[Federal Register Volume 64, Number 244 (Tuesday, December 21, 1999)]
[Proposed Rules]
[Pages 71339-71341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32591]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

[NOTICE (99-159)]

14 CFR Parts 1261 and 1267

RIN 2700-AC35


Meritorious Claims Which Result From the Conduct of NASA 
Functions

AGENCY: National Aeronautics and Space Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Aeronautics and Space Administration (NASA) 
proposes to amend its rules regarding the submission and processing of 
meritorious claims under section 203 of the National Aeronautics and 
Space Act of 1958, as amended. NASA regulations currently discuss the 
submission and processing of meritorious, as well as tort, claims by 
NASA. This proposal provides separate coverage for meritorious claims 
in a new part. The proposal reflects the statutes and requirements 
governing these two types of claims, differences in their processing 
and settlement by NASA, and differences in their payment.

DATES: Comments must be received on or before February 22, 2000.

ADDRESSES: Send comments to Associate General Counsel (Contracts), Code 
GK, National Aeronautics and Space Administration, 300 E Street, SW., 
Washington, DC 20546-0001. Submit electronic comments and other data to 
[email protected]. NASA will consider late comments to the extent 
practicable.

FOR FURTHER INFORMATION CONTACT: Bernard J. Roan, (202) 358-2072 
(voice), (202) 358-4355 (fax), and [email protected] (e-mail).

SUPPLEMENTARY INFORMATION: 42 U.S.C. 2473(c)(13) governs meritorious 
claims against NASA for bodily injury, death, or damage to or loss of 
real or personal property resulting from the conduct of NASA's 
functions. Meritorious claims are those claims that NASA decides, as a 
matter of equity or fairness, to pay, but for which the United States 
could not be held legally liable to the claimant. 42 U.S.C. 2473(c)(13) 
authorizes NASA to consider and pay such meritorious claims in amounts 
of $25,000 or less and to consider for payment such meritorious claims 
exceeding $25,000. In turn, 31 U.S.C. 3104 requires the Secretary of 
the Treasury to certify payment of any claim exceeding $25,000 which 
NASA considers meritorious.
    NASA regulations at 14 CFR subpart 1261.3 presently govern the 
processing of meritorious claims. Subpart 1261.3 discusses tort and 
meritorious claims without drawing any significant distinctions between 
the two types of claims. Moreover, subpart 1261.3 does not discuss the 
relationship between NASA and the Secretary of the Treasury in 
processing meritorious claims settled by NASA. Addressing meritorious 
claims separately from tort claims helps to clarify the bases NASA 
deems acceptable for considering meritorious claims.
    The proposed rule creates a new part 1267 of 14 CFR governing 
NASA's processing of meritorious claims. The new part 1267 establishes 
specific procedures for considering meritorious claims arising from 
NASA space launch activities.
    The proposed rule applies only to meritorious claims brought by 
third parties. The proposed rule does not apply to claims arising from 
NASA space launches for which the United States provides its space 
launch contractor indemnification against third party claims under 
other statutory authority. Moreover, the proposed rule, read in 
conjunction with proposed implementing coverage in the NASA supplement 
to the Federal Acquisition Regulation, addresses certain insurance 
requirements levied on space launch contractors for the payment of 
third party claims which might otherwise be filed as meritorious 
claims. Finally, the new part 1267 discusses administrative matters, 
such as filing and documenting meritorious claims, time limitations, 
processing by NASA officials, and final approval by the NASA General 
Counsel.
    As required by the Regulatory Flexibility Act, NASA certifies that 
this proposed rule will not have a significant economic impact on small 
business entities.
    These regulations do not require additional reporting under the 
criteria of the Paperwork Reduction Act of 1980.
    As required by the Unfunded Mandates Reform Act, NASA certifies 
that this regulation will not compel the expenditure in any 1 year of 
$100 million or more by State, local, and tribal governments in the 
aggregate, or by the private sector. Therefore, the detailed statement 
under section 202 of the Unfunded Mandates Reform Act of 1995 is not 
required.

List of Subjects

14 CFR Part 1261

    Accidents, Administrative practice and procedure, Claims, Tort 
claims.

14 CFR Part 1267

    Accidents, Administrative practice and procedure, Claims, Federal 
Acquisition Regulations, Government contracts, Government procurement, 
Space transportation and exploration, Tort claims.
    For the reasons set forth in the preamble, NASA proposes to amend 
14 CFR parts 1261 and 1267 as follows:

PART 1261--PROCESSING OF MONETARY CLAIMS (GENERAL)

Subpart 1261.3--Claims Against NASA or Its Employees for Damage to 
or Loss of Property or Personal Injury or Death--Accruing on or 
After January 18, 1967

    1. The authority citation for subpart 1261.3 is revised to read as 
follows:

    Authority: 28 U.S.C. 2671-2680; and 28 CFR part 14.

    2. Remove Sec. 1261.301 paragraphs (b) and (c) and redesignate 
paragraph (d) as (b).
    3. Remove Sec. 1261.307 paragraph (b) and redesignate paragraph (c) 
as (b).
    4. Amend Sec. 1261.308 by:
    A. Amending paragraph (c) by removing the phrase ``pursuant either 
to the Federal Tort Claims Act, or 42 U.S.C. 2473(c)(13)''; and
    B. Removing paragraph (d).
    5. Amend Sec. 1261.312 paragraph (a) by removing the phrase ``a 
Voucher for Payment of Tort Claims (NASA Form 616) if the claim has 
been acted upon pursuant to 42 U.S.C. 2473(c)(13), or''.
    6. Add part 1267 to read as follows:

PART 1267--MERITORIOUS CLAIMS WHICH RESULT FROM THE CONDUCT OF NASA 
FUNCTIONS

Sec.
1267.100  Scope of the part.
1267.101  Authorities.
1267.102  Applicability.
1267.103  Definitions.
1267.104  Claims.
1267.105  Presentation of claims.

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1267.106  Filing and processing third party claims involving launch 
service contractors.
1267.107  Evidence and information required from third party 
claimants.
1267.108  Time limitations for third party claims.
1267.109  NASA action on a launch service claim.
1267.110  Confidentiality.

    Authority: 42 U.S.C. 2473(c)(13); 31 U.S.C. 1304.


Sec. 1267.100  Scope of the part.

    This part sets forth the procedures for submitting and processing 
claims against the United States for bodily injury, death, or damage to 
or loss of real or personal property resulting from the conduct of 
certain space launch functions by NASA through launch service 
contractors. This part further designates the NASA officials authorized 
to act upon these claims.


Sec. 1267.101  Authorities.

    42 U.S.C. 2473(c)(13)(A), sec. 203(c)(13)(A) of the National 
Aeronautics and Space Act of 1958, as amended, authorizes NASA to 
consider, ascertain, adjust, determine, settle, and pay, on behalf of 
the United States, any claim made against the United States for $25,000 
or less for bodily injury, death, or damage to or loss of real or 
personal property resulting from the conduct of NASA's functions as 
specified in 42 U.S.C. 2473(a). NASA may settle and pay a claim under 
this authority even though the United States could not be held legally 
liable to the claimant.
    (a) 42 U.S.C. 2473(c)(13)(B) authorizes NASA to consider a claim in 
excess of $25,000 which, but for the dollar amount, would otherwise be 
covered by 42 U.S.C. 2473(c)(13)(A).
    (b) 31 U.S.C. 1304, as amended by Public Law 104-316, appropriates 
amounts to pay settlements of meritorious claims, when certified by the 
Secretary of the Treasury and in excess of the amount payable from 
Agency appropriations under 42 U.S.C. 2473.


Sec. 1267.102  Applicability.

    (a) One of NASA's primary functions is launching Government and 
Government-sponsored payloads into space. In recognition of this fact, 
NASA has determined that launches conducted by NASA through launch 
service contractors constitute, for purposes of considering claims 
under 42 U.S.C. 2473(c)(13), the conduct of a NASA function. 
Accordingly, NASA will include in its contracts for launch services a 
clause designating the launch as being the conduct of a NASA function 
and agreeing to consider claims resulting from the launch under the 
authority of 42 U.S.C. 2473(c)(13) and the procedures prescribed in 
this part.
    (b) This part does not apply to launches for which the NASA 
Administrator has provided indemnification pursuant to Public Law 85-
804, or to launches for which the Department of Transportation has 
issued or transferred a license under the Commercial Space Launch Act, 
49 U.S.C., Chapter 701.


Sec. 1267.103  Definitions.

    (a) Meritorious claims are those claims that NASA decides to pay as 
a matter of equity or fairness, but for which the United States could 
not be held legally liable to the claimant.
    (b) Third party claimant means any person or entity, other than 
NASA, the launch service contractor, or the launch service contractor's 
subcontractors, at any tier, involved in the performance of launch 
services pursuant to a contract with NASA. For purposes of this part, 
employees of the Government, employees of the launch service 
contractor, and employees of the launch service contractor's 
subcontractors come within the definition of third party claimant.


Sec. 1267.104  Claims.

    (a) For purposes of this part, a meritorious claim arises as a 
demand by a third party claimant against a NASA launch service 
contractor for money damages, in a sum certain, for bodily injury, 
death, or damage to or loss of real or personal property resulting from 
a launch conducted by NASA through that launch service contractor.
    (b) NASA will consider a third party claim, originally made against 
a launch service contractor, as a claim against the United States for 
purposes of 42 U.S.C. 2473(c)(13) if the launch services were provided 
pursuant to a contract containing the clause at NASA Federal 
Acquisition Regulation Supplement (NFS) 1852.228-XX. Once received and 
evaluated, NASA will consider a third party claim that is reasonable in 
amount to be meritorious, unless the gross negligence or willful 
misconduct of the third party claimant, or any launch service 
contractor or subcontractor, caused or was an intervening cause in the 
bodily injury, death, or damage to or loss of real or personal property 
for which damages are sought.
    (c) NASA will forward any meritorious claim that is reasonable in 
amount and arose out of the conduct of NASA's space launch function to 
the Secretary of the Treasury for certification for payment from the 
permanent Judgment Fund pursuant to 31 U.S.C. 1304 and implementing 
regulations; provided, the claim exceeds $25,000 and the launch service 
contractor has exhausted any insurance coverage required by the 
contract.


Sec. 1267.105  Presentation of claims.

    (a) For damage to or loss of real or personal property, the owner 
of the property or his or her duly authorized agent or legal 
representative may present a claim.
    (b) For bodily injury, the injured person or his or her duly 
authorized agent or legal representative may present a claim.
    (c) For wrongful death, the executor or administrator of the 
decedent's estate or any other person legally entitled to assert such a 
claim in accordance with applicable state law may present a claim.
    (d) For any loss wholly compensated by insurance, an insurer with 
the rights of a subrogee may present a claim. For any loss partially 
compensated by insurance, multiple parties with the rights of subrogees 
may present claims individually as their respective interests appear, 
or jointly. An insurer that provides insurance required by the NASA 
launch service contract may not present a subrogation claim based on 
that insurance.
    (e) If an agent or legal representative presents a claim, it must 
be presented in the name of the claimant. The agent or legal 
representative must sign the claim, showing the title or legal capacity 
of the person signing, accompanied by evidence of the legal authority 
of the agent or representative to present a claim on behalf of the 
claimant.


Sec. 1267.106  Filing and processing third party claims involving 
launch service contractors.

    (a) To come under this part, a third party claim arising out of a 
launch conducted by NASA through a launch service contractor must first 
be filed with the contractor providing the launch service. If the 
identity of the cognizant launch service contractor is not apparent, a 
claimant should contact the nearest NASA Center for information.
    (b) The cognizant launch service contractor must promptly process 
any third party claim received in accordance with the terms of the 
contract and this part. As an initial matter, the launch service 
contractor must verify that any third party claim for bodily injury, 
death, or damage to or loss of real or personal property resulted from 
a launch conducted by NASA through the launch service contractor. If 
the claim resulted from a launch by NASA

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conducted through the launch service contractor, then the contractor 
must settle the matter in a reasonable amount, applying any available 
insurance coverage required by the contract.
    (c) If the cognizant launch service contractor finds that the 
insurance coverage required by the contract has been exhausted, the 
claim must be given to the NASA contracting officer. The contracting 
officer must consider any remaining liability as a claim against the 
United States in accordance with this subpart, the terms of the launch 
service contract, the Federal Acquisition Regulation (FAR), and the 
NASA FAR Supplement (NFS). As such, the contracting officer must 
examine the remaining liability to determine whether the amount claimed 
is reasonable. For amounts determined to be unreasonable, the 
contracting officer must refer the claim back to the launch service 
contractor to conduct further discussions. Ultimately, the contract's 
disputes clause prescribes procedures for resolving disagreements, if 
necessary. For amounts determined to be reasonable, the contracting 
officer must process the claim in accordance with Sec. 1267.109.


Sec. 1267.107  Evidence and information required from third party 
claimants.

    (a) A third party claimant should, insofar as possible, provide 
competent evidence to the launch service contractor to substantiate the 
circumstances alleged to have given rise to the claim and the amount 
claimed. A third party claimant should obtain supporting statements, 
repair bills, one or more estimates for repair, and other data, if 
possible. Documentation from disinterested parties should be obtained 
whenever possible.
    (b) With regard to the amount claimed, a third party claimant must 
notify the launch service contractor of, and provide information 
concerning, any money or other property received as damages or 
compensation, or which the third party claimant may be entitled to 
receive from other sources by reason of the claimed bodily injury, 
death, or damage to or loss of real or personal property. These other 
sources of money, damages, or compensation include, but are not limited 
to, other launch service contractors, insurers, employers, and persons 
whose conduct may have caused or contributed to the accident or 
incident.
    (c) A third party claimant must provide an English translation of 
any supporting document written in a foreign language.


Sec. 1267.108  Time limitations for third party claims.

    (a) Consistent with the time limitation stipulated in 42 U.S.C. 
2473(c)(13)(A), to receive consideration in accordance with this part, 
a third party claimant must file its claim with the launch service 
contractor within 2 years after the occurrence of the accident or 
incident out of which the claim arose. If the launch service contractor 
receives a third party claim within this time period, but after the 
launch service contract has expired, or if the claim is still pending 
when the contract expires, the contracting officer will reserve the 
matter for resolution during final contract closeout.
    (b) A third party claimant has properly filed a claim for purposes 
of paragraph (a) of this section, when the cognizant launch service 
contractor receives from the claimant, or the claimant's duly 
authorized agent or legal representative, a written notification and 
description of the incident or accident giving rise to the claim, 
accompanied by substantiation of the amount claimed.


Sec. 1267.109  NASA action on a launch service claim.

    (a) The contracting officer must investigate any launch service 
claim submitted by the launch service contractor. As necessary, the 
contracting officer may request any NASA office or other Federal agency 
to assist in the investigation.
    (b) The contracting officer must evaluate any launch service claim 
submitted by a launch service contractor to determine that it is 
meritorious and reasonable in amount. As part of this evaluation, the 
contracting officer must verify that the amount requested is over and 
above any insurance required by the contract and that the launch 
service contractor or its insurer has, in fact, paid out an amount to 
the third party claimant equal to the amount of any required insurance 
coverage.
    (c) The NASA General Counsel is NASA's final approving official for 
claims arising under 42 U.S.C. 2473, in an amount exceeding $25,000. To 
pay this type of claim from the permanent indefinite judgment fund, 
however, 31 U.S.C. 1304 requires certification by the Secretary of the 
Treasury. Accordingly, to facilitate the processing of claims under 
this part, the contracting officer must forward to the NASA General 
Counsel the following documentation:
    (1) A short and concise statement of the general facts surrounding 
the launch service claim as a whole;
    (2) Copies of all relevant portions of the launch service contract 
file and the claim file; and
    (3) The contracting officer's analysis of the launch service claim 
and recommendations regarding payment from the permanent indefinite 
judgment fund.
    (d) The NASA General Counsel must fully evaluate and consider any 
launch service claim forwarded in accordance with paragraph (c) of this 
section. If the General Counsel deems the claim to be reasonable, the 
General Counsel will refer the launch service claim to the Secretary of 
the Treasury for certification and payment from the permanent 
indefinite judgment fund pursuant to 31 U.S.C. 1304.


Sec. 1267.110  Confidentiality.

    Under the process prescribed in this subpart, NASA officials may 
gain access to contractor documents and other materials that are 
privileged, business sensitive, or confidential. In accordance with 18 
U.S.C. 1905, NASA officials may not disclose these materials in any 
manner or to any extent not authorized by law and must take appropriate 
steps to prevent unauthorized disclosures.

Daniel S. Goldin,
Administrator.
[FR Doc. 99-32591 Filed 12-20-99; 8:45 am]
BILLING CODE 7510-01-P