[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: 94-11018]


[[Page Unknown]]

[Federal Register: May 9, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 1843

[NFS Case 933704]

 

NASA FAR Supplement; Undefinitized Contract Action

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

ACTION: Interim rule.

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SUMMARY: NASA contracting activities are instructed that contract 
modifications and task orders generally must be fully negotiated and 
priced (``definitized'') prior to issuance. If circumstances require 
issuance prior to definitization, actions with an estimated cost over 
$1,000,000 must be approved by the head of the contracting activity, 
except that for actions under Space Station contracts, the threshold is 
$10,000,000 and the approving authority is the Headquarters official 
responsible for the Space Station program. These approval levels cannot 
be delegated. Undefinitized actions should be issued as bilateral 
agreements, should contain a cost ceiling or not-to-exceed price, and 
should be definitized within 180 days. Certain exceptions apply.

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 933704 
in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Roger Wilson, (202) 358-0486, 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

    Many NASA contracts involve research and development where 
discoveries made during performance dictate a change in the work, and 
it is more efficient to issue an unpriced change than to allow the work 
to proceed in a direction that is obviously no longer desirable. 
However, the too-frequent use of undefinitized contract actions has 
contributed to a perception that the agency lacks discipline in the 
management of changes and the control of contract costs. Without full 
definitization, there is a risk of misunderstanding as to what effort 
is planned and what the programmatic and cost impacts are.

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 is limited to a change in internal agency 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.

List of Subjects in 48 CFR Part 1843

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

    Accordingly, 48 CFR part 1843 is amended as follows.
    1. The authority citation for 48 CFR part 1843 continues to read as 
follows:

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

PART 1843--CONTRACT MODIFICATIONS

    2. Subpart 1843.1 is added as follows:

Subpart 1843.1--General

Sec.
1843.101  Definitions.
1843.102  Policy.
1843.103  Procedures.
1843.104  Exceptions.
1843.105  Definitization.

Subpart 1843.1--General


1843.101  Definitions.

    Undefinitized contract action (UCA) means a unilateral or bilateral 
contract modification or work/task order in which the final price or 
estimated cost and fee have not been negotiated and mutually agreed to 
by NASA and the contractor. (Issuance of letter contracts and 
modifications to letter contracts are governed by subpart 1816.6.)


1843.102  Policy.

    Undefinitized contract actions shall be executed by contracting 
officers on an exception basis and shall be limited to the Agency's 
minimum urgent requirements. The contract file for all UCAs shall be 
documented to justify issuance and shall include a Government estimate 
for the changed requirements.


1843.103  Procedures.

    (a) Issuance of undefinitized contract actions with a Government 
estimated cost or price over $1,000,000 must be approved in writing by 
the Center Director, except that Space Station undefinitized contract 
actions with a Government estimate over $10,000,000 must be approved in 
writing by the Deputy Associate Administrator for Space Flight (Space 
Station). These approval authorities are not delegable. Issuance of 
undefinitized contract actions with a Government estimated cost or 
price less than or equal to $1,000,000 shall also be minimized but may 
be approved on an exception basis in accordance with Center procedures.
    (b) (1) Undefinitized contract actions exceeding $1,000,000 
approved by the Center Director shall be issued as bilateral agreements 
duly executed by an authorized representative of the contractor. These 
bilateral agreements shall set forth a ceiling price or ``not to 
exceed'' estimated cost figure for the changed contractual 
requirements. For fixed price contracts the negotiated price for the 
changed contract requirements shall not exceed the established ceiling 
price. In the case of cost type contracts any costs eventually 
negotiated for the changed requirements in excess of the ``not to 
exceed'' estimated cost figure shall be non-fee bearing. The ceiling 
price or ``not to exceed'' estimated cost figures shall be separately 
identified in the UCA instrument from any increases in the estimated 
cost or Limitation of Government Liability.
    (2) The Center Director or Deputy Associate Administrator for Space 
Flight (Space Station) may waive the ceiling price or ``not to exceed'' 
estimated cost figure and bilateral agreement requirements prior to UCA 
issuance on the basis of urgency. This waiver authority is not 
delegable. Any waivers shall be documented in the contract file.
    (c) The changed contractual requirements set forth in the UCA shall 
be clearly defined and shall be limited to the minimum effort required 
to satisfy urgent program requirements while a cost proposal is 
prepared, analyzed and negotiated.
    (d) For undefinitized contract actions with a Government estimate 
greater than $1,000,000 and not excepted under subpart 1843.104, a 180 
day funding profile shall be obtained from the contractor and reviewed 
by the cognizant NASA personnel prior to execution of the undefinitized 
contract action.
    (e) Undefinitized contract actions with a Government estimated cost 
or price greater than $1,000,000 shall include a requirement that the 
change shall be separately accounted for by the contractor to the 
degree necessary to provide the Contracting Officer visibility into 
actual costs incurred pending definitization. The Contracting Officer 
may waive this requirement for individual actions if there is a 
documented finding that such accounting procedures would not be cost 
effective. Any such waiver shall not affect existing NASA Form 533 or 
other financial reporting requirements set forth in the contract.


1843.104  Exceptions.

    (a) Exceptions to the requirement for Center Director or Deputy 
Associate Administrator for Space Flight (Space Station) approval for 
issuance of undefinitized contract actions as specified in 1843.103(a) 
are--
    (1) Modifications to facilities contracts;
    (2) Modifications to construction contracts using Construction of 
Facilities funding;
    (3) Urgent modifications resulting from Shuttle manifest changes or 
that involve immediate issues of safety or damage/loss of property;
    (4) Modifications to decrease the contract value; or
    (5) Modifications to letter contracts.
    (b) The contract file for any of the above modifications shall be 
documented to justify UCA issuance in addition to citing the 
appropriate exception to Center Director or Deputy Associate 
Administrator for Space Flight (Space Station) approval.


1843.105  Definitization.

    (a) Undefinitized contract actions should be sufficiently complete 
and detailed as to enable the contractor to begin immediate preparation 
of a cost proposal for the changed requirement. The NASA goal is to 
definitize UCAs within 180 days from date of issuance. This goal in no 
way compromises the Agency's continuing requirement for sound cost 
analysis, arms-length negotiations, and fair and reasonable 
settlements.
    (b) Whenever possible, pre-change study efforts or engineering 
change proposals (ECPs) shall be utilized to negotiate and definitize 
changes prior to issuance.

[FR Doc. 94-11018 Filed 5-6-94; 8:45 am]
BILLING CODE 7510-01-P