[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9399]


[[Page Unknown]]

[Federal Register: April 19, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1837 and 1852

 

Revision to NASA FAR Supplement Coverage on Pension Portability

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: This rule proposes to amend the regulation on pension 
portability under NASA contracts. Questions from NASA personnel and 
industry identified a need for consistency regarding the vesting period 
requirements, flowdown to subcontractors, and how to determine when 
pension portability would be appropriate. The rule proposes more 
consistent treatment of those issues.

DATES: Comments must be received on or before June 20, 1994.

ADDRESSES: Submit comments to Mr. Joseph Le Cren, Contract Pricing and 
Finance Division (Code HC), Office of Procurement, NASA Headquarters, 
Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT: Mr. Joseph Le Cren, (202) 358-0444.

SUPPLEMENTARY INFORMATION:

Background

    Questions were raised by both industry and within NASA regarding 
certain aspects of the coverage on pension portability. The majority of 
the questions concerned the lack of consistency of NASA's installations 
regarding the vesting period requirements and whether the pension 
portability requirements should apply to subcontracts. The purpose of 
this change is to address those issues. The rule also requires the use 
of the clause at 48 CFR 1852.237-71 rather than allowing a clause 
substantially the same as that one. It also adds a condition for 
determining when pension portability would be appropriate. Furthermore, 
the rule replaces the requirement that a copy of each written 
determination by the procurement officer to use pension portability be 
sent to the Associate Administrator for Procurement with one that the 
procurement officer only need keep a record of all such determinations.

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 not 
impose any reporting or record keeping requirements subject to the 
Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1837 and 1852

    Government procurement.
Deidre A. Lee,
Associate Administrator for Procurement.

    Accordingly, 48 CFR parts 1837 and 1852 are proposed to be amended 
as follows.

PART 1837--[AMENDED]

    1. The authority citation for 48 CFR parts 1837 and 1852 continues 
to read as follows:

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

    2. In part 1837, subpart 1837.1 is revised to read as follows:

Subpart 1837.1--Service Contracts--General


1837.101   Definitions.

    Pension portability means the recognition and continuation in a 
successor service contract of the predecessor service contract 
employees' pension rights and benefits.


1837.110   Solicitation provisions and contract clauses.

    The contracting officer shall use the clause at 1852.237-71, 
Pension Portability, in a solicitation, contract or negotiated contract 
modification for additional work when the procurement officer 
determines, in accordance with the requirements of 1837.170, that 
pension portability is in the Government's best interest.


1837.170   Pension portability.

    (a) It is NASA's policy not to require pension portability in 
service contracts. However, pension portability requirements may be 
included in a solicitation, contract, or contract modification for 
additional work under the following conditions:
    (1)(i) There is a continuing need for the same or similar services 
for a minimum of five years (inclusive of options) and, if and when the 
contractor changes, a high percentage of the predecessor contractor's 
employees are expected to remain with the program; or
    (ii) Where the employees under a predecessor contract were covered 
by a portable pension plan, a follow-on contract or a contract 
consolidating existing services shall include pension portability as 
long as the total contract period covered by the plan, past and future, 
covers five years.
    (2) Only defined contribution plans, or multiparty defined benefit 
plans operated under a collective bargaining agreement where the plan 
follows the employee instead of the employer, shall be permitted in the 
portability provisions;
    (3) Vesting shall be 100 percent at the earlier of one year of 
continuous employee service or contract termination;
    (4) There is a clear description of the plan, including coverage 
regarding service, pay, liabilities, vesting, termination, and benefits 
from prior contracts, as appropriate; and
    (5) The procurement officer has made a written determination that 
such a provision is in the Government's best interest, including the 
facts supporting that determination.
    (b) The procurement officer shall maintain a record of all written 
determinations that the use of pension portability is in the 
Government's best interest.

PART 1852--[AMENDED]

    3. In part 1852, section 1852.237-71 is revised to read as follows:


1852.237-71   Pension portability.

    As prescribed at 1837.110(a), insert the following clause:

Pension Portability

(XXX 1994)

    (a) In order for pension costs attributable to employees 
assigned to this contract to be allowable costs under this contract, 
the plans covering such employees must:
    (i) Comply with all applicable Government laws and regulations;
    (ii) Be a defined contribution plan or a multiparty defined 
benefit plan operated under a collective bargaining agreement. In 
either case, the plan must be portable, i.e., the plan follows the 
employee, not the employer;
    (iii) Provide for 100 percent employee vesting at the earlier of 
one year of continuous employee service or contract termination; and
    (iv) Not be modified, terminated, or a new plan adopted without 
the prior written approval of the cognizant NASA Contracting 
Officer.
    (b) The Contractor shall include paragraph (a) of this clause in 
all subcontracts for continuing services under a service contract 
where: (1) The prime contract requires pension portability, (2) the 
subcontracted labor dollars (excluding any burdens or profit/fee) 
exceed $2,500,000 and ten percent of the total prime contract labor 
dollars (excluding any burdens or profit/fee), and (3) the 
conditions at 1837.170 are satisfied.

(End of Clause)

[FR Doc. 94-9399 Filed 4-18-94; 8:45 am]
BILLING CODE 7510-01-M