NASA FAR Supplement; Contractor Cost Reporting

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1804, 1842, and 1852

[NFS Case 933705]

NASA FAR Supplement; Contractor Cost Reporting

AGENCY: Office of Procurement, Procurement Policy Division, National

Aeronautics and Space Administration (NASA).

ACTION: Interim rule.

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SUMMARY: Until now, the NFS has had only a prescription for use of the

cost reporting (NASA Form 533 series) clauses, with no policy guidance.

Also, the prescriptions' dollar thresholds for use of the clauses are

stated only by reference to a NASA Management Instruction (NMI), thus

requiring the reader to find and use the NMI in order to determine when

the clauses are required. This change provides the thresholds and adds

some guidance regarding the contracting officer's duties, allowable

changes, and deviation approval authority. There is also some minor

clarification in the wording of the clauses, and the coverage is

relocated to a more appropriate subpart.

DATES: This interim rule is effective May 9, 1994. NASA will accept

written comments until July 8, 1994.

ADDRESSES: Comments regarding this rule should be addressed as follows:

National Aeronautics and Space Administration, Procurement Policy

Division (Code HP), Washington, DC 20546. Please cite HP number 933705

in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Frances Sullivan, (202) 358-0488, or

William T. Childs, (202) 358-0454.

SUPPLEMENTARY INFORMATION:

Availability of NASA FAR Supplement

The NASA FAR Supplement, of which this rule is a part, is available

in its entirety on a subscription basis from the Superintendent of

Documents, Government Printing Office, Washington, DC 20402, telephone

number (202) 783-3238. Cite GPO Subscription Stock Number 933-003-

00000-1. It is not distributed to the public, either in whole or in

part, directly by NASA.

Background

This case was opened based on General Accounting Office Report

AFMD-93-3, October 29, 1992, NASA's Financial Management Operations,

which included a finding that procurement officials did not always

follow agency directives to include contractor reporting requirements

in solicitations and contracts.

Regulatory Flexibility Act

The interim rule is not expected to 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., because this

rule does not significantly change existing policies or procedures. An

Initial Regulatory Flexibility Analysis has, therefore, not been

performed. Comments from small entities concerning the affected NASA

FAR Supplement subparts will be considered in accordance with 5 U.S.C.

601. Such comments must be submitted separately and cite 5 U.S.C. 601,

et seq.

Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

changes to the NASA FAR Supplement do not impose any new recordkeeping

or information collection requirements, or new collections of

information from offerors, contractors, or members of the public which

require the approval of the Office of Management and Budget (OMB) under

44 U.S.C. 3501, et seq. The information collection represented by the

NASA Forms 533 has previously been approved under OMB Control No. 2700-

0003, through 12/21/96.

List of Subjects in 48 CFR Parts 1804, 1842, and 1852

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 48 CFR parts 1804, 1842, and 1852 are amended as

follows.

1. The authority citation for 48 CFR parts 1804, 1842, and 1852

continues to read as follows:

Authority: 42 U.S.C. 2473(c)(1).

PART 1804--ADMINISTRATIVE MATTERS

2. Sections 1804.675 and 1804.675-1 are removed and reserved.

PART 1842--CONTRACT ADMINISTRATION

3. Subpart 1842.72 is added to read as follows:

Subpart 1842.72--NASA Contractor Financial Management Reporting

Sec.

1842.7201 General.

1842.7202 Contract clauses.

Subpart 1842.72--NASA Contractor Financial Management Reporting

1842.7201 General.

(a) Contracting officer responsibilities. (1) Successful cost

management will only result from a team approach among the procurement,

financial/resources management, and project management communities.

Contracting Officers should play a primary role in managing cost

performance. They must ensure contracts require cost reporting

consistent with both policy requirements and project needs. Contracting

Officers should monitor contractor cost reports on a regular basis to

ensure cost data reported is accurate and timely. Contracting Officers

should independently review cost report data. 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. When contracts are modified to accommodate contractor-

responsible cost performance problems, consideration is required from

the contractor; e.g., reduced fee earning potential.

(b) Reporting requirements. (1) Reporting utilizing NASA Contractor

Financial Management Reports, the NASA Form 533 series, is required

(see NMI 9501.1, NASA Contractor Financial Management Reporting System)

on cost-type, price redetermination, and fixed-price incentive

contracts when the following dollar, period of performance, and scope

criteria are met:

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Criteria Report format

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Period of performance

Contract value/scope 533M 533Q 533P

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$500K up to $1M/all........ 1 year or more....... Required............. Optional............. Optional.

$1,000,000 and greater/all. Less than 1 year..... Required............. Optional............. Optional.

$1,000,000 and greater/all. 1 year or more....... Required............. Required............. Optional.

$25,000,000 and greater/ 1 year or more....... Required............. Required............. Required.

supply contracts.

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(2) Where it is probable that a contract will ultimately meet the

criteria through change orders, supplemental agreements, etc., the

reporting requirement must be implemented in the contract as initially

awarded.

(3) Performance analysis reporting using the 533P format is

mandatory for supply contracts over $25,000,000. Although non-supply

contracts over $25,000,000 require only 533M and 533Q reporting,

Performance Measurement System reports can be an effective management

tool and should be routinely considered as a possible requirement for

non-supply contracts over $25,000,000.

(c) Substitution of contractor reports. With the Contracting

Officer's approval, 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. If substitution is made for the 533P

report, schedule data must be reported as of same date and in the same

reporting categories as the financial data. The Contracting Officer

shall coordinate any proposed substitute with the installation

financial management office.

(d) Contract requirements. (1) The reporting requirements,

including a description of the reporting categories, shall be detailed

in the procurement request, and the reports shall be required by

inclusion of the appropriate clause or clauses prescribed in 1842.7202.

The contract schedule must also indicate the addressees and number of

copies. The reporting categories specified shall be coordinated with

the Installation Financial Management Office to ensure that data

required for agency cost accounting will be provided by the reports.

Reporting due dates shall be in accordance with the provisions of NHB

9501.2, Procedures for Contractor Reporting of Correlated Cost and

Performance Data. No changes to these submission requirements shall be

negotiated except in unusual circumstances and no due dates shall be

later than the date by which the Installation Financial Management

Office requires the reports for entering cost data in the accounting

system.

(2) The contractor shall be required to submit an ``Initial

Report,'' in complete detail, time-phased for the expected life of the

contract, within 10 days after authorization to proceed has been

granted, unless otherwise specified by the Contracting Officer. Regular

monthly and quarterly reporting will begin within 30 days of contract

award.

(e) Deviations. Deviations from the financial management reporting

provisions of the clauses prescribed herein will require approval in

accordance with subpart 1801.4. The Associate Administrator for

Procurement will obtain concurrences of the Director, Financial

Management Division, and the Associate Administrator of the cognizant

Headquarters Program Office.

1842.7202 Contract clauses.

(a) The clause at 1852.242-73, NASA Contractor Financial Management

Reporting, shall be used when any of the NASA Form 533 series of

reports are required from the contractor.

(b) The clause at 1852.242-74, NASA Contractor Financial Management

Reporting (Performance Analysis Report), shall be used in conjunction

with the clause at 1852.242-73 when the Monthly Contractor Financial

Management Performance Analysis Report (533P) is required from the

contractor.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1852.204-71 and 1852.204-72 [Removed]

3. Sections 1852.204-71 and 1852.204-72 are removed.

4. Sections 1852.242-73 and 1852.242-74 are added to read as

follows:

1852.242-73 NASA Contractor Financial Management Reporting.

As prescribed in 1842.7202(a), insert the following clause in

contracts that require submission of any of the NASA Form 533 series of

reports.

NASA Contractor Financial Management Reporting (April 1994)

(a) The Contractor shall submit NASA Contractor Financial

Management Reports on NASA Forms 533 in accordance with the

instructions in Procedures for Contractor Reporting of Correlated

Cost and Performance Data (NHB 9501.2) and on the reverse side of

the forms, as supplemented in the Schedule of this contract. The

detailed reporting categories to be used, which shall be correlated

with technical and schedule reporting, shall be set forth in the

contract Schedule. Contractor implementation of reporting

requirements under this clause shall include NASA approval of the

definitions of the content of each reporting category and give due

regard to the Contractor's established financial management

information system.

(b) Lower level detail used by the Contractor for its own

management purposes to validate information reported to NASA shall

be compatible with NASA requirements.

(c) Reports shall be submitted in the number of copies, at the

time, and in the manner set forth in the contract Schedule or as

designated in writing by the Contracting Officer. Upon completion

and acceptance by NASA of all contract Schedule line items, the

Contracting Officer may direct the Contractor to submit Form 533

reports on a quarterly basis only.

(d) The Contractor shall require first-tier subcontracts that

meet the established reporting criteria set forth in 1842.7201(b)(1)

to report cost data using the NASA Form 533 reports. Copies of

subcontractor Form 533 reports shall be submitted along with the

Contractor's Form 533 reports in the manner set forth in the

contract Schedule or as designated in writing by the Contracting

Officer.

(e) If during the performance of this contract NASA requires a

change in the information or reporting requirements specified in the

Schedule, or as provided for in paragraph (a) or (c) of this clause,

the Contracting Officer shall effect that change in accordance with

the Changes clause of this contract.

(End of clause)

1852.242-74 NASA Contractor Financial Management Reporting

(Performance Analysis Report).

As prescribed in 1842.7202(b), insert the following clause, in

addition to the clause at 1852.242-73, in contracts that require

submission of NASA Form 533P.

NASA Contractor Financial Management Reporting (Performance Analysis

Report) (April 1994)

Monthly reporting of contract performance shall be accomplished

on the NASA Monthly Contractor Financial Management Performance

Analysis Report (NASA Form 533P) in accordance with the instructions

in Procedures for Contractor Reporting of Correlated Cost and

Performance Data (NHB 9501.2) and on the reverse side of the form,

as supplemented in the Schedule of this contract.

(End of clause)

[FR Doc. 94-11017 Filed 5-6-94; 8:45 am]

BILLING CODE 7510-01-P