PART 1842

CONTRACT ADMINISTRATION AND AUDIT SERVICES

# TABLE OF CONTENTS

**SUBPART [1842.1](#subpart-1842.1--contract-audit-services) CONTRACT
AUDIT SERVICES**

1842.101 Contract audit responsibilities.

1842.102 Assignment of contract audit services.

1842.102-70 Review of administration and audit services.

1842.170 Assignment of NASA personnel at contractor plants.

**SUBPART [1842.2](#subpart-1842.2--contract-administration-services)
CONTRACT ADMINISTRATION SERVICES**

1842.202 Assignment of contract administration.

1842.202-70 Retention of contract administration.

1842.270 Contracting officer technical representative (COTR)
delegations.

1842.271 NASA clause.

**SUBPART [1842.3](#OLE_LINK3) CONTRACT ADMINISTRATION OFFICE
FUNCTIONS**

1842.302 Contract administration functions.

**SUBPART [1842.5](#OLE_LINK5) POSTAWARD ORIENTATION**

1842.503 Postaward conferences.

**SUBPART [1842.7](#OLE_LINK7)** **INDIRECT COST RATES**

1842.705 Final indirect cost rates.

1842.705-1 Contracting officer determination procedure.

1842.708 Quick-closeout procedure.

1842.708-70 NASA Quick-closeout procedure.

**SUBPART [1842.8](#OLE_LINK8) DISALLOWANCE OF COSTS**

1842.803 Disallowing costs after incurrence.

**SUBPART [1842.12](#OLE_LINK12) NOVATION AND CHANGE-OF-NAME
AGREEMENTS**

1842.1203 Processing agreements.

1842.1203-70 DOD processing of novation and change-of-name agreements on

behalf of NASA.

**SUBPART [1842.13](#OLE_LINK13) SUSPENSION OF WORK, STOP-WORK ORDERS,
AND GOVERNMENT DELAY OF WORK**

1842.1305 Contract clauses.

**SUBPART [1842.15](#OLE_LINK15) CONTRACTOR PERFORMANCE INFORMATION**

1842.1501 General.

1842.1502 Policy.

1842.1503 Procedures.

**SUBPART [1842.70](#OLE_LINK70) ADDITIONAL NASA CONTRACT CLAUSES**

1842.7001 Observance of legal holidays.

1842.7002 Travel outside of the United States.

1842.7003 Emergency medical services and evacuation.

**SUBPART [1842.71](#subpart-1842.71--submission-of-vouchers) SUBMISSION
OF VOUCHERS**

1842.7101 Submission of vouchers.

**SUBPART [1842.72](#OLE_LINK72) NASA CONTRACTOR FINANCIAL MANAGEMENT**

**REPORTING**

1842.7201 General.

1842.7202 Contract clause.

**SUBPART [1842.73](#subpart-1842.73--audit-tracking-and-resolution)
AUDIT TRACKING AND RESOLUTION**

1842.7301 NASA external audit follow-up system.

1842.7302 Reportable audit disposition documentation.

PART 1842

**CONTRACT ADMINISTRATION AND AUDIT SERVICES**

##  Subpart 1842.1\--Contract Audit Services

**1842.101** **Contract audit responsibilities.**

(a)**(i)** The Defense Contract Audit Agency
([**DCAA**](http://www.dcaa.mil/)) has been designated as the DOD agency
responsible for the performance of audit functions for NASA contracts,
except those awarded to educational institutions for which other
agencies have audit cognizance under [**OMB Circular No.
A-133**](http://www.whitehouse.gov/OMB/circulars/a133/a133.html), those
with Canadian contractors, and those for which NASA will perform audits.

**(ii)** Cross-servicing arrangements are the responsibility of the
Headquarters Office of External Relations (Code ID). Contracting
officers should direct questions to the Headquarters Office of
Procurement (Code HK).

**1842.102 Assignment of contract audit services.**

**1842.102-70 Review of administration and audit services.**

NASA contracting activities shall assess their delegations to DOD
semiannually to determine changes in delegation patterns that could
result in significant changes in DOD manpower requirements or have other
important impacts on DOD contract administration activities. Events such
as major program cutbacks or expansions, changes in locations of major
programs, and sizable new acquisitions should be considered in the
assessment. Contracting activities shall advise the Headquarters Office
of Procurement Contract Management Division when an assessment indicates
a significant change in required DOD support.

**1842.170 Assignment** **of** **NASA** **personnel** **at**
**contractor** **plants.**

(a)(1) NASA personnel normally shall not be assigned at or near a
contractor\'s facility to perform any contract administration functions
listed in [**FAR
42.302(a)**](http://www.arnet.gov/far/current/html/Subpart_42_3.html#1046650).
Before such an assignment is made, a written request shall be forwarded
to the cognizant program director for approval with the concurrence of
the Assistant Administrator for Procurement (Code HS). The following
supporting information shall be forwarded with the request to make the
assignment:

\(i\) A statement of the special circumstances that necessitate the
assignment.

\(ii\) The contract administration services to be performed.

\(iii\) A summary of any discussions held with the cognizant contract
administration organization.

\(iv\) A staffing plan covering three years or such shorter period as
may be appropriate.

\(2\) The provisions of this paragraph do not apply to NASA audit
personnel assigned to the field installations, to NASA technical
personnel covered by 1842.101 and paragraph (b) of this section, unless
they are performing any contract administration functions listed in
[**FAR
42.302(a)**](http://www.arnet.gov/far/current/html/Subpart_42_3.html#1046650),
or to personnel assigned to contractors\' plants on NASA or other
Federal installations.

\(b\) NASA may assign technical personnel (such as quality assurance,
reliability, or engineering representatives) to contractors\' plants or
laboratories to provide direct liaison with NASA and technical
assistance and guidance to the contractor and DOD. The duties and
responsibilities of these technical representatives shall be clearly
defined and shall not conflict with, duplicate, or overlap with
functions delegated to DOD personnel. NASA shall advise appropriate DOD
and contractor organizations of the duties and responsibilities of NASA
technical personnel.

\(c\) When a NASA resident office, including any assigned technical
personnel, and a DOD contract administration office are performing
contract administration functions for NASA contracts at the same
contractor\'s facility, the two offices shall execute a written
agreement clearly establishing the relationship between the two
organizations and the contractor. The agreement should eliminate
duplication in the performance of contract administration functions and
minimize procedural misunderstandings between the two organizations.
Such agreements shall be consistent with existing delegations to the
contract administration offices concerned and shall specify the
relationship of NASA nonprocurement resident personnel to their DOD and
contractor counterparts if such personnel will be involved in any aspect
of contract administration.

## Subpart 1842.2\--Contract Administration Services

**1842.202 Assignment** **of** **contract** **administration.**

\(b\) *Special instructions*.

**(i)** The functions described in 42.302(b)(1) and the following
subparagraphs of 42.302(a) are normally retained: (3), (10), (12), (13),
(14), (15), (17), (18), (19), (20), (21), (22), (23), (24), (29), (32),
(43), (44), (45), (46), (48), (51), (56), (58), (59), (62), (63), (64),
(65), (69), and (70).

\(d\) *Transmittal and documentation*. In addition to the instructions
at [**FAR
42.202(d)(1)**](http://www.arnet.gov/far/current/html/Subpart_42_2.html#1046616)
through (4), contracting officers shall \--

**(i)** Send delegations to DOD contract administration offices in
accordance with the instructions in the DOD Directory of Contract
Administration Services Components (DLAH 4105.4).

**(ii)** At time of contract award, prepare and forward NASA Form 1430,
Letter of Contract Administration Delegation, General, and appropriate
appendices (NASA Form 1430A, 1430B, 1430C, and 1430D) to the contract
administration office

**(iii)** Forward NASA Form 1431, Letter of Acceptance of Contract
Administration, with each NASA Form 1430 and appropriate appendices.
Contracting officers shall use the returned NASA Form 1431 as contract
file documentation that the delegation has been accepted, modified or
rejected by the contract administration office and as a reference for
points of contact for each of the functional areas delegated.

**(iv)** Use NASA Form 1433, Letter of Audit Delegation, to delegate the
audit function and to amend previous delegations. Distribute copies of
the contract and NASA Form 1433 as follows:

**(A)** *Audit office:* One copy of the contract and three NASA Forms
1433. When the Department of Health and Human Services is designated as
the audit office, item 12 on NASA Form 1433 shall be marked \"Not
applicable.\"

**(B)** *Contractor:* One NASA Form 1433.

**(C)** *Cognizant NASA fiscal or financial management office:* One NASA
Form 1433.

**(v)** For contracts with the Canadian Commercial Corporation (CCC),
audits are automatically arranged by the Department of Defense
Production (Canada) (DDP) in accordance with agreements between NASA and
DDP. Audit reports are furnished to DDP. Upon advice from DDP, CCC will
certify the invoice and forward it with Standard Form 1034, Public
Voucher, to the contracting officer for further processing and
transmittal to the fiscal or financial management officer.

**(vi)** For contracts placed directly with Canadian firms, audits are
requested by the contracting officer from the Audit Services Branch,
Comptroller of the Treasury, Department of Finance, Ottawa, Ontario,
Canada. Invoices are approved by the auditor on a provisional basis
pending completion of the contract and final audit. These invoices,
accompanied by SF 1034, are forwarded to the contracting officer for
further processing and transmittal to the fiscal or financial management
officer. Periodic advisory audit reports are furnished directly to the
contracting officer.

**1842.202-70 Retention of contract administration.**

\(a\) The assignment of contract administration is optional for the
following contracts:

**(1)** Research and development study contracts not involving
deliverable hardware or Government furnished property.

**(2)** Contracts with periods of performance of 90 days or less.

**(3)** Contracts with periods of performance of 91 to 180 days that do
not include all of the following:

\(i\) A small business subcontracting plan.

\(ii\) Government-furnished property.

\(iii\) Progress payments, if a fixed-price type contract.

**(4)** Purchase orders without Government source inspection
requirements.

**(5)** Contracts requiring only on-site performance.

**(6)** Contracts requiring work in the vicinity of the awarding center
where DOD contract administration services are not reasonably available.

\(b\) The determination to assign Quality Assurance, Property
Administration or Plant Clearance for administration shall be made after
review by the cognizant technical personnel.

**1842.270 Contracting officer technical representative (COTR)
delegations.**

\(a\) The cognizant contracting officer may appoint a qualified
Government employee to act as their representative in managing the
technical aspects of a particular contract. If necessary, the
contracting officer may appoint an alternate COTR to act during short
absences of the COTR. Technical organizations are responsible for
ensuring that the individual they recommend to the contracting officer
possesses training, qualifications and experience commensurate with the
duties and responsibilities to be delegated and the nature of the
contract.

\(b\) NASA Form 1634, Contracting Officer Technical Representative
(COTR) Delegation, shall be used to appoint COTRs. A COTR's duties and
responsibilities may not be redelegated by the COTR and the COTR may be
held personally liable for unauthorized acts. However, this does not
prohibit the COTR from receiving assistance for the purpose of
monitoring contractor progress and gathering information. When an
individual is appointed as a COTR on more than one contract, separate
delegations shall be issued for each contract. A separate NASA Form 1634
will be used to appoint an alternate COTR.

\(c\) A COTR delegation remains in effect throughout the life of the
contract unless canceled in writing by the cognizant contracting officer
or at any level above that contracting officer. The contracting officer
may modify the delegation only by issuance of a new delegation canceling
and superseding the existing delegation.

\(d\) A COTR shall not be authorized to initiate procurement actions or
in any way cause a change to the contract or increase the Government\'s
financial obligations. However, delegations may be made to construction
contract COTRs to sign emergency on-site change orders in accordance
with NFS 1843.70. Contracting officers shall specify in NASA Form 1634 a
not to exceed limitation on COTR authority. In no event shall the
limitation exceed \$25,000.

\(e\) Each COTR shall acknowledge receipt and accept the delegation by
signing the original delegation letter and returning it to the
contracting officer. The contracting officer shall file original of the
COTR delegation letter in the applicable contract file. Copies of the
signed COTR delegation letter shall be distributed to the COTR, the
contractor, and each cognizant contract administration office.
Acknowledgment and distribution for terminations of COTR delegations and
COTR delegations which revise authority, duties and responsibilities
shall follow the same rules.

\(f\) Federal Acquisition Certification for Contracting Officer
Technical Representatives (FAC-COTR) Requirements

\(1\) These requirements apply to all individuals appointed as COTRs and
alternate COTRs on NASA contracts. These requirements do not apply to
individuals managing grants, or awards made under NASA\'s Small Business
Innovation Research (SBIR) and Small Business Technology Transfer (STTR)
Programs. NASA FAC-COTR Program will be managed by the Acquisition
Career Manager (ACM) within the Office of Procurement.

\(2\) FAC-COTR certificates from any civilian agency are equivalent to
NASA FAC-COTR certificates. The following certificates, from NASA or any
civilian agency, are equivalent to a NASA FAC-COTR certificate:

\(i\) Federal Acquisition Certification in Contracting (FAC-C) Level I
or above; or

\(ii\) Federal Acquisition Certification for Program and Project
Managers (FAC-P/PM) Mid-Level/Journeyman.

\(3\) An individual with a FAC-COTR does not necessarily meet the
requirements for the FAC-C Level I or the FAC-P/PM mid-level/journeyman.

\(4\) For recordkeeping purposes, individuals with equivalent
certificates who will be appointed as COTRs must submit a copy of their
equivalent certificate to the ACM to be recorded as meeting NASA
FAC-COTR requirements.

\(5\) Basic COTR Training. To earn a NASA FAC-COTR certificate,
individuals must complete 40 hours of basic COTR training approved by
the ACM. ACM approved training is available under the NASA Shared
Service Center's Agency-wide COTR Training Blanket Purchase Agreement
(BPA).

\(6\) Continuing Education. COTRs must maintain their skills currency
through continuing education. To maintain a FAC-COTR, COTRs are required
to earn 40 continuous learning points (CLPs) of skills currency training
every two years. The two-year continuous learning cycle is set for all
civilian agencies for the following timeframes: October 01, 2009, until
September 30, 2011, October 01, 2011 until September 30, 2013, and so
forth.

\(7\) With the exception of the NASA-specific COTR refresher training,
there are no specific courses required for COTR continuing education.
Supervisors remain responsible for working with COTRs to identify those
activities and opportunities of greatest benefit to the professional
development of an individual. The training, professional activities,
education and experience that are used to meet the continuing education
requirements must be job related.

\(i\) Each two-year cycle shall include NASA-specific COTR refresher
training which has been approved by the ACM. ACM approved training is
available under NASA Shared Service Center's Agency-wide COTR Training
BPA.

\(ii\) Appendix A to the Office of Federal Procurement Policy's
memorandum, The Federal Acquisition Certification for Contracting
Officer Technical Representatives, dated November 26, 2007, provides
additional guidance on determining continuous learning points. The
memorandum is available at http://www.fai.gov/pdfs/11-26-COTR-Memo.pdf.

\(8\) A FAC-COTR will expire if the continuing education requirements
are not met and the individual will no longer be eligible to be a COTR.

\(9\) FAC-COTR training, both basic and continuous, will be tracked in
SATERN. COTRs are responsible for ensuring their SATERN learning history
is accurate.

\(g\) The contracting officer shall verify that the proposed COTR has a
FAC-COTR before signing NASA Form 1634. The Procurement Officer (PO) may
defer, for a period not to exceed six months, all or part of the
FAC-COTR requirements in writing, on a case-by-case basis, if granting
the deferment is in the best interest of the Agency. This authority
shall be used only when necessary. A written justification shall specify
the reasons for and conditions of the deferment. A copy of the
justification shall be furnished to the ACM and documented in the
contract file(s).

\(1\) If the proposed COTR has not completed basic COTR training, the PO
shall ensure the proposed COTR receives appropriate interim training
until the required COTR basic training is completed. Interim training is
a stop gap measure to ensure the COTR understands his or her authority
and responsibilities. It may include a briefing or on-line training.
Completion of the interim training shall be documented in the applicable
contracts file(s).

**1842.271 NASA clause.**

Insert the clause at
[**1852.242-70**](http://www.hq.nasa.gov/office/procurement/regs/5242-44.htm),
Technical Direction, when paragraph 3(m) of the NASA Form 1634
specifically authorizes a COTR to issue technical direction.

**Subpart** []{#OLE_LINK3 .anchor}**1842.3\--Contract Administration
Office Functions**

**1842.302 Contract administration functions.**

\(a\) In addition to the responsibilities listed in [**FAR
42.302(a)**](http://www.arnet.gov/far/current/html/Subpart_42_3.html#1046650),
responsibility for reviewing earned value management system (EVMS) plans
and verifying initial and continuing contractor compliance with NASA and
DoD EVMS criteria and conformity with ANSI/EIA Standard 748, Industry
Guidelines for EVMS, is normally delegated to DCMA.

**Subpart** []{#OLE_LINK5 .anchor}**1842.5\--Postaward Orientation**

**1842.503 Postaward conferences.**

**(1)** A postaward conference shall be held with representatives of the
contract administration office when \--

**(i)** A contract is expected to exceed \$10,000,000;

**(ii)** Contract performance is required at or near a NASA installation
or NASA-controlled launch site;

**(iii)** The delegation will impose an abnormal demand on the resources
of the contract administration office receiving the delegation; or

**(iv)** Complex contract management problems are expected, particularly
risk management areas identified during program and acquisition
planning, e.g., significant or unusual mission success, technical, cost,
schedule, safety, security, occupational health, environmental
protection, and export control risks.

**(2)** Procurement officer approval is required to waive a post-award
planning conference for contracts meeting any of the criteria in
paragraph (1) of this section. The request for procurement officer
approval to waive a post-award conference shall address action taken and
planned to ensure effective communication with the contract
administration office during the performance of the contract.

**Subpart** []{#OLE_LINK7 .anchor}**1842.7\--Indirect Cost Rates**

**1842.705**  **Final** **indirect** **cost rates.**

**1842.705-1 Contracting officer determination procedure.**

\(b\) *Procedures*

(3)**(i)** When NASA is not the cognizant Federal agency, NASA should
participate with the cognizant contracting officer (or cognizant Federal
agency official) in the final indirect cost rate determination procedure
where the issues involved would have a significant financial impact on
the agency. The NASA participant should be a representative from that
installation providing the preponderance of NASA funding. If a
determination is made that NASA's participation is not warranted, that
decision must be communicated to the cognizant contracting officer (or
cognizant Federal agency official).

**(ii)** When NASA is the cognizant Federal agency, settlement of
indirect costs should be conducted by the cognizant NASA contracting
officer (normally from the installation providing the preponderance of
NASA funding).

**1842.708 Quick-closeout procedure.**

(a)(2)(ii) The 15 percent parameter does not apply to NASA contracts.
Instead, perform a risk analysis that takes into consideration the
contractor systems identified in [**FAR
42.708(a)(2)(ii)**](http://www.arnet.gov/far/current/html/Subpart_42_7.html#1046974),
as well as the concerns of the cognizant contract auditor, and any other
pertinent information.

**1842.708-70 NASA Quick-closeout procedures.**

After a decision is made that the use of quick closeout is appropriate,
the contracting officer shall:

\(a\) Obtain a written agreement from the contractor to participate in
the quick-closeout process under [**FAR
42.708**](http://www.arnet.gov/far/current/html/Subpart_42_7.html#1046974)
for the selected contract(s).

\(b\) Require the contractor to submit a final voucher and a summary of
all costs by cost element and fiscal year for the contract(s) in
question, as well as a copy of the contractor\'s final indirect cost
rate proposal for each fiscal year quick closeout is involved.

\(c\) Notify the cognizant audit activity in writing, identify the
contract(s), and request: (1) the contractor\'s indirect cost history
covering a sufficient number of fiscal years to see the trend of
claimed, audit questioned, and disallowed costs; and (2) any other
information that could impact the decision to use quick-closeout
procedures. Indirect cost histories should be requested from the
contractor only when the cognizant audit activity is unable to provide
the information.

\(d\) Review the contract(s) for indirect cost rate ceilings and any
other contract limitations, as well as the rate history information.

\(e\) Establish final indirect cost rates using one of the following
rates:

\(1\) The contract\'s ceiling indirect cost rates, if applicable, and if
less than paragraphs (e)(2) through (6) of this section.

\(2\) The contractor\'s claimed actual rates adjusted based on the
contractor\'s indirect cost history, if less than paragraphs (e)(3)
through (6) of this section.

\(3\) Recommended rates from the cognizant audit agency, the local
pricing office, another installation pricing office, or other recognized
knowledgeable source.

\(4\) The contractor\'s negotiated billing rates, if less than
paragraphs (e)(5) or (6) of this section.

\(5\) The previous year\'s final rates.

\(6\) Final rates for another fiscal year closest to the period for
which quick-closeout rates are being established.

\(f\) If an agreement is reached with the contractor, obtain a release
of all claims and other applicable closing documents.

\(g\) For those contracts where the indirect cost rate negotiation
function was delegated or falls under the cognizance of another agency,
send a copy of the agreement to that office.

**Subpart** []{#OLE_LINK8 .anchor}**1842.8\--Disallowance of Costs**

**1842.803 Disallowing costs after incurrence.**

*(b) Auditor receipt of vouchers.*

\(1\) NASA has designated the contract auditor as the contracting
officer\'s representative for \--

**(A)** Reviewing vouchers received directly from contractors;

**(B)** Approving vouchers for provisional payment and sending them to
the disbursing office;

**(C)** Reviewing completion/final vouchers and sending them to the
designated contracting officer for approval.

**(D)** Authorizing direct submission of interim vouchers for
provisional payment to disbursing offices for contractors with approved
billing systems.

(2)**(A)** When contract costs are questioned, the auditor shall prepare
and send to the cognizant contracting officer NASA Form 456, Notice of
Contract Costs Suspended and/or Disapproved.

**(B)** After coordination with other NASA and federal agency
contracting officers administering contracts with the same contractor
under which a NASA Form 456 or a DCAA Form 1 has been issued for the
same items of cost, the NASA contracting officer shall take one of the
following actions:

**(*a*)** Assign a notice number and sign the NASA Form 456.

**(*b*)** Issue a new NASA Form 456 suspending the costs rather than
disapproving them pending resolution of the issues.

**(*c*)** Return the unsigned NASA Form 456 to the auditor with a
detailed explanation of why the suspension or disapproval is not being
signed, and process the contractor\'s claim for payment.

**(C)** When more than one NASA contract is affected by a notice, the
NASA contracting officer with the largest amount of contract dollars
affected is responsible for coordination of the NASA Form 456 with the
other contracting officers, including those of other federal agencies,
listed in the notice.

**(D)** An original and three copies (which includes two acknowledgment
copies, one each for return to the contracting officer and the auditor)
of the NASA Form 456 shall be sent to the contractor by certified mail,
return receipt requested; one copy shall be attached to the Standard
Form 1034 and each copy of the Standard Form 1034A on which the
deduction for the suspension/disapproval is made.

**(E)(*a*)** If the amount of the deduction is more than the amount of
the public voucher, the installment method of deduction shall be applied
to the current and subsequent public vouchers until the amount is fully
liquidated. The deductions on any voucher may not exceed the voucher
amount to avoid processing of a voucher in a credit amount. Public
voucher(s) with zero amounts must be forwarded to the fiscal or
financial management office for appropriate action.

**(*b*)** If deductions are in excess of contractor claims, recovery may
be made through a direct refund from the contractor, in the form of a
check payable to NASA, or by a set-off deduction from the voucher(s)
submitted by the contractor under any other contract, unless those
contracts contain a \"no set-off\" provision. If a set-off is affected,
the voucher(s) from which the deduction is made should be annotated to
identify the contract and appropriation affected and the applicable NASA
Form 456.

**Subpart** []{#OLE_LINK12 .anchor}**1842.12\--Novation and
Change-of-Name Agreements**

**1842.1203**  **Processing** **agreements.**

\(b\) The installation shall immediately notify the Headquarters Office
of Procurement (Code HS) of the request to execute a novation
(successor-in-interest) or change-of-name agreement.

\(h\) The contracting officer shall forward one copy of the agreement to
Code HS.

**1842.1203-70 DOD processing of novation** **and change-of-name
agreements on behalf** **of**

**NASA.**

\(a\) Copies of novation and change-of-name agreements executed by DOD
on behalf of NASA are maintained by the Headquarters Office of
Procurement (Code HS).

\(b\) Code HS is the Agency point of contact for issues related to
proposed novation agreements. With the concurrence of Code HS, an
installation may execute a separate agreement with the contractor.

**Subpart** []{#OLE_LINK13 .anchor}**1842.13\--Suspension of Work,
Stop-Work Orders, and Government Delay**

**of Work**

**1842.1305 Contract clauses.**

\(b\) [**FAR
52.242-15**](http://www.arnet.gov/far/current/html/52_241_244.html#1046689),
Stop-Work Order, shall not be used in solicitations or contracts for
research performed by educational or other nonprofit institutions.

**Subpart** **1842.14\--Traffic and Transportation Management**

**1842.1405** **Discrepancies** **incident** **to** **shipment** **of**
**supplies.**

\(a\) NASA personnel shall also report discrepancies and adjust claims
for loss of and damage to Government property in transit in accordance
with [**NPR
6200.1**](http://nodis.hq.nasa.gov/Library/Directives/NASA-WIDE/Procedures/Transportation/N_PG_6200_1A.html),
NASA Transportation and General Traffic Management.

**Subpart** []{#OLE_LINK15 .anchor}**1842.15\--Contractor Performance
Information**

**1842.1501 General.**

Communications with contractors are vital to improved performance and
this is NASA's primary objective in evaluating past performance. Other
objectives include providing data for future source selections. While
the evaluations must reflect both shortcomings and achievements during
performance, they should also elicit from the contractors their views on
impediments to improved performance emanating from the Government or
other sources.

**1842.1502 Policy.**

\(a\) Within 60 days of every anniversary of the award of a contract
having a term exceeding one year, contracting officers must conduct
interim evaluations of performance on contracts subject to **[FAR
Subpart
42.15](http://www.arnet.gov/far/current/html/Subpart_42_15.html#1046571)**
and this subpart. Interim evaluations are not required on contracts
whose award anniversary is within 3 months of the end of the contract
period of performance. The final evaluation will include an evaluation
of the period between the last interim evaluation and the end of the
contract period of performance. Interim performance evaluations are
optional for SBIR/STTR Phase II contracts. A final evaluation
summarizing all performance must be conducted on all contracts.

**1842.1503 Procedures.**

\(a\) The contracting officer shall determine who (e.g., the technical
office or end users of the products or services) evaluates appropriate
portions of the contractor's performance. The evaluations are subjective
in nature. Nonetheless, the contracting officer, who has responsibility

for the evaluations, shall ensure that they are reasonable.

\(b\) NASA Form 1680, entitled, \"Evaluation of Performance,\" shall be
used to document evaluations. This provides for a five-tiered rating
(using the definitions for award fee evaluation scoring found in
[**1816.405-275**](http://www.hq.nasa.gov/office/procurement/regs/1816.htm#1816.405-275))
covering the following attributes: quality, timeliness, price or control
of costs (not required for firm-fixed-price contracts or
firm-fixed-price contracts with economic price adjustment), and other
considerations. Evaluations used in determining award fee payments
satisfy the requirements of this subpart and do not require completion
of NASA Form 1680. In addition, hybrid contracts containing both award
fee and non-award fee portions do not require completion of NASA Form
1680. Contracting Officers shall ensure that the Government discusses
all evaluations with contractors and shall record the date and the
participants on the evaluation form. Contracting officers shall sign and
date the evaluation after considering any comments received from the
contractor within 30 days of the contractor's receipt of the evaluation.
If a contractor in its timely comments disagrees with an evaluation and
requests a review at a level above the contracting officer, it shall be
provided within 30 days. While the FAR forbids use of the evaluations
for source selections more than three years after contract completion,
they shall nevertheless be retained in the contract file as provided in
[**FAR
4.8**](http://www.arnet.gov/far/current/html/Subpart_4_8.html#1039025),
Government Contract Files.

**Subpart** []{#OLE_LINK70 .anchor}**1842.70\--Additional** **NASA
Contract Clauses**

**1842.7001  Observance of legal** **holidays.**

\(a\) The contracting officer shall insert the clause at
[**1852.242-72**](http://www.hq.nasa.gov/office/procurement/regs/5242-44.htm#1852.242-72),
Observance of Legal Holidays, in contracts when work will be performed
at a NASA installation.

\(b\) The clause shall be used with its Alternate I in
cost-reimbursement contracts when it is desired that contractor
employees not have access to the installation during Government
holidays. This alternate may be appropriately modified for fixed-price
contracts.

\(c\) The clause may be used with its Alternate II in cost-reimbursement
contracts when it is desired that administrative leave be granted
contractor personnel in special circumstances, such as inclement weather
or potentially hazardous conditions. This alternate may be appropriately
modified for fixed-price contracts.

**1842.7002  Travel outside of the United** **States.**

The contracting officer shall insert the clause at
[**1852.242-71**](http://www.hq.nasa.gov/office/procurement/regs/5242-44.htm#1852.242-71),
Travel Outside of the United States, in cost-reimbursement solicitations
and contracts where a contractor may travel outside of the United States
and it is appropriate to require Government approval of the travel.

**1842.7003 Emergency medical services and evacuation.**

The contracting officer must insert the clause at
[**1852.242-78**](http://www.hq.nasa.gov/office/procurement/regs/5242-44.htm),
Emergency Medical Services and Evacuation, in all solicitations and
contracts when employees of the contractor are required to travel
outside the United States or to remote locations in the United States.

### 

### Subpart 1842.71\--Submission of Vouchers

**1842.7101 Submission of vouchers.**

\(a\) Vouchers shall be submitted in accordance with the clause at
[**1852.216-87**](http://www.hq.nasa.gov/office/procurement/regs/5215-16.htm#1852.216-87),
Submission of Vouchers for Payment.

\(b\) The auditor shall retain an unpaid copy of the voucher.

\(c\) When a voucher submitted in accordance with the clause at
1852.216-87 contains one or more individual direct freight charges of
\$100 or more, an additional copy of Standard Form 1034A and Standard
Form 1035A shall be submitted and marked for return to the contractor
after payment. This copy shall be transmitted quarterly by the
contractor with the freight bills to the General Services
Administration. When a voucher is identified as the \"Completion
Voucher,\" an additional copy shall be submitted for transmittal to the
NASA contracting officer.

**Subpart** []{#OLE_LINK72 .anchor}**1842.72\--NASA Contractor Financial
Management Reporting**

**1842.7201 General.**

\(a\) **Contracting officer responsibilities.**

\(1\) Contracting officers must ensure contracts require cost reporting
consistent with both policy requirements and project needs. Contracting
Officers shall monitor contractor cost reports on a regular basis to
ensure cost data reported is accurate and timely. Adverse trends or
discrepancies discovered in cost reports should be pursued through
discussions with financial and project team members.

\(2\) Whenever cost performance threatens contract performance,
contracting officers shall require corrective action plans from the
contractors.

\(b\) **Reporting requirements.**

\(1\) Use of the NASA Contractor Financial Management Reports, the NASA
Form 533 series, is required on cost-type, price redetermination, and
fixed-price incentive contracts when the following dollar, period of
performance, and scope criteria are met:

  ----------------------- ----------------------- ----------- -----------
  **Contract              **Period of             **533M**    **533Q**
  value/scope**           Performance**                       

  \$500K to \$999K        1 year or more          Required    Optional

  \$1,000,000 and over    Less than 1 year        Required    Optional

  \$1,000,000 and over    1 year or more          Required    Required
  ----------------------- ----------------------- ----------- -----------

\(2\) When it is probable that a contract will ultimately meet the
criteria in paragraph (b)(1) of this section through change orders,
supplemental agreements, etc., the reporting requirement must be
implemented in the contract based on the estimated final contract value
at the time of award.

\(3\) NF 533Q reporting may be waived by the contracting officer, with
the concurrence of the center chief financial officer and cognizant
project manager, for support service or task order contracts, when NF
533M reports and other data are sufficient to ensure accurate monthly
cost accruals, evaluation of the contractor's cost performance, and
forecasting of resource requirements.

\(4\) Where a specific contractual requirement differs from the standard
system set forth in [**NPR
9501.2**](http://nodis.hq.nasa.gov/Library/Directives/NASA-WIDE/Procedures/Financial_Management/N_PG_9501_2C.html),
NASA Contractor Financial Management Reporting, but is determined to be
in the best interests of the Government and does not eliminate any of
the data elements required by the standard NF 533 formats, it may be
approved by the contracting officer with the concurrence of the center
chief financial officer and the project manager. Such approval shall be
documented and retained, with the supporting rationale, in the contract
file.

\(5\) The contractor\'s internal automated printout reports may be
substituted for the 533 reporting formats only if the substitute reports
contain all the data elements that would be provided by the
corresponding 533\'s. The contracting officer shall coordinate any
proposed substitute with the installation financial management office.

\(c\) **Contract requirements.**

\(1\) Reporting requirements, including a description of reporting
categories, shall be detailed in the procurement request, and reports
shall be required by inclusion of the clause prescribed in
[**1842.7202**](http://www.hq.nasa.gov/office/procurement/regs/1842.htm#1842.7202).
The contract schedule shall include report addressees and numbers of
copies. Reporting categories shall be coordinated with the center
financial management office to ensure that data required for agency cost
accounting will be provided by the reports. Reporting dates shall be in
accordance with NPR 9501.2, except that earlier submission is encouraged
whenever feasible. No due date shall be permitted which is later than
the date by which the center financial management office needs the data
to enter an accurate monthly cost accrual in the accounting system.

\(2\) The contractor shall be required to submit an initial report in
the NF 533Q format, time phased for the expected life of the contract,
within 30 days after authorization to proceed has been granted. NF 533M
reporting will begin no later than 30 days after incurrence of cost. NF
533Q reporting begins with the initial report.

**1842.7202 Contract clause.**

The contracting officer shall insert the clause at
[**1852.242-73**](http://www.hq.nasa.gov/office/procurement/regs/5242-44.htm#1852.242-73),
NASA Contractor Financial Management Reporting, in solicitations and
contracts when any of the NASA Form 533 series of reports is required
from the contractor.

## Subpart 1842.73\--Audit Tracking and Resolution

**1842.7301 NASA external audit follow-up system.**

\(a\) This section implements [**OMB Circular No.
A-50**](http://www.whitehouse.gov/OMB/circulars/a050/a050.html) and NASA
Policy Directive (NPD)
[**9910.1**](http://nodis3.gsfc.nasa.gov/displayDir.cfm?t=NPD&c=9910&s=1),
"Government Accountability Office/NASA Office of Inspector General Audit
Liaison, Resolution, and Followup", which provides more detailed
guidance. Recommendations from external audits (OMB Circular No. A-133,
Audits of States, Local Governments, and Non-Profit Institutions) shall
be resolved by formal review and approval procedures analogous to those
at
[**1815.406-171**](http://www.hq.nasa.gov/office/procurement/regs/1815.htm#15_406-171).

\(b\) The external audit followup system tracks all contract and OMB
Circular No. A-133 audits where NASA has resolution and disposition
authority. The objective of the tracking system is to ensure that audit
recommendations are resolved within 6 months after receipt of the audit
report and corrected as expeditiously as possible.

(c)(1) The identification and tracking of contract audit reports under
NASA cognizance are accomplished in cooperation with the
[**DCAA**](http://www.dcaa.mil/).

\(2\) Identification and tracking of OMB Circular No. A-133 audit
reports are accomplished in cooperation with the NASA Office of the
Inspector General (OIG).

(d)(1) All reportable contract audit reports as defined by Chapter 15,
Section 6, of the [**DCAA Contract Audit
Manual**](http://web.deskbook.osd.mil/reflib/DDCAA/0018m/001/0018m001doc.htm)
(CAM) shall be entered into NASA's Corrective Action Tracking System
(CATS), with the information updated at least quarterly until the audit
recommendations are all resolved and dispositioned (see paragraph (e)
(1) of this section); and

\(2\) Only OMB Circular No. A-133 audit reports involving the following
shall be reported quarterly to the Headquarters Office of Procurement
Analysis Division:

\(i\) A significant management control issue; or

\(ii\) Questioned costs of \$10,000 or more due to an audit finding (see
Subpart E-Auditor, paragraph 510 of OMB Circular No. A-133).

\(3\) NASA contracting officers will maintain a dialogue with DOD
Administrative Contracting Officers (ACO) who have been delegated
activities on NASA contracts. A review will be conducted no less
frequently than semiannually, and the status and disposition of
significant audit findings will be documented in the contract file.
During this review, NASA contracting officers should discuss with the
ACO both prime and subcontract audit reports that have been delegated to
DOD. Should these reports contain any findings or recommendations, the
NASA contracting officer should obtain their status and document the
contract file accordingly.

(e)(1) The terms "resolution" and "corrective action/disposition" are
defined as follows:

\(i\) Resolution - The point at which the IG and Management agree on the
action to be taken on audit report findings and recommendations.

\(ii\) Corrective action/disposition - Management action responsive to
an agreed upon audit recommendation.

\(2\) The resolution and disposition of DCAA audit reports issued to
NASA contracting officers are handled as follows:

\(i\) Audit findings pertaining to an individual NASA contract are the
responsibility of the NASA contracting officer.

\(ii\) Audit findings impacting more than one NASA contract are the
responsibility of the NASA contracting officer providing the
preponderance of funding to the particular contractor for the contractor
fiscal year covered by the audit report (lead contracting officer). The
lead contracting officer should furnish a copy of the audit report to
all NASA contracting officers with contracts impacted by the audit
report. Those contracting officers should be provided the opportunity to
participate in the negotiations or provide input into the negotiation
strategy. At the conclusion of the negotiations, the lead contracting
officer is to provide a copy of the negotiation memorandum to the DCAA
office that issued the audit report, as well as to the contracting
officers for the other impacted NASA contracts.

\(3\) The resolution and disposition of OMB Circular No. A-133 audits
are handled as follows:

\(i\) Audit findings pertaining to an individual NASA award are the
responsibility of the procurement officer for the Center that awarded
the contract.

\(ii\) Audit findings having a Governmentwide impact are the
responsibility of the cognizant Federal agency responsible for
oversight. For organizations subject to OMB Circular No. A-133, there is
either a cognizant agency or an oversight agency. The cognizant agency
is the Federal agency that provides the predominant amount of direct
funding to the recipient organization unless OMB makes a specific
cognizant agency for audit assignment. To provide for the continuity of
cognizance, the determination of the predominant amount of direct
funding will be based on the direct Federal awards expended in the
recipient's fiscal years ending in 1995, 2000, 2005, and every fifth
year thereafter. When there is no direct funding, the Federal agency
with the predominant indirect funding is to assume the oversight
responsibilities. In cases where NASA is the cognizant or oversight
Federal agency, audit resolution and disposition is the responsibility
of the procurement officer for the Center having the largest amount of
direct funding, or, if there is no direct funding, the largest amount of
indirect funding for the audited

period. A copy of the memorandum dispositioning the findings shall be
provided by each Center having resolution responsibility for the
particular report to the Headquarters OIG office, the Headquarters
Office of Procurement Analysis Division, and each Center procurement
office that has awards impacted by the dispositioned findings.

**1842.7302 Reportable audit disposition documentation.**

For each reportable audit provided by DCAA, the contracting officer
shall submit disposition documentation to the office that provided the
report.