Acquisition Regulation; Cost or Pricing Data

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1815, 1816, 1852, and 1870

Acquisition Regulation; Cost or Pricing Data

AGENCY: Office of Procurement, National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

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SUMMARY: This rule revises NASA policies on cost or pricing data in

order to make the policies consistent with recently revised Federal-

wide policies.

EFFECTIVE DATE: October 18, 1995.

FOR FURTHER INFORMATION CONTACT: William T. Childs, (202) 358-0454.

SUPPLEMENTARY INFORMATION:

Background

The Federal Acquisition Streamlining Act of 1994 (FASA) revised

policy on cost or pricing data under the Truth in Negotiations Act

(TINA), among other things. The TINA changes have been implemented in

the Federal Acquisition Regulation (FAR), and those changes necessitate

corresponding revisions of the NASA FAR Supplement (NFS). In addition,

in the spirit of the National Performance Review, changes are being

made to the NFS to provide clarity.

(a) Section 1815.804-1(a)(2), formerly 1815.804-3(a)(2), is deleted

because it duplicates the revised FAR. A new paragraph is substituted

to require that decisions to utilize the FAR cost or pricing data

exception for one-offer adequate price competition situations must be

approved by the head of the contracting activity, and copies of the

approval and basis of price reasonableness must be sent to Headquarters

Code HC.

(b) Section 1815.804-1(d), formerly 1815.804-3(d), is revised to

accommodate the FAR reduction in approval level for cost or pricing

data exceptions to the head of the contracting activity. The

requirement to send a copy of the approval to Headquarters Code HC is

retained, but some of the accompanying documentation is no longer

required to be furnished to Headquarters Code HC.

(c) FAR 15.804-2(a)(2) specifies that below-threshold requirements

for cost or pricing data must be approved by the head of the

contracting activity. Section 1815.804-2(a) is added to require that

copies of such approvals must be furnished to Headquarters Code HC.

(d) FAR 15.804-2(b)(2) provides that certificates of current cost

or pricing data may be made applicable as of a date agreed upon by the

parties. Section 1815.804-2 is amended to add paragraph (b) to provide

guidance that the agreed date should generally be within two weeks of

the date of price agreement.

(e) The dollar thresholds for formal prenegotiation reviews at

1815.807-71 are deleted and left to the centers' discretion.

(f) Most of the coverage in 1815.970-3(b) has been removed because

it is addressed in subpart 1830.70 (60 FR 37983, July 25, 1995). The

discussion of (AS 417 in 1815.970-3(c) has been substantially rewritten

to remove a previous misinterpretation of CAS.

(g) Numerous editorial changes have been made. Numbering, section

headings, and form titles have been revised to comport with the

revisions in FAR subpart 15.8.

This rule pertains to internal NASA procedures only. Because there

is no impact on the public, it is not required to be published for

comment.

Impact

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.). This rule does

[[Page 53879]]

not impose any reporting or record keeping requirements subject to the

Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1815, 1816, 1852 and 1870

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 48 CFR parts 1815, 1816, 1852, and 1870 are amended as

follows.

PART 1815--CONTRACTING BY NEGOTIATION

1. The authority citation for 48 CFR parts 1815, 1816, 1852, and

1870 continues to read as follows:

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

Subpart 1815.8--Price Negotiation

2. The heading of section 1815.804 is revised to read as follows:

1815.804 Cost of pricing data and information other than cost or

pricing data.

3. Section 1815.804-3 is redesignated as 1815.804-1 and the

redesignated section is amended by revising the heading, revising

paragraphs (a)(1) and (2), revising the first and last sentences in

paragraph (a)(3)(i), and revising paragraphs (b), (c), (d), and (e)(3)

to read as follows:

1815.804-1 Prohibition on obtaining cost of pricing data.

(a)(1) The term ``lowest evaluated price,'' as used in FAR 15.804-

1(b)(1)(A), is defined to include all of the factors (for example,

mission suitability, cost, past performance, etc.) used in the

evaluation of proposals (but see paragraph (a)(2) of this section).

(2) When the adequate price competition exemption will be used in a

single-offer situation, the exemption shall be approved by the head of

the contracting activity. The exemption document shall cite the

authority of 10 U.S.C. 2306a(b)(B), and the procedure in paragraph (d)

of this section shall be used.

(3) * * *

(i) The use of this exemption for a cost-reimbursement procurement

requires the careful exercise of judgment on the part of the

contracting officer based on the application of the guidance in FAR

15.804.-1(b)(1)(A) and the regulations of this chapter to the facts of

each procurement. * * * As a consequence, the failure to obtain cost or

pricing data could result in a competing contractor intentionally

underestimating its costs for the purpose of winning the award, which

could then cause the actual contract costs to significantly exceed

those proposed.

* * * * *

(b) When an exemption is granted under FAR 15.804-1(c)(4) for

repetitive submissions of catalog items, Government approval of the

exemption claim shall state the effective period, usually not more than

one year, and require the contractor to furnish any later information

that might raise a question as to the exemption's continuation.

(c) When exempting submission under FAR 15.804-1(b)(2)(iii), the

contracting officer shall document the reasons for the exemption. It is

generally appropriate to include a description of the similarities and

differences from a commercial item, along with a discussion of the

actual sales prices of the commercial item and an explanation of the

value of the differences from that item. If the fact of substantial

sales to the general public is well known, information addressing the

quantity of sales is not required.

(d) When the authority in FAR 15.804-1(a)(3) to grant an exception

waiving the requirement for cost or pricing data is exercised, a copy

of the approval shall be addressed to NASA Headquarters, Analysis

Division, Code HC, and shall include the name and telephone number of

the contracting officer and the basis for the contracting officer's

determination of price reasonableness. The following is a sample format

for the determination and findings for such a waiver.

National Aeronautics and Space Administration

[Installation Name]

Determination and Findings

Authority to Waive Submission of Cost or Pricing Data

On the basis of the following findings and determination, the

requirement for submitting cost or pricing data described below may

be waived pursuant to the authority of 10 U.S.C. 2306a(b)(1)(B).

Findings

1. The (1) proposes to enter into a contract with (2) for the

procurement of (3).

2. Pursuant to FAR 15.804-2, the proposed contractor is required

to submit cost or pricing data. However, waiver of submission of the

cost or pricing data described below is justified for the reasons

indicated: (4)

Determination

The requirement for submission of cost or pricing data described

in the above findings for the proposed procurement is hereby waived.

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Center Director

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Notes--

(1) Name of installation.

(2) Name of proposed contractor.

(3) Brief description of supplies or services.

(4) Identification of the cost or pricing data requirements to

be waived. The waiver may be partial, for example, limited to a

particular subcontractor. Also describe the circumstances and

conditions that make the proposed procurement an exceptional case,

and state the reasons justifying the proposed waiver.

(e)(1) * * *

(2) * * *

(3) The review and audit practices of the Government of Canada, the

price assurance representations, and the adjustments rendered where

profits are excessive are considered to satisfy the requirements of 10

U.S.C. 2306a. Therefore, NASA has waived the requirement for

certification of cost or pricing data submitted by the CCC during the

period April 1, 1990 through March 31, 1996. This waiver applies only

to the certification and does not waive the requirement for submission

of the data.

4. Section 1815.804-2 is added as follows:

1815.804-2 Requiring cost or pricing data.

(a) When an authorization to require cost or pricing data for a

below-threshold procurement is granted pursuant to FAR 15.804-2(a)(2),

a copy of the approval and supporting documentation shall be furnished

to NASA Headquarters, Analysis Division, Code HC.

5. Section 1815.807-70 is amended in paragraph (d)(1) by

republishing the first sentence and revising the second sentence and by

revising the second sentence of paragraph (d)(2) to read as follows:

1815.807-70 Content of the prenegotiation position memorandum.

* * * * *

(d) * * *

(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.

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. * * *

(2) * * * For each proposed subcontract meeting the requirement of

FAR 15.806-2(a), provide the contracting officer's price or cost

analysis and negotiation objective. * * *

* * * * *

[[Page 53880]]

6. Section 1815.807-71 is amended by revising the first sentence to

read as follows:

1815.807-71 Installation reviews.

Each contracting activity shall establish a formal system for the

review of prenegotiation memoranda. * * *

7. Section 1815.807-72 is amended by revising paragraph (a) to read

as follows:

1815.807-72 Headquarters reviews.

* * * * *

(a) Advance information to be provided to Headquarters. The

installation shall provide Code HS with the following, which shall be

furnished as soon as practicable and sufficiently in advance of the

planned commencement of negotiations to allow a reasonable period of

time for Headquarters review:

(1) Five copies of the PPM.

(2) One copy each of the contractor's proposal, the Government

technical evaluation, and all pricing reports (including any audit

reports).

* * * * *

8. Section 1815.870-1 is amended by revising paragraph (a) and the

first sentence of paragraph (b) to read as follows:

1815.870-1 General.

(a) When subcontracts have been placed on a price-redetermination

or fixed-price-incentive basis and the prime contract type is fixed-

price redeterminable or F-PI (successive target), at the time of final

pricing it may be appropriate to negotiate a firm prime contract price,

even though the contractor has not yet established final subcontract

prices. The contracting officer may do this when convinced that the

amount included for subcontracting is reasonable, for example, when

realistic cost information or pricing data on subcontract efforts are

available.

(b) However, even though the available cost information are highly

indefinite and there is a distinct chance that one or more of the

subcontracts eventually may be redetermined at prices lower than those

predicted in redetermining the prime contract price, other

circumstances may require prompt negotiation of the final contract

price. * * *

Subpart 1815.9--Profit

1815.970-2 [Amended]

9. Section 1815.970-2 is amended by removing the paragraph heading

in paragraph (f)(1).

10. Section 1815.970-3 is amended by revising the citation

``1815.970(b)'' to read ``1830.7001'' in the first sentence of

paragraph (a) and by revising paragraph (b) and removing paragraph (c)

to read as follows:

1815.970-3 Facilities capital cost of money.

(a) * * *

(b) CAS 417, cost of money as an element of the cost of capital

assets under construction, should not appear in contract proposals.

These costs are included in the initial value of a facility for

purposes of calculating depreciation and CAS 414.

PART 1816--TYPES OF CONTRACTS

Subpart 1816.2--Fixed-Price Contracts

1816.203-4 [Amended]

11. In paragraph (c) of section 1816.203-4, the citation ``FAR

15.804.2 and -3'' is revised to read ``FAR 15.804-1 and 15.804-2''.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 1852.2--Tests of Provisions and Clauses

12. Section 1852.215-70 is amended by revising the date of the

clause to read ``October 1995'' and revising paragraph (a) of the

clause to read as follows:

1852.215-70 Increases in estimated costs.

* * * * *

(a) Increases resulting from updating or correcting the cost or

pricing data submitted with the proposal;

* * * * *

13. Section 1852.243-70 is amended by revising the date of the

clause to read ``October 1995'' and revising the first sentence of

paragraph (d) of the clause to read as follows:

1852.243-70 Engineering change proposals.

* * * * *

(d) Concurrent with the submission of an ECP, the contractor

shall, in accordance with FAR 15.804-6, provide a completed Standard

Form 1411, Contract Pricing Proposal Cover Sheet (Cost or Pricing

Data Required), with appropriate attachments. * * *

* * * * *

PART 1870--NASA SUPPLEMENTARY REGULATIONS

Subpart 1870.1--NASA Acquisition of Investigations System

14. In section 1870.102, paragraph VI of Appendix B to Appendix I

is revised to read as follows:

1870.102 NASA acquisition of investigations.

* * * * *

VI. Status of Cost Proposals (U.S. Proposals Only)

The Investigator's institution agrees that the cost proposal is

for proposal evaluation and selection purposes, and that following

selection and during negotiations leading to a definitive contract,

the institution will be required to resubmit or execute a Standard

Form (SF) Form 1411 ``Contract Pricing Proposal Cover Sheet (Cost or

Pricing Data Required)'' and certifications and representations

required by law and regulation.

* * * * *

[FR Doc. 95-25858 Filed 10-17-95; 8:45 am]

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