U.S. NUCLEAR REGULATORY COMMISSION

FY 2013 SERVICE CONTRACT INVENTORY ANALYSIS

NRC RESPONSIBLE OFFICIALS

Jill Daly, Branch Chief, Sourcing, Systems and Policy Branch, is the responsible official for 

policy and Darren Ash, Deputy, Executive Director for Corporate Management, is the 

responsible party for the management of the service contract inventory and analysis process. 

BACKGROUND

NRC submitted to the Office of Management and Budget (OMB) Product Service Code (PSC) 

R710, entitled “Support Management - Financial” as the special interest function selected to be 

analyzed during Fiscal Year FY13. 

 

This PSC (R710) was selected because it was not the subject of a previous analysis, it did not 

appear in the NRC’s Top 10 PSCs reported in FY13, and most other top PSCs for FY13 were 

being evaluated as part of NRC’s ongoing strategic sourcing initiatives. The selection of this 

code is consistent with PSC selections made for prior fiscal year service contract inventory 

submissions to OMB. Accordingly, NRC focused its analysis of the service contract inventory 

on this special interest function. 

SCOPE OF REVIEW

The FY13 service contract inventory was reviewed for special interest functions that required 

increased management attention due to possible over-reliance on contractor support for 

activities that may otherwise be performed by Federal employees. The special interest function 

selected for review is under the “R” of the Product Service Codes. Contracts within this code 

include those that provide professional, administrative and management services which could 

be considered closely associated with inherently governmental functions in accordance with 

OMB Policy Letter 11.01 entitled: “Performance of Inherently Governmental and Critical 

Functions.” 

As required by Sections 743(e)(3) and (4) of the Federal Activities Reform Act of 1998 and 

Section C of the attachment to the guidance issued by OMB, a representative sample (50%) of 

these were required. However, in FY13, there was only one contract under PSC R710. The 

work under the contract was evaluated to determine if it was performed satisfactorily, in terms of 

quality and timeliness of performance, and cost constraints. It was also analyzed to determine if 

the services should be considered for conversion to performance by NRC employees in 

accordance with insourcing guidelines. 

 
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METHODOLOGY

The work under this delivery order (DO) has been performed properly in terms of quality and 

timeliness of performance, and met budgetary constraints. The Agency was satisfied with the 

overall performance of the contractor and had no knowledge of cost overruns. The Agency 

continues to review financial service requirements, including those under special interest 

function “Support Management – Financial,” as part of its continued efforts in strategic sourcing, 

including review by Agency commodity councils. This above NRC labor-hour DO was awarded 

based on a BPA call order under GSA schedule number GS35F4670G. The DO was closely 

monitored by the Agency to ensure that no cost overruns occurred and that the contractor was 

providing quality services within budget and on schedule. In addition, based on the established 

criteria for classifying functions as inherently governmental, it was determined that the 

contractor was not performing inherently governmental functions. 

The contracts that typically fall under PSC R710 are primarily for professional consulting 

services to support NRC employees with various financial issues and financial system support 

services. During fiscal year 2013, NRC spent approximately $1 million under PSC R710 for 

computer related support services. This amount consisted of four modifications issued under 

DO number NRCHQ12P090058, totaling $1,010,000, on a labor-hour basis: 

FY13 Incremental Funding Modifications: 

 M003: $260,000.00 

 M004: $100,000.00 

 M007: $550,000.00 

 M008: $100,000.00 

The above DO had a ceiling of $3,503,909.32 with a period of performance of January 31, 2012 

through June 30, 2014. The total obligated amount ($2,970,248.50) was reduced by $539.48; 

thereby resulting in a final obligated amount of $2,969,709.02. The DO was effectively closed 

via contract modification on January 21, 2015. 

A Contractor Performance Assessment Report (CPAR) was completed for this DO. The 

Contracting Officer’s Representative (COR) rated the contractor highly in each evaluation 

category, suggesting that there were no significant performance problems or concerns. 

In accordance with Section 743€ of the Federal Activities Reform Act of 1998 and Appendix D of 

the OMB guidance, NRC analyzed the contracts in this category as follows: 

Each contract in the inventory that is a personal services contract has been entered into, and is 

being performed, in accordance with applicable laws and regulations. No personal services 

contracts were identified during the analysis of this category of service contracts.

(i) The agency is giving special management attention, as set forth in FAR 37.114, 

to functions that are closely associated with inherently governmental functions. 
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FAR 37.114 is actively being followed during the performance of contracts 

awarded under this PSC R710. 

(ii) The agency is not using contractor employees to perform inherently 

governmental functions. A review of NRC’s FY13 Service Contract Inventory 

shows that there are no contractors being used to perform inherently 

governmental functions.

(iii) The agency has specific safeguards and monitoring systems in place to ensure 

that work being performed by contractors has not changed or expanded during 

performance to become an inherently governmental function. Contract scope is 

monitored by the CO to ensure that “scope creep” is not occurring, 

especially into inherently governmental functions through contract 

modifications. CORs are required to ensure that services provided and 

invoiced are in accordance with scope of the contract; and that work does 

not change or expand during performance to become inherently 

governmental.

(iv) The agency is not using contractor employees to perform critical functions in 

such a way that could affect the ability of the agency to maintain control of its 

mission and operations. There are sufficient Agency personnel in place to 

ensure that contractor employees are not performing critical functions to 

the point of affecting NRC’s ability to perform its mission and operations. 

(v) There are sufficient internal agency resources to manage and oversee contracts 

effectively. There are sufficient internal NRC resources to manage and 

oversee contracts effectively. However, the Agency continues to study 

ways in which to improve organizational effectiveness and contractor 

performance.

CONCLUSION

Based on the above analysis, the NRC has determined that it is not necessary to take any 

actions to convert these functions currently being performed by contractors under PSC R710 to 

performance by NRC employees. 

There are no planned or pending actions identified in previous inventories that require follow-up.