[Federal Register Volume 60, Number 201 (Wednesday, October 18, 1995)]
[Rules and Regulations]
[Pages 53878-53880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25858]



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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1815, 1816, 1852, and 1870


Acquisition Regulation; Cost or Pricing Data

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

ACTION: Final rule.

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SUMMARY: This rule revises NASA policies on cost or pricing data in 
order to make the policies consistent with recently revised Federal-
wide policies.

EFFECTIVE DATE: October 18, 1995.

FOR FURTHER INFORMATION CONTACT: William T. Childs, (202) 358-0454.

SUPPLEMENTARY INFORMATION: 

Background

    The Federal Acquisition Streamlining Act of 1994 (FASA) revised 
policy on cost or pricing data under the Truth in Negotiations Act 
(TINA), among other things. The TINA changes have been implemented in 
the Federal Acquisition Regulation (FAR), and those changes necessitate 
corresponding revisions of the NASA FAR Supplement (NFS). In addition, 
in the spirit of the National Performance Review, changes are being 
made to the NFS to provide clarity.
    (a) Section 1815.804-1(a)(2), formerly 1815.804-3(a)(2), is deleted 
because it duplicates the revised FAR. A new paragraph is substituted 
to require that decisions to utilize the FAR cost or pricing data 
exception for one-offer adequate price competition situations must be 
approved by the head of the contracting activity, and copies of the 
approval and basis of price reasonableness must be sent to Headquarters 
Code HC.
    (b) Section 1815.804-1(d), formerly 1815.804-3(d), is revised to 
accommodate the FAR reduction in approval level for cost or pricing 
data exceptions to the head of the contracting activity. The 
requirement to send a copy of the approval to Headquarters Code HC is 
retained, but some of the accompanying documentation is no longer 
required to be furnished to Headquarters Code HC.
    (c) FAR 15.804-2(a)(2) specifies that below-threshold requirements 
for cost or pricing data must be approved by the head of the 
contracting activity. Section 1815.804-2(a) is added to require that 
copies of such approvals must be furnished to Headquarters Code HC.
    (d) FAR 15.804-2(b)(2) provides that certificates of current cost 
or pricing data may be made applicable as of a date agreed upon by the 
parties. Section 1815.804-2 is amended to add paragraph (b) to provide 
guidance that the agreed date should generally be within two weeks of 
the date of price agreement.
    (e) The dollar thresholds for formal prenegotiation reviews at 
1815.807-71 are deleted and left to the centers' discretion.
    (f) Most of the coverage in 1815.970-3(b) has been removed because 
it is addressed in subpart 1830.70 (60 FR 37983, July 25, 1995). The 
discussion of (AS 417 in 1815.970-3(c) has been substantially rewritten 
to remove a previous misinterpretation of CAS.
    (g) Numerous editorial changes have been made. Numbering, section 
headings, and form titles have been revised to comport with the 
revisions in FAR subpart 15.8.
    This rule pertains to internal NASA procedures only. Because there 
is no impact on the public, it is not required to be published for 
comment.

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.). This rule does 

[[Page 53879]]
not impose any reporting or record keeping requirements subject to the 
Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1815, 1816, 1852 and 1870

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
    Accordingly, 48 CFR parts 1815, 1816, 1852, and 1870 are amended as 
follows.

PART 1815--CONTRACTING BY NEGOTIATION

    1. The authority citation for 48 CFR parts 1815, 1816, 1852, and 
1870 continues to read as follows:

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

Subpart 1815.8--Price Negotiation

    2. The heading of section 1815.804 is revised to read as follows:


1815.804  Cost of pricing data and information other than cost or 
pricing data.

    3. Section 1815.804-3 is redesignated as 1815.804-1 and the 
redesignated section is amended by revising the heading, revising 
paragraphs (a)(1) and (2), revising the first and last sentences in 
paragraph (a)(3)(i), and revising paragraphs (b), (c), (d), and (e)(3) 
to read as follows:


1815.804-1  Prohibition on obtaining cost of pricing data.

    (a)(1) The term ``lowest evaluated price,'' as used in FAR 15.804-
1(b)(1)(A), is defined to include all of the factors (for example, 
mission suitability, cost, past performance, etc.) used in the 
evaluation of proposals (but see paragraph (a)(2) of this section).
    (2) When the adequate price competition exemption will be used in a 
single-offer situation, the exemption shall be approved by the head of 
the contracting activity. The exemption document shall cite the 
authority of 10 U.S.C. 2306a(b)(B), and the procedure in paragraph (d) 
of this section shall be used.
    (3) * * *
    (i) The use of this exemption for a cost-reimbursement procurement 
requires the careful exercise of judgment on the part of the 
contracting officer based on the application of the guidance in FAR 
15.804.-1(b)(1)(A) and the regulations of this chapter to the facts of 
each procurement. * * * As a consequence, the failure to obtain cost or 
pricing data could result in a competing contractor intentionally 
underestimating its costs for the purpose of winning the award, which 
could then cause the actual contract costs to significantly exceed 
those proposed.
* * * * *
    (b) When an exemption is granted under FAR 15.804-1(c)(4) for 
repetitive submissions of catalog items, Government approval of the 
exemption claim shall state the effective period, usually not more than 
one year, and require the contractor to furnish any later information 
that might raise a question as to the exemption's continuation.
    (c) When exempting submission under FAR 15.804-1(b)(2)(iii), the 
contracting officer shall document the reasons for the exemption. It is 
generally appropriate to include a description of the similarities and 
differences from a commercial item, along with a discussion of the 
actual sales prices of the commercial item and an explanation of the 
value of the differences from that item. If the fact of substantial 
sales to the general public is well known, information addressing the 
quantity of sales is not required.
    (d) When the authority in FAR 15.804-1(a)(3) to grant an exception 
waiving the requirement for cost or pricing data is exercised, a copy 
of the approval shall be addressed to NASA Headquarters, Analysis 
Division, Code HC, and shall include the name and telephone number of 
the contracting officer and the basis for the contracting officer's 
determination of price reasonableness. The following is a sample format 
for the determination and findings for such a waiver.
National Aeronautics and Space Administration
[Installation Name]
Determination and Findings
Authority to Waive Submission of Cost or Pricing Data

    On the basis of the following findings and determination, the 
requirement for submitting cost or pricing data described below may 
be waived pursuant to the authority of 10 U.S.C. 2306a(b)(1)(B).
Findings
    1. The (1) proposes to enter into a contract with (2) for the 
procurement of (3).
    2. Pursuant to FAR 15.804-2, the proposed contractor is required 
to submit cost or pricing data. However, waiver of submission of the 
cost or pricing data described below is justified for the reasons 
indicated: (4)
Determination
    The requirement for submission of cost or pricing data described 
in the above findings for the proposed procurement is hereby waived.
----------------------------------------------------------------------
Center Director

Date-------------------------------------------------------------------

Notes--

    (1) Name of installation.
    (2) Name of proposed contractor.
    (3) Brief description of supplies or services.
    (4) Identification of the cost or pricing data requirements to 
be waived. The waiver may be partial, for example, limited to a 
particular subcontractor. Also describe the circumstances and 
conditions that make the proposed procurement an exceptional case, 
and state the reasons justifying the proposed waiver.

    (e)(1) * * *
    (2) * * *
    (3) The review and audit practices of the Government of Canada, the 
price assurance representations, and the adjustments rendered where 
profits are excessive are considered to satisfy the requirements of 10 
U.S.C. 2306a. Therefore, NASA has waived the requirement for 
certification of cost or pricing data submitted by the CCC during the 
period April 1, 1990 through March 31, 1996. This waiver applies only 
to the certification and does not waive the requirement for submission 
of the data.
    4. Section 1815.804-2 is added as follows:


1815.804-2  Requiring cost or pricing data.

    (a) When an authorization to require cost or pricing data for a 
below-threshold procurement is granted pursuant to FAR 15.804-2(a)(2), 
a copy of the approval and supporting documentation shall be furnished 
to NASA Headquarters, Analysis Division, Code HC.
    5. Section 1815.807-70 is amended in paragraph (d)(1) by 
republishing the first sentence and revising the second sentence and by 
revising the second sentence of paragraph (d)(2) to read as follows:


1815.807-70  Content of the prenegotiation position memorandum.

* * * * *
    (d) * * *
    (1) Include a parallel tabulation, by element of cost and profit/
fee, of the contractor's proposal, the Government's negotiation 
objective, and the Government's maximum position, if applicable. 
Explain the differences and how the Government position(s) were 
developed, including the estimating assumptions and projection 
techniques employed, and how the positions differ in approach. * * *
    (2) * * * For each proposed subcontract meeting the requirement of 
FAR 15.806-2(a), provide the contracting officer's price or cost 
analysis and negotiation objective. * * *
* * * * *

[[Page 53880]]

    6. Section 1815.807-71 is amended by revising the first sentence to 
read as follows:


1815.807-71  Installation reviews.

    Each contracting activity shall establish a formal system for the 
review of prenegotiation memoranda. * * *
    7. Section 1815.807-72 is amended by revising paragraph (a) to read 
as follows:


1815.807-72  Headquarters reviews.

* * * * *
    (a) Advance information to be provided to Headquarters. The 
installation shall provide Code HS with the following, which shall be 
furnished as soon as practicable and sufficiently in advance of the 
planned commencement of negotiations to allow a reasonable period of 
time for Headquarters review:
    (1) Five copies of the PPM.
    (2) One copy each of the contractor's proposal, the Government 
technical evaluation, and all pricing reports (including any audit 
reports).
* * * * *
    8. Section 1815.870-1 is amended by revising paragraph (a) and the 
first sentence of paragraph (b) to read as follows:


1815.870-1  General.

    (a) When subcontracts have been placed on a price-redetermination 
or fixed-price-incentive basis and the prime contract type is fixed-
price redeterminable or F-PI (successive target), at the time of final 
pricing it may be appropriate to negotiate a firm prime contract price, 
even though the contractor has not yet established final subcontract 
prices. The contracting officer may do this when convinced that the 
amount included for subcontracting is reasonable, for example, when 
realistic cost information or pricing data on subcontract efforts are 
available.
    (b) However, even though the available cost information are highly 
indefinite and there is a distinct chance that one or more of the 
subcontracts eventually may be redetermined at prices lower than those 
predicted in redetermining the prime contract price, other 
circumstances may require prompt negotiation of the final contract 
price. * * *

Subpart 1815.9--Profit


1815.970-2  [Amended]

    9. Section 1815.970-2 is amended by removing the paragraph heading 
in paragraph (f)(1).
    10. Section 1815.970-3 is amended by revising the citation 
``1815.970(b)'' to read ``1830.7001'' in the first sentence of 
paragraph (a) and by revising paragraph (b) and removing paragraph (c) 
to read as follows:


1815.970-3  Facilities capital cost of money.

    (a) * * *
    (b) CAS 417, cost of money as an element of the cost of capital 
assets under construction, should not appear in contract proposals. 
These costs are included in the initial value of a facility for 
purposes of calculating depreciation and CAS 414.

PART 1816--TYPES OF CONTRACTS

Subpart 1816.2--Fixed-Price Contracts


1816.203-4  [Amended]

    11. In paragraph (c) of section 1816.203-4, the citation ``FAR 
15.804.2 and -3'' is revised to read ``FAR 15.804-1 and 15.804-2''.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 1852.2--Tests of Provisions and Clauses

    12. Section 1852.215-70 is amended by revising the date of the 
clause to read ``October 1995'' and revising paragraph (a) of the 
clause to read as follows:


1852.215-70  Increases in estimated costs.

* * * * *
    (a) Increases resulting from updating or correcting the cost or 
pricing data submitted with the proposal;
* * * * *
    13. Section 1852.243-70 is amended by revising the date of the 
clause to read ``October 1995'' and revising the first sentence of 
paragraph (d) of the clause to read as follows:


1852.243-70  Engineering change proposals.

* * * * *
    (d) Concurrent with the submission of an ECP, the contractor 
shall, in accordance with FAR 15.804-6, provide a completed Standard 
Form 1411, Contract Pricing Proposal Cover Sheet (Cost or Pricing 
Data Required), with appropriate attachments. * * *
* * * * *

PART 1870--NASA SUPPLEMENTARY REGULATIONS

Subpart 1870.1--NASA Acquisition of Investigations System

    14. In section 1870.102, paragraph VI of Appendix B to Appendix I 
is revised to read as follows:


1870.102  NASA acquisition of investigations.

* * * * *

VI. Status of Cost Proposals (U.S. Proposals Only)

    The Investigator's institution agrees that the cost proposal is 
for proposal evaluation and selection purposes, and that following 
selection and during negotiations leading to a definitive contract, 
the institution will be required to resubmit or execute a Standard 
Form (SF) Form 1411 ``Contract Pricing Proposal Cover Sheet (Cost or 
Pricing Data Required)'' and certifications and representations 
required by law and regulation.
* * * * *
[FR Doc. 95-25858 Filed 10-17-95; 8:45 am]
BILLING CODE 7510-01-M