NASA FAR Supplement; Rewrite of NASA Policy on Contractor Qualifications, Cost Accounting Standards Administration, and Contract Cost Principles and Procedures

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1809, 1830, and 1831

NASA FAR Supplement; Rewrite of NASA Policy on Contractor

Qualifications, Cost Accounting Standards Administration, and Contract

Cost Principles and Procedures

AGENCY: Office of Procurement, Contract Management Division, National

Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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

SUMMARY: This is a proposed revision of the NASA FAR Supplement in

order to rewrite NASA policy on Contractor Qualifications, Cost

Accounting Standards Administration, and Contract Cost Principles and

Procedures. The changes are intended to streamline the regulation.

DATES: Comments are due on or before September 25, 1995.

ADDRESSES: Comments should be addressed to: National Aeronautics and

Space Administration, Contract Management Division (Code HK/Beck),

Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT:

David K. Beck, (202) 358-0482.

SUPPLEMENTARY INFORMATION:

Background

We are rewriting the NASA FAR Supplement in order to streamline the

regulation, delegate authority to the lowest possible level, and

eliminate unnecessary reports and requirements. This rule proposes

revisions to three parts of the NASA FAR Supplement. Although the

revisions are minor, we are publishing these changes for comment

because the parts cover topics of considerable interest to NASA

contractors.

Summary of Changes

The policy on Canadian subcontractors is shortened and relocated to

Sec. 1809.104-4. The policy on contractor use of ``Made in America''

labels is removed because the topic is addressed by FAR 9.406-2(a)(4).

The discussion of conditions for preaward surveys at Sec. 1809.106-1 is

removed because it is unnecessary guidance.

Several changes are made to Sec. 1809.106-70 on preaward surveys.

Paragraphs (d) (2) and (3) are changed in order to remove unnecessary

words and provide additional guidance on requesting surveys.

Unnecessary words are removed from paragraphs (j)(4) and (k)(1).

In paragraph 1809.202(a), the responsibility for justifying

qualification requirements is restated. Paragraphs 1809.203-70(a) and

1809.206-1(b) are changed to indicate current organizational names.

Paragraph 1809.203-70(c) is removed because it is not needed in this

regulation.

Subpart 1809.4 on debarment is revised in order to show

reassignment of this responsibility in NASA's Office of Procurement,

reorganize the material for clarity, and remove redundant or

unnecessary material.

The following sections on cost accounting standards (CAS)

administration are removed because they provide unnecessary guidance:

Sec. 1830.101 on ``national defense'' contracts, Sec. 1830.7000 on

incentive contracts, Sec. 1830.7001-2 on preaward facilities capital

applications, and Secs. 1830.7002 through 1830.7002-2 on facilities

capital employed for facilities under construction. The remaining CAS

sections are revised for clarity.

In subpart 1831 on cost principles, Sec. 1831.205-670 is revised in

order to shorten the section.

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

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.

Regulatory Flexibility Act

NASA certifies that this regulation will not have a significant

economic impact on a substantial number of small entities under the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

[[Page 37984]]

List of Subjects in 48 CFR Parts 1809, 1830, and 1831

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 48 CFR Parts 1809, 1830, and 1831 are proposed to be

amended as follows:

1. The authority citation for 48 CFR Parts 1809, 1830, and 1831

continues to read as follows:

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

PART 1809--CONTRACTOR QUALIFICATIONS

2. Sections 1809.102 and 1809.102-70 are removed.

3. Section 1809.104 and 1809.104-4 are added to read as follows:

1809.104 Standards.

1809.104-4 Subcontractor responsibility.

Generally, a Canadian firm proposed by the Canadian Commercial

Corporation (CCC) as its subcontractor shall be accepted as responsible

by the contracting officer. However, when the CCC determination of

responsibility is not consistent with other available information, the

contracting officer shall request from CCC and any other appropriate

sources additional information or plant surveys needed in order to make

the determination of responsibility required by FAR 9.103(b).

1809.104-70 and 1809.106 [Removed]

4. Sections 1809.104-70 and 1809.106-1 are removed.

5. Section 1809.106-70 is amended by revising the section heading,

revising paragraphs (d)(2) and (3), revising paragraph (g), removing

the paragraph headings from paragraphs (j)(4)(i) and (ii), and in

paragraph (k)(1) by revising the paragraph heading and the first

sentence to read as follows:

1809.106-70 NASA preaward surveys.

* * * * *

(d) * * *

(2) Any information indicating previous unsatisfactory contract

performance shall be furnished to the survey activity with the preaward

survey request.

(3) If the survey activity is a DOD agency, the request is to be

sent to the appropriate office shown in the DOD Directory of Contract

Administration Services Components, DLAH 4105.4, Attn: Preaward Survey

Monitor. The date on which the completed survey report is desired

should be indicated. DOD normally allows seven working days in which to

conduct a full survey and submit the report to the requesting agency,

however, more time should be allowed for the particular circumstances

of the survey. For example complex items, new or inexperienced

contractors, and time-consuming requirements, such as, secondary

surveys, accounting system reviews, financial capability analysis, or

purchasing activity participation may require additional time.

* * * * *

(g) Steps for survey performance. Three steps in performing a

preaward survey are--

(1) Preliminary analysis;

(2) Development and evaluation of information; and

(3) Preparation and review of the preaward survey report.

* * * * *

(k) * * *

(1) Findings and recommendations of team. When the required

information has been gathered, each participant shall (i) analyze it

and evaluate the prospective contractor's capability to perform with

respect to the functions or elements investigated and (ii) provide

findings and recommendations to the monitor on one or more of the

appropriate forms (see FAR 9.106-4(a)) or on attachments. * * *

* * * * *

6. Paragraph (a) of section 1809.202 is revised to read as follows:

1809.202 Policy.

(a) The cognizant technical activity is responsible for meeting the

requirements of FAR 9.202(a) with approval by the installation's

competition advocate.

* * * * *

7. Section 1809.203-70 is amended by revising paragraph (a) and

removing paragraph (c) to read as follows:

1809.203-70 General.

(a) The Director, Quality Management Division (QW), is responsible

for justifying, determining, and approving NASA's need for inclusion

and continued use of qualification requirements in specifications under

the NASA Microelectronics Reliability Program.

(b) * * *

8. Paragraph (b) section 1809.206-1 is revised to read as follows:

9.206-1 General.

(a) * * *

(b) Requests not to enforce a qualification requirement in a non-

emergency situation shall be prepared by the cognizant requirements

office and approved by the Headquarters Office of Safety and Mission

Assurance (Code Q).

(c) * * *

9. Section 1809.404 is revised to read as follows:

1809.404 List of Parties Excluded from Federal Procurement and

Nonprocurement Programs.

(a) NASA Headquarters, Office of Procurement, Program Operations

Division (Code HS) is responsible for taking the actions enumerated

under FAR 9.404(c).

(b) In compliance with FAR 9.404(c)(5), contracting officers shall

consult the list entitled Parties Excluded from Procurement Programs,

which is contained in the GSA publication entitled, Lists of Parties

Excluded from Federal Procurement or Nonprocurement Programs, to ensure

that they do not award contracts to or consent to subcontracts with

listed parties, except as provided in FAR 9.405.

(c) For the purpose of obtaining copies of the list, field

installation procurement offices shall notify NASA Headquarters, Office

of Procurement, Program Operations Division (Code HS) of how many

copies they want and provide a single mailing address at the

installation. Code HS will, in turn, place the order for the copies

which will be mailed directly to the installation.

10. Section 1809.405 is revised to read as follows:

1809.405 Effect of listing.

If a contract, or subcontract subject to contracting officer

consent, must be awarded, renewed, or otherwise extended with a listed

party, the procurement officer shall prepare a request for a

determination with all necessary supporting documentation and forward

it to the Associate Administrator for Procurement (Code HS) for

approval. Some examples of circumstances that may constitute a

compelling reason under FAR 9.405(a), 9.405-1(b), or 9.405-2(a) for

award, renewal, or extension include the following:

(a) The property or services to be acquired are available only from

the listed party.

(b) The urgency of the requirement dictates that NASA deal with the

listed party.

(c) Other reasons related to the national defense or program

requirements that necessitate continued business dealings with the

listed party.

11. Section 1809.405-1 is revised to read as follows:

[[Page 37985]]

1809.405-1 Continuation of current contracts.

The contracting officer may terminate a contract under FAR 9.405-

1(a) if it is in the best interest of the Government to do so, unless

directed otherwise by the Associate Administrator for Procurement.

12. Sections 1809.405-2, 1809.406, 1809.406-3, 1809.407, and

1809.407-3 are removed.

13. Paragraphs (b), (d), and (e) of section 1809.408 are revised to

read as follows:

1809.408 Certification regarding debarment, suspension, proposed

debarment, and other responsibility matters.

(a) * * *

(b) If the offeror indicates that it is presently debarred,

suspended, or proposed for debarment, the contracting officer may make

a non-responsibility determination without notifying the Associate

Administrator for Procurement. If the contracting officer determines

that award must be made to such firm, follow the procedures set out in

1809.405, FAR 9.405-1(b), 9.405-2, 9.406-1(c) or 9.407-1(d).

(c) * * *

(d) If the offeror indicates that it has been indicted, charged,

convicted, or had a civil judgment rendered against it, the contracting

officer, in accordance with FAR 9.408(a), shall immediately notify the

Associate Administrator for Procurement (Attn: Code HS), providing

details as known, and shall await a response from Code H before

awarding the contract.

(e) If the offeror discloses information that indicates a need for

a debarment or suspension determination by the agency debarring

official, the contracting officer shall report the facts to the

Associate Administrator for Procurement (Code HS) in accordance with

1809.470.

14. Section 1809.470-1 is amended by revising the introductory

text, revising paragraph (b), and adding paragraph (c) to read as

follows:

1809.470-1 Situations requiring reports.

A report incorporating the information required by 1809.470-2 below

shall be forwarded by the procurement officer to the Associate

Administrator for Procurement (Code HS) when a contractor--

(a) * * *

(b) Is suspected of attempting to evade the prohibitions of a

debarment or suspension by change of address, multiple addresses,

formation of new companies, or other devices.

(c) This report is not necessary if the NASA Office of the

Inspector General (OIG) has recommended that the Associate

Administrator for Procurement take debarment or suspension action.

15. Paragraph (h) of section 1809.470-2 is revised to read as

follows:

1809.470-2 Contents of reports.

* * * * *

(h) A complete summary of all pertinent evidence. If a request for

debarment or suspension is based on an indictment or a conviction,

provide copies of those documents.

* * * * *

16. Section 1809.470-3 is revised to read as follows:

1809.470-3 Addresses and copies of reports.

Reports, including enclosures, shall be submitted in duplicate to

the Associate Administrator for Procurement (Code HS).

PART 1830--COST ACCOUNTING STANDARDS ADMINISTRATION

17. Subpart 1830.1 is removed.

18. Section 1830.201-5 is revised to read as follows:

1830.201-5 Waiver.

After the contracting officer has made the determination required

by FAR 30.201-5, the procurement officer shall forward all requests for

waiver of CAS requirements to the Associate Administrator for

Procurement (Code HC) for submittal to the CAS Board.

19. Section 1830.7001 is removed.

20. Section 1830.7001-1 is redesignated as section 1830.7001 and

revised to read as follows:

1830.7001 Contract facilities capital estimates.

(a) After the appropriate Cost Accounting Standards Board-Cost of

Money (CASB-CMF) Forms have been analyzed and cost of money factors

(CMFs) have been developed, the contracting officer can estimate the

facilities capital cost of money and capital employed for a contract

proposal. DD Form 1861 ``Contract Facilities Capital Cost of Money''

shall be used for this purpose and, when properly completed, becomes a

connecting link between the Forms CASB-CMF and any applicable agency

structured approach to determination of profit or fee objectives.

(b) The structure and allocation base units-of-measure must be

compatible on the DD 1861, the proposal, and the CASB-CMF. Overhead

pools, for example, engineering, manufacturing, and G&A, are listed by

year in the first column of the DD Form 1861 labeled POOL. The

allocation base figure for each overhead pool objective is extracted

from the evaluated cost breakdown or pre-negotiation cost objective and

listed by year in the second column. Each allocation base is then

multiplied by the recommended facilities capital cost of money factor

calculated on the CASB-CMF for that base. The total facilities capital

cost of money amounts appearing in the last column labeled AMOUNT are

totaled in the space provided in the line labeled TOTAL. This total

represents the estimated facilities capital cost of money amount for

the contract and is the figure to be used to calculate the

prenegotiation position memorandum objective cost and to reduce the

profit objective in accordance with 1815.970-3(a). The lines labeled

TREASURY RATE and FACILITIES CAPITAL EMPLOYED (TOTAL DIVIDED BY

TREASURY RATE) and Section 7 of the form labeled DISTRIBUTION OF

FACILITIES CAPITAL EMPLOYED do not apply to NASA and should be ignored.

1830.7001-2 [Removed]

21. Sections 1830.7001-2 is removed.

22. Section 1830.7002 is removed and Section 1830.7001-3 is

redesignated as section 1830.7002 and revised to read as follows:

1830.7002 Payments for facilities capital.

(a) Interim billings based on costs incurred. Contract Facilities

Capital Cost of Money may be included in cost reimbursement and

progress payment invoices. The amount that qualifies as cost incurred

for purposes of the Allowable Cost and Payment or Progress Payment

clause of the contract is the result of multiplying the incurred

portions of the indirect cost pool allocation bases by the latest

available CMFs. Like applied overhead at forecasted overhead rates,

such computations are interim estimates subject to adjustment. As each

year's data are finalized by computation of the actual CFMs under CAS

414 and FAR 31.205-10, the new factors should be used to calculate

contract facilities cost of money for the next accounting period.

(b) Final settlement. Contract Facilities Capital Cost of Money for

final cost determination or repricing is based on each year's final

CMFs determined under CAS 414 and supported by separate Forms CASB-CMF.

Contract cost must be separately computed in a manner similar to yearly

final overhead rates. Also like overhead costs, the final settlement

will include an adjustment from interim to final contract cost of

[[Page 37986]]

money. However, estimated or target cost will not be adjusted.

23. Sections 1830.7002-1 through 1830.7002-2 are removed.

PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES

24. Section 1831.205-670 is revised 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

employee compensation in service contracts:

(1) Prior to the award of a cost reimbursement or noncompetitive

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

of $500,000, and

(2) Periodically after award for cost reimbursement contracts and

subcontracts, but at least every three years.

(b) The contracting officer shall ensure the reasonableness of

compensation is evaluated for cost reimbursement and non-competitive

fixed-price type service subcontracts under a prime contract meeting

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

(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) 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. The results

of the periodic evaluations of contractor and subcontractor

compensation after contract award shall be documented in the contract

file.

[FR Doc. 95-18122 Filed 7-24-95; 8:45 am]

BILLING CODE 7510-01-M