[Federal Register Volume 59, Number 173 (Thursday, September 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21998]


[[Page Unknown]]

[Federal Register: September 8, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1801, 1807 and 1815

 

NASA FAR Supplement; Addressing Costs of Contractor Facilities in 
Procurement Plans, Business Management Proposals, and Prenegotiation 
Position Memoranda

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

ACTION: Final rule.

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SUMMARY: This rule amends the regulations pertaining to procurement 
plans, the instructions for technical and business management 
proposals, and the contents of the prenegotiation position memorandum 
in order to emphasize the importance of facilities in the contract 
planning and decision making process.

EFFECTIVE DATE: September 30, 1994.

FOR FURTHER INFORMATION CONTACT:
Mr. Joseph Le Cren (202) 358-0444.

SUPPLEMENTARY INFORMATION:

Background

    Over the last several years, NASA's Office of the Inspector General 
has issued several reports critical of the agency and its contractors 
regarding facilities leasing practices. One report addressed the issue 
on an agency-wide basis. That report stated that NASA was paying 
several times over for the same facilities due to contractors entering 
into a series of short-term leases. This rule emphasizes the importance 
of facilities by requiring installation procurement plans address 
facilities, specifying the information needed from contractors in their 
business management plans for the agency to properly evaluate the 
proposed costs, and requiring that the prenegotiation memorandum 
discuss the factors considered in the evaluation of facilities. This 
rule also revises the current coverage on procurement plans requiring 
Headquarters approval to better address the major facilities issues 
which should be considered.
    No comments were received in response to the proposed rule (59 FR 
24104, May 10, 1994). No changes have been made from the proposed rule.

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.). The information 
collection requirements in this rule have been approved by the Office 
of Management and Budget under 44 U.S.C. 3504(h) (OMB Control Number 
2700-0082 expires July 31, 1997).

List of Subjects in 48 CFR Parts 1801, 1807 and 1815

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
    Accordingly, 48 CFR Parts 1801, 1807 and 1815 are amended as 
follows:
    1. The authority citation for 48 CFR parts 1801, 1807 and 1815 
continues to read as follows:

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

PART 1801--FEDERAL ACQUISITION REGULATIONS SYSTEM

    2. Section 1801.105 is amended in paragraph (a) by adding the 
following entry in numerical order in the table as follows:


1801.105  OMB approval under the Paperwork Reduction Act.

    (a) * * *

------------------------------------------------------------------------
                                                             OMB control
                NASA FAR supplement segment                      No.    
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                                  *****                                 
1815.406-70(b)(5)(iii).....................................    2700-0082
                                                                        
                                  *****                                 
------------------------------------------------------------------------

PART 1807--ACQUISITION PLANNING

    3. Section 1807.170-1 is amended by revising paragraph (b)(10)(i) 
to read as follows:


1807.170-1  Procurement plans requiring approval by NASA Headquarters.

    (a) * * *
    (b) * * *
    (10) Item 10. Contractor-owned or leased and Government-furnished 
property. (i) If the proposed contract period of performance (exclusive 
of options) will be for a shorter period than the useful life, for the 
program, of any required contractor-owned or leased facilities (as 
defined in (FAR) 48 CFR 45.301), the facilities are unlikely to be 
needed by the contractor for any purpose other than the program effort 
being contracted for, and the facilities will represent a significant 
cost to the contract, then the procurement plan shall discuss the 
feasibility of the Government acquiring the right to use the facilities 
for longer than the proposed contract period, as well as the proposed 
procurement strategy for accomplishing this use.
    (A) If program uncertainties for continuing beyond the contract 
period of performance (exclusive of options) are significant, it may be 
in the Government's best interests to acquire use of the facilities 
during only that time. This strategy may make the facilities more 
costly to the Government for the contract period than if a contractual 
arrangement for longer use were made. However, it should reduce the 
program risks associated with longer-term Government facilities 
obligations;
    (B) If the program uncertainties for continuing beyond the contract 
period of performance (exclusive of options) are not significant, it 
may be in the Government's best interests to acquire the right to use 
the facilities for longer than the proposed contract period of 
performance (exclusive of options) in order to take advantage of 
economies in long-term facilities investment. In such cases, the 
following shall be considered:
    (1) Whether the amount of the potential cost savings to the 
Government arising from the contractor entering into a long-term 
arrangement (lease, purchase or construction) continuing beyond the 
contract period of performance (exclusive of options) could be 
significant;
    (2) If a long-term investment by the contractor could result in 
significant cost savings to the Government, the type of long-term 
arrangement that is believed would be most appropriate (e.g., long-term 
lease with the right of assignment to a third party or the Government, 
at the Government's option; purchase or construction of the facilities, 
with depreciation and cost of money either accelerated to cover the 
contract period of performance (exclusive of options) or over the 
useful life of the facilities); and
    (3) Whether the contractor might require a financial guarantee be 
provided by the Government in order to enter into a long-term 
arrangement and, if so, what the potential amount of such a guarantee 
might be, should the contract end (e.g., options are not exercised, or 
the contractor is not selected in a recompetition).
* * * * *
    4. Section 1807.170-2 is amended by adding a sentence at the end of 
the paragraph to read as follows:


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

    * * * In addition, installation prescribed formats shall ensure 
that plans for procurements in excess of $2,500,000 address the 
considerations at 1807.170-1(b)(10).

PART 1815--CONTRACTING BY NEGOTIATION

    5. Section 1815.406-70 is amended by republishing paragraph (b) 
introductory text and paragraph (b)(5) introductory text and revising 
paragraph (b)(5)(iii) to read as follows:


1815.406-70  Instructions for technical proposal and business 
management proposal submission.

    (a) * * *
    (b) Business management proposal. Proposals should include the 
following:
* * * * *
    (5) A statement as to--
* * * * *
    (iii) The cost of any additional facilities (as defined at (FAR) 48 
CFR 45.301) required to perform the work and how the costs are to be 
charged, with information as to whether the facilities will be 
contractor-furnished or Government-furnished and, if contractor-
furnished, the alternatives considered (e.g., short-term lease, long-
term lease with option to transfer the lease to a third party, 
purchase), including the long and short term benefits of each 
alternative, a description of any unique requirements or arrangements 
involved with each alternative, as well as the reasons for the 
alternative selected, a copy of the proposed lease or purchase 
agreement, identification of all costs included in the lease and 
ownership alternatives considered; and
* * * * *
    6. Paragraph (c)(5) of section 1815.807-70 is revised to read as 
follows:


1815.807-70  Content of the prenegotiation position memorandum.

* * * * *
    (c) * * *
    (5) Contractor/Government investment in facilities and equipment 
(and any modernization to be provided by the contractor/Government). 
Although not all inclusive, the following are to be covered:
    (i) The facilities needed by the contractor;
    (ii) How the facilities are to be provided (Government or 
contractor);
    (iii) If to be provided by the contractor, the alternatives 
considered (operating lease, capital lease, contractor purchase or 
construction, or other alternatives);
    (iv) Whether a financial guarantee has been requested by the 
offeror;
    (v) The reasons for the alternative selected; and
    (vi) How the costs are to be charged;
* * * * *
[FR Doc. 94-21998 Filed 9-7-94; 8:45 am]
BILLING CODE 7510-01-M