[Federal Register Volume 60, Number 142 (Tuesday, July 25, 1995)]
[Proposed Rules]
[Pages 37983-37986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18122]



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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1809, 1830, and 1831


NASA FAR Supplement; Rewrite of NASA Policy on Contractor 
Qualifications, Cost Accounting Standards Administration, and Contract 
Cost Principles and Procedures

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

ACTION: Proposed rule.

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SUMMARY: This is a proposed revision of the NASA FAR Supplement in 
order to rewrite NASA policy on Contractor Qualifications, Cost 
Accounting Standards Administration, and Contract Cost Principles and 
Procedures. The changes are intended to streamline the regulation.

DATES: Comments are due on or before September 25, 1995.

ADDRESSES: Comments should be addressed to: National Aeronautics and 
Space Administration, Contract Management Division (Code HK/Beck), 
Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT:
David K. Beck, (202) 358-0482.

SUPPLEMENTARY INFORMATION:

Background

    We are rewriting the NASA FAR Supplement in order to streamline the 
regulation, delegate authority to the lowest possible level, and 
eliminate unnecessary reports and requirements. This rule proposes 
revisions to three parts of the NASA FAR Supplement. Although the 
revisions are minor, we are publishing these changes for comment 
because the parts cover topics of considerable interest to NASA 
contractors.

Summary of Changes

    The policy on Canadian subcontractors is shortened and relocated to 
Sec. 1809.104-4. The policy on contractor use of ``Made in America'' 
labels is removed because the topic is addressed by FAR 9.406-2(a)(4). 
The discussion of conditions for preaward surveys at Sec. 1809.106-1 is 
removed because it is unnecessary guidance.
    Several changes are made to Sec. 1809.106-70 on preaward surveys. 
Paragraphs (d) (2) and (3) are changed in order to remove unnecessary 
words and provide additional guidance on requesting surveys. 
Unnecessary words are removed from paragraphs (j)(4) and (k)(1).
    In paragraph 1809.202(a), the responsibility for justifying 
qualification requirements is restated. Paragraphs 1809.203-70(a) and 
1809.206-1(b) are changed to indicate current organizational names. 
Paragraph 1809.203-70(c) is removed because it is not needed in this 
regulation.
    Subpart 1809.4 on debarment is revised in order to show 
reassignment of this responsibility in NASA's Office of Procurement, 
reorganize the material for clarity, and remove redundant or 
unnecessary material.
    The following sections on cost accounting standards (CAS) 
administration are removed because they provide unnecessary guidance: 
Sec. 1830.101 on ``national defense'' contracts, Sec. 1830.7000 on 
incentive contracts, Sec. 1830.7001-2 on preaward facilities capital 
applications, and Secs. 1830.7002 through 1830.7002-2 on facilities 
capital employed for facilities under construction. The remaining CAS 
sections are revised for clarity.
    In subpart 1831 on cost principles, Sec. 1831.205-670 is revised in 
order to shorten the section.
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 
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.

Regulatory Flexibility Act

    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.). 

[[Page 37984]]


List of Subjects in 48 CFR Parts 1809, 1830, and 1831

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

    Accordingly, 48 CFR Parts 1809, 1830, and 1831 are proposed to be 
amended as follows:
    1. The authority citation for 48 CFR Parts 1809, 1830, and 1831 
continues to read as follows:

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

PART 1809--CONTRACTOR QUALIFICATIONS

    2. Sections 1809.102 and 1809.102-70 are removed.
    3. Section 1809.104 and 1809.104-4 are added to read as follows:


1809.104  Standards.


1809.104-4  Subcontractor responsibility.

    Generally, a Canadian firm proposed by the Canadian Commercial 
Corporation (CCC) as its subcontractor shall be accepted as responsible 
by the contracting officer. However, when the CCC determination of 
responsibility is not consistent with other available information, the 
contracting officer shall request from CCC and any other appropriate 
sources additional information or plant surveys needed in order to make 
the determination of responsibility required by FAR 9.103(b).


1809.104-70 and 1809.106  [Removed]

    4. Sections 1809.104-70 and 1809.106-1 are removed.
    5. Section 1809.106-70 is amended by revising the section heading, 
revising paragraphs (d)(2) and (3), revising paragraph (g), removing 
the paragraph headings from paragraphs (j)(4)(i) and (ii), and in 
paragraph (k)(1) by revising the paragraph heading and the first 
sentence to read as follows:


1809.106-70  NASA preaward surveys.

* * * * *
    (d) * * *
    (2) Any information indicating previous unsatisfactory contract 
performance shall be furnished to the survey activity with the preaward 
survey request.
    (3) If the survey activity is a DOD agency, the request is to be 
sent to the appropriate office shown in the DOD Directory of Contract 
Administration Services Components, DLAH 4105.4, Attn: Preaward Survey 
Monitor. The date on which the completed survey report is desired 
should be indicated. DOD normally allows seven working days in which to 
conduct a full survey and submit the report to the requesting agency, 
however, more time should be allowed for the particular circumstances 
of the survey. For example complex items, new or inexperienced 
contractors, and time-consuming requirements, such as, secondary 
surveys, accounting system reviews, financial capability analysis, or 
purchasing activity participation may require additional time.
* * * * *
    (g) Steps for survey performance. Three steps in performing a 
preaward survey are--
    (1) Preliminary analysis;
    (2) Development and evaluation of information; and
    (3) Preparation and review of the preaward survey report.
* * * * *
    (k) * * *
    (1) Findings and recommendations of team. When the required 
information has been gathered, each participant shall (i) analyze it 
and evaluate the prospective contractor's capability to perform with 
respect to the functions or elements investigated and (ii) provide 
findings and recommendations to the monitor on one or more of the 
appropriate forms (see FAR 9.106-4(a)) or on attachments. * * *
* * * * *
    6. Paragraph (a) of section 1809.202 is revised to read as follows:


1809.202  Policy.

    (a) The cognizant technical activity is responsible for meeting the 
requirements of FAR 9.202(a) with approval by the installation's 
competition advocate.
* * * * *
    7. Section 1809.203-70 is amended by revising paragraph (a) and 
removing paragraph (c) to read as follows:


1809.203-70  General.

    (a) The Director, Quality Management Division (QW), is responsible 
for justifying, determining, and approving NASA's need for inclusion 
and continued use of qualification requirements in specifications under 
the NASA Microelectronics Reliability Program.
    (b) * * *
    8. Paragraph (b) section 1809.206-1 is revised to read as follows:


9.206-1  General.

    (a) * * *
    (b) Requests not to enforce a qualification requirement in a non-
emergency situation shall be prepared by the cognizant requirements 
office and approved by the Headquarters Office of Safety and Mission 
Assurance (Code Q).
    (c) * * *
    9. Section 1809.404 is revised to read as follows:


1809.404  List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.

    (a) NASA Headquarters, Office of Procurement, Program Operations 
Division (Code HS) is responsible for taking the actions enumerated 
under FAR 9.404(c).
    (b) In compliance with FAR 9.404(c)(5), contracting officers shall 
consult the list entitled Parties Excluded from Procurement Programs, 
which is contained in the GSA publication entitled, Lists of Parties 
Excluded from Federal Procurement or Nonprocurement Programs, to ensure 
that they do not award contracts to or consent to subcontracts with 
listed parties, except as provided in FAR 9.405.
    (c) For the purpose of obtaining copies of the list, field 
installation procurement offices shall notify NASA Headquarters, Office 
of Procurement, Program Operations Division (Code HS) of how many 
copies they want and provide a single mailing address at the 
installation. Code HS will, in turn, place the order for the copies 
which will be mailed directly to the installation.
    10. Section 1809.405 is revised to read as follows:


1809.405  Effect of listing.

    If a contract, or subcontract subject to contracting officer 
consent, must be awarded, renewed, or otherwise extended with a listed 
party, the procurement officer shall prepare a request for a 
determination with all necessary supporting documentation and forward 
it to the Associate Administrator for Procurement (Code HS) for 
approval. Some examples of circumstances that may constitute a 
compelling reason under FAR 9.405(a), 9.405-1(b), or 9.405-2(a) for 
award, renewal, or extension include the following:
    (a) The property or services to be acquired are available only from 
the listed party.
    (b) The urgency of the requirement dictates that NASA deal with the 
listed party.
    (c) Other reasons related to the national defense or program 
requirements that necessitate continued business dealings with the 
listed party.
    11. Section 1809.405-1 is revised to read as follows:

[[Page 37985]]



1809.405-1  Continuation of current contracts.

    The contracting officer may terminate a contract under FAR 9.405-
1(a) if it is in the best interest of the Government to do so, unless 
directed otherwise by the Associate Administrator for Procurement.
    12. Sections 1809.405-2, 1809.406, 1809.406-3, 1809.407, and 
1809.407-3 are removed.
    13. Paragraphs (b), (d), and (e) of section 1809.408 are revised to 
read as follows:


1809.408  Certification regarding debarment, suspension, proposed 
debarment, and other responsibility matters.

    (a) * * *
    (b) If the offeror indicates that it is presently debarred, 
suspended, or proposed for debarment, the contracting officer may make 
a non-responsibility determination without notifying the Associate 
Administrator for Procurement. If the contracting officer determines 
that award must be made to such firm, follow the procedures set out in 
1809.405, FAR 9.405-1(b), 9.405-2, 9.406-1(c) or 9.407-1(d).
    (c) * * *
    (d) If the offeror indicates that it has been indicted, charged, 
convicted, or had a civil judgment rendered against it, the contracting 
officer, in accordance with FAR 9.408(a), shall immediately notify the 
Associate Administrator for Procurement (Attn: Code HS), providing 
details as known, and shall await a response from Code H before 
awarding the contract.
    (e) If the offeror discloses information that indicates a need for 
a debarment or suspension determination by the agency debarring 
official, the contracting officer shall report the facts to the 
Associate Administrator for Procurement (Code HS) in accordance with 
1809.470.
    14. Section 1809.470-1 is amended by revising the introductory 
text, revising paragraph (b), and adding paragraph (c) to read as 
follows:


1809.470-1  Situations requiring reports.

    A report incorporating the information required by 1809.470-2 below 
shall be forwarded by the procurement officer to the Associate 
Administrator for Procurement (Code HS) when a contractor--
    (a) * * *
    (b) Is suspected of attempting to evade the prohibitions of a 
debarment or suspension by change of address, multiple addresses, 
formation of new companies, or other devices.
    (c) This report is not necessary if the NASA Office of the 
Inspector General (OIG) has recommended that the Associate 
Administrator for Procurement take debarment or suspension action.
    15. Paragraph (h) of section 1809.470-2 is revised to read as 
follows:


1809.470-2  Contents of reports.

* * * * *
    (h) A complete summary of all pertinent evidence. If a request for 
debarment or suspension is based on an indictment or a conviction, 
provide copies of those documents.
* * * * *
    16. Section 1809.470-3 is revised to read as follows:


1809.470-3  Addresses and copies of reports.
    Reports, including enclosures, shall be submitted in duplicate to 
the Associate Administrator for Procurement (Code HS).

PART 1830--COST ACCOUNTING STANDARDS ADMINISTRATION

    17. Subpart 1830.1 is removed.
    18. Section 1830.201-5 is revised to read as follows:


1830.201-5  Waiver.

    After the contracting officer has made the determination required 
by FAR 30.201-5, the procurement officer shall forward all requests for 
waiver of CAS requirements to the Associate Administrator for 
Procurement (Code HC) for submittal to the CAS Board.
    19. Section 1830.7001 is removed.
    20. Section 1830.7001-1 is redesignated as section 1830.7001 and 
revised to read as follows:


1830.7001  Contract facilities capital estimates.

    (a) After the appropriate Cost Accounting Standards Board-Cost of 
Money (CASB-CMF) Forms have been analyzed and cost of money factors 
(CMFs) have been developed, the contracting officer can estimate the 
facilities capital cost of money and capital employed for a contract 
proposal. DD Form 1861 ``Contract Facilities Capital Cost of Money'' 
shall be used for this purpose and, when properly completed, becomes a 
connecting link between the Forms CASB-CMF and any applicable agency 
structured approach to determination of profit or fee objectives.
    (b) The structure and allocation base units-of-measure must be 
compatible on the DD 1861, the proposal, and the CASB-CMF. Overhead 
pools, for example, engineering, manufacturing, and G&A, are listed by 
year in the first column of the DD Form 1861 labeled POOL. The 
allocation base figure for each overhead pool objective is extracted 
from the evaluated cost breakdown or pre-negotiation cost objective and 
listed by year in the second column. Each allocation base is then 
multiplied by the recommended facilities capital cost of money factor 
calculated on the CASB-CMF for that base. The total facilities capital 
cost of money amounts appearing in the last column labeled AMOUNT are 
totaled in the space provided in the line labeled TOTAL. This total 
represents the estimated facilities capital cost of money amount for 
the contract and is the figure to be used to calculate the 
prenegotiation position memorandum objective cost and to reduce the 
profit objective in accordance with 1815.970-3(a). The lines labeled 
TREASURY RATE and FACILITIES CAPITAL EMPLOYED (TOTAL DIVIDED BY 
TREASURY RATE) and Section 7 of the form labeled DISTRIBUTION OF 
FACILITIES CAPITAL EMPLOYED do not apply to NASA and should be ignored.


1830.7001-2  [Removed]

    21. Sections 1830.7001-2 is removed.
    22. Section 1830.7002 is removed and Section 1830.7001-3 is 
redesignated as section 1830.7002 and revised to read as follows:


1830.7002  Payments for facilities capital.

    (a) Interim billings based on costs incurred. Contract Facilities 
Capital Cost of Money may be included in cost reimbursement and 
progress payment invoices. The amount that qualifies as cost incurred 
for purposes of the Allowable Cost and Payment or Progress Payment 
clause of the contract is the result of multiplying the incurred 
portions of the indirect cost pool allocation bases by the latest 
available CMFs. Like applied overhead at forecasted overhead rates, 
such computations are interim estimates subject to adjustment. As each 
year's data are finalized by computation of the actual CFMs under CAS 
414 and FAR 31.205-10, the new factors should be used to calculate 
contract facilities cost of money for the next accounting period.
    (b) Final settlement. Contract Facilities Capital Cost of Money for 
final cost determination or repricing is based on each year's final 
CMFs determined under CAS 414 and supported by separate Forms CASB-CMF. 
Contract cost must be separately computed in a manner similar to yearly 
final overhead rates. Also like overhead costs, the final settlement 
will include an adjustment from interim to final contract cost of 

[[Page 37986]]
money. However, estimated or target cost will not be adjusted.

    23. Sections 1830.7002-1 through 1830.7002-2 are removed.

PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES

    24. Section 1831.205-670 is revised to read as follows:

1831.205-670  Evaluation of contractor and subcontractor compensation 
for service contracts.

    (a) The contracting officer shall evaluate the reasonableness of 
employee compensation in service contracts:

    (1) Prior to the award of a cost reimbursement or noncompetitive 
fixed-price type contract which has a total potential value in excess 
of $500,000, and

    (2) Periodically after award for cost reimbursement contracts and 
subcontracts, but at least every three years.

    (b) The contracting officer shall ensure the reasonableness of 
compensation is evaluated for cost reimbursement and non-competitive 
fixed-price type service subcontracts under a prime contract meeting 
the criteria in paragraph (a)(1) of this section if:

    (1) The subcontract has a total potential value in excess of 
$500,000; and

    (2) The cumulative value of all of a subcontractor's service 
subcontracts under the prime contract is in excess of 10 percent of the 
prime contract's total potential value.

    (c) The results of the contracting officer's evaluation, including 
any excessive compensation found and its planned resolution, shall be 
addressed in the prenegotiation position memorandum, with the final 
resolution discussed in the price negotiation memorandum. The results 
of the periodic evaluations of contractor and subcontractor 
compensation after contract award shall be documented in the contract 
file.

[FR Doc. 95-18122 Filed 7-24-95; 8:45 am]

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