[Federal Register Volume 59, Number 123 (Tuesday, June 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15606]


[Federal Register: June 28, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1831 and 1852


Revision to NASA FAR Supplement Coverage on Precontract Costs

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 regulations pertaining to 
precontract costs to specify the content of letters to contractors 
which authorize the incurrence of precontract costs, make clear the 
circumstances when precontract costs would be appropriate, and clarify 
that precontract costs are not allowable unless the clause 
``Precontract Costs'' is included in the contract. In addition, the 
proposed rule revises the prescription for the clause to allow its use 
in other than cost-reimbursement contracts. Also, the rule proposes to 
change the title of that clause from ``Date of Incurrence of Costs'' to 
``Precontract Costs'' to more accurately reflect its purpose.

DATES: Comments must be received on or before August 29, 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

    Although NASA has used authorization letters for precontract costs 
for many years, there has been little standardization in the contents 
of the letters. In addition, the current NASA FAR Supplement coverage 
at 1831.205-32 does not make it clear when the use of precontract costs 
would be appropriate, or that the clause at 1852.231-70 is required to 
be in the contract in order for precontract costs to be allowable. In 
addition, the clause prescription incorrectly states that the clause 
only should go in cost-reimbursement contracts. The clause would also 
be applicable to fixed-price incentive or redeterminable contracts and 
to terminated firm-fixed price contracts, as the cost principles at 
(FAR) 48 CFR Subpart 31.2 would be applicable. The proposed rule 
specifies the information to be included in precontract cost 
authorization letters to contractors, identifies when the use of 
precontract costs would be appropriate, as well as requires the clause 
at 1852.231-70 be used for precontract costs to be allowable. The 
proposed rule also retitles the clause at 1852.231-70 from the ``Date 
of Incurrence of Costs'' to ``Precontract Costs'' to more accurately 
reflect the purpose of the clause.

Impact

    NASA certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities under 
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 1831 and 1852

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

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

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

PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES

    2. Section 1831.205-32 is revised to read as follows:


1831.205-32  Precontract costs.

    (a) The authorization of precontract costs is not encouraged and 
shall be granted only when there will be a sole source award or a 
single offeror has been selected for negotiations as the result of a 
competitive procurement, the criteria at (FAR) 48 CFR 31.205-32 are 
met, and a written request and justification has been submitted to and 
approved by the procurement officer. The justification shall (1) 
substantiate the necessity for the contractor to proceed prior to 
contract award, (2) specify the start date of such contractor effort, 
(3) identify the total estimated time of the advanced effort, and (4) 
specify the cost limitation.
    (b) Authorization to the contractor to incur precontract costs 
shall be in writing and shall (1) specify the start date of incurrence 
of such costs, (2) specify a limitation on the total amount of 
precontract costs which may be incurred, (3) state that the costs are 
allowable only to the extent they would have been if incurred after the 
contract had been entered into, and (4) state that the Government is 
under no obligation to reimburse the contractor for any costs unless a 
contract is awarded.
    (c) Precontract costs shall not be allowable unless the clause at 
1852.231-70, Precontract Costs, is included in the contract.
    3. Section 1831.205-70 is revised to read as follows:


1831.205-70  Contract clause.

    The contracting officer shall insert the clause at 1852.231-70, 
Precontract Costs, in contracts for which specific coverage of 
precontract costs is authorized under 1831.205-32.
    4. Section 1852.231-70 is revised to read as follows:


1852.231-70  Precontract costs.

    As prescribed in 1831.205-70, insert the following clause:

Precontract Costs

(XXX 19XX)

    The contractor shall be entitled to reimbursement for costs 
incurred on or after ______________ in an amount not to exceed $ 
________ that, if incurred after this contract had been entered 
into, would have been reimbursable under this contract.

(End of clause)

[FR Doc. 94-15606 Filed 6-27-94; 8:45 am]
BILLING CODE 7510-01-M