[Federal Register Volume 67, Number 34 (Wednesday, February 20, 2002)]
[Rules and Regulations]
[Pages 7618-7619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4076]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 1832

RIN 2700-AC33


Limitation on Incremental Funding and Deobligations

AGENCY: National Aeronautics and Space Administration.

ACTION: Final rule.

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SUMMARY: This final rule amends the NASA FAR Supplement (NFS) to revise 
the criteria for incrementally funding contracts and establish dollar 
thresholds for incremental funding and deobligations under contracts. 
These changes will further limit the number of contracts eligible to be 
incrementally funded and the number of incremental funding and 
deobligation modifications.

EFFECTIVE DATE: February 20, 2002.

FOR FURTHER INFORMATION CONTACT: Ron Lentz, NASA Headquarters (Code 
HK), Washington, DC, (202) 358-0416, e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    Currently, NFS 1832.702-70 limits the incremental funding of cost-
reimbursement and fixed-price contracts. In spite of these 
restrictions, numerous incremental funding modifications are being 
issued against

[[Page 7619]]

each of the above contracts. The high number of modifications creates a 
workload burden for budget and procurement personnel in the Agency. 
This final rule further restricts the number of cost-reimbursement 
contracts that can be incrementally funded by revising the criteria 
that a contract must meet in order for it to be incrementally funded. A 
threshold of $500,000 or more is specified for R&D contracts under 
which no supplies are deliverable and a minimum contract period of 
performance of at least one year is specified. Furthermore, initial 
contract funding must be $100,000 or more. It also establishes a 
minimum dollar threshold of $25,000 that certain incremental funding 
and deobligation modifications must meet.

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 
the changes primarily affect internal procedures which will merely 
result in fewer, but larger dollar value, funding actions on contracts.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this final rule 
does not impose any new record keeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public that require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 1832

    Government procurement.

Tom Luedtke,
Assistant Administrator for Procurement.

    Accordingly, 48 CFR part 1832 is amended as follows:
    1. The authority citation for 48 CFR Part 1832 continues to read as 
follows:

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

PART 1832--CONTRACT FINANCING

    2. Revise section 1832.702-70 to read as follows:


1832.702-70  NASA policy.

    (a) Cost-reimbursement contracts may be incrementally funded only 
if all the following conditions are met:
    (1) The total value of the contract (including options as defined 
in FAR Subpart 17.2) is--
    (i) $500,000 or more for R&D contracts under which no supplies are 
deliverable; or
    (ii) $1,000,000 or more for all other contracts.
    (2) The period of performance exceeds one year.
    (3) The funds are not available to fund the total contract value 
fully at award.
    (4) Initial funding of the contract is $100,000 or more.
    (b) Fixed-price contracts, other than those for research and 
development, shall not be incrementally funded.
    (c)(1) Fixed-price contracts for research and development may be 
incrementally funded if the conditions of 1832.702-70(a)(1) through (4) 
are met and the initial funding of the contract is at least 50 percent 
of the total fixed price.
    (2) Incrementally funded fixed-price contracts shall be fully 
funded as soon as adequate funding becomes available.
    (d) Except for a modification issued to fully fund a contract, 
incremental funding modifications shall not be issued for amounts 
totaling less than $25,000.
    (e) Except for a modification issued to close out a contract, 
modifications deobligating funds shall not be issued for amounts 
totaling less than $25,000.
    (f) The procurement officer, with the concurrence of the 
installation Comptroller, may waive any of the conditions set forth in 
paragraphs 1832.702-70(a) through (e). The procurement officer shall 
maintain a record of all such approvals during the fiscal year.
    (g) A class deviation from the conditions set forth in paragraphs 
1832.702-70(a) through (e) exists to permit incremental funding of 
contracts under Phase II of the Small Business Innovation Research 
(SBIR) and Small Business Technology Transfer (STTR) programs. This 
deviation exists with the understanding that the contracts will be 
fully funded when funds become available.

[FR Doc. 02-4076 Filed 2-19-02; 8:45 am]
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