[Federal Register Volume 59, Number 88 (Monday, May 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11017]


[[Page Unknown]]

[Federal Register: May 9, 1994]


=======================================================================
-----------------------------------------------------------------------

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1804, 1842, and 1852

[NFS Case 933705]

 

NASA FAR Supplement; Contractor Cost Reporting

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

ACTION: Interim rule.

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

SUMMARY: Until now, the NFS has had only a prescription for use of the 
cost reporting (NASA Form 533 series) clauses, with no policy guidance. 
Also, the prescriptions' dollar thresholds for use of the clauses are 
stated only by reference to a NASA Management Instruction (NMI), thus 
requiring the reader to find and use the NMI in order to determine when 
the clauses are required. This change provides the thresholds and adds 
some guidance regarding the contracting officer's duties, allowable 
changes, and deviation approval authority. There is also some minor 
clarification in the wording of the clauses, and the coverage is 
relocated to a more appropriate subpart.

DATES: This interim rule is effective May 9, 1994. NASA will accept 
written comments until July 8, 1994.

ADDRESSES: Comments regarding this rule should be addressed as follows: 
National Aeronautics and Space Administration, Procurement Policy 
Division (Code HP), Washington, DC 20546. Please cite HP number 933705 
in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Frances Sullivan, (202) 358-0488, or 
William T. Childs, (202) 358-0454.

SUPPLEMENTARY INFORMATION:

Availability of NASA FAR Supplement

    The NASA FAR Supplement, of which this rule is a part, is available 
in its entirety on a subscription basis from the Superintendent of 
Documents, Government Printing Office, Washington, DC 20402, telephone 
number (202) 783-3238. Cite GPO Subscription Stock Number 933-003-
00000-1. It is not distributed to the public, either in whole or in 
part, directly by NASA.

Background

    This case was opened based on General Accounting Office Report 
AFMD-93-3, October 29, 1992, NASA's Financial Management Operations, 
which included a finding that procurement officials did not always 
follow agency directives to include contractor reporting requirements 
in solicitations and contracts.

Regulatory Flexibility Act

    The interim rule is not expected to have a 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., because this 
rule does not significantly change existing policies or procedures. An 
Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. Comments from small entities concerning the affected NASA 
FAR Supplement subparts will be considered in accordance with 5 U.S.C. 
601. Such comments must be submitted separately and cite 5 U.S.C. 601, 
et seq.

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 
or information collection 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. The information collection represented by the 
NASA Forms 533 has previously been approved under OMB Control No. 2700-
0003, through 12/21/96.

List of Subjects in 48 CFR Parts 1804, 1842, and 1852

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
    Accordingly, 48 CFR parts 1804, 1842, and 1852 are amended as 
follows.
    1. The authority citation for 48 CFR parts 1804, 1842, and 1852 
continues to read as follows:

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

PART 1804--ADMINISTRATIVE MATTERS

    2. Sections 1804.675 and 1804.675-1 are removed and reserved.

PART 1842--CONTRACT ADMINISTRATION

    3. Subpart 1842.72 is added to read as follows:
Subpart 1842.72--NASA Contractor Financial Management Reporting
Sec.
    1842.7201  General.
    1842.7202  Contract clauses.

Subpart 1842.72--NASA Contractor Financial Management Reporting


1842.7201  General.

    (a) Contracting officer responsibilities. (1) Successful cost 
management will only result from a team approach among the procurement, 
financial/resources management, and project management communities. 
Contracting Officers should play a primary role in managing cost 
performance. They must ensure contracts require cost reporting 
consistent with both policy requirements and project needs. Contracting 
Officers should monitor contractor cost reports on a regular basis to 
ensure cost data reported is accurate and timely. Contracting Officers 
should independently review cost report data. Adverse trends or 
discrepancies discovered in cost reports should be pursued through 
discussions with financial and project team members.
    (2) Whenever cost performance threatens contract performance, 
Contracting Officers shall require corrective action plans from the 
contractors. When contracts are modified to accommodate contractor-
responsible cost performance problems, consideration is required from 
the contractor; e.g., reduced fee earning potential.
    (b) Reporting requirements. (1) Reporting utilizing NASA Contractor 
Financial Management Reports, the NASA Form 533 series, is required 
(see NMI 9501.1, NASA Contractor Financial Management Reporting System) 
on cost-type, price redetermination, and fixed-price incentive 
contracts when the following dollar, period of performance, and scope 
criteria are met: 

----------------------------------------------------------------------------------------------------------------
                     Criteria                                              Report format                        
----------------------------------------------------------------------------------------------------------------
                             Period of performance                                                              
   Contract value/scope                                     533M                   533Q                533P     
----------------------------------------------------------------------------------------------------------------
$500K up to $1M/all........  1 year or more.......  Required.............  Optional.............  Optional.     
$1,000,000 and greater/all.  Less than 1 year.....  Required.............  Optional.............  Optional.     
$1,000,000 and greater/all.  1 year or more.......  Required.............  Required.............  Optional.     
$25,000,000 and greater/     1 year or more.......  Required.............  Required.............  Required.     
 supply contracts.                                                                                              
----------------------------------------------------------------------------------------------------------------

    (2) Where it is probable that a contract will ultimately meet the 
criteria through change orders, supplemental agreements, etc., the 
reporting requirement must be implemented in the contract as initially 
awarded.
    (3) Performance analysis reporting using the 533P format is 
mandatory for supply contracts over $25,000,000. Although non-supply 
contracts over $25,000,000 require only 533M and 533Q reporting, 
Performance Measurement System reports can be an effective management 
tool and should be routinely considered as a possible requirement for 
non-supply contracts over $25,000,000.
    (c) Substitution of contractor reports. With the Contracting 
Officer's approval, the contractor's internal automated printout 
reports may be substituted for the 533 reporting formats only if the 
substitute reports contain all the data elements that would be provided 
by the corresponding 533's. If substitution is made for the 533P 
report, schedule data must be reported as of same date and in the same 
reporting categories as the financial data. The Contracting Officer 
shall coordinate any proposed substitute with the installation 
financial management office.
    (d) Contract requirements. (1) The reporting requirements, 
including a description of the reporting categories, shall be detailed 
in the procurement request, and the reports shall be required by 
inclusion of the appropriate clause or clauses prescribed in 1842.7202. 
The contract schedule must also indicate the addressees and number of 
copies. The reporting categories specified shall be coordinated with 
the Installation Financial Management Office to ensure that data 
required for agency cost accounting will be provided by the reports. 
Reporting due dates shall be in accordance with the provisions of NHB 
9501.2, Procedures for Contractor Reporting of Correlated Cost and 
Performance Data. No changes to these submission requirements shall be 
negotiated except in unusual circumstances and no due dates shall be 
later than the date by which the Installation Financial Management 
Office requires the reports for entering cost data in the accounting 
system.
    (2) The contractor shall be required to submit an ``Initial 
Report,'' in complete detail, time-phased for the expected life of the 
contract, within 10 days after authorization to proceed has been 
granted, unless otherwise specified by the Contracting Officer. Regular 
monthly and quarterly reporting will begin within 30 days of contract 
award.
    (e) Deviations. Deviations from the financial management reporting 
provisions of the clauses prescribed herein will require approval in 
accordance with subpart 1801.4. The Associate Administrator for 
Procurement will obtain concurrences of the Director, Financial 
Management Division, and the Associate Administrator of the cognizant 
Headquarters Program Office.


1842.7202  Contract clauses.

    (a) The clause at 1852.242-73, NASA Contractor Financial Management 
Reporting, shall be used when any of the NASA Form 533 series of 
reports are required from the contractor.
    (b) The clause at 1852.242-74, NASA Contractor Financial Management 
Reporting (Performance Analysis Report), shall be used in conjunction 
with the clause at 1852.242-73 when the Monthly Contractor Financial 
Management Performance Analysis Report (533P) is required from the 
contractor.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


1852.204-71 and 1852.204-72  [Removed]

    3. Sections 1852.204-71 and 1852.204-72 are removed.
    4. Sections 1852.242-73 and 1852.242-74 are added to read as 
follows:


1852.242-73  NASA Contractor Financial Management Reporting.

    As prescribed in 1842.7202(a), insert the following clause in 
contracts that require submission of any of the NASA Form 533 series of 
reports.

NASA Contractor Financial Management Reporting (April 1994)

    (a) The Contractor shall submit NASA Contractor Financial 
Management Reports on NASA Forms 533 in accordance with the 
instructions in Procedures for Contractor Reporting of Correlated 
Cost and Performance Data (NHB 9501.2) and on the reverse side of 
the forms, as supplemented in the Schedule of this contract. The 
detailed reporting categories to be used, which shall be correlated 
with technical and schedule reporting, shall be set forth in the 
contract Schedule. Contractor implementation of reporting 
requirements under this clause shall include NASA approval of the 
definitions of the content of each reporting category and give due 
regard to the Contractor's established financial management 
information system.
    (b) Lower level detail used by the Contractor for its own 
management purposes to validate information reported to NASA shall 
be compatible with NASA requirements.
    (c) Reports shall be submitted in the number of copies, at the 
time, and in the manner set forth in the contract Schedule or as 
designated in writing by the Contracting Officer. Upon completion 
and acceptance by NASA of all contract Schedule line items, the 
Contracting Officer may direct the Contractor to submit Form 533 
reports on a quarterly basis only.
    (d) The Contractor shall require first-tier subcontracts that 
meet the established reporting criteria set forth in 1842.7201(b)(1) 
to report cost data using the NASA Form 533 reports. Copies of 
subcontractor Form 533 reports shall be submitted along with the 
Contractor's Form 533 reports in the manner set forth in the 
contract Schedule or as designated in writing by the Contracting 
Officer.
    (e) If during the performance of this contract NASA requires a 
change in the information or reporting requirements specified in the 
Schedule, or as provided for in paragraph (a) or (c) of this clause, 
the Contracting Officer shall effect that change in accordance with 
the Changes clause of this contract.

(End of clause)


1852.242-74  NASA Contractor Financial Management Reporting 
(Performance Analysis Report).

    As prescribed in 1842.7202(b), insert the following clause, in 
addition to the clause at 1852.242-73, in contracts that require 
submission of NASA Form 533P.

NASA Contractor Financial Management Reporting (Performance Analysis 
Report) (April 1994)

    Monthly reporting of contract performance shall be accomplished 
on the NASA Monthly Contractor Financial Management Performance 
Analysis Report (NASA Form 533P) in accordance with the instructions 
in Procedures for Contractor Reporting of Correlated Cost and 
Performance Data (NHB 9501.2) and on the reverse side of the form, 
as supplemented in the Schedule of this contract.

(End of clause)

[FR Doc. 94-11017 Filed 5-6-94; 8:45 am]
BILLING CODE 7510-01-P