![](media/image1.wmf){width="0.8243055555555555in"
height="0.6888888888888889in"} Procurement Notice

National Aeronautics and

Space Administration

Washington, DC 20546

##  PN 97-67

> **October 23, 2001**

# UNDEFINITIZED CONTRACT ACTIONS (UCAs)

***BACKGROUND:*** This PN implements various changes to NASA\'s
management controls for issuance and definitization of Undefinitized
Contract Actions (UCAs) and the issuance of letter contracts. These
changes have been initiated as a result of an agency effort to reduce
both the dollar value and number of UCAs, and to speed the
definitization process. The new management controls include: addressing
UCA management in acquisition plans and in contractor award fee
evaluations when appropriate; lowering the threshold for Center Director
approval of UCAs; requiring "not to exceeds" (NTEs) for all UCAs
exceeding \$100,000; and adding the requirement that UCAs not requiring
Center Director approval be approved by the Procurement Officer.
Finally, for both UCAs and letter contracts, contracting officers are
required to ensure that undefinitized actions are limited to the minimum
severable effort required to satisfy urgent program requirements, and
that remaining requirements are acquired through separate fully priced
and definitized contract actions.

***ACQUISITIONS AFFECTED BY CHANGE:*** This PN applies to undefinitized
contract actions (i.e. a unilateral or bilateral contract modification
or delivery/task order in which the final price or estimated cost and
fee have not been negotiated and mutually agreed to by NASA and the
contractor) and letter contracts.

***ACTION REQUIRED BY CONTRACTING OFFICERS:***

\(a\) Ensure that acquisition plans address change management if
contract changes are anticipated.

\(b\) Include contractor responsiveness to requests for change proposals
in award fee contract evaluation when contract changes are anticipated.

\(c\) Before issuance of any undefinitized contract action obtain Center
Director (\>\$100K) or Procurement Officer (\<\$100K) approval.

\(d\) Establish NTEs for all UCAs exceeding \$100,000.

***CLAUSE CHANGES:*** There are no clause changes as a result of this
PN.

***PARTS AFFECTED:*** Changes are made in Parts 1807, 1816, and 1843.

***REPLACEMENT PAGES:*** You may use the enclosed pages to replace 7:3,
7:4, 16:1, 16:2, 16:9, 16:10, 16:11, 16:12, 16:13, and Part 1843.

***TYPE OF RULE AND PUBLICATION DATE:*** This PN was published as a
final rule in the Federal Register (66 FR 53545-53549, October 23,
2001).

***PIC CANCELLATION:*** PIC 01-16, Class Deviation to the NASA FAR
Supplement Lowering the Threshold for Center Director Approval for
Undefinitized Contract Actions, is cancelled.

***HEADQUARTERS CONTACT:*** Tom O'Toole, Code HK, (202) 358-0478,
e-mail: <totoole@hq.nasa.gov>.

R. Scott Thompson

Director, Contract Management Division

Enclosures

DISTRIBUTION:

**NFS List**

**HK/cbo/10-23-01/x1248**

**DocName: a:\\pn97-67.doc**

\(a\) The acquisition planning team shall obtain input from the center
offices responsible for matters of safety and mission assurance,
occupational health, environmental protection, information technology,
export control, and security. Their presence on the team shall help to
ensure that all NASA acquisitions are structured in accordance with NASA
safety, occupational health, environmental, export control, and security
policy. As part of this process, the team shall recommend any
appropriate solicitation or contract requirements for implementation of
safety, occupational health, environmental, information technology,
export control, and security concerns. (See NPG 8715.3, NASA Safety
Manual; NPG 7120.5, NASA Program and Project Management Processes and
Requirements; NPG 2810.1, Security of Information Technology, and NPG
1620.1, Security Procedures and Guidelines, all available at
www.nodis.hq.nasa.gov).

**1807.105 Contents of written acquisition plans.**

Acquisition plans shall address each applicable topic listed in FAR
7.105, as supplemented by this section. Plans shall be structured by
subject heading using each italicized topic heading in the same sequence
as presented in the FAR. Subheadings should be used when appropriate
(e.g., the separate items under contracting considerations at
7.105(b)(4)). Topics not applicable to a given acquisition (e.g.,
design-to-cost and should-cost are not compatible with service
acquisitions), should be marked N/A. The requirements in FAR 7.105
regarding performance-based contracting methods shall not be limited to
acquisition plans for service contracts.

(a)(1) Describe in nontechnical terms the supplies or services to be
acquired. Include quantities.

(a)(2) NPG 7120.5 shall be an integral part of acquisition planning for
programs and projects subject to its requirements. If the NPG does not
apply, the acquisition plan shall clearly state that fact. If the NPG
does apply, specify whether all required NPG 7120.5 documentation is
current and approved (see 1804.7301(b)(2)(i)). If not, describe the
approach for obtaining approval or the authority to proceed without
approval before release of draft or final solicitations. For programs
and projects under the NPG, all draft or final solicitations subject to,
or directly or substantially in support of, those programs or projects
shall clearly identify the program or project of which they are part.

(a)(3) Identify the estimated cost and describe the estimating
methodology.

(a)(5) Specify the delivery or performance period requirements
separately by the basic contract, each option, and the total.

(a)(7) Discuss project/program risks (see NPG 7120.5, NASA Program and
Project Management Processes and Requirements). In addition to
technical, schedule, and cost risks, the discussion shall include such
considerations as: safety and security (including personnel, information
technology, and facilities/property); the need to involve foreign
sources (contractor and/or governmental), and risks of unauthorized
technology transfer (see NPD 2110.1D and Export Control Program
(http://www.hq.nasa.gov/office/codei/nasaecp/ecpolicy.html)); and
resource risk, including the necessary level and expertise of NASA
personnel resources available to manage the project/program. For each
area of risk identified, the discussion shall include a quantification
of the relative magnitude (e.g., high, medium, low) together with the
specific actions taken to structure the acquisition approach to manage
the risks throughout the acquisition process. For example, this
discussion would identify those areas that have safety risk, discuss how
safety is addressed in contract requirements and evaluated in the source
selection, and how it will be managed and incentivized during contract
performance. Decisions to accept, mitigate, track, and/or research risk
factors shall be identified and documented as part of acquisition
planning.

(a)(8) Streamlining applies to all NASA acquisitions. Describe all
planned streamlining procedures.

(b)(3) Address how cost realism will be evaluated.

(b)(4)**(A)** If an incentive contract is planned, describe the planned
incentive(s) and the anticipated effects.

**(B)** Describe subcontracting issues, including all applicable
subcontracting goals. (See FAR part 19 and part 1819).

(b)(5)**(A)** Identify the estimated cost separately by the basic
contract, each option and total amount.

**(B)** Identify the funding by fiscal year and unique project number
(UPN).

**(C)** Discuss planned approaches to eliminate funding shortfalls (vs.
the estimated cost).

(b)(6) Identify the type of work statement/specification planned.
Specifically address the applicability of performance-based requirement
descriptions and the availability of commercial sources for the
supplies/services.

\(b\) (10) Address contract management issues, including **\--**

**(A)** Planned delegations of administrative functions; and

**(B)** When contract changes are anticipated, the plan to manage such
changes and the specific measures that will be taken to minimize the
issuance of undefinitized contract actions.

(b)(20) If the period between release of solicitation to contract award
is more than 120 calendar days (180 days for formal SEB competitions),
explain why that goal cannot be met.

**1807.107 Additional requirements for acquisitions involving
bundling.**

\(c\) Requests for approval of proposed bundlings that do not meet the
thresholds in FAR 7.107(b) must be sent to the Headquarters Office of
Procurement (Code HS).

\(e\) The substantial bundling documentation requirement applies to each
proposed NASA bundling expected to exceed \$5 million or more. The
contracting officer must forward the documentation along with the
measurable benefits analysis required by FAR 7.107(b) to the
Headquarters Office of Procurement (Code HS) in sufficient time to allow
a minimum of 10 days for review.

**1807.107-70 Orders against Federal Supply Schedule contracts,
Governmentwide acquisition contracts (GWACs), or other existing
indefinite-delivery contracts.**

The FAR and NFS requirements for justification, review, and approval of
bundling of contract requirements also apply to an order from a Federal
Supply Schedule contract, Governmentwide acquisition contract, or other
indefinite-delivery contract if the requirements consolidated under the
order meet the definition of "bundling" at FAR 2.101.

**1807.170** **Acquisition Strategy Meeting (ASM).**

\(a\) The ASM is an acquisition plan conducted through a meeting
attended by all interested NASA offices. At the meeting, the acquisition
plan topics and structure specified in 1807.105 are presented in
briefing format, and formal written minutes prepared to summarize the
decisions, actions, and conclusions of the ASM members. The approved
minutes, along with the briefing

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.

1816.506-70 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 level-of-effort contract is 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 Associate Administrator for
Procurement. Requests for approval shall be submitted to the
Headquarters Office of Procurement (Code HS).

# Subpart 1816.3\--Cost-Reimbursement Contracts

\(1\) Normally, the contractor should be given a score of 0 for cost
control when there is a significant overrun within its control. However,
the contractor may receive higher scores for cost control if the overrun
is insignificant. Scores should decrease sharply as the size of the
overrun increases. In any evaluation of contractor overrun performance,
the Government shall consider the reasons for the overrun and assess the
extent and effectiveness of the contractor\'s efforts to control or
mitigate the overrun.

\(2\) The contractor should normally be rewarded for an underrun within
its control, up to the maximum score allocated for cost control,
provided the average numerical rating for all other award fee evaluation
factors is 81 or greater (see 1816.405-275). An underrun shall be
rewarded as if the contractor has met the estimated cost of the contract
(see 1816.405-274(d)(3)) when the average numerical rating for all other
factors is less than 81 but greater than 60.

\(3\) The contractor should be rewarded for meeting the estimated cost
of the contract, but not to the maximum score allocated for cost
control, to the degree that the contractor has prudently managed costs
while meeting contract requirements. No award shall be given in this
circumstance unless the average numerical rating for all other award fee
evaluation factors is 61 or greater.

\(f\) When an AF arrangement is used in conjunction with another
contract type, the award fee's cost control factor will only apply to a
subjective assessment of the contractor's efforts to control costs and
not the actual cost outcome incentivized under the basic contract type
(e.g. CPIF, FPIF).

(g)(1) The contractor\'s performance against the subcontracting plan
incorporated in the contract shall be evaluated. Emphasis may be placed
on the contractor\'s accomplishment of its goals for subcontracting with
small business, HUBZone small business, women-owned small business**,**
veteran-owned small business, and service-disabled veteran-owned small
business concerns.

\(2\) The contractor\'s performance against the contract target for
participation as subcontractors by small disadvantaged business concerns
in the NAICS Major Groups designated by the Department of Commerce (see
FAR 19.201(c)) shall also be evaluated if the clause at FAR 52.219-26,
Small Disadvantaged Business Participation - Incentive Subcontracting,
is not included in the contract (see FAR 19.1204(c)).

\(3\) The contractor\'s achievements in subcontracting high technology
efforts as well as the contractor\'s performance under the
Mentor-Protégé Program, if applicable, may also be evaluated.

\(4\) The evaluation weight given to the contractor\'s performance
against the considerations in paragraphs (g)(1) through (g)(3) of this
section should be significant (up to 15 percent of available award fee).
The weight should motivate the contractor to focus management attention
to subcontracting with small, HUBZone, women-owned, veteran-owned, and
service-disabled veteran-owned small business concerns, and with small
disadvantaged business concerns in designated NAICS Major Groups to the
maximum extent practicable, consistent with efficient contract
performance.

\(h\) When contract changes are anticipated, the contractor's
responsiveness to requests for change proposals should be evaluated.
This evaluation should include the contractor's submission of timely,
complete proposals and cooperation in negotiating the change.

\(i\) Only the award fee performance evaluation factors set forth in the
performance evaluation plan shall be used to determine award fee scores.

\(j\) The Government may unilaterally modify the applicable award fee
performance evaluation factors and performance evaluation areas prior to
the start of an evaluation period. The contracting officer shall notify
the contractor in writing of any such changes 30 days prior to the start
of the relevant evaluation period.

**1816.405-275 Award fee evaluation scoring.**

\(a\) A scoring system of 0-100 shall be used for all award fee ratings.
Award fee earned is determined by applying the numerical score to the
award fee pool. For example, a score of 85 yields an award fee of 85
percent of the award fee pool. No award fee shall be paid unless the
total score is 61 or greater.

\(b\) The following standard adjectival ratings and the associated
numerical scores shall be used on all award fee contracts.

\(1\) **[Excellent]{.underline}** (100-91): Of exceptional merit;
exemplary performance in a timely, efficient, and economical manner;
very minor (if any) deficiencies with no adverse effect on overall
performance.

\(2\) **[Very good]{.underline}** (90-81): Very effective performance,
fully responsive to contract requirements; contract requirements
accomplished in a timely, efficient, and economical manner for the most
part; only minor deficiencies.

\(3\) **[Good]{.underline}** (80-71): Effective performance; fully
responsive to contract requirements; reportable deficiencies, but with
little identifiable effect on overall performance.

\(4\) **[Satisfactory]{.underline}** (70-61): Meets or slightly exceeds
minimum acceptable standards; adequate results; reportable deficiencies
with identifiable, but not substantial, effects on overall performance.

\(5\) **[Poor/Unsatisfactory]{.underline}** (less than 61): Does not
meet minimum acceptable standards in one or more areas; remedial action
required in one or more areas; deficiencies in one or more areas which
adversely affect overall performance.

\(c\) As a benchmark for evaluation, in order to be rated \"Excellent,\"
the contractor must be under cost, on or ahead of schedule, and have
provided excellent technical performance.

\(d\) A scoring system appropriate for the circumstances of the
individual contract requirement should be developed. Weighted scoring is
recommended. In this system, each evaluation factor (e.g., technical,
schedule, cost control) is assigned a specific percentage weighting with
the cumulative weightings of all factors totaling 100. During the award
fee evaluation, each factor is scored from 0-100 according to the
ratings defined in 1816.405-275(b). The numerical score for each factor
is then multiplied by the weighting for that factor to determine the
weighted score. For example, if the technical factor has a weighting of
60 percent and the numerical score for that 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.

**1816.506-70 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 NPG 9501.2, NASA Contractor Financial Management
Reporting System), 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.**

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

\(1\) Proposed contractor\'s name and address.

\(2\) Location where contract is to be performed.

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

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

(5) Performance period or delivery schedule.

\(6\) Amount of letter contract.

\(7\) Performance period of letter contract.

\(8\) Estimated total amount of definitive contract.

\(9\) Type of definitive contract to be executed.

\(10\) A statement that the definitive contract will contain all
required clauses or identification of specific clause deviations that
have been approved.

\(11\) A statement as to the necessity and advantage to the Government
of the proposed letter contract.

\(12\) The definitization schedule described in FAR 16.603-2(c) expected
to be negotiated with the contractor.

\(b\) Requests for authority to issue letter contracts having an
estimated definitive contract amount equal to or greater than the Master
Buy Plan submission thresholds of 1807.7101 (or modifications thereto)
shall be signed by the procurement officer and submitted to the
Associate Administrator for Procurement (Code HS) for approval.

\(c\) Authority to approve the issuance of letter contracts below the
Master Buy Plan submission thresholds specified in 1807.7101 is
delegated to the procurement officer.

\(d\) Any modification of an undefinitized letter contract approved by a
procurement officer in accordance with paragraph (c) of this section
that increases the estimated definitized contract amount to or above the
Master Buy Plan submission thresholds must have the prior approval of
the Associate Administrator for Procurement (Code HS).

**PART 1843**

**CONTRACT MODIFICATIONS**

**TABLE OF CONTENTS**

**SUBPART 1843.2 CHANGE ORDERS**

1843.205 Contract clauses.

1843.205-70 NASA contract clauses.

**SUBPART 1843.70 UNDEFINITIZED CONTRACT ACTIONS**

1843.7001 Definitions.

1843.7002 Policy.

1843.7003 Procedures.

1843.7004 Exceptions.

1843.7005 Definitization.

**SUBPART 1843.71 SHARED SAVINGS**

1843.7101 Shared Savings Program.

1843.7102 Solicitation provision and contract clause.

**PART 1843**

**CONTRACT MODIFICATIONS**

**Subpart 1843.2\--Change Orders**

**1843.205 Contract** **clauses.**

As authorized in the prefaces of clauses FAR 52.243-1, Changes\--Fixed
Price; FAR 52.243-2, Changes\--Cost Reimbursement; and FAR 52.243-4,
Changes; and in the prescription at 43.205(c) for FAR 52.243-3,
Changes\--Time-and-Material or Labor-Hours, the period within which a
contractor must assert its right to an equitable adjustment may be
varied not to exceed 60 calendar days.

**1843.205-70 NASA** **contract** **clauses.**

(a)(1) The contracting officer may insert in contracts a clause
substantially the same as 1852.243-70, Engineering Change Proposals,
when ECPs are expected. Paragraphs (c) and (d) of the basic clause and
Alternate I of the clause shall be changed to reflect the specific type
of contract.

\(2\) If it is desirable to preclude a large number of small-dollar,
contractor-initiated engineering changes and to reduce the
administrative cost of reviewing them, the contracting officer shall use
the clause with its Alternate I.

\(3\) If the contract is a cost-reimbursement type, the contracting
officer shall use the clause with its Alternate II.

\(b\) The contracting officer may insert a clause substantially as
stated at 1852.243-72, Equitable Adjustments, in solicitations and
contracts for --

\(1\) Dismantling, demolishing, or removing improvements; or

\(2\) Construction, when the contract amount is expected to exceed the
simplified acquisition threshold and a fixed-price contract is
contemplated.

**Subpart 1843.70\-- Undefinitized Contract Actions**

**1843.7001 Definition~~s~~.**

**\"Undefinitized contract action (UCA)\"** means a unilateral or
bilateral contract modification or delivery/task order in which the
final price or estimated cost and fee have not been negotiated and
mutually agreed to by NASA and the contractor. (Issuance of letter
contracts and their modifications are governed by subpart 1816.6.)

**1843.7002 Policy.**

\(a\) Undefinitized contract actions may be issued only on an exception
basis, and centers must ensure that NASA liabilities and commitments are
minimized. When an undefinitized contract action is justified and
program requirements can be severed into smaller, discreet efforts, the
work authorized by the undefinitized contract action 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 undefinitized contract action and must be acquired through a
separate fully priced and definitized contract action.

\(b\) The contract file for each UCA shall be documented to justify
issuance and shall include a Government estimate for the changed
requirements.

1843.7003 Procedures.

(a)(1) Issuance of undefinitized contract actions with a Government
estimated cost or price over \$100,000 must be approved in writing by
the Center Director.

\(2\) All other undefinitized contract actions must be approved in
writing by the procurement officer.

\(3\) In emergency situations, approval may be given orally and
subsequently confirmed in writing.

\(4\) The approval authorities in paragraphs (a)(1) and (2) of this
section are not delegable.

\(b\) (1) Undefinitized contract actions exceeding \$100,000 must be
issued as bilateral agreements setting forth a ceiling price or \"not to
exceed\" estimated cost figure for the changed contractual requirements.
For fixed price contracts the negotiated price for the changed contract
requirements shall not exceed the established ceiling price. In the case
of cost type contracts any costs eventually negotiated for the changed
requirements in excess of the \"not to exceed\" estimated cost figure
shall be non-fee bearing. The ceiling price or \"not to exceed\"
estimated cost figures shall be separately identified in the UCA
instrument from the pricing structure of the basic contract.

\(2\) The Center Director may waive the ceiling price or \"not to
exceed\" estimated cost figure and bilateral agreement requirements
prior to UCA issuance on the basis of urgency. This waiver authority is
not delegable. Any waivers shall be documented in the contract file.

\(c\) The changed contractual requirements set forth in the UCA shall be
clearly defined and shall be limited to the minimum effort required to
satisfy urgent program requirements while a cost proposal is prepared,
analyzed and negotiated.

\(d\) For undefinitized contract actions with a Government estimate
greater than \$1,000,000 and not excepted under subpart 1843.7004, a 180
day funding profile shall be obtained from the contractor prior to
execution of the undefinitized contract action.

\(e\) Undefinitized contract actions with a Government estimated cost or
price greater than \$1,000,000 shall include a requirement that the
change shall be separately accounted for by the contractor to the degree
necessary to provide the contracting officer visibility into actual
costs incurred pending definitization. The contracting officer may waive
this requirement for individual actions if there is a documented finding
that such accounting procedures would not be cost effective. Any such
waiver shall not affect existing NASA Form 533 or other financial
reporting requirements set forth in the contract.

**1843.7004 Exceptions.**

\(a\) Exceptions to the requirement for Center Director or procurement
officer approval of undefinitized contract actions are\--

\(1\) Modifications to facilities contracts;

\(2\) Modifications to construction contracts using Construction of
Facilities funding;

\(3\) Urgent modifications resulting from Shuttle manifest changes or
that involve immediate issues of safety or damage/loss of property;

\(4\) Modifications to decrease the contract value; or

\(5\) Modifications to letter contracts.

\(b\) The contract file for any of the modifications in paragraph (a) of
this section shall cite the exception and include complete supporting
rationale for its applicability.

**1843.7005 Definitization.**

\(a\) Undefinitized contract actions should be sufficiently complete and
detailed as to enable the contractor to begin immediate preparation of a
cost proposal for the changed requirement. The NASA goal is to
definitize UCAs within 180 days from date of issuance.

\(b\) Whenever possible, pre-change study efforts or engineering change
proposals (ECPs) shall be utilized to negotiate and definitize changes
prior to issuance.

**Subpart 1843.71\--Shared Savings**

**1843.7101 Shared Savings Program.**

This subpart establishes and describes the methods for implementing and
administering a Shared Savings Program. This program provides an
incentive for contractors to propose and implement, with NASA approval,
significant cost reduction initiatives. NASA will benefit as the more
efficient business practices that are implemented lead to reduced costs
on current and follow-on contracts. In return, contractors are entitled
to share in cost savings subject to limits established in the contract.
The contracting officer may require the contractor to provide periodic
reporting, or other justification, or to require other steps (e.g., cost
segregation) to ensure projected cost savings are being realized.

**1843.7102 Solicitation provision and contract clause.**

The contracting officer shall insert the clause at 1852.243-71, Shared
Savings, in all solicitations and contracts expected to exceed
\$1,000,000, except those awarded under FAR Part 12, NRA and AO
procedures, or the SBIR and STTR programs.