[Federal Register Volume 67, Number 132 (Wednesday, July 10, 2002)]
[Rules and Regulations]
[Pages 45790-45820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16261]



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Part II





National Aeronautics and Space Administration





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14 CFR Parts 1260 and 1274



NASA Grant and Cooperative Agreement Handbook--Rewrite of Section D--
Cooperative Agreements with Commercial Firms and Implementation of 
Section 319 of Public Law 106-391, Buy American Encouragement; Final 
Rule

  Federal Register / Vol. 67, No. 132 / Wednesday, July 10, 2002 / 
Rules and Regulations  

[[Page 45790]]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Parts 1260 and 1274

RIN 2700-AC44


NASA Grant and Cooperative Agreement Handbook--Rewrite of Section 
D--Cooperative Agreements with Commercial Firms and Implementation of 
Section 319 of Public Law 106-391, Buy American Encouragement

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This is a final rule, which adopts with changes the proposed 
rule published in the Federal Register on October 29, 2001. This final 
rule revises Section D, Cooperative Agreements with Commercial Firms, 
to clarify current management policies, incorporate process 
improvements, conform to recent changes in legislation, and institute 
risk management as part of source selection. This final rule also 
implements Section 319, Buy American encouragement, of the NASA 
Authorization Act of 2000.

EFFECTIVE DATE: July 10, 2002.

FOR FURTHER INFORMATION CONTACT: Rita Svarcas, Procurement Analyst, 
NASA Headquarters, Office of Procurement, Analysis Division (Code HC), 
Washington, DC 20546-0001, (202) 358-0464, or e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule provides a comprehensive revision to NASA grant and 
cooperative agreement policies codified at 14 CFR 1274, Grants and 
Cooperative Agreements with Commercial Firms. The revision was 
initiated by NASA as part of the Agency's effort to re-engineer its 
processes for awarding and administering grants and cooperative 
agreements. Changes are chiefly aimed at clarifying NASA policies for 
publication of requirements, evaluating and selecting proposals, and 
implementation of a process for managing the performance risks 
associated with certain types of cooperative agreements with commercial 
firms. Scientific breakthroughs based on NASA or NASA mission related 
projects have greatly benefited the American society, and the world as 
a whole. In realizing these successes, NASA's technological pursuits 
involve research and experimental projects, where risks are simply 
unavoidable. Some recognition of the risks and liability issues 
associated with some of these projects is reflected in recent 
legislation (section 431 of Public Law 105-276), which provides for 
NASA indemnification of the developers of experimental aerospace 
vehicles performing under Cooperative Agreements. This rewrite of 
NASA's Grant and Cooperative Agreement Handbook, implements a process 
that requires early identification, assessment, and management by NASA 
and the Recipient, of risk and safety issues associated with a given 
research project.
    Additionally, the proposed rule promulgated the requirements of 
Section 319, ``Buy American Encouragement,'' of the NASA Authorization 
Act of 2000 (Public Law 106-391) for recipients of non-profit grants 
and cooperative agreements.
    This final rule, adopts with changes the proposed rule published in 
the Federal Register (66 FR 54468) on October 29, 2001. No comments 
were received from industry. Comments were received from NASA field 
installations. All comments were considered in formulation of this 
final rule. Changes made in this final rule clarify existing 
requirements, correct references, reorganize material for clarity, and 
provide updated Uniform Resource Locator (URL) addresses. No comments 
were received on the change to 14 CFR 1260 implementing Section 319 of 
NASA's Authorization Act of 2000.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This is not a 
major rule under 5 U.S.C. 804.

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 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., because the rule primarily clarifies existing requirements and 
refocusing attention on risk management.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes do 
not impose information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 14 CFR Parts 1260 and 1274

    Grant Programs--Science and Technology.

Tom Luedtke,
Assistant Administrator for Procurement.

PART 1260--GRANTS AND COOPERATIVE AGREEMENTS

    Accordingly, 14 CFR Chapter V is amended as follows:
    1. The authority citation for 14 CFR part 1260 continues to read as 
follows:

    Authority: 42 U.S.C. 2374 (c)(1), Pub. L. 97-258, 96 Stat. 1003 
(31 U.S.C. 6301 et seq.), and OMB Circular A-110.

Sec. 1260.20  [Amended]

    2. In section 1260.20, amend paragraphs (a), (d), (e), (f), and (h) 
by removing ``1260.38'' and adding ``1260.39'' in its place.

    3. Add Sec. 1260.39 to read as follows:


Sec. 1260.39  Buy American encouragement.

Buy American Encouragement

July 2002

    (a) As stated in Section 319 of Public Law 106-391, the NASA 
Authorization Act of 2000, Recipients are encouraged to purchase 
only American-made equipment and products.
    (b) The Recipient will observe property standards and provisions 
set forth in 1260.131 through 1260.137.

[End of Provision]

    4. Revise Part 1274 to read as follows:

PART 1274--COOPERATIVE AGREEMENTS WITH COMMERCIAL FIRMS

Subpart 1274.1--General
Sec.
1274.101   Purpose.
1274.102   Scope.
1274.103   Definitions.
1274.104   Effect on other issuances.
1274.105   Review requirements.
1274.106   Deviations.
1274.107   Publication of requirements.
Subpart 1274.2--Pre-Award Requirements
1274.201   Purpose.
1274.202   Methods of award.
1274.203   Solicitations/Cooperative Agreement Notices.
1274.204   Costs and payments.
1274.205   Consortia as recipients.
1274.206   Metric Conversion Act.
1274.207   Extended agreements.
1274.208   Intellectual property.
1274.209   Evaluation and selection.
1274.210   Unsolicited proposals.
1274.211   Award procedures.
1274.212   Document format and numbering.
1274.213   Distribution of cooperative agreements.
1274.214   Inquiries and release of information.

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Subpart 1274.3--Administration
1274.301   Delegation of administration.
1274.302   Transfers, novations, and change of name agreements.
Subpart 1274.4--Property
1274.401   Government furnished property.
1274.402   Contractor acquired property.
Subpart 1274.5--Procurement Standards
1274.501   Purpose of procurement standards.
1274.502   Recipient responsibilities.
1274.503   Codes of conduct.
1274.504   Competition.
1274.505   Procurement procedures.
1274.506   Cost and price analysis.
1274.507   Procurement records.
1274.508   Contract administration.
1274.509   Contract provisions.
1274.510   Subcontracts.
Subpart 1274.6--Reports and Records
1274.601   Retention and access requirements for records.
Subpart 1274.7--Suspension or Termination
1274.701   Suspension or termination.
Subpart 1274.8--Post-Award/Administrative Requirements
1274.801   Adjustments to performance costs.
1274.802   Modifications.
1274.803   Closeout procedures.
1274.804   Subsequent adjustments and continuing responsibilities.
Subpart 1274.9--Other Provisions and Special Conditions
1274.901   Other provisions and special conditions.
1274.902   Purpose.
1274.903   Responsibilities.
1274.904   Resource sharing requirements.
1274.905   Rights in data.
1274.906   Designation of new technology representative and patent 
representative.
1274.907   Disputes.
1274.908   Milestone payments.
1274.909   Term of agreement.
1274.910   Authority.
1274.911   Patent rights.
1274.912   Patent rights--retention by the recipient (large 
business).
1274.913   Patent rights--retention by the recipient (small 
business).
1274.914   Requests for waiver of rights--large business.
1274.915   Restrictions on sale or transfer of technology to foreign 
firms or institutions.
1274.916   Liability and risk of loss.
1274.917   Additional funds.
1274.918   Incremental funding.
1274.919   Cost principles and accounting standards.
1274.920   Responsibilities of the NASA Technical Officer.
1274.921   Publications and reports: non-proprietary research 
results.
1274.922   Suspension or termination.
1274.923   Equipment and other property.
1274.924   Civil rights.
1274.925   Subcontracts.
1274.926   Clean Air-Water Pollution Control Acts.
1274.927   Debarment and suspension and Drug-Free Workplace.
1274.928   Foreign national employee investigative requirements.
1274.929   Restrictions on lobbying.
1274.930   Travel and transportation.
1274.931   Electronic funds transfer payment methods.
1274.932   Retention and examination of records.
1274.933   Summary of recipient reporting.
1274.934   Safety.
1274.935   Security classification requirements.
1274.936   Breach of safety or security.
1274.937   Security requirements for unclassified information 
technology resources.
1274.938   Modifications.
1274.939   Application of Federal, State, and Local laws and 
regulations.
1274.940   Changes in recipient's membership.
1274.941   Insurance and indemnification.
1274.942   Export licenses.

Appendix to Part 1274--Listing of Exhibits

Exhibit A to Part 1274--Contract provisions
Exhibit B to Part 1274--Reports

    Authority: 31 U.S.C. 6301 to 6308; 42 U.S.C. 2451 et seq.

Subpart 1274.1--General


Sec. 1274.101  Purpose.

    The following policy guidelines establish uniform requirements for 
NASA cooperative agreements awarded to commercial firms.


Sec. 1274.102  Scope.

    (a) The business relationship between NASA and the recipient of a 
cooperative agreement differs from the relationship that exists between 
NASA and the recipient of a grant. Under the auspices of a grant, there 
is very little involvement and interaction between NASA and the grantee 
(other than a few administrative, funding, and reporting requirements, 
or in some cases matching of funds).
    Under a cooperative agreement, because of its substantial 
involvement, NASA assumes a higher degree of responsibility for the 
technical performance outcomes and associated financial costs of 
research activities. In some cooperative agreement projects, NASA may 
be required to indemnify the recipient (to the extent authorized by 
Congress). While the principal purpose of NASA's involvement and 
commitment of resources is to stimulate or support research activity, a 
major incentive for involvement by commercial firms (particularly where 
costs are shared) is the profit potential from marketable products 
expected to result from the cooperative agreement project.
    (b) Cooperative agreements (in areas or research relevant to NASA's 
mission) are ordinarily entered into with commercial firms to--
    (1) Support research and development;
    (2) Provide technology transfer from the Government to the 
recipient; or
    (3) Develop a capability among U.S. firms to potentially enhance 
U.S. competitiveness.
    (c) Projects that normally result in a cooperative agreement award 
to a commercial entity are projects that:
    (1) Are not intended for the direct benefit of NASA;
    (2) Are expected to benefit the general public;
    (3) Require substantial cost sharing; and
    (4) Have commercial applications and profit generating potential.
    (d) The principal purpose of cooperative agreements is to stimulate 
research to benefit the general public through the criteria stated in 
paragraphs (a) through (c) of this section. Since all research 
activities must be within NASA's authorized expenditure of 
appropriations, there may be instances where NASA can derive incidental 
use or benefits while preserving the principal purpose of the 
cooperative agreement. However, a careful balance must be established 
and maintained in the cooperative agreement's technical and business 
objectives, so that the principal purpose of the project serves to 
benefit the general public (i.e., technology will transfer from the 
Government to the public and the commercial partner expects a 
marketable product to result). If a cooperative agreement is awarded 
when the proper award instrument should have been a contract (because 
the primary purpose of the award is for the direct benefit of NASA), 
the cooperative agreement award can be protested. Thus, before pursuing 
any incidental benefits that materialize under a cooperative agreement, 
NASA Centers should ensure that the advice of legal counsel is 
obtained.


Sec. 1274.103  Definitions.

    Administrator. The Administrator or Deputy Administrator of NASA.
    Agreement officer. A Government employee (usually a Contracting 
Officer or Grant Officer) who has been delegated the authority to 
negotiate, award, or administer the cooperative agreement. Most often 
Contracting Officers are delegated this authority for the more complex 
cooperative agreement projects.

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    Assistant Administrator for Procurement. The head of the Office of 
Procurement, NASA Headquarters (Code H).
    Cash contributions. The cash invested in a given program or project 
by the Federal Government and/or recipient. The recipient's cash 
contributions may include money contributed by third parties.
    Closeout. The process by which NASA determines that all applicable 
administrative actions and all required work of the award have been 
completed by the recipient and NASA.
    Commercial item. The definition in FAR 2.101 is applicable.
    Consortium. A consortium is a group of organizations that enter 
into an agreement to collaborate for the purposes of the cooperative 
agreement with NASA. The agreement to collaborate can take the form of 
a legal entity such as a partnership or joint venture but it is not 
necessary that such an entity be created. A consortium may be made up 
of firms that normally compete for commercial or Government business or 
may be made up of firms that perform complementary functions in a given 
industry.
    Cooperative agreement. As defined by 31 U.S.C. 6305, cooperative 
agreements are financial assistance instruments used to stimulate or 
support activities for authorized purposes and in which the Government 
participates substantially in the performance of the effort. This Part 
1274 covers only cooperative agreements with commercial firms where 
resource sharing is involved. Cooperative agreements with other types 
of organizations are covered by 14 CFR Part 1260.
    Cooperative agreement notice (CAN). Publication on Federal Business 
Opportunities (FedBizOpps) or NASA Acquisition Internet Service (NAIS) 
websites advertising the solicitation of competitive proposals for the 
award of a cooperative agreement.
    Cost sharing. Arrangement whereby the Government and the recipient 
share the funding requirements of a program or project at an agreed 
upon ratio or percentage (normally 50/50). Normally, the Government's 
payment of its share of the costs is contingent upon the accomplishment 
of tangible milestones (preferred method). Any payment arrangement that 
is based on a method other than the accomplishment of tangible 
milestones (e.g., a reimbursable arrangement where NASA pays a share of 
incurred costs, regardless of the accomplishment of tangible 
milestones) must be approved through the deviation process discussed in 
1274.106.
    Date of completion. The date on which all work under an award is 
completed or the date on the award document, or any supplement or 
amendment thereto, on which NASA sponsorship ends.
    Days. Calendar days, unless otherwise indicated.
    General purpose equipment. Equipment which is usable for other than 
research, medical, scientific, or technical activities, whether or not 
special modifications are needed to make them suitable for a particular 
purpose. Examples of general purpose equipment include office equipment 
and furnishings, air conditioning equipment, reproduction and printing 
equipment, motor vehicles, and automatic data processing equipment.
    Government furnished equipment. Equipment in the possession of, or 
acquired directly by, the Government and subsequently delivered, or 
otherwise made available, to a recipient and equipment procured by the 
recipient with Government funds under a cooperative agreement. In most 
cases, Government furnished equipment will be counted as part of the 
Government's in-kind or non-cash contributions to the cooperative 
agreement for the purpose of determining the share ratio.
    Incremental funding. A method of funding a cooperative agreement 
where the funds initially allotted to the cooperative agreement are 
less than the award amount. Additional funding is added as described in 
Sec. 1274.918.
    Non-cash or in-kind contributions. May be in the form of personnel 
resources (where cost accounting methods allow accumulation of such 
costs), real property, equipment, supplies and other expendable 
property, and the value of goods and services directly benefiting and 
specifically identifiable to the project or program. Costs incurred by 
NASA to provide the services of one of its support contractors to 
perform part of NASA's requirements under a cooperative agreement shall 
be included as part of NASA's cost share, and will be counted as an in-
kind contribution to the cooperative agreement.
    Recipient. An organization receiving financial assistance under a 
cooperative agreement to carry out a project or program. A recipient 
may be an individual firm, including sole proprietor, partnership, 
corporation, or a consortium of business entities.
    Resource contributions. The total value of resources provided by 
either party to the cooperative agreement including both cash and non-
cash contributions.
    Subcontracting dollar threshold. The dollar amount of the 
cooperative agreement subject to the small business subcontracting 
policies (includes small business, veteran-owned small business, 
service-disabled veteran-owned small business, historically 
underutilized small business, small disadvantaged business, women-owned 
business concerns, Historically Black Colleges and Universities, and 
minority educational institutions). For cooperative agreements, the 
dollar threshold to which the small business subcontracting policies 
apply, is established by the total amount of NASA's cash contributions.
    Suspension. An action by NASA or the recipient that temporarily 
discontinues efforts under an award, pending corrective action or 
pending a decision to terminate the award.
    Technical officer. The official of the cognizant NASA office who is 
responsible for monitoring the technical aspects of the work under a 
cooperative agreement. A Contracting Officer's Technical Representative 
may serve as a Technical Officer.
    Termination. The cancellation of a cooperative agreement in whole 
or in part, by either party at any time prior to the date of 
completion.


Sec. 1274.104  Effect on other issuances.

    For awards subject to this part, all administrative requirements of 
codified program regulations, program manuals, handbooks and other non-
regulatory materials which are inconsistent with the requirements of 
this part shall be superseded, except to the extent they are required 
by statute, or authorized in accordance with the deviations provision 
in Sec. 1274.106.


Sec. 1274.105  Review requirements.

    (a) Once the decision is made by a Headquarters program office or 
Center procurement personnel, to pursue the Cooperative Agreement 
Notice (CAN) process, for which the total NASA resources to be expended 
equal or exceed $10 million (cash plus non-cash contributions), a 
notification shall immediately be provided to the Assistant 
Administrator for Procurement (Code HS). The notification(s) shall be 
forwarded by the cognizant Headquarters program office or the Center 
procurement office (as applicable). For any CAN where NASA's cash 
contributions are expected to equal or exceed $10 million, Headquarters 
program office or Center procurement personnel shall also notify the 
Assistant Administrator for Small and Disadvantaged Business 
Utilization (Code K). All such notifications, as

[[Page 45793]]

described in paragraph (b) of this section, shall evidence concurrence 
by the cognizant Center Procurement Officer. These review requirements 
also apply where an unsolicited proposal is received from a commercial 
firm (or from a team of recipients where one of more team members is a 
commercial firm), and the planned award document is a cooperative 
agreement.
    (b) The notification shall be accomplished by sending an electronic 
mail (e-mail) message to the following address at NASA Headquarters: 
[email protected]. The notification must include the following 
information, as a minimum--
    (1) Identification of the cognizant Center and program office;
    (2) Description of the proposed program for which proposals are to 
be solicited;
    (3) Rationale for decision to use a CAN rather than other types of 
solicitations;
    (4) The amount of Government funding to be available for award(s);
    (5) Estimate of the number of cooperative agreements to be awarded 
as a result of the CAN;
    (6) The percentage of cost-sharing to be required;
    (7) Tentative schedule for release of CAN and award of cooperative 
agreements;
    (8) If the term of the cooperative agreement is anticipated to 
exceed 3 years and/or if the Government cash contribution is expected 
to exceed $20M, address anticipated changes, if any, to the provisions 
(see Sec. 1274.207); and
    (9) If the cooperative agreement is for programs/projects that 
provide aerospace products or capabilities, (e.g., provision of space 
and aeronautics systems, flight and ground systems, technologies and 
operations), a statement that the requirements of NASA Policy Directive 
(NPD) 7120.4 and NASA Policy Guidance (NPG) 7120.5 have been met. This 
affirmative statement will include a specific reference to the signed 
Program Commitment Agreement.
    (c) Code HS will respond by e-mail message to the sender, with a 
copy of the message to the Procurement Officer and the Office of Small 
and Disadvantaged Business Utilization, within five (5) working days of 
receipt of this initial notification. The response will address the 
following:
    (1) Whether Code HS agrees or disagrees with the appropriateness 
for using a CAN for the effort described,
    (2) Whether Code HS will require review and approval of the CAN 
before its issuance,
    (3) Whether Code HS will require review and approval of the 
selected offeror's cost sharing arrangement (e.g., cost sharing 
percentage; type of contribution (cash, labor, etc.)).
    (4) Whether Code HS will require review and approval of the 
resulting cooperative agreement(s).
    (d) If a response from Code HS is not received within 5 working 
days of notification, the program office or Center may proceed with 
release of the CAN and award of the cooperative agreements as 
described.
    (e) Before issuance, each field-generated CAN shall be approved by 
the installation director or designee, with the concurrence of the 
procurement officer. Each Headquarters generated CAN shall be approved 
by the cognizant Program Associate Administrator or designee, with 
concurrence of the Headquarters Offices of General Counsel (Code GK), 
External Relations (Code I), Safety & Mission Assurance (Code Q), and 
Procurement (Code HS).


Sec. 1274.106  Deviations.

    (a) The Assistant Administrator for Procurement may grant 
exceptions for classes of, or individual cooperative agreements and 
deviations from the requirements of this Regulation when exceptions are 
not prohibited by statute.
    (b) A deviation is required for any of the following:
    (1) When a prescribed provision set forth in this regulation for 
use verbatim is modified or omitted.
    (2) When a provision is set forth in this regulation, but not 
prescribed for use verbatim, and the installation substitutes a 
provision which is inconsistent with the intent, principle, and 
substance of the prescribed provision.
    (3) When a NASA form or other form is prescribed by this 
regulation, and that form is altered or another form is used in its 
place.
    (4) When limitations, imposed by this regulation upon the use of a 
provision, form, procedure, or any other action, are not adhered to.
    (c) Requests for authority to deviate from this regulation will be 
forwarded to Headquarters, Program Operations Division (Code HS). Such 
requests, signed by the Procurement Officer, shall contain as a 
minimum--
    (1) A full description of the deviation and identification of the 
regulatory requirement from which a deviation is sought;
    (2) Detailed rationale for the request, including any pertinent 
background information;
    (3) The name of the recipient and identification of the cooperative 
agreement affected, including the dollar value.
    (4) A statement as to whether the deviation has been re quested 
previously, and, if so, circumstances of the previous request(s); and
    (5) A copy of legal counsel's concurrence or comments.


Sec. 1274.107  Publication of requirements.

    Cooperative agreements may result from recipient proposals 
submitted in response to the publication of a NASA Research 
Announcement (NRA), a Cooperative Agreement Notice (CAN), or other 
Broad Agency Announcement (BAA). BAA's, NRA's and CAN's are normally 
promulgated through publicly accessible Government-wide announcements 
such as those published under the Federal Business Opportunities 
(FedBizOpps), and/or the NASA Acquisition Internet Service (NAIS). 
Prior to publicizing the CAN, see Sec. 1274.105.

Subpart 1274.2--Pre-Award Requirements


Sec. 1274.201  Purpose.

    This subpart provides pre-award guidance, prescribes forms and 
instructions, and addresses other pre-award matters.


Sec. 1274.202  Methods of award.

    (a) Competitive agreements. Consistent with 31 U.S.C. 6301(3), NASA 
uses competitive procedures to award cooperative agreements whenever 
possible.
    (b) Awards using other than competitive procedures. Solicitations 
for award of a Cooperative Agreement shall not be issued to, nor 
negotiations conducted with a single source unless--
    (1) Use of such actions is documented in writing; and
    (2) Concurrence and approvals are obtained. The dollar thresholds 
will be determined by the total value of the resources committed to the 
Cooperative Agreement (cash and quantifiable in-kind contributions).


Sec. 1274.203  Solicitations/cooperative agreement notices.

    (a) Agreement officers should use every effort to issue draft pre-
award cooperative agreement information. Any draft documentation 
released for comment shall contain all factors/subfactors. Draft 
documents should be as close to the final product as possible. Draft 
Cooperative Agreement Notices (CAN's) or Cooperative Agreements (CA) 
should include terms and conditions, special requirements and expected 
cash and non-cash (in-kind) contributions.

[[Page 45794]]

    (1) Publication of draft documentation may serve to prevent 
unnecessary expenditure of resources and unproductive time that may be 
spent by NASA and potential recipients. Release of draft documentation 
also serves to assist NASA in refining program objectives and 
requirements, and maximizes the quality of research proposals submitted 
for formal evaluation and source selection.
    (2) During the information gathering process, comments may be 
invited from potential recipients on all aspects of the draft 
documentation, including the requirements, schedules, proposal 
instructions and evaluation approaches. Potential recipients should be 
specifically requested to identify unnecessary or inefficient 
requirements. Comments should also be requested on any perceived 
safety, occupational health, security (including information technology 
security), environmental, export control, and/or other programmatic 
risk issues associated with performance of the CA.
    (3) Agreement officers should include in the award schedule 
adequate time for the process to include industry review and comments, 
and NASA's evaluation and disposition of comments received.
    (4) When providing draft documents for comment, the draft CAN shall 
advise interested parties that any issued draft documentation shall not 
be considered as a solicitation for award, and that NASA is not 
requesting proposals in response to the draft publication.
    (5) Whenever feasible, agreement officers should include a summary 
of the disposition of significant comments when issuing the final CAN 
and/or CA.
    (b) The evaluation section of the CAN shall notify potential 
recipients of the relative importance of factors, and any subfactors or 
other criteria that will be evaluated during the selection process.
    (c) For its research projects, NASA may publish the expected 
project goals and objectives in terms of ``What'' the commercial 
recipient is expected to accomplish. The commercial recipient may be 
required to submit a proposed statement of work with its proposal 
stating ``How'' the recipient will accomplish the task(s). Depending on 
its importance to the success of the project, for some projects the 
recipient's statement of work may be included as an evaluation 
criterion for award. In these instances, the requirement for submission 
of the recipient's statement of work will be clearly identified as a 
subfactor or criterion that will be evaluated, and its relative weight 
or ranking in relation to other evaluation criteria shall be stated. In 
all cases, where the recipient submits a statement of work in response 
to NASA project objectives, NASA shall have final approval of the 
acceptability of the statement of work.
    (d) Where performance-based milestone payments are planned, the 
potential recipient should be encouraged to suggest in its statement of 
work (which incorporates the project goals and objectives), or 
elsewhere in its proposal, terms and/or performance events upon which 
milestone payments can be negotiated.
    (e) The CAN should provide a description and value for any 
quantifiable non-cash or in-kind Government resources (personnel, 
equipment, facilities, etc.), in addition to any cash funds that will 
be offered by the Government as part of its contributions to the 
cooperative agreement. As part of its proposal package, the recipient 
may also identify additional non-cash or in-kind resources it wishes 
NASA to contribute. The recipient shall verify the suitability of the 
requested resource(s) to the work to be performed under the cooperative 
agreement. Any additional verifiable and suitable non-cash or in-kind 
resources requested, shall be added to NASA's shared cost of performing 
the cooperative agreement, and may require increased cash or in-kind 
contributions from the recipient to meet its percentage of the cost 
share.
    (f) To protect the integrity of the competitive process, upon 
release of the formal CAN the agreement officer shall direct that all 
personnel associated with the source selection refrain from 
communicating with prospective recipients and to refer all inquiries to 
the agreement officer or other authorized representative. The 
notification to potential recipients may be sent in any format (e.g., 
letter or electronic) appropriate to the complexity of the acquisition. 
It is not intended that all communication with potential recipients be 
terminated. Agreement officers should continue to provide information 
as long as it does not create an unfair competitive advantage or reveal 
proprietary data.


Sec. 1274.204  Costs and payments.

    (a) Cost allowability. (1) Cooperative agreements awarded to 
commercial firms are subject to the cost accounting standards and 
principles of 48 CFR Chapter 99, as implemented by FAR Parts 30 and 31.
    (2) If the recipient is a consortium which includes non-commercial 
entities as members, cost allowability for those members will be 
determined as follows:
    (i) Allowability of costs incurred by state, local or federally-
recognized Indian tribal governments is determined in accordance with 
the provisions of OMB Circular A-87, ``Cost Principles for State and 
Local Governments.''
    (ii) The allowability of costs incurred by non-profit organizations 
is determined in accordance with the provisions of OMB Circular A-122, 
``Cost Principles for Non-Profit Organizations.''
    (iii) The allowability of costs incurred by institutions of higher 
education is determined in accordance with the provisions of OMB 
Circular A-21, ``Cost Principles for Educational Institutions.''
    (iv) The allowability of costs incurred by hospitals is determined 
in accordance with the provisions of Appendix E of 45 CFR part 74, 
``Principles for Determining Costs Applicable to Research and 
Development Under Grants and Contracts with Hospitals.''
    (3) A recipient's method for accounting for the expenditure of 
funds must be consistent with generally accepted accounting principles.
    (b) Cost sharing. (1) Given the mutually beneficial nature of, in 
particular, potential commercially marketable products expected to 
result from the research activities of the cooperative agreement, 
resource contributions are required from the recipient. The commercial 
recipient is expected to contribute at least 50 percent of the total 
resources necessary to accomplish the cooperative agreement effort. 
Recipient contributions may be cash, non-cash (in-kind) or both. 
Acceptable non-cash or in-kind resources include such items as 
equipment, facilities, labor, office space, etc. In determining the 
incentive to the recipient to share costs, agreement officers must 
consider a variety of factors. For example, while the future 
profitability of intellectual property may serve as an incentive for 
involvement of the commercial firm in the cooperative agreement, the 
actual or imputed value of such items as patent rights, data rights, 
trade secrets, etc., included in intellectual property is generally not 
considered a reliable source for computation of the recipient's 
contributions.
    (2) In most cases these costs are not readily quantifiable. Thus, 
although the value of intellectual property rights should be factored 
into the incentive for the recipient to share at least 50 percent of 
costs, intellectual property rights do not serve as quantifiable 
amounts to determine the equitable dollar amounts of costs to be 
shared.
    (3) As is expected from the commercial partner, the Government's 
cost share should reflect certain non-

[[Page 45795]]

cash as well as cash contributions to the most practicable extent 
possible. Where quantifiable, NASA will include in the calculation of 
the Government's cost share, non-cash or in-kind contributions, which 
includes the value of equipment, personnel, and facilities. Costs 
incurred by NASA to provide the services of one or more support 
contractors to perform part of NASA's requirements under a cooperative 
agreement will be counted as part of NASA's in-kind contributions. This 
approach is also supported by the initiative to implement full cost 
accounting methods within the Federal Government.
    (4) When other Government agencies act as partners along with NASA 
(e.g., Department of Defense or Federal Aviation Administration), the 
resources contributed by any Government agency shall be counted as part 
of the Government's total cost share under the cooperative agreement.
    (5) For every cooperative agreement, there should be evidence of 
the recipient's strong commitment and self-interest in the success of 
the research project. A very strong indicator of a recipient's self-
interest is the willingness to commit to a meaningful level of cost 
sharing (i.e., 50 percent). Before considering whether it is 
impracticable for the recipient to share at least 50% of the 
performance costs, agreement officers should also consider whether 
other factors exist that demonstrate the recipient's financial stake or 
self-interest in the success of the cooperative agreement.
    (6) In cases where a contribution of less than 50 percent is 
anticipated from the commercial recipient, approval of the Assistant 
Administrator for Procurement (Code HS) is required prior to award. The 
request for approval should address the evaluation factor in the 
solicitation and how the proposal accomplishes those objectives to such 
a degree that a share ratio of less than 50 percent is warranted.
    (7) Once accepted for application to costs shared under the 
cooperative agreement, cash and in-kind contributions including 
Independent Research and Development (IR&D) costs, may not be included 
as contributions for any other federally assisted project or program.
    (c) Fixed funding. (1) Cooperative agreements are funded by NASA 
through the disbursement of agreed upon fixed payment amounts to the 
recipient. NASA makes disbursement of funds to the recipient as 
``Milestone payments'' discussed in paragraph (d) of this section. If 
the recipient achieves the final milestone, final payment is made, 
which completes NASA's financial responsibilities under the agreement.
    (2) Fixed payments on a cooperative agreement are made by NASA 
based on the accomplishment by the recipient of predetermined tangible 
milestones. Any arrangement where payments are made on a basis other 
than accomplished tangible milestones must be approved in accordance 
with the requirements of Sec. 1274.106 Deviations.
    (3) If the cooperative agreement is terminated prior to achievement 
of all milestones, NASA's funding is limited to milestone payments 
already made plus NASA's share of costs incurred to meet commitments of 
the recipient, which had in the judgment of NASA become firm prior to 
the effective date of termination. In no event, however, shall the 
amount of NASA's share of these additional costs exceed the amount of 
the next scheduled milestone payment.
    (d) Milestone obligations and payments. Agreement officers, 
technical officers, accounting and finance officials, and all other 
responsible NASA personnel shall ensure that funds for milestone 
payments are obligated, billed and expended in accordance with the 
guidance set forth by the NASA Financial Management Manual (FMM 9000).
    (1) There must always be sufficient funds obligated to cover the 
next milestone payment. In addition, funds must be made available (but 
not necessarily obligated) to cover all milestone payments expected to 
be made during the current fiscal year of performance.
    (2) Disbursement of funds to the recipient is based on the 
achievement of milestones or performance-related benchmarks. The 
milestone must represent the accomplishment of verifiable, significant 
event(s) and may not be based upon the mere passage of time or the 
performance of a particular level of effort. The Government technical 
officer must verify to and advise the agreement officer that each 
milestone has been achieved prior to authorizing the corresponding 
payment.
    (3) The amount of funds to be disbursed by NASA in recognition of 
the achievement of milestones (``milestone payments'') shall be 
established consistent with the ratio of resource sharing agreed upon 
under the cooperative agreement (see paragraph (e)(2) of this section). 
While the schedule for milestone achievement must reflect the project 
being undertaken, the frequency should not be greater than one payment 
per month. For many projects, scheduling milestones to be accomplished 
about every 60 to 90 days appears to be most workable. Partial or 
interim milestone payments may not be made.
    (4) The final milestone payment should be structured so that the 
associated payment is large enough to provide incentive to the 
recipient to complete its responsibilities under the cooperative 
agreement. Alternatively, funds may be reserved for disbursement after 
completion of the effort.
    (e) Incremental funding. Whenever the period of performance for the 
cooperative agreement crosses fiscal years, the agreement shall be 
incrementally funded using appropriations from different fiscal years. 
In other circumstances, incremental funding may be appropriate. The 
total amount of funds obligated during the course of a fiscal year must 
be sufficient to cover the Government's share of the costs anticipated 
to be incurred by the recipient during that fiscal year. NASA may allot 
funds to an agreement at various times during a fiscal year in 
anticipation of the occurrence of costs. However, there must always be 
sufficient funds obligated to cover all milestone payments expected to 
be made during the current fiscal year.
    (f) Profit applicability. Recipients shall not be paid a profit 
under cooperative agreements. Profit may be paid by the recipient to 
subcontractors, if the subcontractor is not part of the offering team 
and the subcontract is an arms-length relationship. All entities that 
are involved in performing the research and development effort that is 
the purpose of the cooperative agreement shall be part of the 
recipient's consortium and not subcontractors.
    (g) Independent Research and Development (IR&D) costs. When 
determining the applicable dollar amounts or reasonableness of proposed 
IR&D costs to be included as part of the recipient's cost share, 
agreement officers should seek assistance from DCAA or the cognizant 
audit agency.
    (1) In accordance with FAR 31.205-18(e), IR&D costs may include 
costs contributed by contractors in performing cooperative research and 
development agreements or similar arrangements, entered into under 
sections 203(c)(5) and (6) of the National Aeronautics and Space Act of 
1958, as amended (42.U.S.C. 2473(c)(5) and (6)). IR&D costs incurred by 
a contractor pursuant to these types of cooperative agreements should 
be considered as allowable IR&D costs if the work performed would have 
been allowed as contractor IR&D had there been no cooperative 
arrangement.

[[Page 45796]]

    (2) IR&D costs (or an agreed upon portion of IR&D costs) incurred 
by the recipient's organization and deemed by NASA as the same type of 
research being undertaken by the cooperative agreement between NASA and 
the recipient may serve as part of the recipient's contribution of 
shared costs under the cooperative agreement. When considering the use 
of IR&D costs as part of the recipient's cost share, the IR&D costs 
offered by the recipient shall meet the requirements of FAR 31.205-18. 
Any IR&D costs incurred in a prior period, and offered as part of the 
recipient's cost share shall meet the criteria established by FAR 
31.205-18(d), Deferred IR&D Costs.


Sec. 1274.205  Consortia as recipients.

    (a) The use of consortia as recipients for cooperative agreements 
is encouraged. Such arrangements tend to bring a broader range of 
capabilities and resources to the cooperative agreement. In addition, 
consortium members can better share the projects financial costs (e.g., 
the 50 percent recipient's cost share or other costs of performance).
    (b) NASA enters into an agreement with only one entity (as 
identified by the consortium members). (Also see Sec. 1274.940.) The 
inclusion of non-profit or educational institutions, small businesses, 
or small disadvantaged businesses in the consortium could be 
particularly valuable in ensuring that the results of the consortium's 
activities are disseminated.
    (c) Key to the success of the cooperative agreement with a 
consortium is the consortium's Articles of Collaboration, which is a 
definitive description of the roles and responsibilities of the 
consortium's members. The Articles of Collaboration must designate a 
lead firm to represent the consortium and authority to sign on the 
consortium's behalf. It should also address to the extent appropriate--
    (1) Commitments of financial, personnel, facilities and other 
resources;
    (2) A detailed milestone chart of consortium activities;
    (3) Accounting requirements;
    (4) Subcontracting procedures;
    (5) Disputes;
    (6) Term of the agreement;
    (7) Insurance and liability issues;
    (8) Internal and external reporting requirements;
    (9) Management structure of the consortium;
    (10) Obligations of organizations withdrawing from the consortia;
    (11) Allocation of data and patent rights among the consortia 
members
    (12) Agreements, if any, to share existing technology and data;
    (13) The firm that is responsible for the completion of the 
consortium's responsibilities under the cooperative agreement and has 
the authority to commit the consortium and receive payments from NASA, 
and address employee policy or other personnel issues.
    (d) The consortium's charter or by-laws may be substituted for the 
Articles of Collaboration only if they are inclusive of all of the 
required information.
    (e) An outline of the Articles of Collaboration should be required 
as part of the proposal and evaluated during the source selection 
process. Articles of Collaboration do not become part of the resulting 
cooperative agreement.


Sec. 1274.206  Metric Conversion Act.

    The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205) declares that the metric system is 
the preferred measurement system for U.S. trade and commerce. NASA`s 
policy with respect to the metric measurement system is stated in NPD 
8010.2, Use of the Metric System of Measurement in NASA Programs.


Sec. 1274.207  Extended agreements.

    (a) Multiple year cooperative agreements are encouraged, but 
normally they should span no more than three years.
    (b) The provisions set forth in Sec. 1274.901 are generally 
considered appropriate for agreements not exceeding 3 years and/or a 
Government cash contribution not exceeding $20M. For cooperative 
agreements expected to be longer than 3 years and/or involve Government 
cash contributions exceeding $20M, consideration should be given to 
provisions which place additional restrictions on the recipient in 
terms of validating performance and accounting for funds expended.


Sec. 1274.208  Intellectual property.

    (a) Intellectual property rights. A cooperative agreement covers 
the disposition of rights to intellectual property between NASA and the 
recipient. If the recipient is a consortium or partnership, rights 
flowing between multiple organizations in a consortium must be 
negotiated separately and formally documented, preferably in the 
Articles of Collaboration.
    (b) Rights in patents. Patent rights clauses are required by 
statute and regulation. The clauses exist for recipients of the 
agreement whether they are--
    (1) Other than small business or nonprofit organizations (generally 
referred to as large businesses) or
    (2) Small businesses or nonprofit organizations.
    (c) Inventions. There are five situations in which inventions may 
arise under a cooperative agreement--
    (1) Recipient Inventions;
    (2) Subcontractor Inventions;
    (3) NASA Inventions;
    (4) NASA Support Contractor Inventions; and
    (5) Joint Inventions with Recipient.
    (d) Recipient inventions. (1) A recipient, if a large business, is 
subject to section 305 of the National Aeronautics and Space Act of 
1958 (42 U.S.C. 2457) relating to property rights in inventions. The 
term ``invention'' includes any invention, discovery, improvement, or 
innovation. Title to an invention made under a cooperative agreement by 
a large business recipient initially vests with NASA. The recipient may 
request a waiver under the NASA Patent Waiver Regulations to obtain 
title to inventions made under the agreement. Such a request may be 
made in advance of the agreement (or 30 days thereafter) for all 
inventions made under the agreement. Alternatively, requests may be 
made on a case-by-case basis any time an individual invention is made. 
Such waivers are liberally and expeditiously granted after review by 
NASA's Invention and Contribution Board and approval by NASA's General 
Counsel. When a waiver is granted, any inventions made in the 
performance of work under the agreement are subject to certain 
reporting, election and filing requirements, a royalty-free license to 
the Government, march-in rights, and certain other reservations.
    (2) A recipient, if a small business or nonprofit organization, may 
elect to retain title to its inventions. The term ``nonprofit 
organization'' is defined in 35 U.S.C. 201(i) and includes universities 
and other institutions of higher education or an organization of the 
type described in section 501(c)(3) of the Internal Revenue Code. The 
Government obtains an irrevocable, nonexclusive, royalty-free license.
    (e) Subcontractor inventions--(1) Large business. If a recipient 
enters into a subcontract (or similar arrangement) with a large 
business organization for experimental, developmental, research, design 
or engineering work in support of the agreement to be performed in the 
United States, its possessions, or Puerto Rico, section 305 of the 
Space Act applies. The clause applicable to large business 
organizations is to be used (suitably modified to identify the parties) 
in any subcontract. The

[[Page 45797]]

subcontractor may request a waiver under the NASA Patent Waiver 
Regulations to obtain rights to inventions made under the subcontract 
just as a large business recipient can (see paragraph (d)(1) of this 
section). It is strongly recommended that a prospective large business 
subcontractor contact the NASA installation Patent Counsel or 
Intellectual Property Counsel to assure that the right procedures are 
followed. Just like the recipient, any inventions made in the 
performance of work under the agreement are subject to certain 
reporting, election and filing requirements, a royalty-free license to 
the Government, march-in rights, and certain other reservations.
    (2) Non-profit organization or small business. In the event the 
recipient enters into a subcontract (or similar arrangement) with a 
domestic nonprofit organization or a small business firm for 
experimental, developmental, or research work to be performed under the 
agreement, the requirements of 35 U.S.C. 200 et seq. regarding ``Patent 
Rights in Inventions Made With Federal Assistance,'' apply. The 
subcontractor has the first option to elect title to any inventions 
made in the performance of work under the agreement, subject to 
specific reporting, election and filing requirements, a royalty-free 
license to the Government, march-in rights, and certain other 
reservations that are specifically set forth.
    (3) Work outside the United States. If the recipient subcontracts 
for work to be done outside the United States, its possessions or 
Puerto Rico, the NASA installation Patent Counsel or Intellectual 
Property Counsel should be contacted for the proper patent rights 
clause to use and the procedures to follow.
    (4) Notwithstanding paragraphs (e)(1), (2), and (3) of this 
section, and in recognition of the recipient's substantial 
contribution, the recipient is authorized, subject to rights of NASA 
set forth elsewhere in the agreement, to:
    (i) Acquire by negotiation and mutual agreement rights to a 
subcontractor's subject inventions as the recipient may deem necessary; 
or
    (ii) If unable to reach agreement pursuant to paragraph (e)(4)(i) 
of this section, request that NASA invoke exceptional circumstances as 
necessary pursuant to 37 CFR 401.3(a)(2) if the prospective 
subcontractor is a small business firm or nonprofit organization, or 
for all other organizations, request that such rights for the recipient 
be included as an additional reservation in a waiver granted pursuant 
to 14 CFR 1245.1. The exercise of this exception does not change the 
flow down of the applicable patent rights clause to subcontractors. 
Applicable laws and regulations require that title to inventions made 
under a subcontract must initially reside in either the subcontractor 
or NASA, not the recipient. This exception does not change that. The 
exception does authorize the recipient to negotiate and reach mutual 
agreement with the subcontractor for the grant-back of rights. Such 
grant-back could be an option for an exclusive license or an 
assignment, depending on the circumstances.
    (f) NASA inventions. NASA will use reasonable efforts to report 
inventions made by its employees as a consequence of, or which bear a 
direct relation to, the performance of specified NASA activities under 
an agreement. Upon timely request, NASA will use its best efforts to a 
grant recipient first option to acquire either an exclusive or 
partially-exclusive, revocable, royalty-bearing license, on terms to be 
negotiated, for any patent applications and patents covering such 
inventions. This exclusive or partially-exclusive license to the 
recipient will be subject to the retention of rights by or on behalf of 
the Government for Government purposes.
    (g) NASA support contractor inventions. It is preferred that NASA 
support contractors be excluded from performing any of NASA's 
responsibilities under an agreement since the rights obtained by a NASA 
support contractor could work against the rights needed by the 
recipient. In the event NASA support contractors are tasked by NASA to 
work under the agreement and inventions are made by support contractor 
employees, the support contractor will normally retain title to its 
employee inventions in accordance with 35 U.S.C. 202, 14 CFR part 1245, 
and E.O. 12591. In the event the recipient decides not to pursue right 
to title in any such invention and NASA obtains title to such 
inventions, upon timely request, NASA will use its best efforts to 
grant the recipient first option to acquire either an exclusive or 
partially exclusive, revocable, royalty-bearing license, upon terms to 
be negotiated, for any patent applications and patents covering such 
inventions. This exclusive or partially-exclusive license to the 
recipient will be subject to the retention of rights by or on behalf of 
the Government for Government purposes.
    (h) Joint inventions. (1) NASA and the recipient agree to use 
reasonable efforts to identify and report to each other any inventions 
made jointly between NASA employees (or employees of NASA support 
contractors) and employees of Recipient. For large businesses, the 
Associate General Counsel (Intellectual Property) may agree that the 
United States will refrain, for a specified period, from exercising its 
undivided interest in a manner inconsistent with the recipient's 
commercial interest. For small business firms and nonprofit 
organizations, the Associate General Counsel (Intellectual Property) 
may agree to assign or transfer whatever rights NASA may acquire in a 
subject invention from its employee to the recipient as authorized by 
35 U.S.C. 202(e). The agreement officer negotiating the agreement with 
small business firms and nonprofit organizations can agree, up front, 
that NASA will assign whatever rights it may acquire in a subject 
invention from its employee to the small business firm or nonprofit 
organization. Requests under this paragraph shall be made through the 
Center Patent Counsel.
    (2) NASA support contractors may be joint inventors. If a NASA 
support contractor employee is a joint inventor with a NASA employee, 
the same provisions apply as those for NASA support contractor 
inventions (see paragraph (g) of this section). The NASA support 
contractor will retain or obtain nonexclusive licenses to those 
inventions in which NASA obtains title. If a NASA support contractor 
employee is a joint inventor with a recipient employee, the NASA 
support contractor and recipient will become joint owners of those 
inventions in which they have elected to retain title or requested and 
have been granted waiver of title. Where the NASA support contractor 
has not elected to retain title or has not been granted waiver of 
title, NASA will jointly own the invention with the Recipient.
    (i) Licenses to recipient(s). (1) Any exclusive or partially 
exclusive commercial licenses are to be royalty-bearing consistent with 
Government-wide policy in licensing its inventions. It also provides an 
opportunity for royalty-sharing with the employee-inventor, consistent 
with Government-wide policy under the Federal Technology Transfer Act.
    (2) Upon application in compliance with 37 CFR Part 404--Licensing 
of Government Owned Inventions, all recipients shall be granted a 
revocable, nonexclusive, royalty-free license in each patent 
application filed in any country on a subject invention and any 
resulting patent in which the Government obtains title. Because 
cooperative agreements are cost sharing cooperative arrangements with a 
purpose of benefiting the public by improving the competitiveness of 
the

[[Page 45798]]

recipient and the Government receives an irrevocable, nonexclusive, 
royalty-free license in each recipient subject invention, it is only 
equitable that the recipient receive, at a minimum, a revocable, 
nonexclusive, royalty-free license in NASA inventions and NASA 
contractor inventions where NASA has acquired title.
    (3) Once a recipient has exercised its option to apply for an 
exclusive or partially exclusive license, a notice, identifying the 
invention and the recipient, is published in the Federal Register, 
providing the public opportunity for filing written objections for 60 
days.
    (j) Preference for United States manufacture. Despite any other 
provision, the recipient agrees that any products embodying subject 
inventions or produced through the use of subject inventions shall be 
manufactured substantially in the United States. ``Manufactured 
substantially in the United States'' means the product must have over 
50 percent of its components manufactured in the United States. This 
requirement is met if the cost to the recipient of the components 
mined, produced, or manufactured in the United States exceeds 50 
percent of the cost of all components required to make the product. In 
making this determination, only the product and its components shall be 
considered. The cost of each component includes transportation costs to 
the place of incorporation into the product and any applicable duty 
whether or not a duty-free entry certificate is issued. Components of 
foreign origin of the same class or kind for which determinations have 
been made in accordance with FAR 25.101(a) are treated as domestic. 
Scrap generated, collected, and prepared for processing in the United 
States is considered domestic. The intent of this provision is to 
support manufacturing jobs in the United States regardless of the 
status of the recipient as a domestic or foreign controlled company. 
However, in individual cases, the requirement to manufacture 
substantially in the United States, may be waived by the Assistant 
Administrator for Procurement (Code HS) upon a showing by the recipient 
that under the circumstances domestic manufacture is not commercially 
feasible.
    (k) Space Act agreements. Invention and patent rights in 
cooperative agreements must comply with statutory and regulatory 
provisions. Where circumstances permit, a Space Act Agreement is 
available as an alternative instrument which can be more flexible in 
the area of invention and patent rights.
    (l) Data rights. Data rights provisions can and should be tailored 
to best achieve the needs and objectives of the respective parties 
concerned.
    (1) The data rights clause at Sec. 1274.905 assumes a substantially 
equal cost sharing relationship where collaborative research, 
experimental, developmental, engineering, demonstration, or design 
activities are to be carried out, such that it is likely that 
``proprietary'' information will be developed and/or exchanged under 
the agreement. If cost sharing is unequal or no extensive research, 
experimental, developmental, engineering, demonstration, or design 
activities are likely, a different set of clauses may be appropriate.
    (2) The primary question that must be answered when developing data 
clauses is what does each party need or intend to do with the data 
developed under the agreement. Accordingly, the data rights clauses may 
be tailored to fit the circumstances. Where conflicting goals of the 
parties result in incompatible data provisions, agreement officers for 
the Government must recognize that private companies entering into 
cooperative agreements bring resources to that relationship and must be 
allowed to reap an appropriate benefit for the expenditure of those 
resources. However, since serving a public purpose is a major objective 
of a cooperative agreement, care must be exercised to ensure the 
recipient is not established as a long term sole source supplier of an 
item or service and is not in a position to take unfair advantage of 
the results of the cooperative agreement. Therefore, a reasonable time 
period (i.e., depending on the technology, two to five years after 
production of the data) may be established after which the data first 
produced by the recipient in the performance of the agreement will be 
made public.
    (3) Data can be generated from different sources and can have 
various restrictions placed on its dissemination. Recipient data 
furnished to NASA can exist prior to, or be produced outside of, the 
agreement or be produced under the agreement. NASA can also produce 
data in carrying out its responsibilities under the agreement. Each of 
these areas must be covered.
    (4) For data, including software, first produced by the recipient 
under the agreement, the recipient may assert copyright. Data exchanged 
with a notice showing that the data is protected by copyright must 
include appropriate licenses in order for NASA to use the data as 
needed.
    (5) Recognizing that the dissemination of the results of NASA's 
activities is a primary objective of a cooperative agreement, the 
parties should specifically delineate what results will be published 
and under what conditions. This should be set forth in the clause of 
the cooperative agreement entitled ``Publication and Reports: Non-
Proprietary Research Results.'' Any such agreement on the publication 
of results should be stated to take precedence over any other clause in 
the cooperative agreement.
    (6) Section 1274.905(b)(3) requires the recipient to provide NASA a 
government purpose license for data first produced by the Recipient 
that constitutes trade secrets or confidential business or financial 
information. NASA and the recipient shall determine the scope of this 
license at the time of award of the cooperative agreement. In addition 
to the purposes given as examples in Sec. 1274.905(b)(3), the license 
should provide NASA the right to use this data under a separate 
cooperative agreement or contract issued to a party other than the 
recipient for the purpose of continuing the project in the event the 
cooperative agreement is terminated by either party.
    (7) In accordance with section 303(b) of the Space Act, any data 
first produced by NASA under the agreement which embodies trade secrets 
or financial information that would be privileged or confidential if it 
had been obtained from a private participant, will be marked with an 
appropriate legend and maintained in confidence for an agreed to period 
of up to five years (the maximum allowed by law). This does not apply 
to data other than that for which there has been agreement regarding 
publication or distribution. The period of time during which data first 
produced by NASA is maintained in confidence should be consistent with 
the period of time determined in accordance with paragraph (h)(2) of 
this section, before which data first produced by the recipient will be 
made public. Also, NASA itself may use the marked data (under suitable 
protective conditions) for agreed-to purposes.


Sec. 1274.209  Evaluation and selection.

    (a) Factor development. The agreement officer, along with the NASA 
evaluation team has discretion to determine the relevant evaluation 
criteria based upon the project requirements, and the goals and 
objectives of the cooperative agreement.
    (b) Communications during non-competitive awards. For cooperative 
agreements awarded non-competitively (see Sec. 1274.202(b)), there are 
no

[[Page 45799]]

restrictions on communications between NASA and the recipient. In 
addition, there is no requirement for the development and publication 
of formal evaluation or source selection criteria.
    (c) Communications during competitive awards. As discussed in 
Sec. 1274.203(c), when a competitive source selection process will be 
followed to select the recipient, an appropriate level of care shall be 
taken by NASA personnel in order to protect the integrity of the source 
selection process. Therefore, upon release of the formal cooperative 
agreement notice (CAN), the agreement officer shall direct all 
procurement personnel associated with the source selection to refrain 
from communicating with prospective recipients and that all inquiries 
be referred to the agreement officer, or other authorized 
representative.
    (d) Selection factors and subfactors. (1) At a minimum, the 
selection process for the competitive award of cooperative agreements 
to commercial entities shall include evaluation of potential 
recipients' proposals for merit and relevance to NASA's mission 
requirements through their responses to the publication of NASA 
evaluation factors. The evaluation factors should include technical and 
management capabilities (mission suitability), past performance, and 
proposed costs (including proposed cost share).
    (2) For programs that may involve potentially hazardous operations 
related to flight, and/or mission critical ground systems, NASA's 
selection factors and subfactors shall provide for evaluation of the 
recipient's proposed approach to managing risk (e.g., technology being 
applied or developed, technical complexity, performance specifications 
and tolerances, delivery schedule, etc.).
    (3) As part of the evaluation process, the factors, subfactors, or 
other criteria should be tailored to properly address the requirements 
of the cooperative agreement.
    (e) Other factors and subfactors. Other factors and subfactors may 
include--
    (1) The composition or appropriateness of the business relationship 
of proposed team members or consortium, articles of collaboration, 
participation of an appropriate mix of small business, veteran-owned 
small business, service-disabled veteran-owned small business, 
historically underutilized small business, small disadvantaged 
business, and women-owned business concerns, as well as non-profits and 
educational institutions, including historically black colleges and 
universities and minority institutions).
    (2) Other considerations may include enhancing U.S. 
competitiveness, developing a capability among U.S. firms, 
identification of potential markets, appropriateness of business risks.
    (f) Proposal evaluation. The proposals shall be evaluated in 
accordance with the criteria published in the CAN. Proposals selected 
for award will be supported by documentation as described in 
1274.211(b). When evaluation results in a proposal not being selected, 
the proposer will be notified in accordance with the CAN.
    (g) Technical evaluation. The technical evaluation of proposals may 
include peer reviews. Because the business sense of a cooperative 
agreement proposal is critical to its success, NASA may reserve the 
right to utilize appropriate outside evaluators to assist in the 
evaluation of such proposal elements as the business base projections, 
the market for proposed products, and/or the impact of anticipated 
product price reductions.
    (h) Cost/price evaluation. (1) Prior to award of a cooperative 
agreement, agreement officers shall ensure that proposed costs are 
accurate and reasonable. In order to do so, cost and pricing data may 
be required. The level of cost and pricing data to be requested shall 
be commensurate with the analysis necessary to reach agreement on 
overall proposed project costs. The evaluation of costs shall lead to 
the determination and verification of total project costs to be shared 
by NASA and the recipient, as well as establishment of NASA's milestone 
payment schedule based on its 50 percent cost share. The guidance at 
FAR 15.4 and NFS 1815.4 can assist in determining whether cost and 
pricing data are necessary and the level of analysis required. While 
competition may be present (i.e., more than one proposal is received), 
in most cases companies are proposing competing technologies and 
varying approaches that reflect very different methods (and 
accompanying costs) to satisfy NASA's project objectives. Consequently, 
this type of competitive environment is very different from an 
environment where competitive proposals are submitted in response to a 
request for proposals leading to award of a contract for relatively 
well-defined program or project requirements.
    (2) During evaluation of the cost proposal, the agreement officer, 
along with other NASA evaluation team members and/or pricing support 
personnel, shall determine the reasonableness of the overall proposed 
project costs, including verifying the value of the recipient's 
proposed non-cash and in-kind contributions. Commitments should be 
obtained and verified to the extent practicable from the recipient or 
any associated team members, from which proposed contributions will be 
made.
    (3) If the recipient's proposed contributions include application 
of IR&D costs, see Sec. 1274.204(g).
    (i) Awards to foreign governments and firms. (1) An award may not 
be made to a foreign government. However, if selected as the best 
available source, an award may be made to a foreign firm. If a proposal 
is selected from a foreign firm sponsored by their respective 
government agency, or from entities considered quasi-governmental, 
approval must be obtained from Headquarters, Program Operations 
Division (Code HS). Such requests must include detailed rationale for 
the selection, to include the funding source of the foreign 
participant. The approval of the Assistant Administrator for 
Procurement is required to exclude foreign firms from submitting 
proposals. Award to a foreign firm shall be on a no-exchange-of-funds 
basis (see NPD 1360.2).
    (2) The Office of External Affairs (Code I), shall be notified 
prior to any announcement of intent to award to a foreign firm. 
Additionally, pursuant to section 126 of Pub. L. 106-391, as part of 
the evaluation of costs and benefits of entering into an obligation to 
conduct a space mission in which a foreign entity will participate as a 
supplier of the spacecraft, spacecraft system, or launch system, NASA 
shall solicit comment on the potential impact of such participation, 
through notice published in the FedBizOpps or NAIS.
    (j) Safe-guarding proposals. Competitive proposal information shall 
be protected in accordance with FAR 15.207, Handling proposals and 
information. Unsolicited proposals shall be protected in accordance 
with FAR 15.608, Prohibitions, and FAR 15.609, Limited use of data.
    (1) Evaluation team members, the source selection authority, and 
agreement officers are responsible for protecting sensitive information 
on the award of a grant or cooperative agreement and for determining 
who is authorized to receive such information. Sensitive information 
includes: information contained in proposals; information prepared for 
NASA's evaluation of proposals; the rankings of proposals for an award; 
reports and evaluations of source selection panels, boards, or advisory 
councils; and other information deemed sensitive by the source 
selection authority or by the agreement officer.
    (2) No sensitive information shall be disclosed to persons not on 
the

[[Page 45800]]

evaluation team or evaluation panel, unless the Selecting Official or 
the agreement officer has approved disclosure based upon an unequivocal 
``need-to-know'' and the individual receiving the information has 
signed a Non-Disclosure Certificate. All attendees at formal source 
selection presentations and briefings shall be required to sign an 
Attendance Roster and a Disclosure Certificate. The attendance rosters 
and certificates shall be maintained in official files for a minimum of 
six months after award.
    (3) The improper disclosure of sensitive information could result 
in criminal prosecution or an adverse action.
    (k) Controls on the use of outside evaluators. The use of outside 
evaluators shall be approved in accordance with NFS 1815.207-70(b). A 
cover sheet with the following legend shall be affixed to data provided 
to outside evaluators:

Government Notice for Handling Proposals

    This proposal shall be used and disclosed for evaluation purposes 
only, and a copy of this Government notice shall be applied to any 
reproduction or abstract thereof. Any authorized restrictive notices 
which the submitter places on this proposal shall also be strictly 
complied with.
    (l) Printing, binding, and duplicating. Proposals for efforts that 
involve printing, binding, and duplicating in excess of 25,000 pages 
are subject to the regulations of the Congressional Joint Committee on 
Printing. The technical office will refer such proposals to the 
Installation Central Printing Management Officer (ICPMO) to ensure 
compliance with NPD 1490.1. The Agreement Officer will be advised in 
writing of the results of the ICPMO review.


Sec. 1274.210  Unsolicited proposals.

    (a) For a proposal to be considered a valid unsolicited proposal, 
the submission must--
    (1) Be innovative and unique;
    (2) Be independently originated and developed by the recipient;
    (3) Be prepared without Government supervision, endorsement, 
direction or direct Government involvement;
    (4) Include sufficient technical and cost detail to permit a 
determination that Government support could be worthwhile and the 
proposed work could benefit the agency's research and development or 
other mission responsibilities; and
    (5) Not be an advance proposal for a known agency requirement that 
can be acquired by competitive methods.
    (b) For each unsolicited proposal selected for award, the cognizant 
technical office will prepare and furnish to the Agreement Officer, a 
justification for acceptance of an unsolicited proposal (JAUP). The 
JAUP shall be submitted for the approval of the agreement officer after 
review and concurrence at a level above the technical officer. The 
evaluator shall consider the following factors, in addition to any 
others appropriate for the particular proposal:
    (1) Unique and innovative methods, approaches or concepts 
demonstrated by the proposal.
    (2) Overall scientific or technical merits of the proposal.
    (3) The offeror's capabilities, related experience, facilities, 
techniques, or unique combinations of these which are integral factors 
for achieving the proposal objectives.
    (4) The qualifications, capabilities, and experience of the 
proposed key personnel who are critical in achieving the proposal 
objectives.
    (5) Current, open solicitations under which the unsolicited 
proposal could be evaluated.
    (c) Unsolicited proposals shall be handled in accordance with NFS 
1815.606, ``Agency Procedures''.
    (d) Unsolicited proposals from foreign sources are subject to NPD 
1360.2, ``Development of International Cooperation in Space and 
Aeronautics Programs''.
    (e) There is no requirement for a public announcement of the award 
of a cooperative agreement. In addition, there is no requirement for 
announcement of awards resulting from unsolicited proposals. However, 
in those instances where a public announcement is planned and the award 
is the result of an unsolicited proposal, in addition to the 
requirements of NFS 1805.303-71(a)(3), NASA personnel must take 
measures that ensure protection of the data and intellectual property 
rights of submitters of unsolicited proposals as provided by FAR 
5.202(a)(8).
    (f) Additional information regarding unsolicited proposals is 
available in the handbook entitled, ``Guidance for the Preparation and 
Submission of Unsolicited Proposals'', which is available on the NASA 
Acquisition Internet Service Website at: http://ec.msfc.nasa.gov/hq/library/unSol-Prop.html.


Sec. 1274.211  Award procedures.

    (a) In accordance with NFS 1805.303-71(a)(3), the NASA 
Administrator shall be notified at least five (5) workdays prior to a 
planned public announcement for award of a cooperative agreement 
(regardless of dollar value), if it is thought the agreement may be of 
significant interest to Headquarters.
    (b) For awards that are the result of a competitive source 
selection, the technical officer will prepare and furnish to the 
agreement officer a signed selection statement based on the selection 
criteria stated in the solicitation.
    (1) Bilateral award. All cooperative agreements shall be awarded on 
a bilateral basis.
    (2) Consortium awards. If the cooperative agreement is to be 
awarded to a consortium, a completed, formally executed Articles of 
Collaboration is required prior to award.
    (c) Central Contractor Registration (CCR). Prior to implementation 
of the Integrated Financial Management (IFM) System at each center, all 
grant and cooperative agreement recipients are required to register in 
the Department of Defense (DOD) Central Contractor Registration (CCR) 
database. Registration is required in order to obtain a Commercial and 
Government Entity (CAGE) code, which will be used as a grant and 
cooperative agreement identification number for the new system. The 
agreement officer shall verify that the prospective awardee is 
registered in the CCR database using the DUNS number or, if applicable, 
the DUNS+4 number, via the Internet at http://www.ccr2000.com or by 
calling toll free: 888-227-2423, commercial: 616-961-5757.
    (d) Certifications, Disclosures, and Assurances. (1) Agreement 
officers are required to ensure that all necessary certifications, 
disclosures, and assurances have been obtained prior to awarding a 
cooperative agreement.
    (2) Each new proposal shall include a certification for debarment 
and suspension under the requirements of 14 CFR 1265.510 and 1260.117.
    (3) Each new proposal for an award exceeding $100,000 shall include 
a certification, and a disclosure form (SF LLL) if required, on 
Lobbying under the requirements of 14 CFR 1271.110 and 1260.117.
    (4) Unless a copy is on file at the NASA center, recipients must 
furnish an assurance on NASA Form (NF) 1206 on compliance with Civil 
Rights statutes specified in 14 CFR parts 1250 through 1253.

[[Page 45801]]

Sec. 1274.212  Document format and numbering.

    (a) Formats. Agreement officers shall use NF 1687A (available via 
the Internet at https://extranet.hq.nasa.gov/nef/user/form_search.cfm), with minimum modification, as the standard cooperative 
agreement cover page for the award of all cooperative agreements.
    (b) Cooperative agreement numbering system. Cooperative agreement 
numbering may be changed once the Integrated Financial Management (IFM) 
is implemented. Until IFM is implemented, cooperative agreement 
numbering shall conform to NFS 1804.7102, except that a NCC prefix will 
be used in lieu of the NAS prefix. Along with the prefix NCC, a one or 
two digit Center Identification Number, and a sequence number of up to 
five digits will be used. Inclusive of the prefix and fiscal year, the 
total number of characters, digits, and spaces cannot exceed 11.


Sec. 1274.213  Distribution of cooperative agreements.

    Copies of cooperative agreements and modifications will be provided 
to: payment office, technical officer, administrative agreement officer 
when delegation has been made (particularly when administrative 
functions are delegated to DOD or another agency), NASA Center for 
Aerospace Information (CASI), Attn: Document Processing Section, 7121 
Standard Drive, Hanover, MD 21076, and any other appropriate recipient. 
Copies of the statement of work, contained in the recipient's proposal 
and accepted by NASA, will be provided to the administrative agreement 
officer and CASI. The cooperative agreement file will contain a record 
of the addresses for distributing agreements and supplements.


Sec. 1274.214  Inquiries and release of information.

    NASA personnel shall follow the procedures established in NFS 
1805.402 prior to releasing information to the news media or the 
general public. The procedures established by NFS 1805.403 shall be 
followed when responding to inquiries from members of Congress.

Subpart 1274.3--Administration


Sec. 1274.301  Delegation of administration.

    Cooperative agreements may be administered by the awarding activity 
or the awarding activity may obtain additional administration services 
in accordance with the procedures provided by NFS 1842.202. NASA Form 
1678, NASA Technical Officer Delegation for Cooperative Agreements with 
Commercial Firms, will be used to delegate responsibilities to the NASA 
Technical Officer.


Sec. 1274.302  Transfers, novations, and change of name agreements.

    (a) Transfer of cooperative agreements. Novation is the only means 
by which a cooperative agreement may be transferred from one recipient 
to another.
    (b) Novation and change of name. NASA legal counsel shall review, 
for legal sufficiency, all novation agreements or change of name 
agreements of the recipient, prior to formal execution by the agreement 
officer.

Subpart Sec. 1274.4--Property


Sec. 1274.401  Government furnished property.

    Property or equipment owned by the Government that will be used in 
the performance of a cooperative agreement shall be included as part of 
the Government's percentage (usually 50 percent) of shared costs. In 
most cases the property or equipment will be categorized as non-cash 
contributions. Agreement officers may use the procedures promulgated by 
FAR Subpart 45.2, as guidelines to calculate the value of the property 
or equipment.


Sec. 1274.402  Contractor acquired property.

    As provided in Sec. 1274.923(c), title to property acquired with 
government funds vests in the government. Under a cost shared 
cooperative agreement, joint ownership of property equal to the cost-
sharing ratio will result if the parties make no specific arrangements 
regarding such property. The disposition of acquired property should be 
addressed in the cooperative agreement at the time of award. The 
cooperative agreement may provide that all such property be contributed 
by the recipient as a non-cash contribution. A reasonable dollar value 
must be specified and adequately supported. In this case, title will 
vest in the recipient. Alternatively, NASA and the recipient may 
include in the cooperative agreement any other appropriate arrangement 
for the disposition of acquired property upon completion of the effort.

Subpart 1274.5--Procurement Standards


Sec. 1274.501  Purpose of procurement standards.

    (a) The procurement standards stated in Secs. 1274.502 through 
1274.510, may not apply to or may supplement the procedures of a 
commercial recipient that has a purchasing system approved in 
accordance with the requirements of FAR Subpart 44.3 and NFS 1844.3.
    (b) Sections 1274.502 through 1274.510 set forth standards for use 
by recipients in establishing procedures for the procurement of 
supplies and other expendable property, equipment, real property and 
other services with Federal funds. These standards are furnished to 
ensure that such materials and services are obtained in an effective 
manner and in compliance with the provisions of applicable Federal 
statutes and executive orders.


Sec. 1274.502  Recipient responsibilities.

    The standards contained in this section do not relieve the 
recipient of the contractual responsibilities arising under its 
contract(s). The recipient is the responsible authority, without 
recourse to NASA, regarding the settlement and satisfaction of all 
contractual and administrative issues arising out of procurements 
entered into in support of an award or other agreement. This includes 
disputes, claims, protests of award, source evaluation or other matters 
of a contractual nature. Matters concerning violation of statute are to 
be referred to such Federal, State or local authority as may have 
proper jurisdiction.


Sec. 1274.503  Codes of conduct.

    The recipient shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and 
administration of contracts. No employee, officer, or agent shall 
participate in the selection, award, or administration of a contract 
supported by Federal funds if a real or apparent conflict of interest 
would be involved. Such a conflict would arise when the employee, 
officer, or agent, any member of his or her immediate family, his or 
her partner, or an organization which employs or is about to employ any 
of the parties indicated herein, has a financial or other interest in 
the firm selected for an award. The officers, employees, and agents of 
the recipient shall neither solicit nor accept gratuities, favors, or 
anything of monetary value from contractors, or parties to 
subagreements. However, recipients may set standards for situations in 
which the financial interest is not substantial or the gift is an 
unsolicited item of nominal value. The standards of conduct shall 
provide for disciplinary actions to be applied for violations of such 
standards by officers, employees, or agents of the recipient.


Sec. 1274.504  Competition.

    All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and

[[Page 45802]]

free competition. The recipient shall be alert to organizational 
conflicts of interest as well as noncompetitive practices among 
contractors that may restrict or eliminate competition or otherwise 
restrain trade. In order to ensure objective contractor performance and 
eliminate unfair competitive advantage, contractors that develop or 
draft specifications, requirements, statements of work, invitations for 
bids and/or requests for proposals shall normally be excluded from 
competing for such procurements, unless conflicts or apparent conflicts 
of interest issues have been resolved. Awards shall be made to the 
bidder or offeror whose bid or offer is responsive to the solicitation 
and is most advantageous to the recipient, price, quality and other 
factors considered. Solicitations shall clearly set forth all 
requirements that the bidder or offeror shall fulfill in order for the 
bid or offer to be evaluated by the recipient. Any and all bids or 
offers may be rejected when it is in the recipient's interest to do so.


Sec. 1274.505  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide at a minimum, that the conditions in 
paragraphs (a)(1), (2) and (3) of this section apply.
    (1) Recipients avoid purchasing unnecessary items.
    (2) Where appropriate, an analysis is made of lease and purchase 
alternatives to determine which would be the most economical and 
practical procurement for the Federal Government.
    (3) Solicitations for goods and services provide for all of the 
following:
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured.
    In competitive procurements, such a description shall not contain 
features that unduly restrict competition.
    (ii) Requirements that the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical 
requirements in terms of functions to be performed or performance 
required, including the range of acceptable characteristics or minimum 
acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
business, veteran-owned small business, service-disabled veteran-owned 
small business, historically underutilized small business, small 
disadvantaged business, women-owned business concerns, Historically 
Black Colleges and Universities, and minority educational institutions 
as subcontractors to the maximum extent practicable. Recipients of NASA 
awards shall take all of the following steps to further this goal.
    (1) Make information on forthcoming opportunities available and 
arrange time frames for purchases and contracts.
    (2) Consider in the contract process whether firms competing for 
larger contracts intend to subcontract with these businesses and 
institutions.
    (3) Encourage contracting with consortiums or teams of these 
businesses and institutions when a contract is too large for one of 
these firms to handle individually.
    (4) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration and the Department 
of Commerce's Minority Business Development Agency in the solicitation 
and utilization of small businesses, minority-owned firms and women's 
business enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be 
appropriate for the particular procurement and for promoting the best 
interest of the program or project involved. The ``cost-plus-a-
percentage-of-cost'' or ``percentage of construction cost'' methods of 
contracting shall not be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be 
given to such matters as contractor integrity, record of past 
performance, financial and technical resources or accessibility to 
other necessary resources. In certain circumstances, contracts with 
certain parties are restricted by 14 CFR part 1265, the implementation 
of Executive Orders 12549 and 12689, Debarment and Suspension.
    (e) Recipients shall, on request, make available for NASA, pre-
award review and procurement documents, such as request for proposals 
or invitations for bids, independent cost estimates, etc., when any of 
the following conditions apply:
    (1) A recipient's procurement procedures or operation fails to 
comply with the procurement standards in NASA's implementation of this 
subpart.
    (2) The procurement is expected to exceed the simplified 
acquisition threshold and is to be awarded without competition or only 
one bid or offer is received in response to a solicitation.
    (3) The procurement, which is expected to exceed the simplified 
acquisition threshold, specifies a ``brand name'' product.
    (4) The proposed award over the simplified acquisition threshold is 
to be awarded to other than the apparent low bidder under a sealed bid 
procurement.
    (5) A proposed contract modification changes the scope of a 
contract or increases the contract amount by more than the amount of 
the simplified acquisition threshold.


Sec. 1274.506  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. 
Price analysis may be accomplished in various ways, including the 
comparison of price quotations submitted, market prices and similar 
indicies, together with discounts. Cost analysis is the review and 
evaluation of each element of cost to determine reasonableness, 
allocability and allowability.


Sec. 1274.507  Procurement records.

    Procurement records and files for purchases in excess of the 
simplified acquisition threshold shall include the following at a 
minimum:
    (a) Basis for contractor selection.
    (b) Justification for lack of competition when competitive bids or 
offers are not obtained.
    (c) Basis for award cost or price.


Sec. 1274.508  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms, conditions and specifications of 
the contract and to ensure adequate and timely follow-up of all 
purchases. Recipients shall evaluate contractor performance and 
document, as appropriate, whether contractors have met the terms, 
conditions and specifications of the contract.


Sec. 1274.509  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all 
contracts. The following provisions shall also be applied to 
subcontracts:

[[Page 45803]]

    (a) Contracts in excess of the simplified acquisition threshold 
(currently $100,000) shall contain contractual provisions or conditions 
that allow for administrative, contractual, or legal remedies in 
instances in which a contractor violates or breaches the contract 
terms, and provide for such remedial actions as may be appropriate.
    (b) All contracts in excess of the simplified acquisition threshold 
shall contain suitable provisions for termination by the recipient, 
including the manner by which termination shall be effected and the 
basis for settlement. In addition, such contracts shall describe 
conditions under which the contract may be terminated for default as 
well as conditions where the contract may be terminated because of 
circumstances beyond the control of the contractor.
    (c) All negotiated contracts (except those for less than the 
simplified acquisition threshold) awarded by recipients shall include a 
provision to the effect that the recipient, NASA, the Comptroller 
General of the United States, or any of their duly authorized 
representatives, shall have access to any books, documents, papers and 
records of the contractor which are directly pertinent to a specific 
program for the purpose of making audits, examinations, excerpts and 
transcriptions.
    (d) For Construction and facility improvements, except as otherwise 
required by statute, an award that requires the contracting (or 
subcontracting) for construction or facility improvements shall provide 
for the recipient to follow its own requirements relating to bid 
guarantees, performance bonds, and payment bonds unless the 
construction contract or subcontract exceeds $100,000. For those 
contracts or subcontracts exceeding $100,000, NASA may accept the 
bonding policy and requirements of the recipient, provided NASA has 
made a determination that the Federal Government's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute such contractual documents as may be required 
within the time specified.
    (2) A performance bond on the part of the contractor for 100 
percent of the contract price. A ``performance bond'' is one executed 
in connection with a contract to secure fulfillment of all the 
contractor's obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by statute of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (4) Where bonds are required in the situations described in this 
section, the bonds shall be obtained from companies holding 
certificates of authority as acceptable sureties pursuant to 31 CFR 
part 223, ``Surety companies doing business with the United States.''


Sec. 1274.510  Subcontracts.

    Recipients (individual firms or consortia) are not authorized to 
issue grants or cooperative agreements to subrecipients. All entities 
that are involved in performing the research and development effort 
that is the purpose of the cooperative agreement shall be part of the 
recipient's consortium and not subcontractors. All contracts, including 
small purchases, awarded by recipients and their contractors shall 
contain the procurement provisions of Exhibit A to this part, as 
applicable and may be subject to approval requirements cited in 
Sec. 1274.925.

Subpart 1274.6--Reports and Records


Sec. 1274.601  Retention and access requirements for records.

    (a) This subpart sets forth requirements for record retention and 
access to records for awards to recipients.
    (b) Financial records, supporting documents, statistical records, 
and all other records pertinent to an award shall be retained for a 
period of three years from the date of submission of the final invoice. 
The only exceptions are the following:
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until 
all litigation, claims or audit findings involving the records have 
been resolved and final action taken.
    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by NASA, the 3-
year retention requirement is not applicable to the Recipient.
    (4) Indirect cost rate proposals, cost allocations plans, etc., as 
specified in paragraph (g) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by NASA.
    (d) NASA shall request transfer of certain records to its custody 
from recipients when it determines that the records possess long term 
retention value. However, in order to avoid duplicate record keeping, 
NASA may make arrangements for recipients to retain any records that 
are continuously needed for joint use.
    (e) NASA, the Inspector General, Comptroller General of the United 
States, or any of their duly authorized representatives, have the right 
of timely and unrestricted access to any books, documents, papers, or 
other records of Recipients that are pertinent to the awards, in order 
to make audits, examinations, excerpts, transcripts and copies of such 
documents. This right also includes timely and reasonable access to a 
recipient's personnel for the purpose of interview and discussion 
related to such documents. The rights of access in this paragraph are 
not limited to the required retention period, but shall last as long as 
records are retained.
    (f) Unless required by statute, NASA shall not place restrictions 
on recipients that limit public access to the records of recipients 
that are pertinent to an award, except when NASA can demonstrate that 
such records shall be kept confidential and would have been exempted 
from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 
552) if the records had belonged to NASA.
    (g) Indirect cost rate proposals, cost allocations plans, etc., 
applies to the following types of documents, and their supporting 
records: indirect cost rate computations or proposals, cost allocation 
plans, and any similar accounting computations of the rate at which a 
particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (1) If submitted for negotiation. If the recipient submits to NASA 
or the subrecipient submits to the recipient the proposal, plan, or 
other computation to form the basis for negotiation of the rate, then 
the 3-year retention period for its supporting records starts on the 
date of such submission.
    (2) If not submitted for negotiation. If the recipient is not 
required to submit to NASA or the subrecipient is not required to 
submit to the recipient the proposal, plan, or other computation for 
negotiation purposes, then the 3-year retention period for the 
proposal, plan, or other computation and its supporting records starts 
at the end of the fiscal year (or other accounting period)

[[Page 45804]]

covered by the proposal, plan, or other computation.

Subpart 1274.7--Suspension or Termination


Sec. 1274.701  Suspension or termination.

    (a) Suspension. NASA or the recipient may suspend the cooperative 
agreement for a mutually agreeable period of time, if an assessment is 
required to determine whether the agreement should be terminated.
    (b) Termination. (1) A cooperative agreement provides both NASA and 
the recipient the ability to terminate the Agreement if it is in their 
best interests to do so, by giving the other party prior written 
notice. Upon receipt of a notice of termination, the receiving party 
shall take immediate steps to stop the accrual of any additional 
obligations, which might require payment.
    (2) NASA may, for example, terminate the Agreement if the recipient 
is not making anticipated technical progress, if the recipient 
materially changes the objectives of the agreement, or if appropriated 
funds are not available to support the program.
    (3) Similarly, the recipient may terminate the agreement if, for 
example, technical progress is not being made, if the commercial 
recipient shifts its technical emphasis, or if other technological 
advances have made the effort obsolete.
    (4) If the cooperative agreement is terminated by either NASA or 
the recipient and NASA elects to continue the project with a party 
other than the recipient, the right of the government to use data first 
produced by either NASA or the recipient in the performance of this 
agreement is covered by 1274.905(b). See Sec. 1274.208(l)(6) to assure 
that appropriate language is contained in Sec. 1274.905(b).

Subpart 1274.8--Post-Award/Administrative Requirements


Sec. 1274.801   Adjustments to performance costs.

    In order to accomplish program objectives, there may be occasions 
where additional contributions (cash and/or in-kind contributions) by 
NASA and the recipient beyond the initial agreement may be needed. 
There may also be occasions where actual costs of NASA and the 
recipient may be less than initially agreed. In cases where program 
costs are adjusted, prior to execution of a modification to the 
agreement, mutual agreement between NASA and the recipient shall also 
be reached on the corresponding changes in program requirements such as 
schedule, work statements and milestone payments. Funding for any work 
required beyond the initial funding level of the cooperative agreement, 
shall require submission by the recipient of a detailed proposal to the 
agreement officer. Prior to execution of a modification increasing 
NASA's initial cost share or funding levels, detailed cost analysis 
techniques may be applied, which may include requests for audits 
services and/or application of other pricing support techniques. Any 
adjustments or modifications that result in a change to the performance 
costs of the cooperative agreement shall continue to maintain the share 
ratio requirements (normally 50/50) stated in Sec. 1274.204(b).


Sec. 1274.802  Modifications.

    Modifications to the cooperative agreement in particular, 
modifications that affect funding, milestone payments, program schedule 
and statement of work requirements shall be executed on a bilateral 
basis.


Sec. 1274.803  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date 
of completion of the cooperative agreement, all financial, performance, 
and other reports as required by the terms and conditions of the award. 
Extensions may be approved when requested by the recipient.
    (b) The recipient shall account for any real and personal property 
acquired with Federal funds or received from the Federal Government in 
accordance with Sec. 1274.923.


Sec. 1274.804  Subsequent adjustments and continuing responsibilities.

    The closeout of an award does not affect any of the following:
    (a) Audit requirements in Sec. 1274.932.
    (b) Government Furnished and Contractor Acquired Property 
requirements in Secs. 1274.401 and 1274.402.
    (c) Records retention as required in Sec. 1274.601.

Subpart 1274.9--Other Provisions and Special Conditions


Sec. 1274.901  Other provisions and special conditions.

    Where applicable, the provisions set forth in this subpart are to 
be incorporated in and made a part of all cooperative agreements with 
commercial firms. When included, the provisions at Sec. 1274.902 
through Sec. 1274.909 and the provisions at Sec. 1274.933 through 
Sec. 1274.942 are to be incorporated in full text substantially as 
stated in this regulation. When required, the provisions at 
Sec. 1274.910 through Sec. 1274.932, may be incorporated by reference 
in an enclosure to each cooperative agreement. For inclusion of 
provisions in subcontracts, see Exhibit A of this part, and 
Sec. 1274.925.


Sec. 1274.902  Purpose.

Purpose

July 2002

    The purpose of this cooperative agreement is to conduct a shared 
resource project that will lead to------. This cooperative agreement 
will advance the technology developments and research which have 
been performed on------. The specific objective is to------. This 
work will culminate in------.

[End of Provision]

Sec. 1274.903  Responsibilities.

Responsibilities

July 2002

    (a) This Cooperative Agreement will include substantial NASA 
participation during performance of the effort. NASA and the 
Recipient agree to the following Responsibilities, a statement of 
cooperative interactions to occur during the performance of this 
effort. NASA and the Recipient shall exert all reasonable efforts to 
fulfill the responsibilities stated below.
    (b) NASA Responsibilities. The following NASA responsibilities 
are hereby set forth effective upon the start date, which unless 
stated otherwise, shall be the execution date of this bilateral 
Cooperative Agreement. The end date stated below, may be changed by 
a written bilateral modification:


Responsibilities     Start Date                   End Date
 


    (c) Recipient Responsibilities. The Recipient shall be 
responsible for particular aspects of project performance as set 
forth in the technical proposal dated------, attached hereto (or 
Statement of Work dated------, attached hereto). The following 
responsibilities are hereby set forth effective upon the start date, 
which unless stated otherwise, shall be the execution date of this 
bilateral Cooperative Agreement. The end date stated below, may be 
changed by a written bilateral modification:


Responsibilities     Start Date                   End Date
 


    (d) Since NASA contractors may obtain certain intellectual 
property rights arising from work for NASA in support of this 
agreement, NASA will inform Recipient whenever NASA intends to use 
NASA contractors to perform technical engineering services in 
support of this agreement.
    (e) Unless the Cooperative Agreement is terminated by the 
parties, end date can only be changed by execution of a bilateral 
modification.

[End of Provision]


Sec. 1274.904  Resource sharing requirements.

Resource Sharing Requirements

July 2002

    Where NASA and other Government agencies are involved in the 
cooperative

[[Page 45805]]

agreement, ``NASA'' shall also mean ``Federal Government''.
    (a) NASA and the Recipient will share in providing the resources 
necessary to perform the agreement. NASA funding and non-cash 
contributions (personnel, equipment, facilities, etc.) and the 
dollar value of the Recipient's cash and/or non-cash contribution 
will be on a------ (NASA)-------- (Recipient) basis. Criteria and 
procedures for the allowability and allocability of cash and non-
cash contributions shall be governed by FAR Parts 30 and 31, and NFS 
Parts 1830 and 1831.
    (b) The Recipient's share shall not be charged to the Government 
under this Agreement or under any other contract, grant, or 
cooperative agreement, except to the extent that the Recipient's 
contribution may be allowable IR&D costs pursuant to FAR 31.205-
18(e).

[End of Provision]


Sec. 1274.905  Rights in data.

    As noted in Sec. 1274.208(l)(1), the following provision assumes a 
substantially equal cost sharing relationship where collaborative 
research, experimental, developmental, engineering, demonstration, or 
design activities are to be carried out, such that it is likely that 
``proprietary'' information will be developed and/or exchanged under 
the agreement. If cost sharing is unequal or no extensive research, 
experimental, developmental, engineering, demonstration, or design 
activities are likely, a different set of provisions may be 
appropriate. The Agreement Officer is expected to complete and/or 
select the appropriate bracketed language under the provision for those 
paragraphs dealing with data first produced under the cooperative 
agreement. In addition, the Agreement Officer may, in consultation with 
the Center's Patent or Intellectual Property Counsel, tailor the 
provision to fit the particular circumstances of the program and/or the 
recipient's need to protect specific proprietary information.

Rights in Data

July 2002

    (a) Definitions.
    ``Data,'' means recorded information, regardless of form, the 
media on which it may be recorded, or the method of recording. The 
term includes, but is not limited to, data of a scientific or 
technical nature, computer software and documentation thereof, and 
data comprising commercial and financial information.
    (b) Data categories.
    (1) General. Data exchanged between NASA and Recipient under 
this cooperative agreement will be exchanged without restriction as 
to its disclosure, use or duplication except as otherwise provided 
below in this provision.
    (2) Background Data. In the event it is necessary for Recipient 
to furnish NASA with Data which existed prior to, or produced 
outside of, this cooperative agreement, and such Data embodies trade 
secrets or comprises commercial or financial information which is 
privileged or confidential, and such Data is so identified with a 
suitable notice or legend, the Data will be maintained in confidence 
and disclosed and used by NASA and its contractors (under suitable 
protective conditions) only for the purpose of carrying out NASA's 
responsibilities under this cooperative agreement. Upon completion 
of activities under this agreement, such Data will be disposed of as 
requested by Recipient.
    (3) Data first produced by Recipient. In the event Data first 
produced by Recipient in carrying out Recipient's responsibilities 
under this cooperative agreement is furnished to NASA, and Recipient 
considers such Data to embody trade secrets or to comprise 
commercial or financial information which is privileged or 
confidential, and such Data is so identified with a suitable notice 
or legend, the Data will be maintained in confidence for a period of 
[insert ``two'' to ``five''] years after development of the data and 
be disclosed and used by [``NASA'' or ``the Government,'' as 
appropriate] and its contractors (under suitable protective 
conditions) only for [insert appropriate purpose; for example: 
experimental; evaluation; research; development, etc.] by or on 
behalf of [``NASA'' or ``the Government'' as appropriate] during 
that period. In order that [``NASA'' or the ``Government'', as 
appropriate] and its contractors may exercise the right to use such 
Data for the purposes designated above, NASA, upon request to the 
Recipient, shall have the right to review and request delivery of 
Data first produced by Recipient. Delivery shall be made within a 
time period specified by NASA.
    (4) Data first produced by NASA. As to data first produced by 
NASA in carrying out NASA's responsibilities under this cooperative 
agreement and which Data would embody trade secrets or would 
comprise commercial or financial information that is privileged or 
confidential if it had been obtained from the Recipient, will be 
marked with an appropriate legend and maintained in confidence for 
an agreed to period of up to ( ) years [INSERT A PERIOD UP TO 5 
YEARS] after development of the information, with the express 
understanding that during the aforesaid period such Data may be 
disclosed and used (under suitable protective conditions) by or on 
behalf of the Government for Government purposes only, and 
thereafter for any purpose whatsoever without restriction on 
disclosure and use. Recipient agrees not to disclose such Data to 
any third party without NASA's written approval until the 
aforementioned restricted period expires. Use of this data under a 
separate cooperative agreement or contract issued to a party other 
than the Recipient for the purpose of continuing the project in the 
event this cooperative agreement is terminated by either party shall 
constitute a government purpose.
    (5) Copyright. (i) In the event Data is exchanged with a notice 
indicating the Data is protected under copyright as a published 
copyrighted work, or are deposited for registration as a published 
work in the U.S. Copyright Office, the following paid-up licenses 
shall apply:
    (A) If it is indicated on the Data that the Data existed prior 
to, or was produced outside of, this agreement, the receiving party 
and others acting on its behalf, may reproduce, distribute, and 
prepare derivative works for the purpose of carrying out the 
receiving party's responsibilities under this cooperative agreement; 
and
    (B) If the furnished Data does not contain the indication of 
paragraph (b)(5)(i)(A) of this section, it will be assumed that the 
Data was first produced under this agreement, and the receiving 
party and others acting on its behalf, shall be granted a paid up, 
nonexclusive, irrevocable, world-wide license for all such Data to 
reproduce, distribute copies to the public, prepare derivative 
works, distribute copies to the public, and perform publicly and 
display publicly, by or on behalf of the receiving party. For Data 
that is computer software, the right to distribute shall be limited 
to potential users in the United States.
    (ii) When claim is made to copyright, the Recipient shall affix 
the applicable copyright notice of 17 U.S.C. 401 or 402 and 
acknowledgment of Government sponsorship to the data when and if the 
data are delivered to the Government.
    (6) Oral and visual information. If information which the 
Recipient considers to embody trade secrets or to comprise 
commercial or financial information which is privileged or 
confidential is disclosed orally or visually to NASA, such 
information must be reduced to tangible, recorded form (i.e., 
converted into Data as defined herein), identified and marked with a 
suitable notice or legend, and furnished to NASA within 10 days 
after such oral or visual disclosure, or NASA shall have no duty to 
limit or restrict, and shall not incur any liability for, any 
disclosure and use of such information.
    (7) Disclaimer of liability. Notwithstanding the above, NASA 
shall not be restricted in, nor incur any liability for, the 
disclosure and use of:
    (i) Data not identified with a suitable notice or legend as set 
in paragraph (b)(2) of this section; nor
    (ii) Information contained in any Data for which disclosure and 
use is restricted under paragraphs (b)(2) or (3) of this section, if 
such information is or becomes generally known without breach of the 
above, is known to or is generated by NASA independently of carrying 
out responsibilities under this agreement, is rightfully received 
from a third party without restriction, or is included in data which 
Participant has, or is required to furnish to the U.S. Government 
without restriction on disclosure and use.
    (c) Marking of data. Any Data delivered under this cooperative 
agreement, by NASA or the Recipient, shall be marked with a suitable 
notice or legend indicating the data was generated under this 
cooperative agreement.
    (d) Lower tier agreements. The Recipient shall include this 
provision, suitably modified to identify the parties, in all

[[Page 45806]]

subcontracts or lower tier agreements, regardless of tier, for 
experimental, developmental, or research work.

[End of Provision]


Sec. 1274.906  Designation of New Technology Representative and Patent 
Representative.

Designation of New Technology Representative and Patent Representative

July 2002

    (a) For purposes of administration of the clause of this 
cooperative agreement entitled ``PATENT RIGHTS--RETENTION BY THE 
CONTRACTOR (LARGE BUSINESS)'' or ``PATENT RIGHTS--RETENTION BY THE 
CONTRACTOR (SMALL BUSINESS)'' the following named representatives 
are hereby designated by the Agreement Officer to administer such 
clause:

------------------------------------------------------------------------
         Title                Office code                Address
------------------------------------------------------------------------
New Technology
Representative
Patent
Representative
------------------------------------------------------------------------

    (b) Reports of reportable items, and disclosure of subject 
inventions, interim reports, final reports, utilization reports, and 
other reports required by the clause, as well as any correspondence 
with respect to such matters, should be directed to the New 
Technology Representative unless transmitted in response to 
correspondence or request from the Patent Representative. Inquiries 
or requests regarding disposition of rights, election of rights, or 
related matters should be directed to the Patent Representative. 
This clause shall be included in any subcontract hereunder requiring 
``PATENT RIGHTS--RETENTION BY THE CONTRACTOR (LARGE BUSINESS)'' 
clause or ``PATENT RIGHTS--RETENTION BY THE CONTRACTOR (SMALL 
BUSINESS)'' clause, unless otherwise authorized or directed by the 
Agreement Officer. The respective responsibilities and authorities 
of the above-named representatives are set forth in NFS 1827.305-
370.

[End of Provision]


Sec. 1274.907  Disputes.

Disputes

July 2002
    (a) In the event that a disagreement arises, representatives of the 
parties shall enter into discussions in good faith and in a timely and 
cooperative manner to seek resolution. If these discussions do not 
result in a satisfactory solution, the aggrieved party may seek a 
decision from the Dispute Resolution Official under paragraph (b) of 
this provision. This request must be presented no more than (3) three 
months after the events giving rise to the disagreement have occurred.
    (b) The aggrieved party may submit a written request for a decision 
to the Center Ombudsman, who is designated as the Dispute Resolution 
Official. The written request shall include a statement of the relevant 
facts, a discussion of the unresolved issues, and a specification of 
the clarification, relief, or remedy sought. A copy of this written 
request and all accompanying materials must be provided to the other 
party at the same time. The other party shall submit a written position 
on the matters in dispute within thirty (30) calendar days after 
receiving this notification that a decision has been requested. The 
Dispute Resolution Official shall conduct a review of the matters in 
dispute and render a decision in writing within thirty (30) calendar 
days of receipt of such written position.
[End of Provision]


Sec. 1274.908  Milestone payments.

Milestone Payments

July 2002

    (a) By submission of the first invoice, the Recipient is 
certifying that it has an established accounting system which 
complies with generally accepted accounting principles, with the 
requirements of this agreement, and that appropriate arrangements 
have been made for receiving, distributing, and accounting for 
Federal funds received under this agreement.
    (b) Payments will be made upon the following milestones: [The 
schedule for payments may be based upon the Recipient's completion 
of specific tasks, submission of specified reports, or whatever is 
appropriate.]


Date                Payment                         Amount
                    Milestone
 


    (c) Upon submission by the recipient of invoices in accordance 
with the provisions of the agreement and upon certification by NASA 
of completion of the payable milestone, the Agreement Officer shall 
authorize payment. Payment shall be made within 30 calendar days 
after receipt of proper invoice. Payment shall be considered as 
being made on the date of electronic funds transfer. A proper 
invoice must include the following:
    (i) Name and address of the recipient.
    (ii) Invoice date (The Recipient is encouraged to date invoices 
as close as possible to the date of the mailing or transmission).
    (iii) Cooperative agreement number.
    (iv) Description, milestone, and extended price of efforts/tasks 
performed.
    (v) Payment terms.
    (vi) Name and address of Recipient official to whom payment is 
to be sent. (Must be the same as that in the cooperative agreement 
or in a proper notice of assignment).
    (vii) Name (where practicable), title, phone number, and mailing 
address of the person to be notified in the event of a defective 
invoice.
    (viii) Any other information or documentation required by the 
cooperative agreement.
    (ix) Taxpayer identification number (TIN).
    (x) While not required, the recipient is strongly encouraged to 
assign an identification number to each invoice.
    (d) A payment milestone may be successfully completed in advance 
of the date appearing in paragraph (b) of this section. However, 
payment shall not be made prior to that date without the written 
consent of the Agreement Officer.
    (e) The recipient is not entitled to partial payment for partial 
completion of a payment milestone.
    (f) Unless approved by the Agreement Officer, all preceding 
payment milestones must be completed before payment can be made for 
the next payment milestone.
    (g) (i) If the Recipient is authorized to submit invoices 
directly to the NASA paying office, the original invoice should be 
submitted to:
    [Insert the mailing address for submission of cost vouchers]
    (ii) If the Recipient is not authorized to submit invoices 
directly to the NASA paying office, the original invoice should be 
submitted to the Agreement Officer for certification.
    (iii) Copies of the recipient's invoice should be submitted to 
the following offices:
    (A) Copy 1--NASA Agreement Officer.
    (B) Copy 2--Auditor.
    (C) Copy 3--Contract administration office.
    (D) Copy 4--Project management office.
    (E) Copy 5--Other recipients as designated by the Agreement 
Officer.

[End of Provision]


Sec. 1274.909  Term of agreement.

Term of Agreement

July 2002

    (a) The agreement commences on the effective date indicated on 
the attached cover sheet and continues until the expiration date 
indicated on the attached cover sheet unless terminated by either 
party. If all resources are expended prior to the expiration date of 
the agreement, the parties have no obligation to continue 
performance and may elect to cease at that point. The parties may 
extend the expiration date if additional time is required to 
complete the milestones at no increase in Government resources. 
Requests for approval for no-cost extensions must be forwarded to 
the NASA Agreement Officer no later than ten days prior to the 
expiration of the award to be considered.
    (b) Provisions of this Agreement, which, by their express terms 
or by necessary implication, apply for periods of time other than 
that specified as the agreement term, shall be given effect, 
notwithstanding expiration of the term of the agreement.

[End of Provision]


Sec. 1274.910  Authority.

Authority

July 2002

    This is a cooperative agreement as defined in 31 U.S.C. 6305 
(the Chiles Act) and is

[[Page 45807]]

entered into pursuant to the authority of 42 U.S.C. 2451, et seq. 
(the Space Act).

[End of Provision]


Sec. 1274.911  Patent rights.

Patent Rights

July 2002

    (a) Definitions. (1) Administrator means the Administrator or 
Deputy Administrator of NASA.
    (2) Invention means any invention or discovery which is or may 
be patentable or otherwise protectable under Title 35 of the United 
States Code.
    (3) Made when used in relation to any invention means the 
conception or first actual reduction to practice such invention.
    (4) Nonprofit organization means a domestic university or other 
institution of higher education or an organization of the type 
described in Section 501(c)(3) of the Internal Revenue Code of 1954 
(26 U.S.C. 501(c)) and exempt from taxation under Section 501(a) of 
the Internal Revenue Code (26 U.S.C. 501(a)), or any domestic 
nonprofit scientific or educational organization qualified under a 
State nonprofit organization statute.
    (5) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are, to the extent permitted 
by law or Government regulations, available to the public on 
reasonable terms.
    (6) Recipient means:
    (i) The signatory Recipient party or parties or;
    (ii) The Consortium, where a Consortium has been formed for 
carrying out Recipient responsibilities under this agreement.
    (7) Small Business Firm means a domestic small business concern 
as defined at 15 U.S.C. 632 and implementing regulations of the 
Administrator of the Small Business Administration. (For the purpose 
of this definition, the size standard contained in 13 CFR 121.901 
through 121.911 will be used.)
    (8) Subject Invention means any invention of a Recipient and/or 
Government employee conceived or first actually reduced to practice 
in the performance of work under this Agreement.
    (9) Manufactured substantially in the United States means the 
product must have over 50 percent of its components manufactured in 
the United States. This requirement is met if the cost to the 
Recipient of the components mined, produced, or manufactured in the 
United States exceeds 50 percent of the cost of all components 
required to make the product. (In making this determination only the 
product and its components shall be considered.) The cost of each 
component includes transportation costs to the place of 
incorporation into the product and any applicable duty (whether or 
not a duty-free entry certificate is issued). Components of foreign 
origin of the same class or kind for which determinations have been 
made in accordance with FAR 25.102(a)(3) and (4) are treated as 
domestic. Scrap generated, collected, and prepared for processing in 
the United States is considered domestic.
    (b) Allocation of principal rights.--(1) Recipient Inventions. 
For other than Small Business Firm or Nonprofit organization 
Recipients, the ``PATENT RIGHTS--RETENTION BY RECIPIENT (LARGE 
BUSINESS)'' provision applies. For Small Business Firm and Nonprofit 
organization Recipients, the ``PATENT RIGHTS--RETENTION BY RECIPIENT 
(SMALL BUSINESS)'' provision applies.
    (2) NASA Inventions. NASA will use reasonable efforts to report 
inventions made by NASA employees as a consequence of, or which bear 
a direct relation to, the performance of specified NASA activities 
under this cooperative agreement and, upon timely request, NASA will 
use its best efforts to grant the Recipient or designated Consortium 
Member (if applicable) the first option to acquire either an 
exclusive or partially exclusive, revocable, royalty-bearing 
license, on terms to be subsequently negotiated, for any patent 
applications and patents covering such inventions, and subject to 
the license reserved in paragraph (b)(5)(i) of this section. Upon 
application in compliance with 37 CFR Part 404--Licensing of 
Government Owned Inventions, the Recipient or each Consortium Member 
(if applicable), shall be granted a revocable, nonexclusive, 
royalty-free license in each patent application filed in any country 
on a subject invention and any resulting patent in which the 
Government acquires title. Each nonexclusive license may extend to 
subsidiaries and affiliates, if any, within the corporate structure 
of the licensee and includes the right to grant sublicenses of the 
same scope to the extent the licensee was legally obligated to do so 
at the time the cooperative agreement was signed.
    (3) NASA Contractor Inventions. In the event NASA contractors 
are tasked to perform work in support of specified NASA activities 
under this cooperative agreement and inventions are made by 
contractor employees, the recipient will normally retain title to 
its employee inventions in accordance with 35 U.S.C. 202, 14 CFR 
Part 1245, and E.O. 12591. In the event the recipient decides not to 
pursue right to title in any such invention and NASA obtains title 
to such inventions, NASA will use reasonable efforts to report such 
inventions and, upon timely request, NASA will use its best efforts 
to grant the Recipient or designated Consortium Member (if 
applicable) the first option to acquire either an exclusive or 
partially exclusive, revocable, royalty-bearing license, upon terms 
to be subsequently negotiated, for any patent applications and 
patents covering such inventions, and subject to the license 
reserved in paragraph (b)(5)(ii) of this section. Upon application 
in compliance with 37 CFR Part 404--Licensing of Government Owned 
Inventions, the Recipient or each Consortium Member (if applicable), 
shall be granted a revocable, nonexclusive, royalty-free license in 
each patent application filed in any country on a subject invention 
and any resulting patent in which the Government acquires title. 
Each nonexclusive license may extend to subsidiaries and affiliates, 
if any, within the corporate structure of the licensee and includes 
the right to grant sublicenses of the same scope to the extent the 
licensee was legally obligated to do so at the time the cooperative 
agreement was signed.
    (4) Joint NASA and Recipient Inventions. NASA and Recipient 
agree to use reasonable efforts to identify and report to each other 
any inventions made jointly between NASA employees (or employees of 
NASA contractors) and employees of Recipient.
    (i) For other than small business firms and nonprofit 
organizations the Administrator may agree that the United States 
will refrain from exercising its undivided interest in a manner 
inconsistent with Recipient's commercial interest and to cooperate 
with Recipient in obtaining patent protection on its undivided 
interest on any waived inventions subject, however, to the condition 
that Recipient makes its best efforts to bring the invention to the 
point of practical application at the earliest practicable time. In 
the event that the Administrator determines that such efforts are 
not undertaken, the Administrator may void NASA's agreement to 
refrain from exercising its undivided interest and grant licenses 
for the practice of the invention so as to further its development. 
In the event that the Administrator decides to void NASA's agreement 
to refrain from exercising its undivided interest and grant licenses 
for this reason, notice shall be given to the Inventions and 
Contributions Board as to why such action should not be taken. 
Either alternative will be subject to the applicable license or 
licenses reserved in paragraph (b)(5) of this section.
    (ii) For small business firms and nonprofit organization, NASA 
may assign or transfer whatever rights it may acquire in a subject 
invention from its employee to the Recipient as authorized by 35 
U.S.C. 202(e).
    (5) Minimum rights reserved by the Government. Any license or 
assignment granted Recipient pursuant to paragraphs (b)(2), (b)(3), 
or (b)(4) of this section will be subject to the reservation of the 
following licenses:
    (i) As to inventions made solely or jointly by NASA employees, 
the irrevocable, royalty-free right of the Government of the United 
States to practice and have practiced the invention by or on behalf 
of the United States; and
    (ii) As to inventions made solely by, or jointly with, employees 
of NASA contractors, the rights in the Government of the United 
States as set forth in paragraph (b)(5)(i) of this section, as well 
as the revocable, nonexclusive, royalty-free license in the 
contractor as set forth in 14 CFR 1245.108.
    (6) Preference for United States manufacture. The Recipient 
agrees that any products embodying subject inventions or produced 
through the use of subject inventions shall be manufactured 
substantially in the United States. However, in individual cases, 
the requirement to manufacture substantially in the United States 
may be waived by the Assistant Administrator for Procurement (Code 
HS) with the concurrence of the Associate General Counsel for 
Intellectual Property

[[Page 45808]]

upon a showing by the Recipient that under the circumstances 
domestic manufacture is not commercially feasible.
    (7) Work performed by the Recipient under this cooperative 
agreement is considered undertaken to carry out a public purpose of 
support and/or stimulation rather than for acquiring property or 
services for the direct benefit or use of the Government. 
Accordingly, such work by the Recipient is not considered ``by or 
for the United States'' and the Government assumes no liability for 
infringement by the Recipient under 28 U.S.C. 1498.

[End of Provision]


Sec. 1274.912  Patent rights--retention by the recipient (large 
business).

Patent Rights--Retention by the Recipient (Large Business)

July 2002

    (a) Definitions.
    (1) Administrator, as used in this clause, means the 
Administrator of the National Aeronautics and Space Administration 
(NASA) or duly authorized representative.
    (2) Invention, as used in this clause, means any invention or 
discovery which is or may be patentable or otherwise protectable 
under title 35 of the U.S.C.
    (3) Made, as used in relation to any invention, means the 
conception or first actual reduction to practice such invention.
    (4) Nonprofit organization, as used in this clause, means a 
domestic university or other institution of higher education or an 
organization of the type described in section 501(c)(3) of the 
Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from 
taxation under section 501(a) of the Internal Revenue Code (26 
U.S.C. 501(a)), or any domestic nonprofit scientific or educational 
organization qualified under a State nonprofit organization statute.
    (5) Practical application, as used in this clause, means to 
manufacture, in the case of a composition or product; to practice, 
in the case of a process or method; or to operate, in case of a 
machine or system; and, in each, case, under such conditions as to 
establish that the invention is being utilized and that its benefits 
are, to the extent permitted by law or Government regulations, 
available to the public on reasonable terms.
    (6) Reportable item, as used in this clause, means any 
invention, discovery, improvement, or innovation of the Recipient, 
whether or not the same is or may be patentable or otherwise 
protectable under Title 35 of the United States Code, conceived or 
first actually reduced to practice in the performance of any work 
under this contract or in the performance of any work that is 
reimbursable under any clause in this contract providing for 
reimbursement of costs incurred prior to the effective date of this 
contract.
    (7) Small business firm, as used in this clause, means a 
domestic small business concern as defined at 15 U.S.C. 632 and 
implementing regulations of the Administrator of the Small Business 
Administration. (For the purpose of this definition, the size 
standard contained in 13 CFR 121.901 through 121.911 will be used.)
    (8) Subject invention, as used in this clause, means any 
reportable item which is or may be patentable or otherwise 
protectable under Title 35 of the United States Code, or any novel 
variety of plant that is or may be protectable under the Plant 
Variety Protection Act (7 U.S.C. 2321, et seq).
    (9) Manufactured substantially in the United States means the 
product must have over 50 percent of its components manufactured in 
the United States. This requirement is met if the cost to the 
Recipient of the components mined, produced, or manufactured in the 
United States exceeds 50 percent of the cost of all components 
required to make the product. (In making this determination only the 
product and its components shall be considered.) The cost of each 
component includes transportation costs to the place of 
incorporation into the product and any applicable duty (whether or 
not a duty-free entry certificate is issued). Components of foreign 
origin of the same class or kind for which determinations have been 
made in accordance with Federal Acquisition Regulation 25.102(a)(3) 
and (4) are treated as domestic. Scrap generated, collected, and 
prepared for processing in the United States is considered domestic.
    (b) Allocation of principal rights--(1) Presumption of title.
    (i) Any reportable item that the Administrator considers to be a 
subject invention shall be presumed to have been made in the manner 
specified in paragraph (1) or (2) of section 305(a) of the National 
Aeronautics and Space Act of 1958 (42 U.S.C. 2457(a)) (hereinafter 
called ``the Act''), and the above presumption shall be conclusive 
unless at the time of reporting the reportable item the Recipient 
submits to the Agreement Officer a written statement, containing 
supporting details, demonstrating that the reportable item was not 
made in the manner specified in paragraph (1) or (2) of section 
305(a) of the Act.
    (ii) Regardless of whether title to a given subject invention 
would otherwise be subject to an advance waiver or is the subject of 
a petition for waiver, the Recipient may nevertheless file the 
statement described in paragraph (b)(1)(i) of this section. The 
Administrator will review the information furnished by the Recipient 
in any such statement and any other available information relating 
to the circumstances surrounding the making of the subject invention 
and will notify the Recipient whether the Administrator has 
determined that the subject invention was made in the manner 
specified in paragraph (1) or (2) of section 305(a) of the Act.
    (2) Property rights in subject inventions. Each subject 
invention for which the presumption of paragraph (b)(1)(i) of this 
section is conclusive or for which there has been a determination 
that it was made in the manner specified in paragraph (1) or (2) of 
section 305(a) of the Act shall be the exclusive property of the 
United States as represented by NASA unless the Administrator waives 
all or any part of the rights of the United States, as provided in 
paragraph (b)(3) of this section.
    (3) Waiver of rights. (i) Section 305(f) of the Act provides for 
the promulgation of regulations by which the Administrator may waive 
the rights of the United States with respect to any invention or 
class of inventions made or that may be made under conditions 
specified in paragraph (1) or (2) of section 305(a) of the Act. The 
promulgated NASA Patent Waiver Regulations, 14 CFR part 1245, 
subpart 1, have adopted the Presidential memorandum on Government 
Patent Policy of February 18, 1983, as a guide in acting on 
petitions (requests) for such waiver of rights.
    (ii) As provided in 14 CFR part 1245, subpart 1, Recipients may 
petition, either prior to execution of the Agreement or within 30 
days after execution of the Agreement, for advance waiver of rights 
to any or all of the inventions that may be made under an Agreement. 
If such a petition is not submitted, or if after submission it is 
denied, the Recipient (or an employee inventor of the Recipient may 
petition for waiver of rights to an identified subject invention 
within eight months of first disclosure of invention in accordance 
with paragraph (e)(2) of this section or within such longer period 
as may be authorized in accordance with 14 CFR 1245.105. Further 
procedures are provided in the REQUESTS FOR WAIVER OF RIGHTS--LARGE 
BUSINESS provision.
    (c) Minimum rights reserved by the Government. (1) With respect 
to each Recipient subject invention for which a waiver of rights is 
applicable in accordance with 14 CFR part 1245, subpart 1, the 
Government reserves--
    (i) An irrevocable, royalty-free license for the practice of 
such invention throughout the world by or on behalf of the United 
States or any foreign government in accordance with any treaty or 
agreement with the United States; and
    (ii) Such other rights as stated in 14 CFR 1245.107.
    (2) Nothing contained in this paragraph shall be considered to 
grant to the Government any rights with respect to any invention 
other than a subject invention.
    (d) Minimum rights to the Recipient. (1) The Recipient is hereby 
granted a revocable, nonexclusive, royalty-free license in each 
patent application filed in any country on a Recipient subject 
invention and any resulting patent in which the Government acquires 
title, unless the Recipient fails to disclose the subject invention 
within the times specified in paragraph (e)(2) of this section. The 
Recipient's license extends to its domestic subsidiaries and 
affiliates, if any, within the corporate structure of which the 
Recipient is a party and includes the right to grant sublicenses of 
the same scope to the extent the Recipient was legally obligated to 
do so at the time the contract was awarded. The license is 
transferable only with the approval of the Administrator except when 
transferred to the successor of that part of the Recipient's 
business to which the invention pertains.
    (2) The Recipient's domestic license may be revoked or modified 
by the Administrator to the extent necessary to achieve expeditious 
practical application of the subject invention pursuant to an 
application for an exclusive license submitted in accordance with 14 
CFR part 1245, subpart 3, Licensing of NASA Inventions. This

[[Page 45809]]

license will not be revoked in that field of use or the geographical 
areas in which the Recipient has achieved practical application and 
continues to make the benefits of the invention reasonably 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of the Administrator to the 
extent the Recipient, its licensees, or its domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
foreign country.
    (3) Before revocation or modification of the license, the 
Recipient will be provided a written notice of the Administrator's 
intention to revoke or modify the license, and the Recipient will be 
allowed 30 days (or such other time as may be authorized by the 
Administrator for good cause shown by the Recipient) after the 
notice to show cause why the license should not be revoked or 
modified. The Recipient has the right to appeal, in accordance with 
14 CFR 1245.112, any decision concerning the revocation or 
modification of its license.
    (e) Invention identification, disclosures, and reports. (1) The 
Recipient shall establish and maintain active and effective 
procedures to assure that reportable items are promptly identified 
and disclosed to Recipient personnel responsible for the 
administration of this clause within six months of conception and/or 
first actual reduction to practice, whichever occurs first in the 
performance of work under this contract. These procedures shall 
include the maintenance of laboratory notebooks or equivalent 
records and other records as are reasonably necessary to document 
the conception and/or the first actual reduction to practice of the 
reportable items, and records that show that the procedures for 
identifying and disclosing reportable items are followed. Upon 
request, the Recipient shall furnish the Agreement Officer a 
description of such procedures for evaluation and for determination 
as to their effectiveness.
    (2) The Recipient will disclose each reportable item to the 
Agreement Officer within two months after the inventor discloses it 
in writing to Recipient personnel responsible for the administration 
of this clause or, if earlier, within six months after the Recipient 
becomes aware that a reportable item has been made, but in any event 
for subject inventions before any on sale, public use, or 
publication of such invention known to the Recipient. The disclosure 
to the agency shall be in the form of a written report and shall 
identify the Agreement under which the reportable item was made and 
the inventor(s) or innovator(s). It shall be sufficiently complete 
in technical detail to convey a clear understanding, to the extent 
known at the time of the disclosure, of the nature, purpose, 
operation, and physical, chemical, biological, or electrical 
characteristics of the reportable item. The disclosure shall also 
identify any publication, on sale, or public use of any subject 
invention and whether a manuscript describing such invention has 
been submitted for publication and, if so, whether it has been 
accepted for publication at the time of disclosure. In addition, 
after disclosure to the agency, the Recipient will promptly notify 
the agency of the acceptance of any manuscript describing a subject 
invention for publication or of any on sale or public use planned by 
the Recipient for such invention.
    (3) The Recipient shall furnish the Agreement Officer the 
following:
    (i) Interim reports every 12 months (or such longer period as 
may be specified by the Agreement Officer) from the date of the 
Agreement, listing reportable items during that period, and 
certifying that all reportable items have been disclosed (or that 
there are no such inventions) and that the procedures required by 
paragraph (e)(1) of this section have been followed.
    (ii) A final report, within three months after completion of the 
work, listing all reportable items or certifying that there were no 
such reportable items, and listing all subcontracts at any tier 
containing a patent rights clause or certifying that there were no 
such subcontracts.
    (4) The Recipient agrees, upon written request of the Agreement 
Officer, to furnish additional technical and other information 
available to the Recipient as is necessary for the preparation of a 
patent application on a subject invention and for the prosecution of 
the patent application, and to execute all papers necessary to file 
patent applications on subject inventions and to establish the 
Government's rights in the subject inventions.
    (5) The Recipient agrees, subject to 48 CFR (FAR) 27.302(j), 
that the Government may duplicate and disclose subject invention 
disclosures and all other reports and papers furnished or required 
to be furnished pursuant to this clause.
    (f) Examination of records relating to inventions. (1) The 
Agreement Officer or any authorized representative shall, pursuant 
to the Retention and Examination of Records provision of this 
cooperative agreement, have the right to examine any books 
(including laboratory notebooks), records, and documents of the 
Recipient relating to the conception or first actual reduction to 
practice of inventions in the same field of technology as the work 
under this contract to determine whether--
    (i) Any such inventions are subject inventions;
    (ii) The Recipient has established and maintained the procedures 
required by paragraph (e)(1) of this section; and
    (iii) The Recipient and its inventors have complied with the 
procedures.
    (2) If the Agreement Officer learns of an unreported Recipient 
invention that the Agreement Officer believes may be a subject 
inventions, the Recipient may be required to disclose the invention 
to the agency for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be 
subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (g) Subcontracts. (1) Unless otherwise authorized or directed by 
the Agreement Officer, the Recipient shall--
    (i) Include this Clause Patent Rights--Retention by the 
Recipient--(Large Business) (suitably modified to identify the 
parties) in any subcontract hereunder (regardless of tier) with 
other than a small business firm or nonprofit organization for the 
performance of experimental, developmental, or research work; and
    (ii) Include the clause Patent Right--Retention by the 
Recipient--(Small Business) (suitably modified to identify the 
parties) in any subcontract hereunder (regardless of tier) with a 
small business firm or nonprofit organization for the performance of 
experimental, developmental, or research work.
    (2) In the event of a refusal by a prospective subcontractor to 
accept such a clause the Recipient--
    (i) Shall promptly submit a written notice to the Agreement 
Officer setting forth the subcontractor's reasons for such refusal 
and other pertinent information that may expedite disposition of the 
matter; and
    (ii) Shall not proceed with such subcontract without the written 
authorization of the Agreement Officer.
    (3) The Recipient shall promptly notify the Agreement Officer in 
writing upon the award of any subcontract at any tier containing a 
patent rights clause by identifying the subcontractor, the 
applicable patent rights clause, the work to be performed under the 
subcontract, and the dates of award and estimated completion. Upon 
request of the Agreement Officer, the Recipient shall furnish a copy 
of such subcontract, and, no more frequently than annually, a 
listing of the subcontracts that have been awarded.
    (4) The subcontractor will retain all rights provided for the 
Recipient in the clause of paragraph (g)(1)(i) or (1)(ii) of this 
section, whichever is included in the subcontract, and the Recipient 
will not, as part of the consideration for awarding the subcontract, 
obtain rights in the subcontractor's subject inventions.
    (5) Notwithstanding paragraph (g)(4) of this section, and in 
recognition of the contractor's substantial contribution of funds, 
facilities and/or equipment to the work performed under this 
cooperative agreement, the Recipient is authorized, subject to the 
rights of NASA set forth elsewhere in this clause, to:
    (i) Acquire by negotiation and mutual agreement rights to a 
subcontractor's subject inventions as the Recipient may deem 
necessary to obtaining and maintaining of such private support; and
    (ii) Request, in the event of inability to reach agreement 
pursuant to paragraph (g)(5)(i) of this section, that NASA invoke 
exceptional circumstances as necessary pursuant to 37 CFR 
401.3(a)(2) if the prospective subcontractor is a small business 
firm or organization, or for all other organizations, request that 
such rights for the Recipient be included as an additional 
reservation in a waiver granted pursuant to 14 CFR part 1245, 
subpart 1. Any such requests to NASA should be prepared in 
consideration of the following guidance and submitted to the 
contract officer.
    (A) Exceptional circumstances. A request that NASA make an 
``exceptional circumstances'' determination pursuant to 37 CFR 
401.3(a)(2) must state the scope of rights sought by the Recipient 
pursuant to such determination; identify the proposed

[[Page 45810]]

subcontractor and the work to be performed under the subcontract; 
and state the need for the determination.
    (B) Waiver petition. The subcontractor should be advised that 
unless it requests a waiver of title pursuant to the NASA Patent 
Waiver Regulations (14 CFR part 1245, subpart 1), NASA will acquire 
title to the subject invention (42 U.S.C. 2457, as amended, sec. 
305). If a waiver is not requested or granted, the Recipient may 
request a license from NASA (see licensing of NASA inventions, 14 
CFR part 1245, subpart 3). A subcontractor requesting a waiver must 
follow the procedures set forth in the attached clause REQUESTS FOR 
WAIVER OF RIGHTS--LARGE BUSINESS.
    (h) Preference for United States manufacture. The Recipient 
agrees that any products embodying subject inventions or produced 
through the use of subject inventions shall be manufactured 
substantially in the United States. However, in individual cases, 
the requirement to manufacture substantially in the United States 
may be waived by the Assistant Administrator for Procurement (Code 
HS) with the concurrence of the Associate General Counsel for 
Intellectual Property upon a showing by the Recipient that under the 
circumstances domestic manufacture is not commercially feasible.
    (i) March-in rights. The Recipient agrees that, with respect to 
any subject invention in which it has acquired title, NASA has the 
right in accordance with the procedures in 37 CFR 401.6 and any 
supplemental regulations of the agency to require the Recipient, an 
assignee or exclusive licensee of a subject invention to grant a 
nonexclusive, partially exclusive, or exclusive license in any field 
of use to a responsible applicant or applicants, upon terms that are 
reasonable under the circumstances, and if the Subcontractor, 
assignee, or exclusive licensee refuses such a request NASA has the 
right to grant such a license itself if the Federal agency 
determines that--
    (1) Such action is necessary because the Recipient or assignee 
has not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Recipient, assignee, or 
their licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Recipient, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.

[End of Provision]


Sec. 1274.913  Patent rights--retention by the recipient (small 
business).

Patent Rights--Retention by the Recipient (Small Business)

July 2002

    (a) Definitions.
    (1) Invention, as used in this clause, means any invention or 
discovery which is or may be patentable or otherwise protectable 
under title 35 of the U.S.C.
    (2) Made, as used in this clause, when used in relation to any 
invention means the conception or first actual reduction to practice 
such invention.
    (3) Nonprofit organization, as used in this clause, means a 
university or other institution of higher education or an 
organization of the type described in section 501(c)(3) of the 
Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from 
taxation under section 501(a) of the Internal Revenue Code (26 
U.S.C. 501(a)) or any nonprofit scientific or educational 
organization qualified under a state nonprofit organization statute.
    (4) Practical application, as used in this clause, means to 
manufacture, in the case of a composition of product; to practice, 
in the case of a process or method, or to operate, in the case of a 
machine or system; and, in each case, under such conditions as to 
establish that the invention is being utilized and that its benefits 
are, to the extent permitted by law or Government regulations, 
available to the public on reasonable terms.
    (5) Small business firm, as used in this clause, means a small 
business concern as defined at Section 2 of Pub. L. 85-536 (15 
U.S.C. 632) and implementing regulations of the Administrator of the 
Small Business Administration. For the purpose of this clause, the 
size standards for small business concerns involved in Government 
procurement and subcontracting at 13 CFR 121.901 through 121.911 
will be used.
    (6) Subject invention, as used in this clause, means any 
invention of the Subcontractor conceived or first actually reduced 
to practice in the performance of work under this Agreement.
    (7) Manufactured substantially in the United States means the 
product must have over 50 percent of its components manufactured in 
the United States. This requirement is met if the cost to the 
Recipient of the components mined, produced, or manufactured in the 
United States exceeds 50 percent of the cost of all components 
required to make the product. (In making this determination only the 
product and its components shall be considered.) The cost of each 
component includes transportation costs to the place of 
incorporation into the product and any applicable duty (whether or 
not a duty-free entry certificate is issued). Components of foreign 
origin of the same class or kind for which determinations have been 
made in accordance with FAR 25.102(a)(3) and (4) are treated as 
domestic. Scrap generated, collected, and prepared for processing in 
the United States is considered domestic.
    (b) Allocation of principal rights. The Recipient may retain the 
entire right, title, and interest throughout the world to each 
subject invention subject to the provisions of this clause and 35 
U.S.C. 203. With respect to any subject invention in which the 
Recipient retains title, the Federal Government shall have a 
nonexclusive, nontransferable, irrevocable, paid-up license to 
practice or have practiced for or on behalf of the United States the 
subject invention throughout the world.
    (c) Invention disclosure, election of title, and filing of 
patent application by Recipient.
    (1) The Recipient will disclose each subject invention to NASA 
within two months after the inventor discloses it in writing to 
Recipient personnel responsible for patent matters. The disclosure 
to the agency shall be in the form of a written report and shall 
identify the contract under which the invention was made and the 
inventor(s). It shall be sufficiently complete in technical detail 
to convey a clear understanding to the extent known at the time of 
the disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. 
The disclosure shall also identify any publication, on sale or 
public use of the invention and whether a manuscript describing the 
invention has been submitted for publication and, if so, whether it 
has been accepted for publication at the time of disclosure. In 
addition, after disclosure to the agency, the Recipient will 
promptly notify the agency of the acceptance of any manuscript 
describing the invention for publication or of any sale or public 
use planned by the Recipient.
    (2) The Recipient will elect in writing whether or not to retain 
title to any such invention by notifying NASA within two years of 
disclosure to the Federal agency. However, in any case where 
publication, on sale or public use has initiated the one-year 
statutory period wherein valid patent protection can still be 
obtained in the United States, the period for election of title may 
be shortened by the agency to a date that is no more than 60 days 
prior to the end of the statutory period.
    (3) The Recipient will file its initial patent application on a 
subject invention to which it elects to retain title within one year 
after election of title or, if earlier, prior to the end of any 
statutory period wherein valid patent protection can be obtained in 
the United States after a publication, on sale, or public use. The 
Recipient will file patent applications in additional countries or 
international patent offices within either 10 months of the 
corresponding initial patent application of six months from the date 
permission is granted by the Commissioner of Patents and Trademarks 
to file foreign patent applications where such filing has been 
prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure election, 
and filing under paragraphs (c)(1), (2), and (3) of this section 
may, at the discretion of the agency, be granted.
    (d) Conditions when the Government may obtain title. The 
Recipient will convey to NASA, upon written request, title to any 
subject invention--
    (1) If the Recipient fails to disclose or elect title to the 
subject invention within the times

[[Page 45811]]

specified in paragraph (c) of this section, or elects not to retain 
title; provided, that the agency may only request title within 60 
days after learning of the failure of the Recipient to disclose or 
elect within the specified times.
    (2) In those countries in which the Recipient fails to file 
patent applications within the times specified in paragraph (c) of 
this section; provided, however, that if the Recipient has filed a 
patent application in a country after the times specified in 
paragraph (c) of this section, but prior to its receipt of the 
written request of the Federal agency, the Recipient shall continue 
to retain title in that country.
    (3) In any country in which the Recipient decides not to 
continue the prosecution of any application for, to pay the 
maintenance fees on, or defend in reexamination or opposition 
proceeding on, a patent on a subject invention.
    (e) Minimum rights to Recipient and protection of the Recipient 
right to file.
    (1) The Recipient will retain a nonexclusive, royalty-free 
license throughout the world in each subject invention to which the 
Government obtains title, except if the Recipient fails to disclose 
the invention within the times specified in paragraph (c) of this 
section. The Recipient's license extends to its domestic subsidiary 
and affiliates, if any, within the corporate structure of which the 
Recipient is a party and includes the right to grant sublicenses of 
the same scope to the extent the Recipient was legally obligated to 
do so at the time the agreement was awarded. The license is 
transferable only with the approval of NASA, except when transferred 
to the successor of that part of the Recipient's business to which 
the invention pertains.
    (2) The Contractor's domestic license may be revoked or modified 
by NASA to the extent necessary to achieve expeditious practical 
application of subject invention pursuant to an application for an 
exclusive license submitted in accordance with applicable provisions 
at 37 CFR Part 404 and agency licensing regulations (if any). This 
license will not be revoked in that field of use or the geographical 
areas in which the Subcontractor has achieved practical application 
and continues to make the benefits of the invention reasonable 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of NASA to the extent the 
Subcontractor, its licensees, or the domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
foreign country.
    (3) Before revocation or modification of the license, NASA will 
furnish the Recipient a written notice of its intention to revoke or 
modify the license, and the Recipient will be allowed 30 days (or 
such other time as may be authorized by NASA for good cause shown by 
the Recipient) after the notice to show cause why the license should 
not be revoked or modified. The Recipient has the right to appeal, 
in accordance with applicable regulations in 37 CFR Part 404 and 14 
CFR Subpart 1245.1, concerning the licensing of Government-owned 
inventions, any decision concerning the revocation or modification 
of the license.
    (f) Recipient action to protect the Government's interest. (1) 
The Recipient agrees to execute or to have executed and promptly 
deliver to NASA all instruments necessary to:
    (i) establish or confirm the rights the Government has 
throughout the world in those subject inventions to which the 
Subcontractor elects to retain title, and,
    (ii) convey title to the Federal agency when requested under 
paragraph (d) of this section and to enable the Government to obtain 
patent protection throughout the world in that subject invention.
    (2) The Recipient agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Recipient each subject invention made under contract in order 
that the Recipient can comply with the disclosure provisions of 
paragraph (c) of this section, and to execute all papers necessary 
to file patent applications on subject inventions and to establish 
the Government's rights in the subject inventions. This disclosure 
format should require, as a minimum, the information required by 
paragraph (c)(1) of this section. The Recipient shall instruct such 
employees, through employee agreements or other suitable educational 
programs, on the importance of reporting inventions in sufficient 
time to permit the filing of patent applications prior to U.S. or 
foreign statutory bars.
    (3) The Recipient will notify NASA of any decisions not to 
continue the prosecution of a patent application, pay maintenance 
fees, or defend in a reexamination or opposition proceeding on a 
patent, in any country, not less than 30 days before the expiration 
of the response period required by the relevant patent office.
    (4) The Recipient agrees to include, within the specification of 
any United States patent application and any patent issuing thereon 
covering a subject invention the following statement, ``This 
invention was made with Government support under (identify the 
agreement) awarded by NASA. The Government has certain rights in the 
invention.''
    (5) The Recipient shall provide the Agreement Officer the 
following:
    (i) A listing every 12 months (or such longer period as the 
Agreement Officer may specify) from the date of the Agreement, of 
all subject inventions required to be disclosed during the period.
    (ii) A final report prior to closeout of the Agreement listing 
all subject inventions or certifying that there were none.
    (iii) Upon request, the filing date, serial number, and title, a 
copy of the patent application, and patent number and issue date for 
any subject invention in any country in which the Recipient has 
applied for patents.
    (iv) An irrevocable power to inspect and make copies of the 
patent application file, by the Government, when a Federal 
Government employee is a co-inventor.
    (g) Subcontracts. (1) Unless otherwise authorized or directed by 
the Agreement Officer, the Recipient shall--
    (i) Include this clause (Patent Rights--Retention by the 
Recipient (Small Business)), suitably modified to identify the 
parties, in all subcontracts, regardless of tier, for experimental, 
developmental, or research work to be performed by a small business 
firm or domestic nonprofit organization; and
    (ii) Include in all other subcontracts, regardless of tier, for 
experimental, developmental, or research work the patent rights 
clause (Patent Rights--Retention by the Recipient (Large Business).
    (2) In the event of a refusal by a prospective subcontractor to 
accept such a clause the Recipient--
    (i) Shall promptly submit a written notice to the Agreement 
Officer setting forth the subcontractor's reasons for such refusal 
and other pertinent information that may expedite disposition of the 
matter; and
    (ii) Shall not proceed with such subcontract without the written 
authorization of the Agreement Officer.
    (3) The Recipient shall promptly notify the Agreement Officer in 
writing upon the award of any subcontract at any tier containing a 
patent rights clause by identifying the subcontractor, the 
applicable patent rights clause, the work to be performed under the 
subcontract, and the dates of award and estimated completion. Upon 
request of the Agreement Officer, the Recipient shall furnish a copy 
of such subcontract, and, no more frequently than annually, a 
listing of the subcontracts that have been awarded.
    (4) The subcontractor will retain all rights provided for the 
Recipient in the clause under paragraph (g)(1)(i) or (g)(1)(ii) of 
this section, whichever is included in the subcontract, and the 
Recipient will not, as part of the consideration for awarding the 
subcontract, obtain rights in the subcontractor's subject 
inventions.
    (5) Notwithstanding paragraph (g)(4) of this section, and in 
recognition of the contractor's substantial contribution of funds, 
facilities and/or equipment to the work performed under this 
cooperative agreement, the Recipient is authorized, subject to the 
rights of NASA set forth elsewhere in this clause, to--
    (i) Acquire by negotiation and mutual agreement rights to a 
subcontractor's subject inventions as the Recipient may deem 
necessary to obtaining and maintaining of such private support; and
    (ii) Request, in the event of inability to reach agreement 
pursuant to paragraph (g)(5)(i) of this section that NASA invoke 
exceptional circumstances as necessary pursuant to 37 CFR 
401.3(a)(2) if the prospective subcontractor is a small business 
firm or organization, or for all other organizations, request that 
such rights for the Recipient be included as an additional 
reservation in a waiver granted pursuant to 14 CFR part 1245, 
subpart 1. Any such requests to NASA should be prepared in 
consideration of the following guidance and submitted to the 
contract office:
    (A) Exceptional circumstances. A request that NASA make an 
``exceptional circumstances'' determination pursuant to 37 CFR 
401.3(a)(2) must state the scope of rights sought by the Recipient 
pursuant to such determination; identify the proposed

[[Page 45812]]

subcontractor and the work to be performed under the subcontract; 
and state the need for the determination.
    (B) Waiver petition. The subcontractor should be advised that 
unless it requests a waiver of title pursuant to the NASA Patent 
Waiver Regulations (14 CFR part 1245, subpart 1), NASA will acquire 
title to the subject invention (42 U.S.C. 2457, as amended, sec. 
305). If a waiver is not requested or granted, the Recipient may 
request a license from NASA (see licensing of NASA inventions, 14 
CFR part 1245, subpart 3). A subcontractor requesting a waiver must 
follow the procedures set forth in the REQUESTS FOR WAIVER OF 
RIGHTS--LARGE BUSINESS provision.
    (h) Reporting on utilization of subject inventions. The 
Recipient agrees to submit, on request, periodic reports no more 
frequently than annually on the utilization of a subject invention 
or on efforts at obtaining such utilization that are being made by 
the Recipient or its licensees or assignees. Such reports shall 
include information regarding the status of development, date of 
first commercial sale or use, gross royalties received by the 
Recipient, and such other data and information as the agency may 
reasonably specify. The Recipient also agrees to provide additional 
reports as may be requested by the agency in connection with any 
march-in proceeding under-taken by the agency in accordance with 
paragraph (i) of this section. As required by 35 U.S.C. 202(c)(5), 
the agency agrees it will not disclose such information to persons 
outside the Government without permission of the Recipient.
    (i) Preference for United States manufacture. The Recipient 
agrees that any products embodying subject inventions or produced 
through the use of subject inventions shall be manufactured 
substantially in the United States. However, in individual cases, 
the requirement to manufacture substantially in the United States 
may be waived by the Assistant Administrator for Procurement (Code 
HS) with the concurrence of the Associate General Counsel for 
Intellectual Property upon a showing by the Recipient that under the 
circumstances domestic manufacture is not commercially feasible.
    (j) March-in rights. The Recipient agrees that, with respect to 
any subject invention in which it has acquired title, NASA has the 
right in accordance with the procedures in 37 CFR 401.6 and any 
supplemental regulations of the agency to require the Recipient, an 
assignee or exclusive licensee of a subject invention to grant a 
nonexclusive, partially exclusive, or exclusive license in any field 
of use to a responsible applicant or applicants, upon terms that are 
reasonable under the circumstances, and if the Subcontractor, 
assignee, or exclusive licensee refuses such a request NASA has the 
right to grant such a license itself if the Federal agency 
determines that--
    (1) Such action is necessary because the Recipient or assignee 
has not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Recipient, assignee, or 
their licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Recipient, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this section has not been obtained or waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.
    (k) Special provisions for Agreements with nonprofit 
organizations. If the Recipient is a nonprofit organization, it 
agrees that--
    (1) Rights to a subject invention in the United States may not 
be assigned without the approval of NASA, except where such 
assignment is made to an organization which has one of its primary 
functions the management of inventions; provided, that such assignee 
will be subject to the same provisions as the Recipient;
    (2) The Recipient will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when NASA deems it appropriate) when the subject invention is 
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the 
Recipient with respect to subject inventions, after payment of 
expenses (including payments to inventors) incidental to the 
administration of subject inventions will be utilized for the 
support of scientific research or education; and
    (4) It will make efforts that are reasonable under the 
circumstances to attract licensees of subject inventions that are 
small business firms, and that it will give a preference to a small 
business firm when licensing a subject invention if the Recipient 
determines that the small business firm has a plan or proposal for 
marketing the invention which, if executed, is equally as likely to 
bring the invention to practical application as any plans or 
proposals from applicants that are not small business firms; 
provided that the Recipient is also satisfied that the small 
business firm has the capability and resources to carry out its plan 
or proposal. The decision whether to give a preference in any 
specific case will be at the discretion of the Recipient. However, 
the Recipient agrees that the Secretary of Commerce may review the 
Contractor's licensing program and decisions regarding small 
business applicants, and the Recipient will negotiate changes to its 
licensing policies, procedures, or practices with the Secretary of 
Commerce when the Secretary's review discloses that the Recipient 
could take reasonable steps to more effectively implement the 
requirements of this paragraph.
    (l) Documentation submissions. A copy of all submissions or 
requests required by this clause, plus a copy of any reports, 
manuscripts, publications, or similar material bearing on patent 
matters, shall be sent to the installation Patent Counsel in 
addition to any other submission requirements in the cooperative 
agreement. If any reports contain information describing a ``subject 
invention'' for which the Recipient has elected or may elect title, 
NASA will use reasonable efforts to delay public release by NASA or 
publication by NASA in a NASA technical series, in order for a 
patent application to be filed, provided that the Recipient identify 
the information and the ``subject invention'' to which it relates at 
the time of submittal. If required by the Agreement Officer, the 
Recipient shall provide the filing date, serial number and title, a 
copy of the patent application, and a patent number and issue date 
for any ``subject invention'' in any country in which the Recipient 
has applied for patents.

[End of Provision]


Sec. 1274.914  Requests for waiver of rights--large business.

Requests for Waiver of Rights--Large Business

July 2002

    (a) In accordance with the NASA Patent Waiver Regulations, 14 
CFR part 1245, subpart 1, waiver of rights to any or all inventions 
made or that may be made under a NASA agreement, contract or 
subcontract with other than a small business firm or a domestic 
nonprofit organization may be requested at different time periods. 
Advance waiver of rights to any or all inventions that may be made 
under a contract or subcontract may be requested prior to the 
execution of the agreement, contract or subcontract, or within 30 
days after execution by the selected Recipient. In addition, waiver 
of rights to an identified invention made and reported under a 
agreement, contract or subcontract may be requested, even though a 
request for an advance waiver was not made or, if made, was not 
granted.
    (b) Each request for waiver of rights shall be by petition to 
the Administrator and shall include an identification of the 
petitioner; place of business and address; if petitioner is 
represented by counsel, the name, address, and telephone number of 
the counsel; the signature of the petitioner or authorized 
representative; and the date of signature. No specific forms need be 
used, but the request should contain a positive statement that 
waiver of rights is being requested under the NASA Patent Waiver 
Regulations; a clear indication of whether the request is for an 
advance waiver or for a waiver of rights for an individual 
identified invention; whether foreign rights are also requested and, 
if so, the countries, and a citation of the specific Section or 
Sections of the regulations under which such rights are requested; 
and the name, address, and telephone number of the party with whom 
to communicate when the request is acted upon. Requests for advance 
waiver of rights should, preferably, be included with the proposal, 
but in any event in advance of negotiations.
    (c) Petitions for advance waiver, prior to agreement execution, 
must be submitted to the Agreement Officer. All other petitions will 
be submitted to the Patent Representative designated in the 
contract.
    (d) Petitions submitted with proposals selected for negotiation 
of a agreement will be forwarded by the Contracting or Officer to

[[Page 45813]]

the installation Patent Counsel for processing and then to the 
Inventions and Contributions Board. The Board will consider these 
petitions and where the Board makes the findings to support the 
waiver, the Board will recommend to the Administrator that waiver be 
granted, and will notify the petitioner and the Agreement Officer of 
the Administrator's determination. The Agreement Officer will be 
informed by the Board whenever there is insufficient time or 
information or other reasons to permit a decision to be made without 
unduly delaying the execution of the agreement. In the latter event, 
the petitioner will be so notified by the Agreement Officer. All 
other petitions will be processed by installation Patent Counsel and 
forwarded to the Board. The Board shall notify the petitioner of its 
action and if waiver is granted, the conditions, reservations, and 
obligations thereof will be included in the Instrument of Waiver. 
Whenever the Board notifies a petitioner of a recommendation adverse 
to, or different from, the waiver requested, the petitioner may 
request reconsideration under procedures set forth in the 
Regulations.

[End of Provision]


Sec. 1274.915  Restrictions on sale or transfer of technology to 
foreign firms or institutions.

Restrictions on Sale or Transfer of Technology to Foreign Firms or 
Institutions

July 2002

    (a) The parties agree that access to technology developments 
under this Agreement by foreign firms or institutions must be 
carefully controlled. For purposes of this clause, a transfer 
includes a sale of the company, or sales or licensing of the 
technology. Transfers include:
    (1) Sales of products or components,
    (2) Licenses of software or documentation related to sales of 
products or components, or
    (3) Transfers to foreign subsidiaries of the Recipient for 
purposes related to this Agreement.
    (b) The Recipient shall provide timely notice to the Agreement 
Officer in writing of any proposed transfer of technology developed 
under this Agreement. If NASA determines that the transfer may have 
adverse consequences to the national security interests of the 
United States, or to the establishment of a robust United States 
industry, NASA and the Recipient shall jointly endeavor to find 
alternatives to the proposed transfer which obviate or mitigate 
potential adverse consequences of the transfer.

[End of Provision]


Sec. 1274.916  Liability and risk of loss.

    The following provision is applicable to all cooperative agreements 
with commercial firms, except programs or projects that are subject to 
Section 431 of Public Law 105-276, which addresses insurance for, or 
indemnification of, developers of experimental aerospace vehicles.

Liability and Risk of Loss

July 2002

    (a) With regard to activities undertaken pursuant to this 
agreement, neither party shall make any claim against the other, 
employees of the other, the other's related entities (e.g., 
contractors, subcontractors, etc.), or employees of the other's 
related entities for any injury to or death of its own employees or 
employees of its related entities, or for damage to or loss of its 
own property or that of its related entities, whether such injury, 
death, damage or loss arises through negligence or otherwise, except 
in the case of willful misconduct.
    (b) To the extent that a risk of damage or loss is not dealt 
with expressly in this agreement, each party's liability to the 
other party arising out of this Agreement, whether or not arising as 
a result of an alleged breach of this Agreement, shall be limited to 
direct damages only, and shall not include any loss of revenue or 
profits or other indirect or consequential damages.

[End of Provision]


Sec. 1274.917  Additional funds.

Additional Funds

July 2002

    Pursuant to this Agreement, NASA is providing a fixed amount of 
funding for activities to be undertaken under the terms of this 
cooperative agreement. NASA is under no obligation to provide 
additional funds. Under no circumstances shall the Recipient 
undertake any action which could be construed to imply an increased 
commitment on the part of NASA under this cooperative agreement.

[End of Provision]


Sec. 1274.918  Incremental funding.

Incremental Funding

July 2002

    (a) Of the award amount indicated on the cover page of this 
Agreement, only the obligated amount indicated on the cover page of 
this agreement is available for payment. NASA may supplement the 
Agreement, as required, until it is fully funded. Any work beyond 
the funding limit will be at the recipient's risk.
    (b) These funds will be obligated as appropriated funds become 
available without any action required of the Recipient. NASA is not 
obligated to make payments in excess of the total funds obligated.

[End of Provision]


Sec. 1274.919  Cost principles and accounting standards.

Cost Principles and Accounting Standards

July 2002

    The expenditure of Government funds by the Recipient and the 
allowability of costs recognized as a resource contribution by the 
Recipient (See clause entitled ``Resource Sharing Requirements'') 
shall be governed by the FAR cost principles implemented by FAR 
Parts 30, 31, and 48 CFR part 99. (If the Recipient is a consortium 
which includes non-commercial firm members, cost allowability for 
those members will be determined as follows: Allowability of costs 
incurred by State, local or federally-recognized Indian tribal 
governments is determined in accordance with the provisions of OMB 
Circular A-87, ``Cost Principles for State and Local Governments.'' 
The allowability of costs incurred by non-profit organizations is 
determined in accordance with the provisions of OMB Circular A-122, 
``Cost Principles for Non-Profit Organizations.'' The allowability 
of costs incurred by institutions of higher education is determined 
in accordance with the provisions of OMB Circular A-21, ``Cost 
Principles for Educational Institutions.'' The allowability of costs 
incurred by hospitals is determined in accordance with the 
provisions of Appendix E of 45 CFR part 74, ``Principles for 
Determining Costs Applicable to Research and Development Under 
Grants and Contracts with Hospitals.'')

[End of Provision]


Sec. 1274.920  Responsibilities of the NASA technical officer.

Responsibilities of the NASA Technical Officer

July 2002

    (a) The NASA Agreement Officer and Technical Officer for this 
cooperative agreement are identified on the cooperative agreement 
cover sheet.
    (b) The Agreement Officer shall serve as NASA's authorized 
representative for the administrative elements of all work to be 
performed under the agreement.
    (c) The Technical Officer shall have the authority to issue 
written Technical Advice which suggests redirecting the project work 
(e.g., by changing the emphasis among different tasks), or pursuing 
specific lines of inquiry likely to assist in accomplishing the 
effort. The Technical Officer shall have the authority to approve or 
disapprove those technical reports, plans, and other technical 
information the Recipient is required to submit to NASA for 
approval. The Technical Officer is not authorized to issue and the 
Recipient shall not follow any Technical Advice which constitutes 
work which is not contemplated under this agreement; which in any 
manner causes an increase or decrease in the resource sharing or in 
the time required for performance of the project; which has the 
effect of changing any of the terms or conditions of the cooperative 
agreement; or which interferes with the Recipient's right to perform 
the project in accordance with the terms and conditions of this 
cooperative agreement. In the event of perceived interference, 
dispute resolution procedures apply as set forth in 1274.907.

[End of Provision]


Sec. 1274.921  Publications and reports: non-proprietary research 
results.

    The requirements set forth under this provision may be modified by 
the Agreement Officer based on specific report needs for the particular 
grant or cooperative agreement.

[[Page 45814]]

Publications and Reports: Non-Proprietary Research Results

July 2002

    (a) NASA encourages the widest practicable dissemination of 
research results at all times during the course of the investigation 
consistent with the other terms of this agreement.
    (b) All information disseminated as a result of the cooperative 
agreement shall contain a statement which acknowledges NASA's 
support and identifies the cooperative agreement by number.
    (c) Prior approval by the NASA Technical Officer is required 
only where the Recipient requests that the results of the research 
be published in a NASA scientific or technical publication. Two 
copies of each draft publication shall accompany the approval 
request.
    (d) Reports shall contain full bibliographic references, 
abstracts of publications and lists of all other media in which the 
research was discussed. The Recipient shall submit the following 
technical reports:
    (1) A progress report for every year of the cooperative 
agreement (except the final year). Each report is due 60 days before 
the anniversary date of the cooperative agreement and shall describe 
research accomplished during the report period.
    (2) A summary of research is due by 90 days after the expiration 
date of the cooperative agreement, regardless of whether or not 
support is continued under another cooperative agreement. This 
report is intended to summarize the entire research accomplished 
during the duration of the cooperative agreement.
    (e) Progress reports and summaries of research shall display the 
following on the first page:
    (1) Title of the cooperative agreement.
    (2) Type of report.
    (3) Period covered by the report.
    (4) Name and address of the Recipient's organization.
    (5) Cooperative agreement number.
    (f) An original and two copies, one of which shall be of 
suitable quality to permit micro-reproduction, shall be sent as 
follows:
    (1) Original--Agreement Officer.
    (2) Copy--Technical Officer
    (3) Micro-reproducible copy--NASA Center for Aerospace 
Information (CASI), Parkway Center, Attn: Document Processing 
Section, 7121 Standard Drive, Hanover, MD 21076.

[End of Provision]


Sec. 1274.922  Suspension or termination.

Suspension or Termination

July 2002

    (a) This cooperative agreement may be suspended or terminated in 
whole or in part by the Recipient or by NASA after consultation with 
the other party. With prior written notice, NASA may terminate the 
agreement, for example, if the Recipient is not making anticipated 
technical progress, if the Recipient materially fails to comply with 
the terms of the agreement, if the Recipient materially changes the 
objective of the agreement, or if appropriated funds are not 
available to support the program.
    (b) Upon fifteen (15) days written notice to the other party, 
either party may temporarily suspend the cooperative agreement, 
pending corrective action or a decision to terminate the cooperative 
agreement. The notice should express the reasons why the agreement 
is being suspended.
    (c) In the event of termination by either party, the Recipient 
shall not be entitled to additional funds or payments except as may 
be required by the Recipient to meet NASA`s share of commitments 
which had in the judgment of NASA become firm prior to the effective 
date of termination and are otherwise appropriate. In no event, 
shall these additional funds or payments exceed the amount of the 
next payable milestone billing amount.

[End of Provision]


Sec. 1274.923  Equipment and other property.

Equipment and Other Property

July 2002

    (a) Under no circumstances shall cooperative agreement funds be 
used to acquire land or any interest therein, to acquire or 
construct facilities (as defined in 48 CFR (FAR) 45.301), or to 
procure passenger carrying vehicles.
    (b) Contractor acquired equipment or property used in 
performance of the Cooperative Agreement shall be controlled in 
accordance with 48 CFR (FAR) 45.6.
    (c) The government shall have title to equipment and other 
personal property acquired with government funds. Such property 
shall be disposed of pursuant to 48 CFR (FAR) 45.603. The Recipient 
shall have title to equipment and other personal property acquired 
with Recipient funds. Such property shall remain with the Recipient 
at the conclusion of the cooperative agreement. Under a shared cost 
arrangement, the Government and the Recipient have joint ownership 
of acquired property in accordance with the cost share ratio. 
Jointly owned property shall be disposed of as agreed to by the 
parties.
    (d) Title to Government furnished equipment (including 
equipment, title to which has been transferred to the Government 
prior to completion of the work) will remain with the Government.
    (e) The Recipient shall establish and maintain property 
management standards for Government property and otherwise manage 
such property as set forth in 48 CFR (FAR) 45.5 and 48 CFR (NFS) 
1845.5.
    (f) Recipients shall submit annually a NASA Form 1018, NASA 
Property in the Custody of Contractors, in accordance with the 
instructions on the form, the provisions of 48 CFR (NFS) 1845.71 and 
any supplemental instructions that may be issued by NASA for the 
current reporting period. The original NF 1018 shall be submitted to 
the center Deputy Chief Financial Officer, Finance, with three 
copies sent concurrently to the center Industrial Property Officer. 
The annual reporting period shall be from October 1 of each year 
through September 30 of the following year. The report shall be 
submitted in time to be received by October 31. Negative reports 
(i.e. no reportable property) are required. The information 
contained in the reports in entered into the NASA accounting system 
to reflect current asset values for agency financial statement 
purposes. Therefore, it is essential that required reports be 
received no later than October 31. A final report is required within 
30 days after expiration of the agreement.
    (g) As of the date of this rewrite, process changes have been 
made to facilitate electronic submission of NF 1018. Recipients may 
use the procedures established by NASA Procurement Notice (PN) 97-
64, issued on August 9, 2001.

[End of Provision]


Sec. 1274.924  Civil rights.

Civil Rights

July 2002

    Work on NASA cooperative agreements is subject to the provisions 
of Title VI of the Civil Rights Act of 1964 (Public Law 88-352; 42 
U.S.C. 2000d-l), Title IX of the Education Amendments of 1972 (20 
U.S.C. 1680 et seq.), section 504 of the Rehabilitation Act of 1973, 
as amended (29 U.S.C. 794), the Age Discrimination Act of 1975 (42 
U.S.C. 6101 et seq.), and the NASA implementing regulations (14 CFR 
parts 1250, 1251, 1252 and 1253).

[End of Provision]


Sec. 1274.925  Subcontracts.

Subcontracts

July 2002

    (a) Recipients are not authorized to issue grants or cooperative 
agreements.
    (b) NASA Agreement Officer consent is required for subcontracts 
over[dollar threshold inserted by Agreement Officer] and/or 
subcontracts for [critical systems, subsystems, components, or 
services inserted by Agreement Officer and Cognizant NASA Project 
Office]------.
    (c) If not submitted by the Recipient and accepted by NASA in 
the original proposal. The Recipient shall provide the following 
information to the Agreement Officer:
    (1) A copy of the proposed subcontract.
    (2) Basis for subcontractor selection.
    (3) Justification for lack of competition when competitive bids 
or offers are not obtained.
    (4) Basis for award cost or award price.
    (d) The Recipient shall utilize small business, veteran-owned 
small business, service-disabled veteran-owned small business, 
historically underutilized small business, small disadvantaged 
business, women-owned business concerns, Historically Black Colleges 
and Universities, and minority educational institutions as 
subcontractors to the maximum extent practicable.
    (e) All entities that are involved in performing the research 
and development effort that is the purpose of the cooperative 
agreement shall be part of the Recipient's consortium and not 
subcontractors.

[[Page 45815]]

[End of Provision]


Sec. 1274.926  Clean Air-Water Pollution Control Acts.

Clean Air-Water Pollution Control Acts

July 2002

    If this cooperative agreement or supplement thereto is in excess 
of $100,000, the Recipient agrees to notify the Agreement Officer 
promptly of the receipt, whether prior or subsequent to the 
Recipient's acceptance of this cooperative agreement, of any 
communication from the Director, Office of Federal Activities, 
Environmental Protection Agency (EPA), indicating that a facility to 
be utilized under or in the performance of this cooperative 
agreement or any subcontract thereunder is under consideration to be 
listed on the EPA ``List of Violating Facilities'' published 
pursuant to 40 CFR 15.20. By acceptance of a cooperative agreement 
in excess of $100,000, the Recipient--
    (a) Stipulates that any facility to be utilized thereunder is 
not listed on the EPA ``List of Violating Facilities'' as of the 
date of acceptance;
    (b) Agrees to comply with all requirements of section 114 of the 
Clean Air Act, as amended (42 U.S.C. 1857 et seq. as amended by 
Public Law 91-604) and section 308 of the Federal Water Pollution 
Control Act, as amended (33 U.S.C. 1251 et seq. as amended by Public 
Law 92-500) relating to inspection, monitoring, entry, reports and 
information, and all other requirements specified in the 
aforementioned sections, as well as all regulations and guidelines 
issued thereunder after award of and applicable to the cooperative 
agreement; and
    (c) Agrees to include the criteria and requirements of this 
clause in every subcontract hereunder in excess of $100,000, and to 
take such action as the Contracting or Grant Officer may direct to 
enforce such criteria and requirements.

[End of Provision]


Sec. 1274.927  Debarment and suspension and drug-free workplace.

Debarment and Suspension and Drug-Free Workplace

July 2002

    NASA cooperative agreements are subject to the provisions of 14 
CFR part 1265, Government-wide Debarment and Suspension 
(Nonprocurement) and 14 CFR part 1267, Government-wide requirements 
for Drug-Free Workplace, unless excepted by 14 CFR 1265.110 or 
1265.610.

[End of Provision]


Sec. 1274.928  Foreign national employee investigative requirements.

Foreign National Employee Investigative Requirements

July 2002

    (a) The Recipient shall submit a properly executed Name Check 
Request (NASA Form 531) and a completed applicant fingerprint card 
(Federal Bureau of Investigation Card FD-258) for each foreign 
national employee requiring access to a NASA Installation. These 
documents shall be submitted to the Installation's Security Office 
at least 75 days prior to the estimated duty date. The NASA 
Installation Security Office will request a National Agency Check 
(NAC) for foreign national employees requiring access to NASA 
facilities. The NASA Form 531 and fingerprint card may be obtained 
from the NASA Installation Security Office.
    (b) The Installation Security Office will request from NASA 
Headquarters, Code I, approval for each foreign national's access to 
the Installation prior to providing access to the Installation. If 
the access approval is obtained from NASA Headquarters prior to 
completion of the NAC and performance of the cooperative agreement 
requires a foreign national to be given access immediately, the 
Technical Officer may submit an escort request to the Installation's 
Chief of Security.

[End of Provision]


Sec. 1274.929  Restrictions on lobbying.

Restrictions on Lobbying

July 2002

    This award is subject to the provisions of 14 CFR part 1271 
``New Restrictions on Lobbying.''

[End of Provision]


Sec. 1274.930  Travel and transportation.

Travel and Transportation

July 2002

    (a) For travel funded by the government under this agreement, 
section 5 of the International Air Transportation Fair Competitive 
Practices Act of 1974 (49 U.S.C. 40118) (Fly America Act) requires 
the Recipient to use U.S.-flag air carriers for international air 
transportation of personnel and property to the extent that service 
by those carriers is available.
    (b) Department of Transportation regulations, 49 CFR part 173, 
govern Recipient shipment of hazardous materials and other items.

[End of Provision]


Sec. 1274.931  Electronic funds transfer payment methods.

Electronic Funds Transfer Payment Methods

July 2002

    Payments under this cooperative agreement will be made by the 
Government by electronic funds transfer through the Treasury Fedline 
Payment System (FEDLINE) or the Automated Clearing House (ACH), at 
the option of the Government. After award, but no later than 14 days 
before an invoice is submitted, the Recipient shall designate a 
financial institution for receipt of electronic funds transfer 
payments, and shall submit this designation to the Agreement Officer 
or other Government official, as directed.
    (a) For payment through FEDLINE, the Recipient shall provide the 
following information:
    (1) Name, address, and telegraphic abbreviation of the financial 
institution receiving payment.
    (2) The American Bankers Association 9-digit identifying number 
for wire transfers of the financing institution receiving payment if 
the institution has access to the Federal Reserve Communication 
System.
    (3) Payee's account number at the financial institution where 
funds are to be transferred.
    (4) If the financial institution does not have access to the 
Federal Reserve Communications System, name, address, and 
telegraphic abbreviation of the correspondent financial institution 
through which the financial institution receiving payment obtains 
wire transfer activity. Provide the telegraphic abbreviation and 
American Bankers Association identifying number for the 
correspondent institution.
    (b) For payment through ACH, the Recipient shall provide the 
following information:
    (1) Routing transit number of the financial institution 
receiving payment (same as American Bankers Association identifying 
number used for FEDLINE).
    (2) Number of account to which funds are to be deposited.
    (3) Type of depositor account (``C'' for checking, ``S'' for 
savings).
    (4) If the Recipient is a new enrollee to the ACH system, a 
``Payment Information Form,'' SF 3881, must be completed before 
payment can be processed.
    (c) In the event the Recipient, during the performance of this 
cooperative agreement, elects to designate a different financial 
institution for the receipt of any payment made using electronic 
funds transfer procedures, notification of such change and the 
required information specified above must be received by the 
appropriate Government official 30 days prior to the date such 
change is to become effective.
    (d) The documents furnishing the information required in this 
clause must be dated and contain the signature, title, and telephone 
number of the Recipient official authorized to provide it, as well 
as the Recipient's name and contract number.
    (e) Failure to properly designate a financial institution or to 
provide appropriate payee bank account information may delay 
payments of amounts otherwise properly due.

[End of Provision]


Sec. 1274.932  Retention and examination of records.

Retention and Examination of Records

July 2002

    Financial records, supporting documents, statistical records, 
and all other records (or microfilm copies) pertinent to this 
cooperative agreement shall be retained for a period of 3 years, 
except that records for nonexpendable property acquired with 
cooperative agreement funds shall be retained for 3 years after its 
final disposition and, if any litigation, claim, or audit is started 
before the expiration of the 3-year period, the records shall be 
retained until all litigation, claims, or audit findings involving 
the records have been resolved. The retention period starts from the 
date of the submission of the final invoice. The Administrator of 
NASA and the Comptroller General of the United States, or any of 
their duly authorized representatives, shall have access to any 
pertinent books, documents, papers, and

[[Page 45816]]

records of the Recipient and of subcontractors to make audits, 
examinations, excerpts, and transcripts. All provisions of this 
clause shall apply to any subcontractor performing substantive work 
under this cooperative agreement.

[End of Provision]


Sec. 1274.933  Summary of recipient reporting responsibilities.

Summary of Recipient Reporting Responsibilities

July 2002

    This cooperative agreement requires the recipient to submit a 
number of reports. These reporting requirements are summarized 
below. In the event of a conflict between this provision and other 
provisions of the cooperative agreement requiring reporting, the 
other provisions take precedence.
    [The Agreement Officer may add/delete reporting requirements as 
appropriate.]

------------------------------------------------------------------------
           Report                   Frequency             Reference
------------------------------------------------------------------------
Report of Joint NASA/         As required.........  1274.911 Patent
 Recipient Inventions.                               Rights
                                                    (Paragraph (b)(4))
Interim Report of Reportable  Every 12 months.....  1274.912 Patent
 Items.                                              Rights--Retention
                                                     by the Recipient
                                                     (Large Business)
                                                    (Paragraph
                                                     (e)(3)(i))
Final Report of Reportable    3 months after        1274.912 Patent
 Items.                        completion.           Rights--Retention
                                                     by the Recipient
                                                     (Large Business)
                                                     (Paragraph
                                                     (e)(3)(ii))
Disclosure of Subject         Within 2 months       1274.912 Patent
 Inventions.                   after inventor        Rights Retention by
                               discloses it to       the Recipient
                               Recipient.            (Large Business)
                                                     (Paragraph (e)(2))
                                                     or
                                                    1274.913 Patent
                                                     Rights--Retention
                                                     by the Recipient
                                                     (Small Business)
                                                    (Paragraph (c)(1))
Election of Title to a        1 year after          1274.913 Patent
 Subject Invention.            disclosure of the     Rights--Retention
                               subject invention     by the Recipient
                               if a statutory bar    (Small Business)
                               exists, otherwise    (Paragraph (c)(2))
                               within 2 years.
Listing of Subject            Every 12 months from  1274.913 Patent
 Inventions.                   the date of the       Rights--Retention
                               agreement.            by the Recipient
                                                     (Small Business)
                                                    (Paragraph
                                                     (f)(5)(i))
Subject Inventions Final      Prior to close-out    1274.913 Retention
 Report.                       of the agreement.     by the Recipient
                                                     (Small Business)
                                                    (Paragraph
                                                     (f)(5)(ii))
Notification of Decision to   30 days before        1274.913 Patent
 Forego Patent Protection.     expiration of the     Rights--Retention
                               response period.      by the Recipient
                                                     (Small Business)
                                                    (Paragraph (f)(3))
Notification of a             Promptly upon award   1274.912 Patent
 Subcontract Award.            of a subcontract.     Rights--Retention
                                                     by the Recipient
                                                     (Large
                                                     Business)(Paragraph
                                                     (g)(3))
                                                    or 1274.913 Patent
                                                     Rights--Retention
                                                     by the Recipient
                                                     (Small Business)
                                                    (Paragraph (g)(3))
Utilization of Subject        Annually............  1274.913 Patent
 Invention.                                          Rights--Retention
                                                     by the Recipient
                                                     (Small Business)
                                                    (Paragraph (h))
Notice of Proposed Transfer   Prior to              1274.915
 of Technology.                transferring          Restrictions on
                               technology to         Sale or Transfer of
                               foreign firm or       Technology to
                               institution.          Foreign Firms or
                                                     Institutions
                                                    (Paragraph (b))
Progress Report.............  60 days prior to the  1274.921
                               anniversary date of   Publications and
                               the agreement         Reports: Non-
                               (except final year).  Proprietary
                                                     Research Results
                                                    (Paragraph (d)(1))
Summary of Research.........  90 days after         1274.921
                               completion of         Publications and
                               agreement.            Reports: Non-
                                                     Proprietary
                                                     Research Results
                                                    (Paragraph (d)(2))
NASA Form 1018 Property in    Annually by October   1274.923 Equipment
 the Custody of Contractors.   31.                   and Other Property
                                                    (Paragraph (f))
NASA Form 1018 Property in    60 days after         1274.923 Equipment
 the Custody of Contractors.   expiration date of    and Other Property
                               agreement.           (Paragraph (f))
------------------------------------------------------------------------

Sec. 1274.934  Safety.

Safety

July 2002

    NASA's safety priority is to protect: (1) The public, (2) 
astronauts and pilots, (3) the NASA workforce (including contractor 
employees working on NASA contracts), and (4) high-value equipment 
and property.
    (a) The Recipient shall act responsibly in matters of safety and 
shall take all reasonable safety measures in performing under this 
cooperative agreement. The recipient shall comply with all 
applicable federal, state, and local laws relating to safety. The 
Recipient shall maintain a record of, and will notify the NASA 
Agreement Officer immediately (within one workday) of any accident 
involving death, disabling injury or substantial loss of property. 
The Recipient will immediately (within one workday) advise NASA of 
hazards that come to its attention as a result of the work 
performed.
    (b) Where the work under this cooperative agreement involves 
flight hardware, the hazardous aspects, if any, of such hardware 
will be identified, in writing, by the Recipient. Compliance with 
this provision by subcontractors shall be the responsibility of the 
Recipient.

[[Page 45817]]

[End of Provision]


Sec. 1274.935  Security classification requirements.

Security Classification Requirements

July 2002

    Performance under this Cooperative Agreement will involve access 
to and/or generation of classified information, work in a secure 
area, or both, up to the level of [insert the applicable security 
clearance level]. Federal Acquisition Regulation clause 52.204-2 
shall apply to this Agreement and DD Form 254, Contract Security 
Classification Specification Attachment ------ [Insert the 
attachment number of the DD Form 254].

[End of Provision]


Sec. 1274.936  Breach of safety or security.

Breach of Safety or Security

July 2002

    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. NASA's safety priority 
is to protect: The public; astronauts and pilots; the NASA workforce 
(including contractor employees working on NASA contracts); and 
high-value equipment and property. A major breach of safety by the 
Recipient entitles the Government to remedies (pending corrective 
measures by the Recipient) which includes, suspension or termination 
of the Cooperative Agreement, require removal or change of 
Recipient's personnel from performing under the Agreement. A major 
breach of safety must be related directly to the work on the 
Agreement. A major breach of safety is an act or omission of the 
Recipient 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 Safety 
and Health Administration (OSHA) or by a state agency operating 
under an OSHA approved plan.
    (a) Security is the condition of safeguarding against espionage, 
sabotage, crime (including computer crime), or attack. A major 
breach of security by the Recipient entitles the Government to 
remedies (pending corrective measures by the Recipient) which 
includes, suspension or termination of the Cooperative Agreement, 
require removal or change of Recipient's personnel from performing 
under the Cooperative Agreement. A major breach of security may 
occur on or off Government installations, but must be related 
directly to the work on the Cooperative Agreement. A major breach of 
security may arise from any of the following: compromise of 
classified information; illegal technology transfer; workplace 
violence resulting in criminal conviction; sabotage; compromise or 
denial of information technology services; damage or loss greater 
than $250,000 to the Government; or theft.
    (b) In the event of a major breach of safety or security, the 
Recipient shall report the breach to the Agreement Officer. If 
directed by the Agreement Officer, the Recipient shall conduct its 
own investigation and report the results to the Government. The 
Recipient shall cooperate with the Government investigation, if 
conducted.

[End of Provision]


Sec. 1274.937  Security requirements for unclassified information 
technology resources.

Security Requirements for Unclassified Information Technology Resources

July 2002

    (a) The Recipient shall be responsible for Information 
Technology security for all systems connected to a NASA network or 
operated by the Recipient for NASA, regardless of location. This 
provision is applicable to all or any part of the cooperative 
agreement that includes information technology resources or services 
in which the Recipient must have physical or electronic access to 
NASA's sensitive information contained in unclassified systems that 
directly support the mission of the Agency. This includes 
information technology, hardware, software, and the management, 
operation, maintenance, programming, and system administration of 
computer systems, networks, and telecommunications systems. Examples 
of tasks that require security provisions include:
    (1) Computer control of spacecraft, satellites, or aircraft or 
their payloads;
    (2) Acquisition, transmission or analysis of data owned by NASA 
with significant replacement cost should the Recipient's copy be 
corrupted; and
    (3) Access to NASA networks or computers at a level beyond that 
granted the general public, e.g. bypassing a firewall.
    (b) The Recipient shall provide, implement, and maintain an IT 
Security Plan. This plan shall describe the processes and procedures 
that will be followed to ensure appropriate security of IT resources 
that are developed, processed, or used under this cooperative 
agreement. The plan shall describe those parts of the cooperative 
agreement to which this provision applies. The Recipient's IT 
Security Plan shall be compliant with Federal laws that include, but 
are not limited to, the Computer Security Act of 1987 (40 U.S.C. 
1441 et seq.) and the Government Information Security Reform Act of 
2000. The plan shall meet IT security requirements in accordance 
with Federal and NASA policies and procedures that include, but are 
not limited to:
    (1) OMB Circular A-130, Management of Federal Information 
Resources, Appendix III, Security of Federal Automated Information 
Resources;
    (2) NASA Procedures and Guidelines (NPG) 2810.1, Security of 
Information Technology; and
    (3) Chapter 3 of NPG 1620.1, NASA Security Procedures and 
Guidelines.
    (c) Within ---- days after cooperative agreement award, the 
Recipient shall submit for NASA approval an IT Security Plan. This 
plan must be consistent with and further detail the approach 
contained in the Recipient's proposal that resulted in the award of 
this cooperative agreement and in compliance with the requirements 
stated in this provision. The plan, as approved by the Agreement 
Officer, shall be incorporated into the cooperative agreement as a 
compliance document.
    (d)(1) Recipient personnel requiring privileged access or 
limited privileged access to systems operated by the Recipient for 
NASA or interconnected to a NASA network shall be screened at an 
appropriate level in accordance with NPG 2810.1, Section 4.5; NPG 
1620.1, Chapter 3; and paragraph (d)(2) of this provision. Those 
Recipient personnel with non-privileged access do not require 
personnel screening. NASA shall provide screening using standard 
personnel screening National Agency Check (NAC) forms listed in 
paragraph (d)(3) of this provision, unless Recipient screening in 
accordance with paragraph (d)(4) is approved. The Recipient shall 
submit the required forms to the NASA Center Chief of Security (CCS) 
within fourteen (14) days after cooperative agreement award or 
assignment of an individual to a position requiring screening. The 
forms may be obtained from the CCS. At the option of the government, 
interim access may be granted pending completion of the NAC.
    (2) Guidance for selecting the appropriate level of screening is 
based on the risk of adverse impact to NASA missions. NASA defines 
three levels of risk for which screening is required (IT-1 has the 
highest level of risk):
    (i) IT-1--Individuals having privileged access or limited 
privileged access to systems whose misuse can cause very serious 
adverse impact to NASA missions. These systems include, for example, 
those that can transmit commands directly modifying the behavior of 
spacecraft, satellites or aircraft.
    (ii) IT-2--Individuals having privileged access or limited 
privileged access to systems whose misuse can cause serious adverse 
impact to NASA missions. These systems include, for example, those 
that can transmit commands directly modifying the behavior of 
payloads on spacecraft, satellites or aircraft; and those that 
contain the primary copy of ``level 1'' data whose cost to replace 
exceeds one million dollars.
    (iii) IT-3--Individuals having privileged access or limited 
privileged access to systems whose misuse can cause significant 
adverse impact to NASA missions. These systems include, for example, 
those that interconnect with a NASA network in a way that exceeds 
access by the general public, such as bypassing firewalls; and 
systems operated by the Recipient for NASA whose function or data 
has substantial cost to replace, even if these systems are not 
interconnected with a NASA network.
    (3) Screening for individuals shall employ forms appropriate for 
the level of risk as follows:
    (i) IT-1: Fingerprint Card (FC) 258 and Standard Form (SF) 85P, 
Questionnaire for Public Trust Positions;
    (ii) IT-2: FC 258 and SF 85, Questionnaire for Non-Sensitive 
Positions; and
    (iii) IT-3: NASA Form 531, Name Check, and FC 258.
    (4) The Agreement Officer may allow the Recipient to conduct its 
own screening of

[[Page 45818]]

individuals requiring privileged access or limited privileged access 
provided the Recipient can demonstrate that the procedures used by 
the Recipient are equivalent to NASA's personnel screening 
procedures. As used here, equivalent includes a check for criminal 
history, as would be conducted by NASA, and completion of a 
questionnaire covering the same information as would be required by 
NASA.
    (5) Screening of Recipient personnel may be waived by the 
Agreement Officer for those individuals who have proof of--
    (i) Current or recent national security clearances (within last 
three years);
    (ii) Screening conducted by NASA within last three years; or
    (iii) Screening conducted by the Recipient, within last three 
years, that is equivalent to the NASA personnel screening procedures 
as approved by the Agreement Officer under paragraph (d)(4) of this 
provision.
    (e) The Recipient shall ensure that its employees, in 
performance of the cooperative agreement, receive annual IT security 
training in NASA IT Security policies, procedures, computer ethics, 
and best practices in accordance with NPG 2810.1, Section 4.3 
requirements. The Recipient may use web-based training available 
from NASA to meet this requirement.
    (f) The Recipient shall afford NASA, including the Office of 
Inspector General, access to the Recipient's, subcontractors' or 
subawardees' facilities, installations, operations, documentation, 
databases and personnel used in performance of the cooperative 
agreement. Access shall be provided to the extent required to carry 
out a program of IT inspection, investigation and audit to safeguard 
against threats and hazards to the integrity, availability and 
confidentiality of NASA data or to the function of computer systems 
operated on behalf of NASA, and to preserve evidence of computer 
crime.
    (g) The Recipient shall incorporate the substance of this clause 
in all subcontracts or subagreements that meet the conditions in 
paragraph (a) of this provision.

[End of Provision]


Sec. 1274.938  Modifications.

Modifications

July 2002

    During the term of this agreement and in the interest of 
achieving program objectives, the parties may agree to changes that 
affect the responsibility statements, milestones, or other 
provisions of this agreement. Any changes to this agreement will be 
accomplished by a written bilateral modification.

[End of Provision]


Sec. 1274.939  Application of Federal, State, and Local laws and 
regulations.

Application of Federal, State, and Local Laws and Regulations

July 2002

    (a) Federal Laws and Regulations. This Cooperative Agreement 
shall be governed by the Federal Laws, regulations, policies, and 
related administrative practices applicable to this Cooperative 
Agreement on the date the Agreement is executed. The Recipient 
understands that such Federal laws, regulations, policies, and 
related administrative practices may be modified from time to time. 
The Recipient agrees to consider modifying this Agreement to be 
governed by those later modified Federal laws, regulations, 
policies, and related administrative practices that directly affect 
performance of the Project.
    (b) State or Territorial Law and Local Law. Except to the extent 
that a Federal statute or regulation preempts State or territorial 
law, nothing in the Cooperative Agreement shall require the 
Recipient to observe or enforce compliance with any provision 
thereof, perform any other act, or do any other thing in 
contravention of any applicable State or territorial law; however, 
if any of the provisions of the Cooperative Agreement violate any 
applicable State or territorial law, or if compliance with the 
provisions of the Agreement would require the Recipient to violate 
any applicable State or territorial law, the Recipient agrees to 
notify the Government (NASA) immediately in writing in order that 
the Government and the Recipient may make appropriate arrangements 
to proceed with the Project as soon as possible.
    (c) Changed Conditions of Performance (Including Litigation). 
The Recipient agrees to notify the Government (NASA) immediately of 
any change in State or local law, conditions, or any other event 
that may significantly affect its ability to perform the Project in 
accordance with the terms of this Cooperative Agreement. In 
addition, the Recipient agrees to notify the Government (NASA) 
immediately of any decision pertaining to the Recipient's conduct of 
litigation that may affect the Government's interests in the Project 
or the Government's administration or enforcement of applicable 
Federal laws or regulations. Before the Recipient may name the 
Government as a party to litigation for any reason, the Recipient 
agrees to inform the Government; this proviso applies to any type of 
litigation whatsoever, in any forum.
    (d) No Government Obligations to Third Parties. Absent the 
Government's express written consent, and notwithstanding any 
concurrence by the Government in or approval of the award of any 
Agreement of the Recipient (third party contract) or subcontract of 
the Recipient (third party subcontract) or the solicitation thereof, 
the Government shall not be subject to any obligations or 
liabilities to third party contractors or third party subcontractors 
or any other person(s).

[End of Provision]


Sec. 1274.940  Changes in recipient's membership.

Changes in Recipient's Membership

July 2002

    The Recipient shall notify the cognizant Agreement Officer 
within seven (7) days of any change in the corporate membership 
(ownership) structure of the Recipient, including the addition or 
withdrawal of any of the Recipient's affiliated members (e.g., 
Consortium Member). If NASA reasonably determines that any change in 
the corporate membership (ownership) of Recipient will conflict with 
NASA's objectives for the ------ Project or any statutory or 
regulatory restriction applicable to the agency, NASA may terminate 
this Agreement after giving the Agreement Recipient at least ninety 
(90) days prior written notice of such perceived conflict and a 
reasonable opportunity to cure such conflict.

[End of Provision]


Sec. 1274.941  Insurance and indemnification.

    The following provision is applicable to all cooperative 
agreements with commercial firms that involve programs or projects 
that are subject to Section 431 of Public Law 105-276, which 
addresses insurance for, or indemnification of, developers of 
experimental aerospace vehicles.

Insurance and Indemnification

July 2002

    (a) General. The Recipient has applied, under the provisions of 
Section 431 of Public Law 105-276 (Section 431), for indemnification 
by the Government against certain third party damage claims that 
might arise under the Agreement. Under Section 431, a necessary 
prerequisite to, and consideration for, the Government's granting 
such indemnification is the Recipient's obtaining insurance against 
an initial increment of such damages arising from certain third 
party claims. This provision sets forth the requirements for this 
insurance prerequisite to a Government grant of indemnification.
    (b) Definitions. The definitions at 14 CFR 1266, Cross-Waivers 
and Indemnification, apply to this provision.
    (c) Insurance. The Recipient shall obtain, as part of its 
financial contribution, insurance that meets the following 
parameters:
    (1) The insurance policy or policies shall insure against 
damages incurred by third parties arising from covered activities;
    (2) The amount of insurance applicable to each launch shall be 
[Amount to be inserted by the contracting officer]. The Government 
may subsequently increase the amount of insurance the Recipient is 
required to maintain to qualify for indemnification, for one or more 
launches, and the Recipient shall pay the additional cost of such 
increases from its financial contribution; and
    (3) The insurance policy or policies shall name the parties and 
their related entities, and the employees of the parties and their 
related entities, as named insureds.
    Nothing in this provision precludes the Recipient from 
obtaining, at no cost to the Government, such other insurance as the 
Recipient determines advisable to protect its business interests.
    (d) Proof of Insurance. The Recipient shall provide proof of 
insurance that meets the parameters in paragraph (c) of this 
provision and that is acceptable to the Agreement Officer:
    (1) Within 30/60 days after the execution of the modification 
adding this provision to the Agreement;

[[Page 45819]]

    (2) No later than 30 days before each launch; and
    (3) Within 7 days after a request by the Agreement Officer.
    Moreover, the Recipient shall promptly notify the Agreement 
Officer of any termination, or of any change to the terms or 
conditions of an insurance policy or policies for which proof of 
insurance was provided.
    (e) Notification of Claims. The Recipient shall--
    (1) Promptly notify the Agreement Officer of any third party 
claim or suit against the Recipient, one of its related entities, 
any employee of the Recipient or its related entities, or any 
insurer of the Recipient for damages resulting from covered 
activities;
    (2) Furnish evidence or proof of any such claim, suit or 
damages, in the form required by NASA; and
    (3) Immediately furnish to NASA, or its designee, copies of all 
information received by the Recipient, or by any related entity, 
employee or insurer that is pertinent to such claim, suit or 
damages.
    (f) NASA Concurrence in Settlements. NASA shall concur or not 
concur in each settlement of a third party claim by the Recipient's 
insurer(s). For purposes of determining the amount of 
indemnification under this cooperative agreement. Adjudicated claims 
shall be deemed concurred in by NASA.

[End of Provision]


Sec. 1274.942  Export licenses.

Export Licenses

July 2002

    (a) The Recipient shall comply with all U.S. export control laws 
and regulations, including the International Traffic in Arms 
Regulations (ITAR), 22 CFR Parts 120 through 130, and the Export 
Administration Regulations (EAR), 15 CFR parts 730 through 799, in 
the performance of this Cooperative Agreement. In the absence of 
available license exemptions/exceptions, the Recipient shall be 
responsible for obtaining the appropriate licenses or other 
approvals, if required, for exports of hardware, technical data, and 
software, or for the provision of technical assistance.
    (b) The Recipient shall be responsible for obtaining export 
licenses, if required, before utilizing foreign persons in the 
performance of this Cooperative Agreement, including instances where 
the work is to be performed on-site at [insert name of NASA 
installation], where the foreign person will have access to export-
controlled technical data or software.
    (c) The Recipient shall be responsible for all regulatory record 
keeping requirements associated with the use of licenses and license 
exemptions/exceptions.
    (d) The Recipient shall be responsible for ensuring that the 
requirements of this provision apply to its subcontractors.
    (e) The Recipient may request, in writing, that the Agreement 
Officer authorize it to export ITAR-controlled technical data 
(including software) pursuant to the exemption at 22 CFR 
125.4(b)(3). The Agreement Officer or designated representative may 
authorize or direct the use of the exemption where the data does not 
disclose details of the design, development, production, or 
manufacture of any defense article.

[End of Provision]

Appendix to Part 1274--Listing of Exhibits

Exhibit A to Part 1274--Contract Provisions

    All contracts awarded by a recipient, including small purchases, 
shall contain the following provisions if applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring compliance with E.O. 11246, ``Equal Employment 
Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order 
11246 Relating to Equal Employment Opportunity,'' and as 
supplemented by regulations at 41 CFR Part 60, ``Office of Federal 
Contract Compliance Programs, Equal Employment Opportunity, 
Department of Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)--All contracts in excess of $50,000 for construction or repair 
awarded by Recipients and subrecipients shall include a provision 
for compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 
874), as supplemented by Department of Labor regulations (29 CFR 
part 3, ``Contractors and Subcontractors on Public Building or 
Public Work Financed in Whole or in Part by Loans or Grants from the 
United States''). The Act provides that each recipient or 
subrecipient shall be prohibited from inducing, by any means, any 
person employed in the construction, completion, or repair of public 
work, to give up any part of the compensation to which he is 
otherwise entitled. The recipient shall report all suspected or 
reported violations to NASA.
    3. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in 
excess of $2,000 for construction contracts and in excess of $50,000 
for other contracts, other than contracts for commercial items, that 
involve the employment of mechanics or laborers shall include a 
provision for compliance with sections 102 and 107 of the Contract 
Work Hours and Safety Standards Act (40 U.S.C. 327-333), as 
supplemented by Department of Labor regulations (29 CFR part 5). 
Under Subsection 102 of the Act, each recipient shall be required to 
compute the wages of every mechanic and laborer on the basis of a 
standard work week of 40 hours. Work in excess of the standard work 
week is permissible provided that the worker is compensated at a 
rate of not less than 1\1/2\ times the basic rate of pay for all 
hours worked in excess of 40 hours in the work week. Section 107 of 
the Act is applicable to construction work and provides that no 
laborer or mechanic shall be required to work in surroundings or 
under working conditions which are unsanitary, hazardous or 
dangerous. These requirements do not apply to the purchases of 
supplies or materials or articles ordinarily available on the open 
market, or contracts for transportation or transmission of 
intelligence.
    4. Rights to Inventions Made Under a Contract or Agreement--
    Contracts or agreements for the performance of experimental, 
developmental, or research work shall provide for the rights of the 
Federal Government and the Recipient in any resulting invention in 
accordance with 37 CFR part 401, ``Rights to Inventions Made by 
Nonprofit Organizations and Small Business Firms Under Government 
Grants, Contracts and Cooperative Agreements,'' and any implementing 
regulations issued by the awarding agency.
    5. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
    Pollution Control Act (33 U.S.C. 1251 et seq.), as amended --
Contracts, other than contracts for commercial items, of amounts in 
excess of $100,000 shall contain a provision that requires the 
Recipient to agree to comply with all applicable standards, orders 
or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 
et seq.) and the Federal Water Pollution Control Act as amended (33 
U.S.C. 1251 et seq.). Violations shall be reported to NASA and the 
Regional Office of the Environmental Protection Agency (EPA).
    6. Byrd Anti-Lobbying Amendment (31 U.S.C.1352)--Contractors who 
apply or bid for an award of $100,000 or more shall file the 
required certification. Each tier certifies to the tier above that 
it will not and has not used Federal appropriated funds to pay any 
person or organization for influencing or attempting to influence an 
officer or employee of any agency, a member of Congress, officer or 
employee of Congress, or an employee of a member of Congress in 
connection with obtaining any Federal contract, grant or any other 
award covered by 31 U.S.C. 1352. Each tier shall also disclose any 
lobbying with non-Federal funds that takes place in connection with 
obtaining any Federal award. Such disclosures are forwarded from 
tier to tier up to the Recipient.
    7. Debarment and Suspension (E.O.s 12549 and 12689)--No contract 
shall be made to parties listed on the General Services 
Administration's List of Parties Excluded from Federal Procurement 
or Nonprocurement Programs in accordance with E.O.s 12549 and 12689, 
``Debarment and Suspension.'' This list contains the names of 
parties debarred, suspended, or otherwise excluded by agencies, and 
contractors declared ineligible under statutory or regulatory 
authority other than E.O. 12549. Contractors with awards that exceed 
the simplified acquisition threshold shall provide the required 
certification regarding its exclusion status and that of its 
principal employees.

Exhibit B to Part 1274--Reports

1. Individual Procurement Action Report (NASA Form 507)

    The Agreement Officer is responsible for submitting NASA Form 
507 for all cooperative agreement actions.

2. Property Reporting.

    As provided in paragraph (f) of Sec. 1274.923, an annual NASA 
Form (NF) 1018, NASA Property in the Custody of Contractors, will be 
submitted by October 31 of each year. Negative annual reports are 
required. A final

[[Page 45820]]

report is required within 30 days after expiration of the agreement 
(also see paragraph (g) of 1274.923 for electronic submission 
guidance).

3. Disclosure of Lobbying Activities (SFLLL)

    (a) Agreement Officers shall provide one copy of each SF LLL 
furnished under 14 CFR 1271.110 to the Procurement Officer for 
transmittal to the Director, Analysis Division (Code HC).
    (b) Suspected violations of the statutory prohibitions imple 
mented by 14 CFR part 1271 shall be reported to the Director, 
Contract Management Division (Code HK).

[FR Doc. 02-16261 Filed 7-9-02; 8:45 am]
BILLING CODE 7510-01-P