[Federal Register Volume 59, Number 111 (Friday, June 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13819]


[[Page Unknown]]

[Federal Register: June 10, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1807 and 1810

RIN 2700-AB54

 

Acquisition Regulation; Addition of Coverage to the NASA FAR 
Supplement on Performance-Based Contracting

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

ACTION: Final rule.

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SUMMARY: This rule sets forth the policies for using performance-based 
contracting techniques and addressing this issue as an item in 
procurement plans.

EFFECTIVE DATE: June 30, 1994.

FOR FURTHER INFORMATION CONTACT:
Dave Beck, Telephone: (202) 358-0482.

SUPPLEMENTARY INFORMATION:

Background

    The regulation was developed to implement OMB's request that NASA 
make greater use of performance-based contracting techniques. It holds 
requiring activities responsible for stating specifications, purchase 
descriptions, and statements of work, on the basis of performance, 
where practical, so that a variety of products or services may apply. 
The regulation also ensures that contract files include a statement on 
consideration or use of performance-based contracting techniques.

Availability of NASA FAR Supplement

    The NASA FAR Supplement, of which this regulation 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, 
whether in whole or in part, directly by NASA.

Executive Order 12866

    The Office of Information and Regulatory Affairs has determined 
that this rule is significant under E.O. 12866. This regulation is 
needed because greater use of performance-based contracting techniques 
will give contractors more freedom to innovate and economize, and also 
hold them more accountable for the end results. The regulation meets 
that need by requiring performance-based specifications, purchase 
descriptions and statements of work, where feasible, to (i) describe 
the work in terms of the required output; (ii) place full 
responsibility for quality performance on contractors with formal, 
measurable performance standards and surveillance plans used to assess 
contractor performance; and (iii) avoid relying on cumbersome and 
intrusive process-oriented inspection and oversight programs to assess 
contractor performance.
    The potential costs and benefits of the regulatory action are 
supported by OFPP Policy Letter 91-2, Service Contracting. The 
regulation is NASA's internal implementation of OFPP Policy Letter 91-
2. NASA has benefited using performance-oriented launch service 
contracts that balance the assignment of positive and negative 
performance incentives with a meaningful system of financial rewards 
and penalties. The statements of work are broad in scope and general in 
nature, focusing on the successful delivery of the undamaged and 
operational spacecraft to the proper trajectory and orbital conditions 
without violating mission parameters. Some of these contracts provide 
for (i) mission success pools that incentivize the contractor to 
deliver payload safely and into correct orbit and (ii) liquidated 
damages relative to timely and effective performance.

Regulatory Flexibility Act

    NASA certifies that this 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 rule does not impose any reporting or recordkeeping 
requirements subject to the Paperwork Reduction Act.

List of Subjects in 48 CFR 1807 and 1810

    Government procurement.

Tom Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR parts 1807 and 1810 are amended as follows:
    1. The authority citation for 48 CFR parts 1807 and 1810 continues 
to read as follows:

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

PART 1807--ACQUISITION PLANNING

    2. Part 1807 is amended as set forth below:
    a. In section 1807.170-1, paragraphs (b)(1) (iv) and (v) are 
revised and a new paragraph (b)(1)(vi) is added to read as follows:

1807.170-1  Procurement plans requiring approval by NASA Headquarters.

* * * * *
    (b) * * *
    (1) * * *
    (iv) An identification of any later phases if the procurement is to 
be a phased procurement including the estimated cost thereof;
    (v) A statement as to whether the contractor will be required to 
comply with detailed specifications, meet performance requirements, 
perform a mission, or furnish a level of effort; and
    (vi) A statement on consideration or use of performance-based 
contracting techniques.
* * * * *
    b. Section 1807.170-2 is revised to read as follows:

1807.170-2  Procurement plans requiring approval at the installation 
level.

    Procurement plans prepared for installation-level approval shall be 
prepared in accordance with 1807.170-1 or in the format prescribed by 
the installation. Installation prescribed formats shall ensure that the 
consideration or use of performance-based contracting techniques 
required at 1807.170-1(b)(1)(vi) and all contract management 
considerations enumerated at 1807.170-1(c) are addressed.

PART 1810--SPECIFICATIONS, STANDARDS, AND OTHER PURCHASE 
DESCRIPTIONS

1810.002-71  [Added]

    3. Section 1810.002-71 is added to read as follows:

1810.002-71  Performance-based contracting

    Use of performance-based specifications, where feasible, is the 
preferred method for establishing contract requirements. Requiring 
activities shall, to the maximum extent practicable, use performance-
based specifications, purchase descriptions and statements of work in 
order to give contractors freedom to innovate and economize, and to 
hold contractors accountable for the end results.

[FR Doc. 94-13819 Filed 6-9-94; 8:45 am]
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