[Federal Register Volume 65, Number 226 (Wednesday, November 22, 2000)]
[Rules and Regulations]
[Pages 70315-70316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29899]



48 CFR Parts 1807, 1815, 1816, 1823, 1849, and 1852

Risk Management

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Interim rule adopted as final with changes.


SUMMARY: This is a final rule amending the NASA FAR Supplement (NFS) to 
emphasize considerations of risk management, including safety, security 
(including information technology security), health, export control, 
and damage to the environment, within the acquisition process. This 
final rule addresses risk management within the context of acquisition 
planning, selecting sources, choosing contract type, structuring award 
fee incentives, administering contracts, and conducting contractor 

EFFECTIVE DATE: November 22, 2000.

Office of Procurement, Contract Management Division (Code HK), (202) 
358-1279, email: jdolvin1@mail.hq.nasa.gov.


A. Background

    NASA is adopting as final, with changes, the interim rule published 
in the Federal Register (65 FR 37057-37061, June 13, 2000) that revised 
various NFS Parts to refocus on risk as a core acquisition concern as 
part of NASA's risk-based acquisition management initiative. Comments 
were received from one company and an industry association. All 
comments were considered in the development of the final rule. 
Revisions primarily affect internal procedures and include the 
following: (1) In section 1807.105 the reference to a NASA document is 
revised; (2) in section 1815.203-72, the words ``and RFOs'' are added 
after ``RFPs'' to make it clear that the section applies to MidRange 
procurements; (3) in section 1816.405-274 and new section 1849.102-71, 
language is added to require the contracting officer to notify the 
Associate Administrator for Procurement prior to the determination of a 
zero award fee in accordance with NFS 1816.405-274, and prior to 
exercising remedies under NFS clause 1852.223-75; (4) in section 
1823.7001, the word at the end of paragraph (b)(1) is changed from 
``or'' to ``and'', and the word ``concurrence'' in paragraph (b)(2) is 
changed to ``approval'', to enhance the role of installation safety 
officials in the application of the Safety and Health clause; and (5) 
in section 1852.223-75, the words ``or mission failure'' are added 
after ``fatality'' in paragraph (a), to achieve consistency with 
similar language in section 1816.405-274(c)(2).

B. Regulatory Flexibility Act

    NASA certifies that this final rule will not have a significant 
economic impact on a substantial number of small business entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because 
this rule simply focuses attention on risk management, an existing 
business practice, and does not impose any significant new requirements 
which might have an economic impact.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the NFS do not impose recordkeeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 41 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 1807, 1815, 1816, 1823, 1849, and 

    Government procurement.

Tom Luedtke,
Associate Administrator for Procurement.

Interim Rule Adopted as Final With Changes.

    Accordingly, the interim rule published at 65 FR 37057-37061, June 
13, 2000, is hereby adopted as final with the following changes:
    1. The authority citation for 48 CFR Parts 1807, 1815, 1816, 1823, 
1849, and 1852 continues to read as follows:

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


    2. In section 1807.105, revise paragraph (a)(7) to read as follows:

1807.105  Contents of written acquisition plans.

* * * * *
    (a) * * *
    (7) Discuss project/program risks (see NPG 7120.5, NASA Program and 

[[Page 70316]]

Management Processes and Requirements). In addition to technical, 
schedule, and cost risks, the discussion shall include such 
considerations as: safety and security (including personnel, 
information technology, and facilities/property); the need to involve 
foreign sources (contractor and/or governmental), and risks of 
unauthorized technology transfer (see NPD 2110.1D and Export Control 
Program (http://www.hq.nasa.gov/office/codei/nasaecp/ecpolicy.html)); 
and resource risk, including the necessary level and expertise of NASA 
personnel resources available to manage the project/program. For each 
area of risk identified, the discussion shall include a quantification 
of the relative magnitude (e.g., high, medium, low) together with the 
specific actions taken to structure the acquisition approach to manage 
the risks throughout the acquisition process. For example, this 
discussion would identify those areas that have safety risk, discuss 
how safety is addressed in contract requirements and evaluated in the 
source selection, and how it will be managed and incentivized during 
contract performance. Decisions to accept, mitigate, track, and/or 
research risk factors shall be identified and documented as part of 
acquisition planning.
* * * * *


    3. Revise section 1815.203-72 to read as follows:

1815.203-72  Risk management.

    In all RFPs and RFOs for supplies or services for which a technical 
proposal is required, proposal instructions shall require offerors to 
identify and discuss risk factors and issues throughout the proposal 
where they are relevant, and describe their approach to managing these 


    4. In section 1816.405-274, add paragraph (c)(4) to read as 

1816.405-274  Award fee evaluation factors.

* * * * *
    (c) * * *
    (4) The Associate Administrator for Procurement (Code HS) shall be 
notified prior to the determination of a zero award fee because of a 
major breach of safety or security.
* * * * *


    5. In section 1823.7001, revise paragraphs (b)(1) and (b)(2) to 
read as follows:

1823.7001  NASA solicitation provisions and contract clauses.

    (b) * * *
    (1) From any contract subject to the Walsh-Healey Public Contracts 
Act (see FAR subpart 22.6) or the Service Contract Act of 1965 (see FAR 
subpart 22.10) in which the application of either act and its 
implementing regulations constitute adequate safety and occupational 
health protection; and
    (2) When the contracting officer, with the approval of the 
installation official(s) responsible for matters of safety and 
occupational health, makes a written determination that the clause is 
not necessary under the circumstances of the acquisition.
* * * * *


    6. Add section 1849.102-71 to read as follows:

1849.102-71  Prior clearance of contract terminations resulting from a 
major breach of safety or security.

    The Associate Administrator for Procurement (Code HS) must be 
notified prior to taking any action to terminate because of a major 
breach of safety or security.


    7. In section 1852.223-70, revise the date of the clause and 
paragraph (c) to read as follows:

1852.223-70  Safety and Health.

* * * * *

Safety and Health, November 2000

* * * * *
    (c) The Contractor shall immediately notify and promptly report 
to the Contracting Officer or a designee any accident, incident, or 
exposure resulting in fatality, lost-time occupational injury, 
occupational disease, contamination of property beyond any stated 
acceptable limits set forth in the contract Schedule; or property 
loss of $25,000 or more, or Close Call (a situation or occurrence 
with no injury, no damage or only minor damage (less than $1,000) 
but possesses the potential to cause any type mishap, or any injury, 
damage, or negative mission impact) that may be of immediate 
interest to NASA, arising out of work performed under this contract. 
The Contractor is not required to include in any report an 
expression of opinion as to the fault or negligence of any employee. 
In addition, service contractors (excluding construction contracts) 
shall provide quarterly reports specifying lost-time frequency rate, 
number of lost-time injuries, exposure, and accident/incident dollar 
losses as specified in the contract Schedule.
* * * * *

    8. In section 1852.223-75, revise the date of the clause and 
paragraph (a) to read as follows:

1852.223-75  Major Breach of Safety or Security.

* * * * *

Major Breach of Safety or Security, November 2000

    (a) Safety is the freedom from those conditions that can cause 
death, injury, occupational illness, damage to or loss of equipment 
or property, or damage to the environment. Safety is essential to 
NASA and is a material part of this contract. A major breach of 
safety may constitute a breach of contract that entitles the 
Government to exercise any of its rights and remedies applicable to 
material parts of this contract, including termination for default. 
A major breach of safety must be related directly to the work on the 
contract. A major breach of safety is an act or omission of the 
Contractor that consists of an accident, incident, or exposure 
resulting in a fatality or mission failure; or in damage to 
equipment or property equal to or greater than $1 million; or in any 
``willful'' or ``repeat'' violation cited by the Occupational Health 
and Safety Administration (OSHA) or by a state agency operating 
under an OSHA approved plan.
* * * * *
[FR Doc. 00-29899 Filed 11-21-00; 8:45 am]