[Federal Register Volume 61, Number 208 (Friday, October 25, 1996)]
[Proposed Rules]
[Pages 55264-55266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26336]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1842 and 1852


Revision to NASA FAR Supplement Coverage on Contractor Financial 
Management Reporting

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

ACTION: Notice of Proposed rulemaking.

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SUMMARY: Changes are proposed to update the NASA FAR Supplement (NFS) 
coverage on contractor financial management reporting to make it 
compatible with current NASA reporting policy, including accounting 
requirements imposed by the Chief Financial Officers Act of 1990, the 
need for complete, timely and accurate project cost information and 
reassessment of the appropriate level of responsibility and authority 
in accordance with Government downsizing initiatives.
    The revised NFS coverage eliminates requirements for use of the 
Monthly Contractor Financial Management Performance Analysis Report, 
NASA Form 533P, and the clause included in 1852.242-74. NASA no longer 
uses the NF 533P format and is revising its approach to performance 
measurement reporting as a result of discussions with other Government 
agencies and industry. Revisions to the NASA performance measurement 
requirements will be published at a later date. The revised coverage 
gives regulatory effect to the publication of revised guidance on NASA 
Contractor Financial Management Reporting in NASA Procedures and 
Guidelines (NPG) 9501.2; provides for approval of exceptions from the 
standard reporting requirements set forth in the NPG at NASA Centers, 
rather than at Headquarters; permits waiver of NF 533Q reporting for 
certain contracts where NF 533M reporting provides adequate 
information; encourages the submission of reports earlier than the 
required due dates whenever feasible; and permits the use of 
alternative due dates, but only when data will be received in time for 
use in NASA's monthly cost accrual process. The time period for 
submission of the initial report is extended from 10 to 30 days after 
authorization to proceed has been granted. Contracting officers are 
given additional options to direct the contractor to report only when 
actual cost changes occur or suspend reporting altogether when the 
contract effort is completed and NASA has accepted all contract line 
items. Prime contractors are no longer required to use NASA Forms 533 
for subcontractor reporting, but must ensure that their NF 533 reports 
include accurate and timely subcontractor cost data. The revised 
procedures will be required to be used on all new contracts issued 
after the proposed regulations are adopted as a final rule. Existing 
contracts at that time will not require modification to incorporate the 
changes unless: requested by the contractor; there is a demonstrated 
cost savings; or there will be no cost for implementation.

DATES: Comments must be received on or before November 25, 1996.

ADDRESSES: Submit comments to Larry G. Pendleton, Contract Management 
Division (Code HK), Office of Procurement, NASA Headquarters, 
Washington, DC 20546. Comments on the paperwork burden should be 
addressed to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, Attention: Desk Officer for NASA, Washington, 
DC 20503.

FOR FURTHER INFORMATION CONTACT: Mr. Larry G. Pendleton, NASA 
Headquarters, Code HK, (202) 358-0487.

SUPPLEMENTARY INFORMATION:

Background

    NASA is updating its requirements for contractor financial 
management reporting in order to comply with the Chief Financial 
Officers Act of 1990, obtain complete, timely and accurate project cost 
information, and implement changes in the responsibilities and 
authorities of both NASA Headquarters and subordinate organizational 
elements.
    The Chief Financial Officers Act of 1990 requires that NASA publish 
audited annual financial statements. This requirement has placed 
additional emphasis on the need for timely and accurate contract cost 
data to ensure the accuracy of NASA accounting information.
    NASA's guidance for contractor financial management reporting, NPG 
9501.2, has been revised to clarify reporting requirements, address 
problems and questions that have arisen over time, and reassign 
responsibilities and authorities to permit more effective operations in 
today's environment. Training on NASA's expectations for contractor 
financial management reporting has been presented to all NASA 
contractors holding cost-reimbursement contracts over the past two 
years, and contractors have informally reviewed and commented upon the 
revised guidance. These changes to the NFS recognize the modified NPG 
9501.2 and provide complimentary coverage.
    Based upon discussions with other Government agencies and industry 
representatives, NASA has eliminated the Monthly Contractor Financial 
Management Performance Report, NF 533P, from the NASA Contractor 
Financial Management Reporting system. The agency is revising its 
approach to performance measurement, or earned value, reporting to make 
it more consistent with Department of Defense requirements and existing 
contractor systems.

Change Highlights

    The following revisions eliminate the use of the Monthly Contractor 
Financial Management Performance Analysis Report, NASA Form 533P. The 
contract clause at 1852.242-74 which required use of NF 533P is 
deleted. Exceptions from the standard reporting requirements are 
authorized to be approved at NASA Centers rather than at NASA 
Headquarters. The time period for submission of the initial report is 
extended from 10 to 30 days after contract authorization to proceed has 
been granted. Prime contractors are no

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longer required to use NASA Forms 533 for subcontractor reporting, but 
must ensure that their NF 533 reports include accurate and timely 
subcontractor cost data.

Regulatory Flexibility Act

    NASA certifies that these regulation changes 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.).

Paperwork Reduction Act

    This rule proposes to eliminate the following report that was 
approved by the Office of Management and Budget (OMB) and assigned OMB 
Control Number 2700-0003.
    Title: Monthly Contractor Financial Management Performance Analysis 
Report.
    Summary: This report provided NASA project management with a timely 
and comprehensive assessment of the contractor's performance over the 
reporting period, including cost, technical and schedule status.
    Notice: Comments on the elimination of this report may be submitted 
to the OMB address shown under ADDRESSEES.

List of Subjects in 48 CFR Parts 1842 and 1852

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

    Accordingly, 48 CFR 1842 and 1852 are proposed to be amended as 
follows:
    1. The authority citation for 48 CFR Parts 1842 and 1852 continues 
to read as follows:

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

PART 1842--CONTRACT ADMINISTRATION

Subpart 1842.72--NASA Contractor Financial Management Reporting


1842.7201  [Amended]

    2. In paragraph (b)(1) to section 1842.7201, the graphics box 
containing reporting criteria and report format is revised to read as 
follows:

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                      Criteria                                              Report Format                       
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                                     Period of                                                                  
     Contract Value/Scope           Performance                     533M                          533Q          
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$500K to $999K...............  1 Year or More......  Required.........................  Optional.               
$1,000,000 and Over..........  1 Less than 1 Year..  Required.........................  Optional.               
$1,000,000 and Over..........  1 Year or More......  Required.........................  Required.               
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    3. In paragraph (b)(2) to section 1842.7201, the phrase ``as 
initially awarded.'' is revised to read ``, based on the estimated 
final contract value at the time of award.''
    4. In section 1842.7201, paragraph (b)(3) is revised and a new 
paragraph (b)(4) is added to read as follows:


1842.7201  General.

    (a) * * *
    (b) * * *
    (3) NF 533Q reporting may be waived by the Contracting Officer, 
with the concurrence of the Center Chief Financial Officer and 
cognizant Project Manager, for support service or task order contracts, 
when NF 533M reports and other data are sufficient to ensure accurate 
monthly cost accruals, evaluate the contractor's cost performance and 
forecast resource requirements.
    (4) Where a specific contractual requirement differs from the 
standard system set forth in NPG 9501.2, NASA Contractor Financial 
Management Reporting, but is determined to be in the best interests of 
the Government and does not eliminate any of the data elements required 
by the standard NF 533 formats, it may be approved by the Contracting 
Officer with the concurrence of the Center Chief Financial Officer and 
cognizant Project Manager. Such approval shall be documented and 
retained, with the supporting rationale, in the contract file.
 * * * * *
    5. In section 1842.7201, the existing paragraph (c) is redesignated 
as a new paragraph (b)(5), and paragraphs (d) and (e) are redesignated 
as paragraphs (c) and (d) and are revised to read as follows:
    (c) Contract requirements. (1) Reporting requirements, including a 
description of reporting categories, shall be detailed in the 
procurement request, and reports shall be required by inclusion of the 
clause in 1842.7202. the contract schedule shall include report 
addressees and numbers of copies. Reporting categories shall be 
coordinated with the Center Financial Management Office to ensure that 
data required for agency cost accounting will be provided by the 
reports. Reporting dates shall be in accordance with NPG 9501.2, except 
that earlier submission is encouraged wherever feasible. No due date 
shall be permitted which is later than the date by which the Center 
Financial Management Office needs the data to enter an accurate monthly 
cost accrual in the accounting system.
    (2) The contractor shall be required to submit an initial report in 
the NF 533Q format, time phased for the expected life of the contract, 
within 30 days after authorization to proceed has been granted. NF 533M 
reporting will begin no later than 30 days after incurrence of cost. NF 
533Q reporting begins with the initial report.
    (d) Deviations. Deviations from the financial management reporting 
clause require approval in accordance with 1801.471, and the 
concurrence of the Director, Financial Management Division and the 
official-in-charge of the cognizant Headquarters Program Office.
    6. Section 1842.7202 is revised to read as follows:


1842.7202   Contract clauses.

    The clause at 1852.242-73, NASA Contractor Financial Management 
Reporting, shall be used when any of the NASA Form 533 reports are 
required from the contractor.

1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    7. Section 1852.242-73 is revised to read as follows:


1852.242-73   NASA Contractor Financial Management Reporting.

    As prescribed in 1842.7202, insert the following clause in 
contracts that require submission of NASA Form 533M or 533Q reports.

NASA Contractor Financial Management Reporting

August 1996.

    (a) The Contractor shall submit NASA Contractor Financial 
Management Reports on NASA Forms 533 in accordance with the 
instructions in NASA Contractor Financial Management Reporting (NPG 
9501.2) and on the reverse side of the forms, as supplemented in the 
Schedule of this contract. The detailed reporting categories to be 
used, which shall correlate with technical

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and schedule reporting, shall be set forth in the Schedule. 
Contractor implementation of reporting requirements under this 
clause shall include NASA approval of the definitions of the content 
of each reporting category and give due regard to the Contractor's 
established financial management information system.
    (b) Lower level detail used by the Contractor for its own 
management purposes to validate information provided to NASA shall 
be compatible with NASA requirements.
    (c) Reports shall be submitted in the number of copies, at the 
time, and in the manner set forth in the Schedule or as directed in 
writing by the Contracting Officer. Upon completion and acceptance 
by NASA of all contract line items, the Contracting Officer may 
direct the Contractor to submit Form 533 reports on a quarterly 
basis only, report only when changes in actual cost occur, or 
suspend reporting altogether.
    (d) The Contractor shall ensure that its NF 533 reports include 
accurate subcontractor cost data, in the proper reporting 
categories, for the reporting period.
    (e) If, during the performance of this contract, NASA requires a 
change in the information or reporting requirements specified in the 
Schedule, or as provided for in paragraph (a) or (c) of this clause, 
the Contracting Officer shall effect that change in accordance with 
the Changes clause of this contract.

(End of clause)


1852.242-74   [Removed]

    8. Section 1852.242-74 is removed.

[FR Doc. 96-26336 Filed 10-24-96; 8:45 am]
BILLING CODE 7510-01-M