[Federal Register Volume 76, Number 131 (Friday, July 8, 2011)]
[Rules and Regulations]
[Pages 40280-40281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17116]



48 CFR Parts 1834

RIN 2700-AD29

Major System Acquisition; Earned Value Management

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Final rule.


SUMMARY: NASA is issuing a final rule to delete the requirement in the 
NASA FAR Supplement (NFS) for contractors to establish and maintain an 
Earned Value Management System (EVMS) for firm-fixed-price (FFP) 
contracts. The final rule recognizes the reduction in risk associated 
with FFP contracts and intends to relieve contractors of an unnecessary 
reporting burden.

DATES: Effective Date: July 8, 2011.

Procurement, Contract Management Division (Suite 5K80); (202) 358-1784; 
e-mail: [email protected].


I. Background

    NASA published a proposed rule in the Federal Register at 76 FR 
7526 on February 10, 2011. The sixty day comment period expired April 
11, 2011. Three comments were received from two respondents. No changes 
are made to the proposed rule as a result of public comments.

II. Discussion and Analysis of the Public Comments

    Comment: The respondent suggested that the policy should more 
clearly define in house and external Earned Value Management 
    Response: The regulation in the NASA FAR Supplement, 1834.201, is 
only directed toward contractor external efforts. Internal Government 
requirements are included but are not regulatory and not a part of this 
    Comment: The respondent suggested including a statement requiring 
any additional reporting requirements for FFP contracts to be 
identified in the solicitation or subsequent contract modification.
    Response: NASA will collect the necessary data for project 
management and oversight. The rule states: ``The contracting officer 
shall collaborate with the government's program/project manager to 
ensure the appropriate data can be obtained or generated to fulfill 
program management needs''. There are various methods to obtain the 
appropriate data, and the CO will include Data Requirements in the 
solicitation and/or contract as needed on a case-by-case basis.
    Comment: The respondent stated that NASA should consider 
implementing the change to existing contracts providing additional cost 
savings to NASA and the industry.
    Response: NASA will not require, but may consider, implementing the 
change on existing contracts, on a case-by-case basis.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    This final rule will not have a significant economic impact on a 
substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because it relaxes 
previous requirements in the NASA FAR Supplement and does not impose a 
significant economic impact beyond that previously required.

V. Paperwork Reduction Act

    This final rule does not impose any new information collection 
requirements that require the approval of the Office of Management and 
Budget (OMB) under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 1834

    Government procurement.

William P. McNally,
Assistant Administrator for Procurement.

    Accordingly, 48 CFR Part 1834 is amended as follows:


1. The authority citation for 48 CFR Part 1834 continues to read as 

    Authority: 42 U.S.C. 2455(a), 2473(c)(1)

[[Page 40281]]

2. Section 1834.201 is revised to read as follows:

1834.201  Policy.

    (a) NASA requires use of an Earned Value Management System (EVMS) 
on acquisitions for development or production work, including 
development or production work for flight and ground support systems 
and components, prototypes, and institutional investments (facilities, 
IT infrastructure, etc.) as specified below:
    (1) For cost or fixed-price incentive contracts and subcontracts 
valued at $50 Million or more the contractor shall have an EVMS that 
has been determined by the cognizant Federal agency to be in compliance 
with the guidelines in the American National Standards Institute/
Electronic Industries Alliance Standard 748, Earned Value Management 
Systems (ANSI/EIA-748).
    (2) For cost or fixed-price incentive contracts and subcontracts 
valued at $20 Million or more but less than $50 Million, the contractor 
shall have an EVMS that complies with the guidelines in ANSI/EIA-748, 
as determined by the cognizant Contracting Officer.
    (3) For cost or fixed-price incentive contracts and subcontracts 
valued at less than $20 Million the application of EVM is optional and 
is a risk-based decision at the discretion of the program/project 
    (b) Requiring earned value management for firm-fixed-price (FFP) 
contracts and subcontracts of any dollar value is discouraged; however, 
a schedule management system and adequate reporting shall be required 
to plan and track schedule performance for development or production 
contracts valued at $20 Million or more. In addition, for FFP contracts 
that are part of a program/project of $50 Million or more, the 
contracting officer shall collaborate with the government's program/
project manager to ensure the appropriate data can be obtained or 
generated to fulfill program management needs and comply with NASA 
Procedural Requirements (NPR) 7120.5.
    (c) An EVMS is not required on non-developmental contracts for 
engineering support services, steady state operations, basic and 
applied research, and routine services such as janitorial services or 
grounds maintenance services.
    (d) Contracting officers shall request the assistance of the 
cognizant Defense Contract Management Agency (DCMA) office in 
determining the adequacy of proposed EVMS plans and procedures and 
system compliance.
    (e) Notwithstanding the EVMS requirements above, if an offeror 
proposes to use a system that has not been determined to be in 
compliance with the American National Standards Institute/Electronics 
Industries Alliance (ANSI/EIA) Standard-748, Earned Value Management 
Systems, the offeror shall submit a comprehensive plan for compliance 
with these EVMS standards, as specified in 1852.234-1, Notice of Earned 
Value Management System. Offerors shall not be eliminated from 
consideration for contract award because they do not have an EVMS that 
complies with these standards.

3. In section 1834.203-70, the introductory text is revised to read as 

1834.203-70  NASA solicitation provision and contract clause.

    Except for firm-fixed price contracts and the contracts identified 
in 1834.201(a)(3), the contracting officer shall insert--
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[FR Doc. 2011-17116 Filed 7-7-11; 8:45 am]