[Federal Register Volume 63, Number 68 (Thursday, April 9, 1998)]
[Rules and Regulations]
[Pages 17339-17340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9431]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1843 and 1852


Suitable Adjustments Under Contracts for Construction, 
Dismantling, Demolishing, or Removing Improvements

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

ACTION: Final rule.

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SUMMARY: This document amends NASA's Federal Acquisition Regulation 
Supplement (NFS) to set forth an agency-wide clause that may be used 
for equitable adjustments under contracts for construction, 
dismantling, demolishing, or removing improvements that are 
contemplated to be fixed-price and exceed the simplified acquisition 
threshold.

EFFECTIVE DATE: April 9, 1998.

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

SUPPLEMENTARY INFORMATION:

Background

    On December 8, 1997, a proposed rule to amend the NFS to establish 
an agency-wide clause to handle equitable adjustments under fixed-price 
contracts in excess of the simplified acquisition threshold for 
construction, dismantling, demolishing, or removing improvements was 
published in the Federal Register (62 FR 64545-64546) for comment. 
Comments were submitted by only one commenter who took exception to 
several aspects of the proposed rule. The comments were reviewed and 
considered; however, no changes were made to the proposed rule as a 
result of them.

Impact

    NASA certifies that this proposed regulation will not have a 
significant economic effect on a substantial number of small entities 
under the 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 1843 and 1852

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

    Accordingly, 48 CFR 1843 and 1852 are amended as follows:
    1. The authority citation for 48 CFR Parts 1843 and 1852 continues 
to read as follows:

    Authority: 42 U.S.C. 2743(c)(1).

PART 1843--CONTRACT MODIFICATIONS


1843.205-70  [Amended]

    2. In section 1843.205-70, the heading is revised, paragraphs (a), 
(b), and (c) are redesignated as (a)(1), (2), and (3), and a new 
paragraph (b) is added to read as follows:


1843.205-70  NASA contract clauses.

* * * * *
    (b) The contracting officer may insert a clause substantially as 
stated at 1852.243-72, Equitable Adjustments, in solicitations and 
contracts for--
    (1) Dismantling, demolishing, or removing improvements; or
    (2) Construction, when the contract amount is expected to exceed 
the simplified acquisition threshold and a fixed-price contract is 
contemplated.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


1852.243-70  [Amended]

    3. In section 1852.243-70, introductory text, the prescription 
``1843.205-70(a)'' is revised to read ``1843.205-70(a)(1)''.
    4. In Alternate I to section 1852.243-70, the prescription 
``1843.205-70(b)'' is revised to read ``1843.205-70(a)(2).
    5. In Alternate II to section 1852.243-70, the prescription 
``1843.205-70(c)'' is revised to read ``1843.205-70(a)(3)''.
    6. Section 1852.243-72 is added to read as follows:


1852.243-72  Equitable Adjustments.

    As prescribed in 1843.205-70(b), insert the following clause.

Equitable Adjustments April 1998

    (a) The provisions of all other clauses contained in this 
contract which provide for an equitable adjustment, including those 
clauses incorporated by reference with the exception of the 
``Suspension of Work'' clause (FAR 52.242-14), are supplemented as 
follows:
    Upon written request, the Contractor shall submit a proposal for 
review by the Government. The proposal shall be submitted to the 
contracting officer within the time limit indicated in the request 
or any extension thereto subsequently granted. The proposal shall 
provide an itemized breakdown of all increases and decreases in the 
contract for the Contractor and each subcontractor in at least the 
following detail: material quantities and costs; direct labor hours 
and rates for each trade; the associated FICA, FUTA, SUTA, and 
Workmen's Compensation Insurance; and equipment hours and rates.
    (b) The overhead percentage cited below shall be considered to 
include all indirect costs including, but not limited to, field and 
office supervisors and assistants, incidental job burdens, small 
tools, and general overhead allocations. ``Commission'' is defined 
as profit on work performed by others. The percentages for overhead, 
profit, and commission are negotiable according to the nature, 
extent, and complexity of the work involved, but in no case shall 
they exceed the following ceilings:

[[Page 17340]]



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                                                                             Overhead      Profit               
                                                                            (percent)    (percent)    Commission
----------------------------------------------------------------------------------------------------------------
To Contractor on work performed by other than its own forces.............        -----        -----           10
To first tier subcontractor on work performed by its subcontractors......        -----        -----           10
To Contractor and/or subcontractors on work performed with their own                                            
 forces..................................................................           10           10        -----
----------------------------------------------------------------------------------------------------------------

    (c) Not more than four percentages for overhead, profit, and 
commission shall be allowed regardless of the number of 
subcontractor tiers.
    (d) The Contractor or subcontractor shall not be allowed 
overhead or commission on the overhead, profit, and/or commission 
received by its subcontractors.
    (e) Equitable adjustments for deleted work shall include 
credits, limited to the same percentages for overhead, profit, and 
commission in paragraph (b) of this clause.
    (f) On proposals covering both increases and decreases in the 
amount of the contract, the application of the overhead, profit, and 
commission shall be on the net change in direct costs for the 
Contractor or the subcontractor performing the work.
    (g) After receipt of the Contractor's proposal, the contracting 
officer shall act within a reasonable period, provided that when the 
necessity to proceed with a change does not permit time to properly 
check the proposal, or in the event of a failure to reach an 
agreement on a proposal, the contracting officer may order the 
Contractor to proceed on the basis of the price being determined at 
the earliest practicable date. In such a case, the price shall not 
be more than the increase or less than the decrease proposed.

(End of clause)

[FR Doc. 98-9431 Filed 4-8-98; 8:45 am]
BILLING CODE 7510-01-U