# Presentation: 370375

## Reimbursable AgreementsCost Accounting Branch (CFG)Karen GentryJune 22, 2007

## Objective

**To provide participant with an overview of the reimbursable process at Ames including using, establishing and tracking agreements.**

## Agenda

- Define Reimbursable Agreement
- Authority/Guidance
- Types of Agreement
- Reimbursable Process
- Travel-Only Agreements
- Enhanced Use Lease Agreements
- SAP
- Acronyms

## Reimbursable Agreement Defined

- Binding agreement with customers for NASA to sell or rent materials, equipment or services.
- Required whenever NASA resources will be committed for use with a non-NASA entity.
- Agreement where all or substantially all of NASA’s costs associated with the undertaking are borne by the non-NASA partner.
- NASA undertakes reimbursable agreements when it has unique goods or services, excess to mission needs, which it can make available to others.
- NASA does not compete with the private sector in the provisions of goods or services.

**Notes:**
Note that NASA is the provider of goods or services, not the other way around.
Resources may include labor, facilities, services, materials, equipment, information, expertise, etc.; not just financial resources.
Full costs of undertaking passed on to customer.
Reimbursable agreements cannot interfere with NASA mission requirements.
Customer has burden of establishing that goods or services cannot be obtained from the private sector.

## Authority

**Current Appropriations**
- The appropriations language states “...appropriates, not otherwise provided for...” Supports NASA’s authority to reimburse its appropriations as reflected in its budget.
**National Aeronautics and Space Act (42 USC 2473)**
- Includes authority for NASA to provide services, equipment, information or facilities on a reimbursable basis.
**Economy Act (31 USC 1535)**
- Provides authority for Federal agencies to perform interagency reimbursable work.  Work must be less expensive and more conveniently provided by Federal agencies than by commercial vendors.
**Other**
- User Charges (31 USC  9701); Deposit of Monies (31 USC 3302); CFO Act (P.L. 101-576); Commercial Space Launch Act (P.L. 98-575); Unitary Wind Tunnel Act (USC 5111-15); Commercial Space Competitiveness Act (USC 5807); Historic Preservation Act of 1966.

**Notes:**
Most of the agreements at Ames are established under the Space Act.
Space Act is unique to NASA whereas Economy Act is available to all federal agencies. Economy Act applies to goods or services (e.g. janitorial work, accounting services, purchases of office supplies.)
We are starting to use the Historic Preservation Act for part of the NRP (Shenandoah Plaza).   The Act allows us to retain the proceeds for maintenance & repair of our historic buildings.

## Authority

- Enhanced Use Lease Agreements
- PL 108-7, FY2003 Omnibus Appropriations Bill, Title IV, General Provision, section 417 amended the Space Act by adding at the end of Title III a new section 315, “Enhanced-Use Lease of Real Property Demonstration”.
- Stipulation was the EUL could be undertaken at no more than two NASA center.

**Notes:**
Most of the agreements at Ames are established under the Space Act.
Space Act is unique to NASA whereas Economy Act is available to all federal agencies. Economy Act applies to goods or services (e.g. janitorial work, accounting services, purchases of office supplies.)
We are starting to use the Historic Preservation Act for part of the NRP (Shenandoah Plaza).   The Act allows us to retain the proceeds for maintenance & repair of our historic buildings.

## NASA Guidance

- Authority to Enter Into Space Act Agreements (NPD 1050.1F)
- Space Act Agreements Manual (NPG 1050.1)
- Administrative Control of Appropriations and Funds (NPD 9050.3)
- Review, Approval and Imposition of User Charges (NPD 9080.1E)
- Reimbursable and Other Customer Agreements (FMR Ch. 16)

**Notes:**
NASA Policy Directives  (NPD)

## Types of Agreement

_**Reimbursable Agreement**_- Agreement where all or substantially all of NASA’s costs associated with the undertaking are borne by the non-NASA customer.
_**Nonreimbursable Agreement**_- Agreement where there is a mutual benefit and NASA and its partner each bear the cost of their participation.
_**Funded Agreement**_- Agreement where NASA transfers appropriated funds to its partner to accomplish an agency mission when the use of a contract, grant or cooperative agreement is not possible.  Very rarely used.
**Terminology**
_**Space Act Agreement**_- Normally refers to a reimbursable agreement between NASA and a non-government entity.
_**Interagency Agreement**_- Normally refers to a reimbursable agreement between NASA and another government entity.
_**Travel-Only Agreement**_- Normally refers to an agreement where the only costs involved are for travel and duration is less than 3 weeks.

**Notes:**
These 3 types of agreement are called out specifically in the Space Act Agreements Manual.
Reimbursable- We discussed this a few slides back.
Nonreimbursable- No money exchanges hands.  Since it involves a commitment of resources, there must be a NASA mission or program requirement.  Each parties respective contribution must be adequate under the circumstance. Should do a cost estimate of NASA’s resources to be used. Usually executed with an MOU, MOA, or letter agreement.  May also be known as a COOPERATIVE AGREEMENT. Technically, domestic agreements are called nonreimbursable agreements while internationals are called coop agreements.
Funded- Partner is domestic.  Not aware of any at Ames.
Also have International Space Act Agreement.  May be reimbursable or non.  Complex and may go thru State Dept.  Won’t be discussing it here.

## Reimbursable Process (Non-Federal)

- Work is tracked by the performing org.  As costs are incurred, appropriations are credited from advance payment.

- At completion of work, a final cost report & bill is issued then agreement is closed.

**1**

**4**

**6**

**8**

**7**

**3**

**2**

**Notes:**
Here is a basic overview of the process. In real life, some steps may be combined, deleted or added.
NASA cannot solicit business.
NASA reps may include perf org, tech folks, directorate, Legal, and CTO.
5. RAN is an acronym for Reimbursable Agreement Number & it is a unique number used to control agreements.
7. Advance payment sit in a suspense account and we credit it back to our appropriation as it is earned, work performed.

## Reimbursable Process (Federal/Interagency)

- At completion of work, a final cost report & bill is issued then agreement is closed.

**1**

**4**

**6**

**8**

- Work is tracked by the performing org. _**Costs are billed as incurred and credited to the appropriation.**_

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**3**

**2**

**Notes:**
Process is the same except for steps 5 and 7.  Don’t need to collect advance payment from federal customers but need some funding cite.
We bill our federal customers monthly using the OPAC system.  We bill based on the accrual for that month.

## Establishing a Reimbursable Agreement

- Generally, the performing org initiates the agreement and prepares the reimbursable package with the assistance of RMD and the Technology Partnerships Branch (DTP).
- Reimbursable package includes:
**Reimbursable Agreement**
**Signed by authorized rep of NASA and customer**
**Citation of legal authority **
**Description of work or services to be performed**
**Initiation and completion dates**
**Estimated cost of work or services**
**Billing information**
**Applicable special requirements **
**Agency appropriation symbol and expiration (Federal cust. only)**

**Notes:**
Template available from Commercial Tech Office.
A citation of legal authority for performing reimb work and crediting reimbursement to NASA appropriation.
Special requirements- milestones, delivery date, etc.

## WBS Request
Used to track work and costs under the agreement.
Initiated through MdM
Estimated Price Report (EPR)
Must use full cost (e.g. direct cost, service pool, G&A, etc.)
All waivers must be justified and approved by CFO.
Funding Document
Space Act- Advance payment must be forwarded immediately to FMD after agreement is signed.  Do not send with package.
Interagency- PO/MIPR if sufficient accounting info is not in agreement.
Funds received from customer should be the same as EPR.
Reimbursable allotment and program authority should be sufficient to cover agreement.  Should be included in budget submission.
Available funds for activities will be lesser of allotment, program authority or advance payment (aka reimbursable budgetary resources).

- Used to track work and costs under the agreement.
- Initiated through MdM
**Estimated Price Report (EPR)**
- Must use full cost (e.g. direct cost, service pool, G&A, etc.)
- All waivers must be justified and approved by CFO.
**Funding Document**
- Space Act- Advance payment must be forwarded immediately to FMD after agreement is signed.  Do not send with package.
- Interagency- PO/MIPR if sufficient accounting info is not in agreement.
- Funds received from customer should be the same as EPR.
- Reimbursable allotment and program authority should be sufficient to cover agreement.  Should be included in budget submission.
- Available funds for activities will be lesser of allotment, program authority or advance payment (aka reimbursable budgetary resources).

**Establishing a Reimbursable Agreement (Cont’d)**

**Notes:**
RAN is 10 numbers coding scheme.
Speak about allotment and P/A and how it backs reimbursable activity.
Just as we received allotment for direct funds, we also receive for reimbursable.  Based on our yearly estimates & quarterly updates, prog. Authority is received.  Important to budget for anticipated agreements.  We also now have a requirement for reimbursable activity to phased, similar to what you do with direct funds.  

If insufficient funds available, can delay the start of work, which may have an impact on your milestones.  YOU ARE NOT ALLOWED TO BEGIN WORK WITHOUT A PROPER AND COMPLETE REIMB AGREEMENT IN PLACE AND THE FUNDS HAVE BEEN POSTED IN THE FINANCIAL SYSTEM.

## EPR 

- Most costs, including CS labor & fringe, travel, contracts, grants, etc. may be charged as direct, service cost or G&A depending on the type of goods/services provided.

- Currently at 23.5%; Issued annually

- CM&O - Charged to all direct costs associated with the order. Applied to all costs “above the line.” Currently 15.6%; Issued annually

- Based on non-refundable, sliding scale, fixed amount for agreements over $1M.

- Charged to all non-Federal customers.  Based on specific PP&E used to support agreement.

**Notes:**
EPR is format used to document full cost and any subsidies/waivers.
EPR content will be different for each agreement.  
Show separate lines for each Cost Element.
Fringe Benefit rate updated annually around August.
Gov’t share of: FEGLI, FEHB, CSRS/FERS, Medicare, TSP Basic/Matching
CAAS charged mainly to programmatic fund sources.
Depreciation charges normally returned to Treasury. Collections for cost not funded by current appropriation almost always returned to Treasury.
Waived cost must be fully justified.  Should explain in detail how agreement activity is beneficial to NASA.  Even better if able to tie back to a program or project.  Waiver must be approved by CFO.
All waived charges are reported to HQ annually.

CAAS
1-2M---$10K
2-5M—$24K
5M + ---0.0052%

## MdM - WBS Request

- 691982.01 - Ames Mission Directorate Unique (assigned by HQ/ARMD) for Institutional Reimbursable Activity
-                .01 - Represents Ames
-                    .06 - Code AO Wind Tunnel Division
-                    .11 - Code CF EULA activity
-                        .xxxx - Customer unique Identifier e.g. Google, Zenpire, etc.
-                                .01 - System requirement (all are 01)
- 691982.01.01.11.1290.01 is Institutional Reimb at Ames for EUL activity with Google.
- On the MdM form, when requesting a new WBS you should input **691982.01.01.11** (I believe previously you were only putting the 11).
- If a new Org. – WBS Level = **WBS4**

**Notes:**
What is an Appropriation?
Statutory authority that allows Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes.  An appropriation usually follows enactment of authorizing legislation. (Source: FMM 9020)

PURPOSE
Found in appropriations act, authorizing legislation, legislative history, committee reports, agency budget request, etc. 
“Necessary Expense” Doctrine- Agency has reasonable discretion in determining how to carry out the object of the appropriation. In other word, where an appropriation is made for a particular object, by implication it confers authority to incur expenses which are necessary or proper or incident to the proper execution of the object.
Three test under necessary expense rule
Must bear a logical relationship to appropriation;
Expenditure not prohibited by law; and
Expenditure not otherwise provided for in another appropriation.

TIME
The placing of time limits on the availability of appropriations is one of the primary means of congressional control.
General Rule: Availability relates to authority to obligate appropriation.
Types of Appropriations: annual, multiple-year, no-year.
“Bona Fide Need” Rule- A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide need, arising in, or in some cases prior to but continuing to exist in, the fiscal year for which the appropriation was made.

AMOUNT
Antideficiency Act prohibits:
Making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law;
Involving the government in any contract or other obligation for the payment of money for any purpose in advance of appropriations made for such purpose, unless the contract or obligation is authorized by law;
Accepting voluntary services for the United States, or employing personal services in excess of that authorized by law, except in cases of emergency involving the safety of human life or the protection of property; and
Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations. 
Augmentation of Appropriation- As a general proposition, an agency may not augment its appropriations from outside sources without statutory authority.  Augmentation would allow an agency to undercut the congressional power of the purse.
Miscellaneous Receipts Statute states “....an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.” (Exceptions: statutory authority; repayment)

## Doing Work Under the Agreement

_**Appropriations Law Considerations**_
- Reimbursable activity is backed by an appropriation authorized by Congress and is subject to the same appropriations law restrictions as direct appropriations as to *Purpose, Time and Amount (PTA).*
_**Purpose**_* – *We can only use appropriated funds for those purposes authorized by Congress*.*
_**Time**_* *– We can only use appropriated funds within the time limits established by Congress.
_**Amount**_* * - We can only use appropriated funds within the amounts established by Congress.

**Notes:**
What is an Appropriation?
Statutory authority that allows Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes.  An appropriation usually follows enactment of authorizing legislation. (Source: FMM 9020)

PURPOSE
Found in appropriations act, authorizing legislation, legislative history, committee reports, agency budget request, etc. 
“Necessary Expense” Doctrine- Agency has reasonable discretion in determining how to carry out the object of the appropriation. In other word, where an appropriation is made for a particular object, by implication it confers authority to incur expenses which are necessary or proper or incident to the proper execution of the object.
Three test under necessary expense rule
Must bear a logical relationship to appropriation;
Expenditure not prohibited by law; and
Expenditure not otherwise provided for in another appropriation.

TIME
The placing of time limits on the availability of appropriations is one of the primary means of congressional control.
General Rule: Availability relates to authority to obligate appropriation.
Types of Appropriations: annual, multiple-year, no-year.
“Bona Fide Need” Rule- A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide need, arising in, or in some cases prior to but continuing to exist in, the fiscal year for which the appropriation was made.

AMOUNT
Antideficiency Act prohibits:
Making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law;
Involving the government in any contract or other obligation for the payment of money for any purpose in advance of appropriations made for such purpose, unless the contract or obligation is authorized by law;
Accepting voluntary services for the United States, or employing personal services in excess of that authorized by law, except in cases of emergency involving the safety of human life or the protection of property; and
Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations. 
Augmentation of Appropriation- As a general proposition, an agency may not augment its appropriations from outside sources without statutory authority.  Augmentation would allow an agency to undercut the congressional power of the purse.
Miscellaneous Receipts Statute states “....an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.” (Exceptions: statutory authority; repayment)

## Doing Work Under the Agreement (Cont’d)

- Work or service must be performed during the availability of the appropriation of the requesting agency or after receipt of advance payment.
- Work cannot be performed prior to, or after the expiration of the period of performance.  All reimbursable agreements are required to state a period of performance.
- If work cannot be completed within NASA’s period of availability, remaining authority may be withdrawn and reissued as new authority provided:
- Period of performance has not expired; and
- Requesting agency’s appropriation is still valid.

**Only applies to Interagency agreements.**

**Notes:**
For Interagency agreement, we need to be concerned with the requesting agency’s “color of money.”  Cannot violate the “time” restriction of App. Law.
Period of performance, however, may be extended.
Reimbursable activity is backed with NASA funds and since we normally use 2 year money, it may expire before the work or services are complete.  May be a problem when other gov’t agency’s such s DOD have longer time limits on their money.  Requires us to withdraw unobligated authority and reissue as new year.

## Closing out the Agreement

- An agreement can be closed out when any one of these conditions exists:
- Period of performance has expired;
- Reimbursable services have been fully completed; or
- The performing org or customer has decided to end agreement.
- Final cost report and final bill are submitted to customer. Must be done within one year after completion of agreement.  Account settled before agreement is closed.
- Customer pays any outstanding bills and NASA refunds any excess funds.  May not augment appropriations.

**Notes:**
Period of performance- Assume that all work is completed. If work not completed, we will allow work to be completed before we close out.  However, no new obligations allowed.
Augmentation violates the “AMOUNT” restriction under App Law.

## Establishing a Travel-Only Agreement

- Travel-only agreement- Agreement where the only costs involved are for travel and duration is less than 3 weeks.
- Less “formal” than a reimbursable agreement.
- Customer pays for travel expenses only. No products or services are provided.
- Types of travel-only agreement:
_**In-Kind**_
- No exchange of funds.
- Customer provides transportation, lodging, food, etc. directly to NASA employee
- Invitation will state “in-kind” and exactly what is covered.
- No G&A levied.

**Notes:**
No G&A levied because no activity is needed on NASA’s part.
Travel-only agreements used mainly for short conferences, lectures, one time trip, etc.
Travel Office will have template letters.
Under in-kind, we request a full cost report from customer and submit that to OIG thru HQ semiannually.

## Establishing a Travel-Only Agreement (Cont’d)

_**Advance Payment**_
- NASA makes the travel arrangements (e.g. air, car, hotel).
- Customer makes advance payment based on estimated travel costs.
- G&A of 6% levied.
_**No Advance Payment**_
- Only permitted when customer has written policy that prohibits this.
- Usually applies to Federal grantees, state/local gov’t, universities, etc.
- NASA will bill after completion of trip.
- G&A of 6% levied.
_**Combination**_
- Combination of “in-kind,” advance payment and no advance payment.
- G&A of 6% levied on all cost not considered “in-kind.”
- G&A charge is rarely waived.

**Notes:**
Travelers would use reimbursable travel budget.  Must budget accurately.

## Establishing a Travel-Only Agreement (Cont’d)

- Contents of travel-only agreement package:
**Letter of Invitation**
- Written, purpose, destination, duration, covered costs, method of reimbursement, etc.
**Request for Approval**
- From performing org to directorate head
**Letter of Acceptance**
- Prepared by performing org and signed by directorate head
**Estimated Price Report (not applicable to “in-kind”)**
**Advance Payment (not applicable to “in-kind”)**
**Travel Orders**
**Job Order Request (not applicable to “in-kind”)**
- Package routed to Directorate, Legal & CFO for approval.

**Notes:**
For in-kind, can skip CFO approval.

## Establishing an Enhanced Use Lease Agreement

- What is an Enhanced Use Lease (EUL) Agreement?
- New way to manage leases approved at ARC & KSC.
- Long term lease and more complicated than a “normal” lease.
- NASA can use the rent proceeds to cover all operating costs of the lease and any proceeds can be used for maintenance, capital revitalization and improvements to real property assets.
- Without EULA, the lease proceeds must go to the Treasury
- Funds are available until expended
- Leverage the value of underutilized real property that is still required for current or future NASA operations and missions.

**Notes:**
For in-kind, can skip CFO approval.

## SAP Reports to Manage Reimbursable Agreements 

- CJ03 (View WBS)
- VA03 (View Sales orders-FMD only)
- ZFI_BEDATA (Budget & COCD by WBS)
- ZFI_BUDGET (Budget Status-Non Full Cost)
- ZFI_FULLCOST (Budget Status by Committ Item)

## Key Points

- Binding agreement to sell or rent materials, equipment or services.
- NASA does not compete with the private sector.
- Agreements must recover full cost unless waiver is granted.
- Agreement must be in place before work can begin.
- Reimbursable activity is subject to same appropriations law restrictions as direct.
- Advance payment must be received from all customers before work can begin.
- NASA may not augment its own appropriation or that of its customer.
- Travel-only agreements must be less than 3 weeks in duration.

## Point of Contact

- Resource Management Division
- Agreement Review & Advice-Beverly Davis  (4-4773)
- Office of the Chief Counsel
- Agreement Review & Advice- (4-6470)
- Technology Partnerships Branch
- Coordination-Phil Herlth (4-0625)
- Financial Management Division
- Reimbursable & A/R Lead- Karen Gentry (4-5317)
- Budget Execution/Sales Orders Codes A-M Diana Ancheta  (4-0220)
- Budget Execution/Sales Orders Codes N-Z JoAnn Staley (4-2709)
- Budget Execution/Sales Orders NRP/MC/EULA Andy Chiem (4-1036)
- Billing & Collections Diana Ancheta (4-0220))
- Billing & Collections Donna Washington (4-5316)

## Acronyms Used

- ALC	Agency Location Code
- CFO 	Chief Financial Office
- COCD	Commit/Obligate/Cost/Disburse
- EPR	Estimated Price Report
- EULA	Enhanced Use Lease Agreement
- FMR	Financial Management Regulations
- FMV	Fair Market Value
- IPAC	Intra-Governmental Payments and Collections
- OMB	Office of Management and Budget
- POP	Program Operating Plan
- RMD	Resources Management Division
- WBS	Work Breakdown Structure
- WCF	Working Capital Fund

## Questions