[Federal Register Volume 59, Number 83 (Monday, May 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10422]


[[Page Unknown]]

[Federal Register: May 2, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1816, 1831, and 1852

 

Deviation From FAR 31.205-18

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

ACTION: Interim rule.

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SUMMARY: This rule provides a class deviation from the cost principle 
on independent research and development (IR&D). This class deviation 
will permit the costs of IR&D effort incurred under a cooperative 
arrangement with NASA, that otherwise would have been allowed as IR&D 
had there been no cooperative arrangement, to be used as the 
contractor's contribution under the arrangement and to be recoverable 
as indirect costs. The intended effect of this deviation will be to 
allow NASA to increase its technology transfer efforts and eliminate 
barriers to technology development as recommended by the President's 
National Performance Review.

DATES: Effective Date: This regulation is effective May 2, 1994.
    Comments: Comments must be received on or before July 1, 1994.

ADDRESSEES: Submit comments to Mr. Joseph Le Cren, Procurement Analyst, 
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

    FAR 31.205-18 precludes the allowability of costs incurred for 
independent research and development (IR&D) by contractions in the 
performance of cooperative arrangements entered into with NASA on a 
cost-sharing basis. This prohibition reflects a policy decision which 
NASA wishes to change. NASA proposes a class deviation which would 
permit costs contributed by a contractor under a cost-sharing 
cooperative arrangement with NASA to be recoverable as indirect costs, 
as long as these costs would otherwise have been allowed as IR&D had 
there been no cooperative arrangement. The deviation is needed in order 
for NASA to increase its technology transfer efforts and to eliminate 
barriers to technology development as recommended by the National 
Performance Review (NPR). The NPR has recommended that NASA devote 10 
to 20 percent of its budget to partnerships with industry. This target 
cannot be successfully achieved only through contracts, grants and 
cooperative agreements with nonprofit institutions. Cooperative 
arrangements with industrial firms or consortia are viewed as the most 
streamlined and efficient way to accomplish technology transfer on the 
scale envisioned by the NPR. However, this is hindered because private 
financing may not be adequate to support the contractor contributions 
to cooperative arrangements. A barrier whose elimination could 
significantly aid in achieving NASA's technology transfer and 
development efforts is the current prohibition at FAR 31.205-18. In 
addition to increasing the transfer of technology by NASA, the 
deviation will also achieve uniformity and consistency with other 
federal agencies in the treatment of similar costs. An example of this 
is the Advanced Research Projects Agency which, under the Technology 
Reinvestment Projects, has entered into cooperative arrangements which 
permit contractors to classify their contribution as IR&D and to 
recover those same costs as allowable indirect costs; the same result 
NASA wishes to achieve.
    This rule is to be effective on an interim basis due to there being 
multiple cooperative agreements which would be detrimentally impacted 
if the rule were delayed.

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 1816, 1831, and 1852

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR parts 1816, 1831, and 1852 are amended as 
follows.
    1. The authority citation for 48 CFR parts 1816, 1831 and 1852 
continues to read as follows:

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

PART 1816--TYPES OF CONTRACTS

    2. Section 1816.307-70 is amended by adding paragraph (h) to read 
as follows:


1816.307-70   NASA contract clauses.

* * * * *
    (h) The contracting officer shall insert the clause at 1852.216-89 
in solicitations and contracts in which the clause at (FAR) 48 CFR 
52.216-7 is included and to which (FAR) 48 CFR part 31, subpart 31.2 is 
applicable.

PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES

    3. Section 1831.205-18 is added to read as follows:


1831.205-18   Independent research and development and bid and proposal 
costs.

    A class deviation from (FAR) 48 CFR 31.205-18(e) exists to permit 
costs contributed by a contractor under a cooperative arrangement with 
NASA to be considered as allowable IR&D costs if the work performed 
would have been allowed as contractor IR&D had there been no 
cooperative arrangement.
    This deviation does not apply to costs contributed by the 
contractor under cost-sharing contracts described in (FAR) 48 CFR 
16.303 and 1816.303.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 1852.216-89 is added to read as follows:


1852.216-89  Allowable Cost and Payment.

    As prescribed at 1816.307-70(d), insert the following clause:

Allowable Cost and Payment (April 1994)

    Allowable costs shall be determined by the contracting officer 
in accordance with 1831.205-18 in addition to the provisions of 
(FAR) 48 CFR subpart 31.2.

(End of clause)

[FR Doc. 94-10422 Filed 4-29-94; 8:45 am]
BILLING CODE 7510-01-M