48 CFR Parts 1801, 1804, 1808, 1809, 1810, 1814, 1815, 1816, 1817, 1824, 1825, 1831, 1832, 1835, 1837, 1842, 1845, 1846, 1847, 1852, and 1870

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1801, 1804, 1808, 1809, 1810, 1814, 1815, 1816,

1817, 1824, 1825, 1831, 1832, 1835, 1837, 1842, 1845, 1846, 1847, 1852,

and 1870

[NASA FAR Supplement Directive 89-14]

RIN 2700-AB35

Acquisition Regulation; Miscellaneous Amendments to NASA FAR

Supplement; and Reviewing the Reasonableness of Contractor and

Subcontractor Compensation

AGENCY: Office of Procurement, Procurement Policy Division, National

Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document amends the NASA Federal Acquisition Regulation

Supplement (NFS) to reflect a number of miscellaneous changes dealing

with NASA internal or administrative matters, such as removal of NASA

internal reporting requirements. This rule also sets forth the policies

for reviewing the reasonableness of contractor and subcontractor

compensation for service contracts, as well as the solicitation

provision for obtaining such information. It also sets forth the

requirement for the prenegotiation position memorandum to discuss

excessive wages, if any are found.

EFFECTIVE DATE: This regulation will be effective March 31, 1994,

except that the amendments to sections 1801.602-3, 1814.406-3,

1814.406-4, and 1816.603-3 are effective March 16, 1994.

FOR FURTHER INFORMATION CONTACT: Mr. David K. Beck, (202) 358-0482.

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.

Removal of Requirement To Report Ratification Actions to Headquarters

As a result of a NASA Procurement Officers Conference in November

1993, this final rule removes the requirement in section 1801.602-

3(b)(2) that NASA officials provide to NASA Headquarters a copy of each

ratification of an unauthorized commitment along with documentation

supporting the ratification. Ratifications at NASA have been reduced

from 89 ratifications totalling $1.5 million in FY 90 to 27

ratifications totalling $114,000 in FY 93. On September 30, 1993,

additional procedures to control ratifications were required in 48 CFR

1801.602-3(b)(1) (58 FR 51136 and 51137). Consequently, the reporting

requirement in paragraph (b)(2) is no longer needed and will be

eliminated.

Removal of Requirement To Report Certain Mistakes in Bids to NASA

Headquarters

Sections 1814.406-3 and 1814.406-4 are revised to eliminate the

requirement to forward to NASA Headquarters copies of determinations

made under (FAR) 48 CFR 14.406-3(c) and 14.406-4(d), respectively.

Removal of Requirement To Report Certain Letter Contracts to NASA

Headquarters

Section 1816.603-3(a) requires that letter contracts below the

Master Buy Plan threshold (generally $25 million) be approved by the

NASA Procurement Officer at each installation and that a copy of the

approval and other information be provided to NASA Headquarters. This

policy was established years ago to eliminate contractual problems and

to reduce the large number of letter contracts prepared by NASA

Centers. Based on data from our letter contracts status reports, the

Centers are now writing very few letter contracts and the contractual

problems have been eradicated.

With removal of paragraphs (a) (2) and (3), NASA installations will

no longer need to report this information to NASA Headquarters for

letter contracts under $25 million ($10 million in the case of some

smaller installations).

Removal of Requirement for Contract Funding Report

Section 18-32.702-70(d) requires procurement officers to report by

October 31 to the NASA Headquarters Financial Management Division (Code

BFC) on the incremental funding waivers approved during the prior

fiscal year. This final rule eliminates this internal NASA reporting

requirement at the request of the NASA Center Procurement Officers in

order to streamline operations. Procurement Officers will still

maintain records of the waivers that they approve for incremental

funding.

Addition of Coverage to NASA FAR Supplement on the Review of Contractor

and Subcontractor Compensation for Reasonableness

On September 8, 1993, a proposed rule to amend the NFS to add

policies for reviewing the reasonableness of contractor and

subcontractor compensation was published in the Federal Register (58 FR

47244) for comment. All comments were reviewed. No changes have been

made with the exception of deleting the word ``support'' in each case

where it was used with ``service contract,'' ``service subcontracts,''

``service subcontractors,'' or ``services.'' The Office of Management

and Budget has approved this information collection (OMB Number 2700-

0077) through November 30, 1996, under the Paperwork Reduction Act.

Miscellaneous Changes

This rule revises the list of contacts in section 1801.370. Subpart

4.6 is amended in order to revise the instructions to NASA contracting

officers for completing NASA Form 507, Individual Procurement Action

Report. A typographical correction is made in section 1817.504. Section

1832.402-1 is revised to correct the name of the SBIR program. Section

1832.705-2 is removed and 1832.705-270 is amended to require the

contracting officer to place the Contract Funding clause in Section B

of solicitations and contracts without modifying the FAR clause on

Limitation of Funds. The following sections are amended in order to

revise references to NASA Management Instructions and NASA Handbooks:

1804.402; 1804.404-70; 1808.802; 1808.1100; 1809.200; 1810.002;

1814.406-3; 1815.406-5; 1815.570; 1824.102; 1824.202; 1825.604;

1835.003; 1837.200; 1842.173; 1842.202-72; 1845.302-70; 1846.270;

1847.200-70; 1870.103, Appendix I, paragraphs 101.4. and 302.2.; and

1870.303, Appendix I, paragraphs 404.2.l., 602.2., 603.5.b., and

603.5.c. Paragraph (c) of the contract clause at 1852.237-71, Pension

Portability, is amended to add, in place of the asterisk, a note that

was inadvertently omitted. The note explains to NASA contracting

officers the information that contracting officers may insert in

paragraph (c).

Impact

NASA certifies that this 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.).

List of Subjects in 48 CFR Parts 1801, 1804, 1808, 1809, 1810, 1814,

1815, 1816, 1817, 1824, 1825, 1831, 1832, 1835, 1837, 1842, 1845, 1846,

1847, 1852, and 1870

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 48 CFR parts 1801, 1804, 1808, 1809, 1810, 1814, 1815,

1816, 1817, 1824, 1825, 1831, 1832, 1835, 1837, 1842, 1845, 1846, 1847,

1852, and 1870 are amended as follows:

1. The authority citation for 48 CFR parts 1801, 1804, 1808, 1809,

1810, 1814, 1815, 1816, 1817, 1824, 1825, 1831, 1832, 1835, 1837, 1842,

1845, 1846, 1847, 1852, and 1870 continues to read as follows:

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

PART 1801--PURPOSE, AUTHORITY, ISSUANCE

2. Section 1801.105 is amended in paragraph (a) by adding the

following entry in numerical order in the table as follows:

1801.105 OMB approval under the Paperwork Reduction Act.

(a) * * *

------------------------------------------------------------------------

NASA FAR supplement segment OMB control No.

------------------------------------------------------------------------

*****

18-31.............................. 2700-0077

*****

------------------------------------------------------------------------

3. Section 1801.370 is amended by revising paragraphs (a)(1)(i),

(a)(1)(ii), (a)(1)(iii), (a)(2)(i), (a)(2)(iv), (a)(5), and (b) to read

as follows:

1801.370 Points of contact.

* * * * *

(a) * * *

(1) * * *

(i) FAR Council--Eichenlaub

(ii) FAR and NFS Substantive areas--

------------------------------------------------------------------------

Area Analyst(s)

------------------------------------------------------------------------

Part 1:

1.602-3.......................... Whelan.

Balance of 1.6................... Pesnell.

1.7.............................. Pesnell.

All other subparts............... Eichenlaub.

Part 2............................. Beck.

Part 3............................. Muzio.

Part 4:

4.1.............................. Deback.

4.2.............................. Beck.

4.4.............................. Childs.

4.6.............................. King/Beck.

4.7.............................. Beck.

4.8.............................. Childs.

4.9.............................. Beck.

4.70............................. Whelan.

4.71............................. Beck.

4.72............................. Deback.

4.73............................. Pesnell.

Part 5............................. Muzio.

Part 6:

6.5.............................. LaBeau/Pesnell.

All other subparts............... Pesnell.

Part 7............................. O'Neill.

Part 8:

8.3.............................. Whelan.

All other subparts............... Childs.

Part 9:

9.5.............................. Muzio.

All other subparts............... Whelan.

Part 10............................ Sudduth.

Part 11............................ Sudduth.

Part 12:

12.1............................. Sudduth.

12.2............................. Whelan.

12.3............................. Muzio.

12.5............................. Whelan.

Part 13............................ O'Neill.

Part 14............................ O'Neill.

Part 15:

15.1............................. Whelan.

15.4............................. Whelan.

15.5............................. Sudduth.

15.6............................. O'Toole.

15.7............................. Childs.

15.8............................. Walker/Eichenlaub.

15.9............................. Walker/Eichenlaub.

15.10............................ Brundage.

Part 16............................ Whelan.

Part 17............................ Sudduth.

Part 19............................ O'Neill.

Part 20............................ Muzio.

Part 22............................ Childs/Harding.

Part 23............................ Sudduth.

Part 24............................ Whelan.

Part 25:

25.6............................. Sudduth.

All other subparts............... Childs.

Part 27............................ Childs.

Part 28............................ Childs.

Part 29............................ Childs.

Part 30............................ Guenther/Eichenlaub.

Part 31............................ LeCren/Eichenlaub.

Part 32............................ Childs.

Part 33............................ Brundage.

Part 34............................ Whelan.

Part 35............................ O'Neill.

Part 36............................ Pesnell/Stamper.

Part 37............................ Pesnell/Harding.

Part 39............................ O'Toole.

Part 42:

42.7............................. Balinskas/Eichenlaub.

42.8............................. Balinskas/Eichenlaub.

42.10............................ Guenther/Eichenlaub.

42.12............................ King/Childs.

All other subparts............... Pendleton/Childs.

Part 43............................ Pendleton/Pesnell.

Part 44............................ Jeshow/Childs.

Part 45............................ Whelan/Pendleton/Wilchek.

Part 46............................ Childs/Jeshow.

Part 47............................ Childs/Brunner.

Part 48............................ Wilson/Whelan.

Part 49............................ Whelan.

Part 50............................ Muzio.

Part 51............................ Childs.

Part 52............................ Childs/All analysts in assigned

areas.

Part 53............................ Beck.

Part 70:

70.1............................. Deback.

70.2............................. Deback.

70.3............................. O'Toole.

70.4............................. Sudduth.

------------------------------------------------------------------------

(iii) Publication matters--Beck

* * * * *

(2) Grants and cooperative agreements

(i) All areas, including Federal Demonstration Project--Deback

* * * * *

(iv) Intellectual Property--Mannix

* * * * *

(5) Guidelines for Acquisition of Investigations (NHB 8030.6)--

Deback

* * * * *

(b) Consolidated Contact List.

------------------------------------------------------------------------

Name (code) (202)

------------------------------------------------------------------------

Balinskas, James A. (HC).................................... 358-0445

Beck, David K. (HP)......................................... 358-0482

Brundage, Paul D. (HP)...................................... 358-0481

Brunner, Peter E. (JIB)..................................... 358-2289

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

Deback, Thomas L. (HP)...................................... 358-0431

Eichenlaub, Carl E. (HP).................................... 358-0483

Guenther, Anne C. (HC)...................................... 358-0003

Harding, Allan D. (JL)...................................... 358-2274

Jeshow, J. Ronald (HK)...................................... (703) 274-

4127

King, Bruce C. (HM)......................................... 358-0461

LaBeau, Michael D. (HS)..................................... 358-0433

LeCren, Joseph F. (HC)...................................... 358-0444

Mannix, John G. (GP)........................................ 358-2424

Muzio, David L. (HP)........................................ 358-0432

O'Bryant, Cynthia B. (HP)................................... 358-2105

O'Neill, Deborah A. (HP).................................... 358-0440

O'Toole, Thomas J. (HP)..................................... 358-0478

Pendleton, Larry G. (HK).................................... 358-0487

Pesnell, James A. (HP)...................................... 358-0484

Rosen, Eugene D. (K)........................................ 358-2088

Smith, Phillip T. (BFC)..................................... 358-1026

Stamper, William C. (JXF)................................... 358-1133

Sudduth, David S. (HP)...................................... 358-0485

Walker, Reginald W. (HC).................................... 358-0443

Whelan, Thomas J. (HP)...................................... 358-0475

Wilchek, Billie E. (JLE).................................... 358-2301

Wilson, Roger P. (HK)....................................... 358-0486

------------------------------------------------------------------------

1801.602-3 [Amended]

4. Paragraph (b) of section 1801.602-3 is amended by removing

paragraph (b)(2), removing the paragraph designation ``(1)'' from

paragraph (b)(1) following ``(b) Limitations.'', and redesignating

paragraphs (i) through (iv) as paragraphs (b) (1) through (4).

PART 1804--CONTRACT REPORTING

5. Section 1804.402 is amended by revising the first sentence to

read as follows:

1804.402 General.

NASA industrial security policies and procedures are prescribed in

NMI 1600.2, NASA Security Program. * * *

6. Section 1804.404-70 is amended by revising the third sentence to

read as follows:

1804.404-70 Contract clause.

* * * Include in the solicitation and contract a properly executed

DD Form 254, Contract Security Classification, in accordance with NMI

1600.2. * * *

7. Section 1804.671-3 is amended by revising the first sentence to

read as follows:

1804.671-3 Submission due date.

The FACS report shall have information as of the last day of the

month and shall arrive in NASA Headquarters not later than the close of

business on the fifth work day following each month being reported. * *

*

8. Section 1804.671-4 is amended by revising the seventh sentence

of the introductory text to read as follows:

1804.671-4 Preparing Individual Procurement Action Reports (NASA Forms

507, 507A, 507B, 507G, and 507M).

* * * Item numbers 2 through 7, 9, 15a, 20a, 51 through 61, and 66

are for Acquisition Management Subsystem (AMS) reporting at the

installation level only. * * *

* * * * *

1804.671-4 [Amended]

9. Section 1804.671-4 is amended in paragraph (k) by republishing

the paragraph heading and revising the first sentence to read as

follows:

* * * * *

(k) Item 8--Contractor identification code (CIC) number (7

positions). This code is obtained from the publication ``NASA

Contractor Identification Codes,'' managed by the Headquarters

Procurement Systems Division (Code HM). * * *

* * * * *

10. Section 1804.671-4 is amended in paragraph (n) by revising the

entry for Code 24 and adding the following entry in numerical order to

the table to read as follows:

* * * * *

(n) * * *

------------------------------------------------------------------------

Code Installation

------------------------------------------------------------------------

*****

24... Dryden Flight Research Center.

*****

73... Space Station Program Office.

*****

------------------------------------------------------------------------

11. Section 1804.671-4 is amended in paragraph (r) by revising the

last sentence to read as follows:

* * * * *

(r) * * * These procurements must have one of the following

competitive PPC's: AX, AE, AF, BX, BE, BF, FX, FE, FF, GF, KX, KE, QX,

QF, RS, RE, RF, UX, UF, TX, TE, TF, XX, XE, XD, ZX, ZE, or ZD.

* * * * *

12. Section 1804.671-4 is amended in paragraph (s) by removing

``(other than reporting center's)'' in both places (i.e., for Codes 25

and 26).

13. Section 1804.671-4 is amended in paragraph (u) by revising the

entry for Code 08 and by adding the following entry in numerical order

to the table to read as follows:

* * * * *

(u) * * *

------------------------------------------------------------------------

Code Contractor

------------------------------------------------------------------------

*****

08... Other nonprofit (Non-Minority). A non-minority nonprofit

institution or organization that is a corporation, foundation,

trust, or institution not organized for profit, and no part of

its net earnings is applied to the profit of any private

shareholder or individual.

*****

18... Other nonprofit (Minority). A minority nonprofit institution or

organization that is a corporation, foundation, trust, or

institution not organized for profit, and no part of its net

earnings is applied to the profit of any private shareholder or

individual.

*****

------------------------------------------------------------------------

14. Section 1804.671-4 is amended by redesignating paragraphs (z)

through (ttt) as paragraphs (bb) through (vvv), by redesignating

paragraphs (v) through (y) as paragraphs (w) through (z), by adding

paragraphs (v) and (aa), by redesignating newly designated paragraph

(oo)(7) as paragraph (oo)(8), by adding paragraph (oo)(7), and by

revising newly designated paragraph (vv) to read as follows:

* * * * *

(v) Item 16a--Women-owned business (1 position). Enter ``Y'' (yes)

or ``N'' (no) to indicate whether the business concern is a women-owned

business. A women-owned business is one that is at least 51 percent

owned by a woman or women who are U.S. citizens and who also control

and operate the business.

* * * * *

(aa) Item 20a--Contract/grant proposal number (18 positions). Enter

the contract/grant proposal number in this field. This field is

optional and not reported to Headquarters.

* * * * *

(oo) * * *

* * * * *

(7) Code G--Designated entities set-aside. Report this code for

awards set-aside for disadvantaged business, women-owned business,

HBCU's, and other minority institutions. (This covers the 26

procurements authorized by the D&F signed by the Administrator on

December 1, 1992.)

* * * * *

(vv) Item 41--Reserved (1 position).

* * * * *

15. Table 1804-1 is removed following section 1804.676, and a new

table is added at the end of subpart 1804.6 reading as follows:

BILLING CODE 7510-01-P

TR16MR94.003

BILLING CODE 7510-01-C

PART 1808--REQUIRED SOURCES OF SUPPLIES AND SERVICES

16. Section 1808.802 is amended by revising the second sentence to

read as follows:

1808.802 Policy.

* * * Approval of printing supplies or services in contracts shall

be in accordance with NMI 1490.1, NASA Printing, Duplicating, and

Copying Management Program. * * *

17. Section 1808.1100 is revised to read as follows:

1808.1100 Scope of subpart.

NASA procedures for leasing motor vehicles from GSA or commercial

sources are contained in NMI 6000.5, Transportation Management.

PART 1809--CONTRACTOR QUALIFICATIONS

18. Section 1809.200 is revised to read as follows:

1809.200 Scope of subpart.

This subpart prescribes policies and procedures that, like those of

(FAR) 48 CFR part 9, subpart 9.2, are to be followed in the use of

qualified products lists for procurement of microcircuits as authorized

by NMI 5320.5, Basic Policy for NASA Space Flight Program Electrical,

Electronic, and Electromechanical (EEE) Parts, and NMI 5320.6,

Implementation of NASA Standard Electrical, Electronic, and

Electromechanical (EEE) Parts Program.

PART 1810--SPECIFICATIONS, STANDARDS, AND OTHER PURCHASE

DESCRIPTIONS

19. In section 1810.002, the first sentence is revised to read as

follows:

1810.002 Policy.

Implementation of the Metric Conversion Act of 1975, as amended,

and (FAR) 48 CFR 10.002(c), shall be in accordance with the policy

section of NMI 8010.2, Use of the Metric System of Measurements in NASA

Programs. * * *

PART 1814--SEALED BIDDING

20. Paragraph (a) of section 1814.406-3 is revised to read as

follows:

1814.406-3 Other mistakes disclosed before award.

(a) Under the authority delegated by the Administrator in NMI

5101.8, Delegation of Authority To Take Actions in Procurement and

Related Matters, the Associate Administrator for Procurement is

authorized to permit the correction of bids under (FAR) 48 CFR 14.406-3

(a) and (b) and the award of a contract under (FAR) 48 CFR 14.406-3(d)

(see (FAR) 48 CFR 14.406-3(e)). The Associate Administrator for

Procurement has authorized procurement officers to permit withdrawal of

bids when the conditions in (FAR) 48 CFR 14.406-3(c) are met.

* * * * *

1814.406-4 [Amended]

21. Section 1814.406-4 is amended by removing paragraph (b) and by

removing the paragraph designation from paragraph (a).

PART 1815--CONTRACTING BY NEGOTIATION

22. Paragraph (b)(1) of section 1815.406-5 is revised to read as

follows:

1815.406-5 Part IV--Representations and instructions.

* * * * *

(b) * * *

(1) State if the selected contractor will require access to

classified information (see NHB 1620.3, NASA Security Handbook).

* * * * *

23. Section 1815.570 is revised to read as follows:

1815.570 Foreign proposals.

Unsolicited proposals from foreign sources are subject to NMI

1362.1, Initiation and Development of International Cooperation in

Space and Aeronautical Programs.

24. In section 1815.807-70, paragraph (d)(1) is revised to read as

follows:

1815.807-70 Content of the prenegotiation position memorandum.

* * * * *

(d) Cost analysis. (1) Include a parallel tabulation, by element of

cost and profit/fee, of the contractor's proposal, the Government's

negotiation objective, and the Government's maximum position, if

applicable. For each element of cost, compare the contractor's proposal

and each Government position, explain the differences and how the

Government position(s) were developed, including the estimating

assumptions and projection techniques employed, and how the positions

differ in approach. Include a discussion of excessive wages found (if

applicable) and their planned resolution (see 1831.205-670). Explain

how historical costs, including costs incurred under a letter contract

(if applicable), were used in developing the negotiation objective.

* * * * *

PART 1816--TYPES OF CONTRACTS

1816.603-3 [Amended]

25. Section 1816.603-3 is amended by removing paragraphs (a) (2)

and (3), removing the paragraph designation from paragraph (a)(1)

(making that paragraph and paragraph (a) introductory text one

paragraph), and redesignating paragraphs (a)(1) (i) through (xi) as

paragraphs (a) (1) through (11).

PART 1817--SPECIAL CONTRACTING METHODS

26. In section 1817.504, the second sentence of paragraph (a) is

revised to read as follows:

1817.504 Ordering procedures.

(a) * * * Before offers are solicited from commercial sources, the

field installation's Director or a designee (see NMI 5101.24,

Delegation of Authority to Take Actions in Procurement, Grants,

Cooperative Agreements, and Related Matters) must determine whether to

obtain the supplies or services from another Government agency. * * *

* * * * *

PART 1824--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

27. Section 1824.102 is revised to read as follows:

1824.102 General.

For NASA rules and regulations implementing the Privacy Act, see

NMI 1382.17, Privacy Act--NASA Regulations (14 CFR part 1212).

28. Paragraph (a) of section 1824.202 is revised to read as

follows:

1824.202 Policy.

(a) NASA implementation of the Freedom of Information Act is found

in NMI 1382.2, Availability of Agency Records to Members of the Public

(14 CFR part 1206).

* * * * *

PART 1825--FOREIGN ACQUISITION

29. In section 1825.604, the second sentence of paragraph (e) is

revised to read as follows:

1825.604 Exempted supplies.

* * * * *

(e) * * * The contracting officer shall consult 14 CFR 1214.15 (NMI

8610.18, Duty-Free Entry of Space Articles) for procedures for

obtaining the required Headquarters certificates for the duty-free

entry of these articles.

PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES

30. Sections 1831.205-670 and 1831.205-671 are added to read as

follows:

1831.205-670 Evaluation of contractor and subcontractor compensation

for service contracts.

(a) The contracting officer shall evaluate the reasonableness of

compensation for service contracts:

(1) Prior to the award of a cost reimbursement or non-competitive

fixed-price type contract which has a total potential value in excess

of $500,000, and

(2) Periodically after award for cost reimbursement contracts, but

at least every three years.

(b) The contracting officer shall ensure the reasonableness of

compensation is evaluated for cost reimbursement or non-competitive

fixed-price type service subcontracts under a prime contract meeting

the criteria in paragraph (a)(1) of this section where:

(1) The subcontract has a total potential value in excess of

$500,000, and

(2) The cumulative value of all of a subcontractor's service

subcontracts under the prime contract is in excess of 10 percent of the

prime contract's total potential value.

(c)(1) Offerors shall be required to submit as part of their

proposals a compensation plan addressing all proposed labor categories.

Offerors also shall demonstrate in writing that their proposed

compensation is reasonable.

(2) Subcontractors meeting the criteria in paragraph (b) of this

section shall be required to comply with paragraph (c)(1).

(d) The contracting officer's preaward evaluation of each offeror's

and their subcontractors' compensation should be done as part of, or in

addition to DCAA audits, price analyses, or any other means deemed to

be necessary.

(e) The results of the contracting officer's evaluation, including

any excessive compensation found and its planned resolution, shall be

addressed in the prenegotiation position memorandum, with the final

resolution discussed in the price negotiation memorandum.

(f) The contracting officer shall ensure that the reasonableness of

compensation for cost reimbursement subcontracts meeting the criteria

in paragraphs (b)(1) and (2) of this section is periodically reviewed

after award, but at least every three years.

(g) The results of the periodic evaluations of contractor and

subcontractor compensation after contract award shall be documented in

the contract file.

1831.205-671 Solicitation provision.

The contracting officer shall insert a provision substantially the

same as the provision at 1852.231-71, Determination of Compensation, in

solicitations for services which contemplate the award of a cost

reimbursement or non-competitive fixed-price type service contract

having a total potential value in excess of $500,000.

PART 1832--CONTRACT FINANCING

31. The title and first sentence of section 1832.402-1 are revised

to read as follows:

1832.402-1 Small Business Innovation Research contracts

Advance payments for all Small Business Innovation Research (SBIR)

Phase I contracts have been authorized through a class deviation. * * *

32. Paragraph (d) of section 18.32.702-70 is amended by revising

the third and four sentences to read as follows:

1832.702-70 [Amended]

* * * * *

(d) * * * The procurement officer shall maintain a record of all

such approvals during the fiscal year. At a minimum, the record will

include: contract number, description and type; dollar value; amount of

funds initially available; and the reason(s) for the waiver.

* * * * *

1832.705-2 [Removed]

33. Section 1832.705-2 is removed.

34. Section 1832.705-270 is amended by revising the first sentence

of paragraph (b) as follows:

1832.705-270 Additional clauses for limitation of cost or funds.

(a) * * *

(b) The contracting officer shall insert a clause substantially as

stated at 1852.232-81, Contract Funding, in Section B of solicitations

and contracts containing the clause at (FAR) 48 CFR 52.232-22,

Limitation of Funds. * * *

PART 1835--RESEARCH AND DEVELOPMENT CONTRACTING

35. In section 1835.003, paragraph (c) is revised to read as

follows:

1835.003 Policy.

* * * * *

(c) See NMI 5109.13, Recoupment Policy for the Sale, Use, Lease, or

Other Transfer of NASA-Developed Technologies, for NASA policy

regarding recoupment.

PART 1837--SERVICE CONTRACTING

36. Section 1837.200 is revised to read as follows:

1837.200 Scope of subpart.

This subpart implements and supplements (FAR) 48 CFR part 37,

subpart 37.2 and NMI 5104.5, Guidelines for the Use and Approval of

Advisory and Assistance Services Obtained by Contract, and establishes

procedures to be followed in contracting for advisory and assistance

services.

PART 1842--CONTRACT ADMINISTRATION

37. In section 1842.173, the second sentence is revised to read as

follows:

1842.173 Reimbursement for contract administration services.

* * * Budgeting, funding, and payment for these services shall be

accomplished in accordance with NMI 7410.1, Management, Funding, and

Payment for Contract and Grant Administration and Audit Services

Obtained from Other Federal Agencies. * * *

38. In section 1842.202-72, the first sentence is revised to read

as follows:

1842.202-72 Delegations to security offices.

NASA's policies and procedures on security are set forth in NMI

1600.2, NASA Security Program. * * *

PART 1845--GOVERNMENT PROPERTY

39. Paragraph (a) of section 1845.302-70 is revised to read as

follows:

1845.302-70 Securing approval of facilities projects.

(a) Pursuant to NMI 7330.1, Delegation of Authority--Approval

Authorities for Facility Projects, the contracting officer must approve

facilities projects involving leasing, construction, expansion,

modification, rehabilitation, repair, or replacement of real property.

* * * * *

PART 1846--QUALITY ASSURANCE

40. In section 1846.270, the second sentence of paragraph (a) is

revised to read as follows:

1846.270 Contract clauses for space flight-related operations.

(a) * * * The clause, however, shall not be used in procurements

for flight crew members or payload specialists when these individuals

are covered by other NASA Management Instructions that have screening

requirements equivalent to those in NMI 8610.13, Mission Critical Space

Systems Personnel Reliability Program (for example, NMI 7100.16,

Payload Specialists for Space Transportation System (STS) Missions).

* * * * *

PART 1847--TRANSPORTATION

41. Section 1847.200-70 is revised to read as follows:

1847.200-70 Charter of aircraft.

When procuring aircraft by charter, contracting officers shall

comply with NHB 7900.3, Aircraft Operations Management Manual.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

42. Section 1852.231-71 is added to read as follows:

1852.231-71 Determination of Compensation Reasonableness.

As prescribed at 1831.205-671, insert the following provision.

Determination of Compensation Reasonableness

(March 1994)

(a) The proposal shall include a total compensation plan. This

plan shall address all proposed labor categories, including those

personnel subject to union agreements, the Service Contract Act, and

those exempt from both of the above. The total compensation plan

shall include the salaries/wages, fringe benefits and leave programs

proposed for each of these categories of labor. The plan also shall

include a discussion of the consistency of the plan among the

categories of labor being proposed. Differences between benefits

offered professional and non-professional employees shall be

highlighted. The requirements of this plan may be combined with that

required by the clause at (FAR) 48 CFR 52.222-46, ``Evaluation of

Compensation for Professional Employees.''

(b) The offeror shall provide written support to demonstrate

that its proposed compensation is reasonable.

(c) The offeror shall include the rationale for any conformance

procedures used for those Service Contract Act employees proposed

that do not fall within the scope of any classification listed in

the applicable wage determination.

(d) The offeror shall require all service subcontractors (1)

with proposed cost reimbursement or non-competitive fixed-price type

subcontracts having a total potential value in excess of $500,000

and (2) the cumulative value of all their service subcontracts under

the proposed prime contract in excess of 10 percent of the prime

contract's total potential value, provide as part of their proposals

the information identified in (a) through (c) of this provision.

(End of provision)

1852.237-71 [Amended]

43. Paragraph (c) of the clause in section 1852.237-71 is amended

by removing the footnote ``*'' and adding in its place ``________ [In

accordance with 1837.170(a)(2), a period of time (e.g., one year) may

be inserted.]'' and the footnote ``*'' to paragraph (c) is removed.

PART 1870--NASA SUPPLEMENTARY REGULATIONS

44. In Appendix I to section 1870.103, paragraph 101.4. and the

second sentence of paragraph 302.2. are revised to read as follows:

Appendix I to 1870.103: Guidelines for Acquisition of

Investigations

* * * * *

Chapter 1--The Investigation Acquisition System

* * * * *

101 Key Features of the System

* * * * *

4. When the need is determined by the Program Associate

Administrator, payload specialists will be selected in accordance

with NMI 7100.16, Payload Specialists for Space Transportation

System (STS) Missions.

* * * * *

Chapter 3--The Announcement of Opportunity

* * * * *

302 Responsibilities

* * * * *

2. * * * Attention is directed to NMI 1362.1, Initiation and

Development of International Cooperation in Space and Aeronautical

Programs.

* * * * *

45. In Appendix I to section 1870.303, the first sentence of

paragraph 404.2.l, the second sentence of paragraph 602.2, paragraph

603.5.b, and the first sentence of paragraph 603.5.c. are revised to

read as follows:

Appendix I to 1870.303--NASA Source Evaluation Board Procedures

(Handbook)

* * * * *

Chapter 4--SEB Operating Procedures for Solicitation and Evaluation

* * * * *

404 Request for Proposals (RFP's)--Review and Approval

* * * * *

2. * * *

* * * * *

l. When the procurement involves a major system under NMI

7120.4, Management of Major System Programs and Projects, and NHB

7120.5, Management of Major System Programs and Projects Handbook,

the SEB will ensure that the RFP is prepared in terms of mission

need so each offeror can respond with an alternative system design

concept proposal to satisfy the mission need and can propose a

technical approach, design features, and alternatives to schedule,

cost, and capability goals consistent with that concept. * * *

* * * * *

Chapter 6--Source Selection

* * * * *

602 Notice and Debriefing for Unsuccessful Offerors

* * * * *

2. * * * This debriefing should normally take place prior to

contract award and be conducted in accordance with 15.1003. * * *

* * * * *

603 Source Selection Statement

* * * * *

5. * * *

b. Accordingly, unless prior approval is obtained through the

Headquarters Procurement Operations Division (Code HS) with the

concurrence of the Office of General Counsel, Source Selection

Statements for the selection of alternative system design concepts

subject to NMI 7120.4, Management of Major System Programs and

Projects, and NHB 7120.5, Management of Major System Programs and

Projects Handbook, are not to be released to competing offerors or

the general public, if requested, prior to the release of the Source

Selection Statement for full-scale development.

c. A similar problem may occur in other procurements where

competition continues but is not covered under NMI 7120.4 or NHB

7120.5. * * *

* * * * *

[FR Doc. 94-5144 Filed 3-15-94; 8:45 am]

BILLING CODE 7510-01-P