![](media/image1.wmf){width="0.8215277777777777in"
height="0.6868055555555556in"} Procurement Notice

National Aeronautics and

Space Administration

Washington, DC 20546

##  PN 04-01

###  December 29, 2004

**ORDERING PERIODS AND PERFORMANCE PERIODS UNDER TASK AND DELIVERY ORDER
CONTRACTS**

***BACKGROUND:*** Section 843 of the National Defense Authorization Act
for Fiscal Year 2004 (Public Law 108-136) amended the general authority
for task and delivery order contracts at 10 U.S.C. 2304a to specify that
task or delivery order contacts awarded under the authority of that
section may cover a total period of not more than 5 years, including all
options or modifications. This limitation applied to contracts awarded
by NASA, DOD, and the Coast Guard. PIC 04-09, dated April 9, 2004,
implemented this statutory limitation.

Section 813 of the National Defense Authorization Act for Fiscal Year
2005 amends and supersedes the Section 843 limitation. Under this latter
statute, task and delivery order contracts may be for any period up to
five years, and this period may be subsequently extended for one or more
successive periods pursuant to an option or contract modification.
However, in no case may the ordering period exceed a total of ten years
unless approved by the Deputy Chief Acquisition Officer.

This PN implements the revised statute by adding subsection 1816.505-71.
It also adds subsection 1816.505-72 to specify the limitations on order
performance periods that were included in PIC 04-09.

***ACQUISITIONS AFFECTED BY CHANGES:*** The ordering period limitations
in 1816.505-71 apply to all NASA task and delivery order contracts
except advisory and assistance service task order contracts, definite
quantity contracts, and multi-agency contracts awarded by agencies other
than NASA, DoD, or the Coast Guard. The performance period limitations
apply to all NASA task and delivery order contracts.

***ACTION REQUIRED BY CONTRACTING OFFICERS:*** Request deviations under
1817.204(e)(iii) for task and delivery order contracts that contemplate
an ordering period of greater than five years.

***CLAUSE CHANGES:*** None.

***PARTS AFFECTED:*** Parts 1816 and 1817.

***REPLACEMENT PAGES:*** You may use the enclosed pages to replace 16:1,
16:2, 16:11, 16:12, 16:13, 16:14, 17:1, and 17:2 of the NFS.

***TYPE OF RULE AND PUBLICATION DATE:*** Not Applicable. NFS 1817.204
already establishes a five year limitation on all NASA contracts, and
this change conforms to that policy. Accordingly, this change does not
have a significant effect beyond the internal operating procedures of
the Agency or have a significant cost or administrative impact on
contractors or offerors, and therefore does not require codification in
the Code of Federal Regulations (CFR) or publication for public comment.

***CANCELLATION:*** PIC 04-09 is cancelled.

***HEADQUARTERS CONTACT:*** Tom O'Toole, Contract Management Division
(ID010), (202) 358-0478, email: thomas.otoole@nasa.gov.

Tom Luedtke

Deputy Chief Acquisition Officer/Director for Procurement

Enclosures

**DISTRIBUTION:**

**PN List**

PART 1816

**TYPES OF CONTRACTS**

**TABLE OF CONTENTS**

**SUBPART 1816.1 SELECTING CONTRACT TYPES**

1816.104 Factors in selecting contract types.

1816.104-70 Contract type of performance-based contracting (PBC).

**SUBPART 1816.2 FIXED-PRICE CONTRACTS**

1816.202 Firm-fixed-price contracts.

1816.202-70 NASA contract clause.

1816.203 Fixed-price contracts with economic price adjustment.

1816.203-4 Contract clauses.

**SUBPART 1816.3 COST-REIMBURSEMENT CONTRACTS**

1816.303-70 Cost-sharing contracts.

1816.306 Cost-plus-fixed-fee contracts.

1816.307 Contract clauses.

1816.307-70 NASA contract clauses.

**SUBPART 1816.4 INCENTIVE CONTRACTS**

1816.402 Application of pre-determined, formula-type incentives.

1816.402-2 Performance incentives.

1816.402-270 NASA technical performance incentives.

1816.404 Fixed-price contracts with award fees.

1816.405 Cost-reimbursement incentive contracts.

1816.405-2 Cost-plus-award-fee (CPAF) contracts.

1816.405-270 CPAF contracts.

1816.405-271 Base fee.

1816.405-272 Award fee evaluation periods.

1816.405-273 Award fee evaluations.

1816.405-274 Award fee evaluation factors.

1816.405-275 Award fee evaluation scoring.

1816.405-276 Award fee payments and limitations.

1816.406 Contract clauses.

1816.406-70 NASA contract clauses.

**SUBPART 1816.5 INDEFINITE-DELIVERY CONTRACTS**

1816.504 Indefinite quantity contracts.

1816.505 Ordering.

1816.505-70 Task Ordering.

1816.505-71 Task and delivery order contract ordering period.

1816.505-72 Task and delivery order contract performance periods.

1816.506-70 NASA contract clause.

**SUBPART 1816.6 TIME-AND-MATERIALS,** **LABOR-HOUR, AND LETTER
CONTRACTS**

1816.603 Letter contracts.

1816.603-2 Application.

1816.603-370 Approvals.

**PART 1816**

## TYPES OF CONTRACTS

**Subpart** **1816.1\--Selecting Contract Types**

**1816.104 Factors in selecting contract types.**

**1816.104-70 Contract type for performance-based contracting (PBC).**

\(a\) PBC is defined in FAR 2.101 and discussed in FAR 37.6. Although
FAR Part 37 primarily addresses services contracts, PBC is not limited
to these contracts. PBC is the preferred way of contracting for all
supplies and services at NASA. Generally, when contract performance risk
under a PBC specification can be fairly shifted to the contractor to
allow for the operation of objective incentives, a contract type with
objectively measurable incentives (e.g., FFP, FPIF, or CPIF) is
appropriate. However, when contractor performance (e.g., cost control,
schedule, or quality/technical) is best evaluated subjectively using
quantitative measures, a CPAF contract may be used.

\(b\) A PBC is a completion form of contract (something is
accomplished). Term/level-of-effort, time-and-materials and labor hour
contracts are not PBC.

**Subpart** **1816.2\--Fixed-Price Contracts**

**1816.202 Firm-fixed-price contracts.**

**1816.202-70 NASA contract clause.**

The contracting officer shall insert the clause at 1852.216-78,
Firm-Fixed-Price, in firm-fixed-price solicitations and contracts.
Insert the appropriate amount in the resulting contract.

**1816.203 Fixed-price contracts with** **economic price adjustment.**

**1816.203-4 Contract clauses.**

\(a\) In addition to the approval requirements in the prescriptions at
FAR 52.216-2 through 52.216-4, the contracting officer shall coordinate
with the installation\'s Deputy Chief Financial Officer (Finance) before
exceeding the ten-percent limit in paragraph (c)(1) of the clauses at
FAR 52.216-2 and 52.216-3 and paragraph (c)(4) of the clause at
52.216-4.

(d)(2) Contracting officers shall contact the Office of Procurement,
Code HK, for specific guidance on preparing clauses using cost indexes.
Such clauses require advance approval by the Assistant Administrator for
Procurement. Requests for approval shall be submitted to the
Headquarters Office of Procurement (Code HS).

factor is 80, the weighted technical score is 48 (80 x 60 percent). The
weighted scores for each evaluation factor are then added to determine
the total award fee score.

**1816.405-276 Award fee payments and limitations.**

\(a\) *Interim Award Fee Payments*. The amount of an interim award fee
payment (see 1816.405-273(b)) is limited to the lesser of the interim
evaluation score or 80 percent of the fee allocated to that interim
period less any provisional payments (see paragraph (b) of this
subsection) made during the period.

\(b\) *Provisional Award Fee Payments*. Provisional award fee payments
are payments made within evaluation periods prior to an interim or final
evaluation for that period. Provisional payments may be included in the
contract and should be negotiated on a case-by-case basis. For a service
contract, the total amount of award fee available in an evaluation
period that may be provisionally paid is the lesser of a percentage
stipulated in the contract (but not exceeding 80 percent) or the prior
period\'s evaluation score. For an end item contract, the total amount
of provisional payments in a period is limited to a percentage not to
exceed 80 percent of the prior interim period's evaluation score.

\(c\) *Fee Payment*. The Fee Determination Official\'s rating for both
interim and final evaluations will be provided to the contractor within
45 calendar days of the end of the period being evaluated. Any fee,
interim or final, due the contractor will be paid no later than 60
calendar days after the end of the period being evaluated.

**1816.406 Contract clauses.**

**1816.406-70 NASA contract clauses.**

\(a\) As authorized by FAR 16.406(e), the contracting officer shall
insert the clause at 1852.216-76, Award Fee for Service Contracts, in
solicitations and contracts when an award-fee contract is contemplated
and the contract deliverable is the performance of a service.

\(b\) As authorized by FAR 16.406(e), the contracting officer shall
insert the clause at 1852.216-77, Award Fee for End Item Contracts, in
solicitations and contracts when an award fee contract is contemplated
and the contract deliverables are hardware or other end items for which
total contractor performance cannot be measured until the end of the
contract. When the clause is used in a fixed-price award-fee contract,
it shall be modified by deleting references to base fee in paragraphs
(a), and by deleting paragraph (c)(1), the last sentence of (c)(4), and
the first sentence of (c)(5).

\(c\) The contracting officer may insert a clause substantially as
stated at 1852.216-83, Fixed Price Incentive, in fixed-price-incentive
solicitations and contracts utilizing firm or successive targets. For
items subject to incentive price revision, identify the target cost,
target profit, target price, and ceiling price for each item.

\(d\) The contracting officer shall insert the clause at 1852.216-84,
Estimated Cost and Incentive Fee, in cost-plus-incentive-fee
solicitations and contracts.

\(e\) The contracting officer may insert the clause at 1852.216-85,
Estimated Cost and Award Fee, in award-fee solicitations and contracts.
When the contract includes performance incentives, use Alternate I. When
the clause is used in a fixed-price award fee contract, it shall be
modified to delete references to base fee and to reflect the contract
type.

\(f\) As provided at 1816.402-270, the contracting officer shall insert
a clause substantially as stated at 1852.216-88, Performance Incentive,
when the primary deliverable(s) is (are) hardware and total estimated
cost and fee is greater than \$25 million. A clause substantially as
stated at 1852.216-88 may be included in lower dollar value hardware
contracts with the approval of the procurement officer.

**Subpart** **1816.5\--Indefinite-Delivery Contracts**

**1816.504 Indefinite quantity contracts.**

(a)(4)(ii) ID/IQ service contract values and task order values shall be
expressed only in dollars.

(a)(4)(v) See 1815.7003.

**1816.505 Ordering.**

\(a\) (2) Task and delivery orders shall be issued by the contracting
officer.

(b)(5) The Agency and installation ombudsmen designated in accordance
with 1815.7001 shall review complaints from contractors on task order
contracts and delivery order contracts.

**1816.505-70 Task ordering.**

\(a\) The contracting officer shall, to the maximum extent possible,
state task order requirements in terms of functions and the related
performance and quality standards such that the standards may be
objectively measured.

\(b\) To the maximum extent possible, contracting officers shall solicit
contractor task plans to use as the basis for finalizing task order
requirements and enable evaluation and pricing of the contractor\'s
proposed work on a performance based approach as described in
1816.104-70(a).

\(c\) Task order contract type shall be individually determined, based
on the nature of each task order\'s requirements.

\(1\) Task orders may be grouped by contract type for administrative
convenience (e.g., all CPIF orders, all FFP orders, etc.) for contractor
progress and cost reporting.

\(2\) Under multiple awards, solicitations for individual task plans
shall request the same pricing structure from all offerors.

\(d\) Any undefinitized task order issued under paragraph (f) of the
clause at 1852.216-80, Task Ordering Procedure, shall be treated and
reported as an undefinitized contract action in accordance with 1843.70.

**1816.505-71 Task and delivery order contract ordering period.**

\(a\) 10 U.S.C. 2304a establishes limitations on the ordering period of
a task or delivery order contract awarded by NASA. The statute specifies
that the ordering period may be for any period up to five years. This
period may be subsequently extended for one or more successive periods
pursuant to an option or contract modification. In no case may the
ordering period exceed a total of ten years unless approved by the
Deputy Chief Acquisition Officer.

\(b\) The deviation requirement at 1817.204(e)(iii) applies to a task or
delivery contract with an ordering period of more than five years.

\(c\) Orders under GSA Federal Supply Schedule contracts must comply
with the limitations in paragraph (a) of this subsection if the orders
provide for the issuance of subsequent task or delivery orders.

\(d\) The limitations in paragraph (a) of this subsection do not apply
to \--

\(1\) Advisory and assistance service task order contracts (authorized
by 10 U.S.C. 2304b). These contracts are limited by statute to 5 years,
with the authority to extend an additional 6 months (see FAR 16.505(c));

\(2\) Definite quantity contracts; and

\(3\) Multi-agency contracts awarded by agencies other than NASA, DoD,
or the Coast Guard.

**1816.505-72 Task and delivery order contract performance periods.**

\(a\) Performance of orders placed within the contract ordering period
may extend for up to one year past the end of the ordering period if the
contracting officer determines that performance of the order cannot
reasonably be deferred to any planned follow-on contract.

  (b) Orders that require performance of more than one year past the end
of the ordering period must be approved by the Deputy Chief Acquisition
Officer prior to issuance. Centers shall submit approval requests, with
full rationale for the necessity of placing the order, to Code HS at
least two weeks before the planned issuance of the order.

**1816.506-70 NASA contract clause.**

Insert the clause at 1852.216-80, Task Ordering Procedure, in
solicitations and contracts when an indefinite-delivery, task order
contract is contemplated. The clause is applicable to both fixed-price
and cost-reimbursement type contracts. If the contract does not require
533M reporting (see NPR 9501.2, NASA Contractor Financial Management
Reporting), use the clause with its Alternate I.

**Subpart** **1816.6\--Time-and-Materials, Labor-Hour, and Letter
Contracts**

**1816.603 Letter contracts.**

**1816.603-2 Application.**

\(a\) Centers must ensure that NASA liabilities and commitments are
minimized under letter contracts. When a letter contract is justified
and program requirements can be severed into smaller, discreet efforts,
the work authorized by the letter contract must be limited to the
minimum severable effort required to satisfy the urgent program
requirements. The remaining requirements may not be initially included
in the letter contract and must be acquired through a separate fully
priced and definitized contract action.

**1816.603-370 Approvals.**

(a)(1) The approval authority to issue a letter contract is \--

\(i\) The Assistant Administrator for Procurement when the estimated
value of the definitized contract is equal to or greater than the Master
Buy Plan (MBP) submission threshold of 1807.7101;

\(ii\) The procurement officer when the estimated value of the
definitized contract is below the MBP submission threshold; and

\(iii\) The Assistant Administrator for Procurement for any modification
of an undefinitized letter contract approved by the procurement officer
that increases the estimated value of the definitized contract to an
amount equal to or above the MBP submission threshold. This approval
must be obtained prior to issuing the modification.

\(2\) The procurement officer must sign all requests for approval by the
Assistant Administrator for Procurement and submit them to Code HS.

\(b\) All requests for authority to issue a letter contract must include
the following:

\(1\) Contractor name and address.

\(2\) Place of performance.

\(3\) Contract number, including modification number, if applicable.

\(4\) Brief description of the work or services to be performed.

\(5\) Performance period or delivery schedule for both the letter
contract and definitized contract.

\(6\) Estimated value of the work authorized by the letter contract.

\(7\) Estimated value of the definitized contract.

\(8\) Contract type of the definitized contract.

\(9\) A statement that the definitized contract will contain all
required clauses or identification of approved specific clause
deviations.

\(10\) Complete justification of the necessity for the letter contract,
including the advantages to the Government and a description of the
efforts to avoid its issuance or to minimize its scope.

\(11\) The definitization schedule described in FAR 16.603-2(c) expected
to be negotiated with the contractor.

**PART** **1817**

# SPECIAL CONTRACTING METHODS

**TABLE OF CONTENTS**

**SUBPART 1817.1 MULTIYEAR CONTRACTING**

1817.105 Policy.

1817.105-1 Uses.

**SUBPART 1817.2 OPTIONS**

1817.200 Scope of subpart.

1817.203 Solicitations.

1817.204 Contracts.

1817.206 Evaluation.

1817.207 Exercise of options.

1817.207-70 Analysis to support exercise of options.

1817.208 Solicitation provisions and contract clauses.

**SUBPART 1817.4 LEADER COMPANY** **CONTRACTING**

1817.401 General.

**SUBPART 1817.5 INTERAGENCY ACQUISITIONS** **UNDER THE ECONOMY ACT**

1817.500 Scope of subpart.

**SUBPART 1817.70 ACQUISITIONS WITH** **MILITARY DEPARTMENTS**

1817.7000 Scope of subpart.

1817.7001 Authorization and policy.

1817.7002 NASA-Defense Purchase Request and acceptance.

1817.7002-1 Acceptance by Military Department.

1817.7002-2 Changes in estimated total prices.

1817.7002-3 Payments.

1817.7002-4 Contract clause.

**SUBPART 1817.71 EXCHANGE OR SALE OF** **PERSONAL PROPERTY**

1817.7101 Policy.

**SUBPART 1817.72 INTERAGENCY TRANSACTIONS**

1817.7201 Policy.

1817.7202 Determinations and findings requirements.

1817.7203 Ordering procedures.

**SUBPART 1817.73 PHASED ACQUISITION**

1817.7300 Definitions.

1817.7301 Down-selections in phased acquisitions.

1817.7301-1 Pre-solicitation planning.

1817.7301-2 Evaluation factors.

1817.7301-3 Down-selection milestones.

1817.7301-4 Synopsis.

1817.7301-5 Progressive competition.

1817.7302 Contract clauses.

**PART** **1817**

**SPECIAL CONTRACTING METHODS**

**Subpart 1817.1\--Multiyear Contracting**

**1817.105 Policy.**

**1817.105-1 Uses.**

\(b\) The Assistant Administrator for Procurement (Code HS) is the
approval authority for the use of the multiyear contracting technique.
Requests for approval shall be signed by the procurement officer and
shall include a description of the acquisition, identification of
anticipated contract costs and funding, and a determination, with
supporting rationale, that each of the criteria in FAR 17.105-1(b) is
met by the proposed use of multiyear contracting.

**Subpart 1817.2\--Options**

**1817.200 Scope of subpart.**

FAR Subpart 17.2 applies to all NASA contracts.

**1817.203 Solicitations.**

(g)(2) The procurement officer is authorized to approve option
quantities greater than 50 percent.

# 1817.204 Contracts.

(e)**(i)** The 5-year limitation (basic plus option periods) applies to
all NASA contracts regardless of type and other procurement award
instruments. This includes agreements (e.g. basic ordering agreements,
blanket purchase agreements), interagency acquisitions, and orders
placed under agreements or awarded under a Federal Supply Schedule or
other indefinite delivery/indefinite quantity contracts awarded by other
agencies. See 1816.505-71 for limitations on the ordering period of task
and delivery order contracts.

**(ii)** When the performance period exceeds 5 years (exclusive of
options), the program/project office and the contracting officer shall
review the requirement at the mid-point of the performance period to
ensure that the products or services continue to fulfill NASA's mission
needs and that the procurement award instrument continues to provide the
best means of satisfying the requirement.

**(iii)** Requests for deviations from the 5-year limitation policy
shall be sent to the Assistant Administrator for Procurement (Code HS)
and shall include justification for exceeding five