[Federal Register Volume 66, Number 154 (Thursday, August 9, 2001)]
[Rules and Regulations]
[Pages 41805-41806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19996]



48 CFR Parts 1845 and 1852

Property Reporting Requirements

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Final rule.


SUMMARY: This final rule amends the NASA FAR Supplement (NFS) to comply 
with existing Federal accounting standards and OMB rules on Form and 
Content of agency financial statements and makes other changes to 
NASA's property reporting requirements.

EFFECTIVE DATE: August 9, 2001.

HK, Washington, DC 20546, telephone: (202) 358-4593, email: 


A. Background

    NASA is adopting as final with changes the interim rule published 
in the September 11, 2000, Federal Register (65 FR 54813-54816) and as 
corrected in the September 28, 2000, Federal Register (64 FR 58231). 
The OMB Bulletin on Form and Content of Agency Financial Statements 
prescribes financial accounting and reporting requirements for Federal 
agencies. Included are accounting standards which apply to property, 
plant and equipment. Specific changes included in the interim rule 
were: Additional instructions on how to adjust previously reported 
values; a new definition of Agency Peculiar Property to exclude 
completed end items destined for permanent operation in space; and a 
new definition of Work in Process to include completed end items 
destined for permanent operation in space which otherwise meet the 
definition of Agency Peculiar Property. Comments were received from 
four groups. All comments received were considered. Changes made in 
this final rule are for consistency in application and are considered 
editorial in nature.

B. Regulatory Flexibility Act

    NASA certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
because less than three per cent of NASA contracts with small 
businesses have property reporting requirements.

C. Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., applies to 
this final rule because it contains information collection 
requirements. Approval for the additional requirements has been 
obtained under OMB Control No. 2700-0017, approving an increase in 
burden hours from 5,700 to 8144.

List of Subjects in 48 CFR Parts 1845 and 1852

    Government Procurement.

Tom Luedtke,
Associate Administrator for Procurement.

    Accordingly, 48 CFR Parts 1845 and 1852 are amended as follows:
    1. The authority citation for 48 CFR Parts 1845 and 1852 continues 
to read as follows:

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


    2. Revise Sec. 1845.7101 to read as follows:

1845.7101  Instructions for preparing NASA Form 1018.

    NASA must account for and report assets in accordance with 31 
U.S.C. 3512 and 31 U.S.C. 3515, Federal Accounting Standards, and 
Office of Management and Budget (OMB) instructions. Since contractors 
maintain NASA's official records for its assets in their possession, 
NASA must obtain annual data from those records to meet these 
requirements. Changes in Federal Accounting Standards and OMB reporting 
requirements may occur from year to year, requiring contractor 
submission of supplemental information with the NASA Form (NF) 1018. 
Contractors shall retain documentation that supports data reported on 
NF 1018 in accordance with FAR subpart 4.7, Contractor Records 
Retention. Classifications of property, related costs to be reported, 
and other reporting requirements are discussed in this subpart. NASA 
Form 1018 (see 1853.3) provides critical information for NASA financial 
statements and property management. Accuracy and timeliness of the 
report are very important. If errors are discovered on NF 1018 after 
submission, the contractor shall contact the cognizant NASA Center 
Industrial Property Officer (IPO) to discuss corrective action. IPO's 
shall work with NASA Center finance personnel to determine appropriate 
corrective action and provide guidance to contractors.
    3. In section 1845.7101-1, revise paragraphs (c), (d), (g)(2), 
(h)(2), (i)(2), the introductory text of paragraph (k), and (k)(2) to 
read as follows:

1845.7101-1  Property Classification.

* * * * *
    (c) Buildings. Includes costs of buildings, improvements to 
buildings, and fixed equipment required for the operation of a building 
which is permanently attached to and a part of the building and cannot 
be removed without cutting into the walls, ceilings, of floors. 
Contractors shall report buildings with a unit acquisition cost of 
$100,000 or more. Examples of fixed equipment required for functioning 
of a building include plumbing, heating and lighting equipment, 
elevators, central air conditioning systems, and built-in safes and 
    (d) Other Structures and Facilities. Includes costs of acquisitions 
and improvements of real property (i.e. structures and facilities other 
than buildings); for example, airfield pavements, harbor and port 
facilities, power production facilities and distribution systems, 
reclamation and irrigation facilities, flood control and navigation 
aids, utility systems (heating, sewage, water and electrical) when they 
serve several buildings or structures, communication systems, traffic 
aids, roads and bridges, railroads, monuments and memorials, and 
nonstructural improvements such as sidewalks, parking areas, and 
fences. Contractors shall report other structures

[[Page 41806]]

and facilities with a unit acquisition cost of $100,000 or more and a 
useful life of two years or more.
* * * * *
    (g) * * *
    (2) All other items.
    (h) * * *
    (2) All other items.
    (i) * * *
    (2) All other items.
* * * * *
    (k) Agency-Peculiar Property. Includes costs of completed items, 
systems and subsystems, spare parts and components unique to NASA 
aeronautical and space programs. Examples include research aircraft, 
reusable space vehicles, ground support equipment, prototypes, and 
mock-ups. The amount of property, title to which vests in NASA as a 
result of progress payments to fixed price subcontractors, shall be 
included to reflect the pro rata cost of undelivered agency-peculiar 
property. Completed end items which otherwise meet the definition of 
Agency-Peculiar Property, but are destined for permanent operation in 
space, such as satellites and space probes, shall be reported as 
Contract Work in Process. Contractors shall separately report:
* * * * *
    (2) All other items.
* * * * *

    4. In section 1845.7101-2, amend the first sentence of the 
introductory paragraph by capitalizing the word ``Centers'' the first 
time it appears and add the following sentence at the end of paragraph 
(c) to read as follows:

1845.7101-2  Transfers of property.

* * * * *
    (c) * * * The contracting officer shall assist the Government 
Property Administrator and the receiving contractor to obtain all 
required information for the receiving contractor to establish adequate 
property records.

    5. In section 1845.7101-3, delete paragraph (a)(12); amend the 
second sentence of paragraph (a) and paragraph (e) to read as follows:

1845.7101-3  Unit acquisition cost.

    (a) * * * The following is representative of the types of costs 
that shall be included, when applicable: * * *
* * * * *
    (e) Only modifications that improve an item's capacity or extend 
its useful life two years or more and that cost $100,000 or more shall 
be reported on the NF 1018 on the $100,000 & Over line. The costs of 
any other modifications, excluding routine maintenance, will be 
reported on the Under $100,000 line. If an item's original unit 
acquisition cost is less than $100,000, but a single subsequent 
modification costs $100,000 or more, that modification only will be 
reported as an item $100,000 or more on subsequent NF 1018s. The 
original acquisition cost of the item will continue to be included in 
the under $100,000 total. The quantity for the modified item will 
remain ``1'' and be reported with the original acquisition cost of the 
item. If an item's acquisition cost is reduced by removal of components 
so that its remaining acquisition cost is under $100,000, it shall be 
reported as under $100,000.
* * * * *

    6. In section 1845.7101-4, revise paragraphs (b) and (h) to read as 

1845.7101-4  Types of deletions from contractor property records.

* * * * *
    (b) Transferred in Place. Deletion amounts that result from 
transfer of property to a follow-on prime contract or other prime 
contract with the same contractor.
* * * * *
    (h) Other. Types of deletion other than those reported in paragraph 
(a) through (g) of this section such as those resulting from 
reclassifications (e.g. from equipment to agency-peculiar property).

1845.701  [Amended]

    7. Amend section 1845.7101-5, by removing the last sentence.


    8. Amend the clause at section 1852.245-73 by revising the date of 
the clause, paragraphs (b)(2), (b)(3), and the fifth sentence of 
paragraph (c) to read as follows:

1852.245-73  Financial Reporting of NASA Property in the Custody of 

* * * * *

Financial Reporting of NASA Property in the Custody of Contractors 
(August 2001)

* * * * *
    (b)(1) * * *
    (2) The Contractor shall mail the original signed NF 1018 directly 
to the cognizant NASA Center Deputy Chief Financial Officer, Finance, 
unless the Contractor uses the NF 1018 Electronic Submission System 
(NESS) for report preparation and submission.
    (3) One copy shall be submitted (through the Department of Defense 
(DOD) Property Administrator if contract administration has been 
delegated to DOD) to the following address: [Insert name and address of 
appropriate NASA Center office.], unless the Contractor uses the NF 
1018 Electronic Submission System (NESS) for report preparation and 
    (c) * * * The Contracting Officer may, in NASA's interest, withhold 
payment until a reserve not exceeding $25,000 or 5 percent of the 
amount of the contract, whichever is less, has been set aside, if the 
Contractor fails to submit annual NF 1018 reports in accordance with 
1845.505-14 and any supplemental instructions for the current reporting 
period issued by NASA. * * *
* * * * *
[FR Doc. 01-19996 Filed 8-8-01; 8:45 am]