# Presentation: 224749

## JSC Action # 2621Hurricane Allowability/Charging Policy

- Jose Garcia
- 281-483-4117
- 1/5/06

## Hurricane Allowability/Charging Policy

- The action states:
- 	Review the flexibilities for dealing with the impacts of “Hurricane Leave” on our contractors.
- Note: programs have requested a status of this study as well as an understanding of any plan forward prior to implementation

## Allowability

- Restricted to terms and conditions of contract
- Expense considered allowable unless otherwise excluded by the contract based on:
- NFS 1852.242-72 Observance of Legal Holidays Alt II
- FAR 31.205-6 Compensation for personal services
- Memorandum from the Office of the Under Secretary of Defense

## Allowability (cont)

- Fixed priced contracts:
- Contract governs
- Contract terms and conditions
- Contractor may refer to the Contract Pricing Reference Guides for guidance
- Chapter 6: pricing equitable adjustments and settlements

## Charging

- Regulations:
- FAR part 30: CAS
- FAR part 31: Cost Principles
- GAAP: consistency in accounting/estimating
- Contract clause:
- NFS 1852.242-75, Alt 2 Observance of Legal Holidays
- Charge in accordance with contractor’s established accounting policy

## Charging (cont)

- One NASA:
- Stennis:
- Contracting Officer deals with it on a case-by-case basis
- Contracting Officer sends letter to respective contractors prior to event occurring pointing to:
- NFS 1852.242-75, Alt 2 Observance of Legal Holidays clause
- Charge in accordance with contractor’s established accounting policy
- KSC:
- Contracting Officer deals with it on a case-by-case basis
- Point the NFS 1852.242-75, Alt 2 Observance of Legal Holidays clause
- Charge in accordance with contractor’s established accounting policy

## Small Contractors

- Regulations or accounting practices do not distinguish between small or large business except in the area of Cost Accounting Standards and disclosure of accounting practices
- Office of the Under Secretary of Defense did not specially distinguish between small or large businesses in a memo issued or during verbal conversations with the individual who wrote the memo
- Other NASA Centers have not specifically demonstrated a different type behavior between small or large business related to allowability or charging of these type expenses

## Small Contractors

- However:
- Small contractor with fixed priced contractual arrangements should carefully read their contracts to specifically:
- Understand terms and conditions related to emergencies or delay in work
- Understand any specific FAR or NFS exclusions that may affect not being able to submit an equitable adjustment

## Summary

- Hurricane RITA:
- Allowability restricted to the terms and conditions (T&C) of the contract
- Expenses considered allowable if contract T&C do not specifically restrict these type of expenses but must be reasonable & allocable
- Otherwise considered allowable for accounting purposes only
- If allowable by the contract terms & conditions:
- Cost shall be charged in accordance with established accounting polices

## Forward Plan

- Hurricanes in general:
- Procurement Policy Office to develop generic policy covering Center closures
- Post policy to procurement external web-page for accessibility by contractors
- Pricing policy/assistance:
- Develop a site on the procurement external web page to post any general pricing issues, guidance or recommendations to all contractors