[Federal Register Volume 59, Number 47 (Thursday, March 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5145]


[[Page Unknown]]

[Federal Register: March 10, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 1807

 

Procurement Plan Contents Regarding Strategies to Encourage Cost 
Realism

AGENCY: Office of Procurement, Procurement Policy Division, National 
Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: NASA has revised the NASA FAR Supplement to address how cost 
realism will be included in procurement plans. Procurement plans should 
included how the offeror will be advised of the importance of cost 
realism, how cost realism will factor into the evaluation and selection 
decision, how cost realism will be monitored, and how incentives will 
be offered through contract provisions.

DATES: Effective Date: This interim rule is effective March 31, 1994. 
Comments: Comments are due no later than May 9, 1994.

ADDRESSES: Comments should be addressed to Ms. Deborah O'Neill, NASA 
Headquarters, Office or Procurement, Procurement Policy Division (Code 
HP), Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah O'Neill, telephone: (202) 
358-0440.

SUPPLEMENTARY INFORMATION:

Background

    Submission by competing proposers of unrealistically low estimated 
costs in proposals is a common occurrence in acquisitions where cost is 
a factor in the selection decision. Proposers may hope to gain 
selection over others by submitting cost proposals which are 
unrealistically low. This results in probable cost adjustments being 
made, during the source selection process, to the offeror's proposal 
based on assumptions by the Government which may or may not be totally 
accurate. The probable cost estimate is included in the report to the 
Source Selection Official for consideration in making a selection 
decision. Subsequently, selected proposals are negotiated upward based 
upon the cost adjustments, or else cost overruns are experienced on the 
ensuing contracts. The additional guidance on procurement plan 
preparation is provided to encourage NASA acquisition planners to 
address efforts to promote the submission of realistic cost proposals.

Availability of NASA FAR Supplement

    The NASA FAR Supplement, of which this proposed coverage will 
become a part, is codified in 48 CFR, chapter 18, and is available in 
its entirety on a subscription basis from the Superintendent of 
Documents, Government Printing Office, Washington, DC 20402. Cite GPO 
Subscription Stock Number 933-003-00000-1. It is not distributed to the 
public, wither in whole or in part, directly by NASA.

Regulatory Flexibility Act

    NASA certifies that this interim rule will not have 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.).

Paperwork Reduction Act

    This interim rule does not impose any reporting or record keeping 
requirements subject to the Paperwork Reduction Act.

List of Subjects in 48 CFR 1807

    Government procurement.
Thomas S. Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR part 1807 is amended as follows:
    1. The authority citation for 48 CFR part 1807 continues to read as 
follows:

    Authority: 42 U.S.C. 2373 (c)(1).

PART 1807--ACQUISITION PLANNING


1807.170-1  [Amended]

    2. In section 1807.170-1, paragraph (d)(4) is added to read as 
follows:


1807.170-1  Procurement plans requiring approval by NASA Headquarters.

* * * * *
    (d) * * *
    (4) Cost realism. To promote the submission of realistic cost 
proposals, discuss the following factors--
    (i) How the offeror will be advised of the importance of cost 
realism (e.g., address cost realism in solicitation provisions);
    (ii) How cost realism will factor into the evaluation and selection 
decision (e.g., include cost realism in evaluation factors and 
evaluation plan (reduce mission suitability scores));
    (iii) How cost realism will be monitored and how incentives will be 
offered through contract provisions (e.g., recognize cost realism in 
award fee provisions).

[FR Doc. 94-5145 Filed 3-9-94; 8:45 am]
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