct costs for the
Contractor or the subcontractor performing the work.
(g) After receipt of the Contractor's proposal, the contracting
officer shall act within a reasonable period, provided that when the
necessity to proceed with a change does not permit time to properly
check the proposal, or in the event of a failure to reach an
agreement on a proposal, the contracting officer may order the
Contractor to proceed on the basis of the price being determined at
the earliest practicable date. In such a case, the price shall not
be more than the increase or less than the decrease proposed.
(End of clause)
[FR Doc. 97-31935 Filed 12-5-97; 8:45 am]
BILLING CODE 7510-01-M
