14016 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

resolve mutual exclusivity before

December 15, 1995, will be processed,

provided the applications had

completed the 60-day public notice

period on or before November 13, 1995.

Another main point of the decision is

that the Commission will process those

amendments of right filed on or after

November 13, 1995, but before

December 15, 1995. Further, it will

continue to hold in abeyance all

pending mutually exclusive

applications, unless the mutual

exclusivity was resolved by an

amendment of right filed before

December 15, 1995. In addition, the

Memorandum Opinion and Order states

that applications to modify existing 39

GHz licenses and amendments thereto

would be processed regardless of when

filed, provided they neither enlarge the

service area nor change the assigned

frequency blocks (except to delete

them). These applications and

amendments will be processed and

granted, if otherwise in compliance with

the Commission’s Rules.

Ordering Clauses

6. Accordingly, it is hereby ordered

that the Petition for Reconsideration

submitted by Commco, LLC.,

PLAINCOM, INC., and Sintra Capital

Corporation, and the Petition for Partial

Reconsideration filed by DCT

Communications, Inc., are hereby

granted in part and denied in part.

7. It is further ordered that the

Emergency Petition for Stay filed by

Commco, L.L.C., PLAINCOM, INC., and

Sintra Capital Corporation is hereby

dismissed as moot.

8. This action is taken pursuant to the

authority found in Sections 4 (i) and 303

of the Communications Act of 1934, as

amended, 47 U.S.C. 154 (i) and 303, and

Section 0.131 of the Commission’s

Rules, 47 CFR 0.131. For further

information, contact Susan Magnotti,

Private Wireless Division, (202) 418–

0871.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97–7260 Filed 3–24–97; 8:45 am]

BILLING CODE 6712–01–P

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 1803, 1805, 1812, 1815,

1835, 1842, 1843, 1844, 1846, 1847,

1848, 1849, 1850, 1851, and 1852

Rewrite of the NASA FAR Supplement

(NFS)

AGENCY: Office of Procurement, National

Aeronautics and Space Administration

(NASA).

ACTION: Final rule.

SUMMARY: Parts 1842 through 1851,

except 1845, and clauses affected by

these parts are revised in their entirety.

Part 1815, Contracting by Negotiation, is

revised by relocating the existing

coverage on source selection evaluation

plans from 1815.612–70(g) to a new

separately titled section 1815.605–71,

and by establishing a new section

1815.612, Formal source selection. The

revision to part 1842 also incorporates

the changes published as a proposed

rule (61 FR 55264–55266, October 25,

1996). No public comments were

received in response to the proposed

rule, and the proposed changes are

adopted as final except for the deletion

of extraneous paragraph 1842.7201(d).

Also included in this final rule are

editorial changes to 1803 and 1815; a

revision to 1805.402 to reflect the

prohibition in FAR 15.1005(f) on

preaward disclosure of the identify of

offerors; a change to 1812 to authorize

use of an NFS contract clause in

commercial acquisitions; and the

adoption as final rule the proposed

changes to 1852.223–70 and 1852.247–

73 described in the proposed rule to

eliminate non-statutory contractor

certification requirements (61 FR

66643–66646).

EFFECTIVE DATE: March 25, 1997.

FOR FURTHER INFORMATION CONTACT:

Tom O’Toole, (202) 358–0478.

SUPPLEMENTARY INFORMATION:

Background

The National Performance Review

urged agencies to streamline and clarify

their regulations. The NFS rewrite

initiative was established to pursue

these goals by conducting a section by

section review of the NFS to verify its

accuracy, relevancy, and validity. The

NFS will be rewritten in blocks of parts.

Upon completion of all parts, the NFS

will be reissued in a new edition.

Impact

NASA certifies that this regulation

will not have a significant impact on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 602 et seq.). This rule does not

impose any reporting or record keeping

requirements subject to the Paperwork

Reduction Act.

List of Subjects in 48 CFR Parts 1803,

1805, 1812, 1815, 1835, 1842, 1843,

1844, 1846, 1847, 1848, 1849, 1850,

1851, and 1852

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for

Procurement.

Accordingly, 48 CFR Parts 1803, 1805,

1812, 1815, 1835, 1842, 1843, 1844,

1846, 1847, 1848, 1849, 1850, 1851, and

1852 are amended as follows:

1. The authority citation for 48 CFR

1803, 1805, 1812, 1815, 1835, 1842,

1843, 1844, 1846, 1847, 1849, 1850,

1851, and 1852 continues to read as

follows:

Authority: U.S.C. 2473(c)(1).

PART 1803—IMPROPER BUSINESS

PRACTICES AND PERSONAL

CONFLICTS OF INTEREST

1803.101–1 [Amended]

2. The first sentence in section

1803.101–1 is revised to read as follows:

1803.101–1 General.

The statutory prohibitions and their

application to NASA personnel are

discussed in the Standards of Ethical

Conduct for Employees of the Executive

Branch, 5 CFR part 2635, and the

Supplemental Standards of Ethical

Conduct for Employees of the National

Aeronautics and Space Administration,

5 CFR part 6901.* * *

1803.101–2 [Amended]

3. In section 1803.101–2, the phrase

‘‘(See Standards of Conduct for NASA

Employees, NHB 1900.1.)’’ is removed.

1803.104–5 [Amended]

4. In paragraph (d)(1)(A) of section

1803.104–5, the phrase ‘‘under

1870.303, App. I,’’ is revised to read

‘‘(see 1815.612–70)’’.

PART 1805—PUBLICIZING CONTRACT

ACTIONS

1805.402 [Amended]

5. Section 1805.402 is revised to read

as follows:

1805.402 General public. (NASA

paragraphs (1) and (2))

(1) Unless the head of the contracting

activity determines that disclosure

would be prejudicial to the interests of

NASA, the following information on

NASA acquisitions may be released:

(i) The names of firms invited to

submit offers, and
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14017

(iii) The names of firms that attended

any pre-bid or pre-proposal conferences.

(2) Other requests for information

under the Freedom of Information Act

shall be processed in accordance with

FAR 24.2 and 1824.2.

PART 1812—ACQUISITION OF

COMMERCIAL ITEMS

1812.301 [Amended]

6. In section 1812.301, a new

paragraph (f)(i)(J) is added to read as

follows:

1812.301 Solicitation provisions and

contract clauses for the acquisition of

commercial items. (NASA Supplement

paragraph (f))

(f)(i) * * *

(J) 1852.246–72, Material Inspection

and Receiving Report. * * *

PART 1815—CONTRACTING BY

NEGOTIATION

1815.605–71 [Added]

7. Section 1815.605–71 is added to

read as follows:

1815.605–71 Source selection evaluation

plan.

(a) A source selection evaluation plan

shall be prepared for each source

selection. The plan shall include, as a

minimum the general and specific

evaluation guidelines (and special

standards of responsibility, where

applicable) established to assess each

offeror’s proposal against the RFP

evaluation factors, subfactors, and

elements. The evaluation guidelines are

designed to focus the evaluators’

assessment. They are not weighted and

are not listed in the RFP. However, the

substance of the guidelines may be

included in a narrative description of

the subfactors and elements. In

addition, the plan includes the system

used in conducting the evaluation (and

scoring, if applicable) of each offeror’s

proposal.

(b) The source selection evaluation

plan shall be approved by the source

selection authority or other personnel

designated in accordance with

installation procedures before the

formal RFP is issued.

(c) For formal source selections, see

1815.612(c).

1815.612 [Added]

8. Section 1815.612 is added to read

as follows:

1815.612 Formal source selection. (NASA

supplements paragraph (c))

(c) The requirement for a source

selection evaluation plan may be

satisfied by incorporating the

information required by 1815.605–71

into the source selection plan. The

consolidated plan shall be approved by

the source selection authority.

1815.612–70 [Amended]

9. In section 1815.612–70, the

designated paragraph (g) is removed,

and the designated paragraphs (h)

through (k) are redesignated as

paragraphs (g) though (j).

PART 1835—RESEARCH AND

DEVELOPMENT CONTRACTING

1835.016–70 [Amended]

10. In paragraph (b)(2) of section

1835.016–70, the citation ‘‘1815.201’’ is

revised to read ‘‘1805.201’’.

11. Part 1842 is revised to read as

follows:

PART 1842—CONTRACT

ADMINISTRATION

Subpart 1842.1—Interagency Contract

Administration and Audit Services

1842.101 Policy.

1842.102 Procedures.

1842.102–70 Review of administration and

audit services.

1842.170 Assignment of NASA personnel at

contractor plants.

Subpart 1842.2—Assignment of Contract

Administration

1842.202 Assignment of contract

administration.

1842.203 Retention of contract

administration.

1842.270 Contracting officer technical

representative (COTR) delegations.

1842.271 NASA clause.

Subpart 1842.5—Postaward Orientation

1842.503 Postaward conferences.

Subpart 1842.7—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—Disallowance of Costs

1842.803 Disallowing costs after

incurrence.

Subpart 1842.12—Novation and Change-ofName Agreements

1842.1203 Processing agreements.

1842.1203–70 DOD processing of novation

and change-of-name agreements on

behalf of NASA.

Subpart 1842.13—Suspension of Work,

Stop-Work Orders, and Government Delay

of Work

1842.1305 Contract clauses.

Subpart 1842.14—Traffic and

Transportation Management

1842.1405 Discrepancies incident to

shipment of supplies.

Subpart 1842.70—Additional NASA

Contract Clauses

1842.7001 Observance of legal holidays.

1842.7002 Travel outside of the United

States.

Subpart 1842.71—Submission of Vouchers

1842.7101 Submission of vouchers.

Subpart 1842.72—NASA Contractor

Financial Management Reporting

1842.7201 General.

1842.7202 Contract clause.

Subpart 1842.73—Audit Tracking and

Resolution

1842.7301 NASA external audit follow-up

system.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1842.1—Interagency Contract

Administration and Audit Services

1842.101 Policy. (NASA supplements

paragraph (a))

(a)(i) The Defense Contract Audit

Agency (DCAA) 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. 88, 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 HS).

1842.102 Procedures.

1842.102–70 Review of administration and

audit services.

(a) NASA installations shall assess

their delegations to DOD semiannually

to determine changes in delegation

patterns that could (1) result in

significant changes in DOD manpower

requirements or (2) 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.

(b) A summary of significant changes

shall be submitted to the Headquarters

Office of Procurement (Code HK). The

summary shall include—

(1) A description of the change in

work requirements or delegation

pattern;

(2) The estimated duration of the

impact;
14018 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

(3) The results of discussions with

affected DOD contract administration

offices including agreement and

disagreements on the predicted impact

on DOD in terms of changes in

manpower requirements or other costs;

and

(4) Any other significant impact on

DOD or NASA resources or contract

performance risk.

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). Before such an assignment is

made, a written request shall be

forwarded to the cognizant program

director for approval with the

concurrence of the Associate

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 serves

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

(a) 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), 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—Assignment of

Contract Administration

1842.202 Assignment of contract

administration. (NASA supplements

paragraphs (b) and (d))

(b) Withholding normal functions. (1)

The following functions are normally

retained by the contracting office.

(A) Approval of the final voucher

(FAR 42.302(a)(7)).

(B) Countersigning NASA Form 456,

Notice of Contract Costs Suspended

and/or Disapproved (FAR 42.302(a)(8)).

(C) Issuance of decisions under the

disputes clause (FAR 42.302(a)(10)).

(D) Contract payment (FAR

42.302(a)(13)).

(E) Execution of supplement

agreements involving spare parts or

other items selected through

provisioning procedures. However,

delegation of the negotiation of

supplemental agreements for spare parts

and other items and forwarding for

approval and signature of the NASA

contracting officer is permitted (FAR

42.302(a)(22)).

(F) Executive of supplemental

agreements definitizing change orders

(see FAR 42.302(b)(1)).

(G) Issuing termination notices and

executing supplemental agreements for

settlement of termination for default or

for convenience of the Government.

However, delegation of the negotiation

of termination settlements and

forwarding for approval and signature of

the NASA contracting officer is

permitted using NASA Form 1432 (FAR

42.302(a)(23)).

(H) Consent to placement of

subcontracts under FAR 42.302(a)(51).

(See 1844.202–1(a)).

(d) Transmittal and documentation. In

addition to the instructions at FAR

42.202(d) (1) 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,

prepared and forward NASA Form

1430, Letter of Contract Administration

Delegation, General, to the contract

administration office. NASA Form

1430A, Letter of Contract

Administration, Special Instructions,

will supplement the NASA Form 1430,

to modify previously delegated

functions and provide additional or

particular information considered

necessary to ensure clear understanding

of all delegated functions.

(iii) Forward NASA Form 1431, Letter

of Acceptance of Contract

Administration, with each NASA Form

1430 or 1430A. 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 contract 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.

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
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14019

furnished directly to the contracting

officer.

1842.203 Retention of contract

administration. (NASA supplements

paragraph (a))

(a) The assignment of contract

administration is optional for the

following contracts:

(i) Research and development study

contracts not involving deliverable

hardware or Government furnished

property.

(ii) Contracts with delivery schedules

for 90 days or less.

(iii) Purchase orders without

Government source inspection

requirements.

(iv) Contracts requiring only on-site

performance.

(v) Contracts requiring work in the

vicinity of the awarding center where

DOD contract administration services

are not reasonably available.

1842.270 Contracting officer technical

representative (COTR) delegations.

(a) Contracting officers may appoint a

qualified Government employee to act

as their technical representatives 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

with an estimated value not to exceed

the value specified in writing by the

contracting officer in the NASA Form

1634 but in no event to exceed $25,000.

(e) Each COTR shall acknowledge

receipt and accept the delegation by

signing the original delegation letter.

The original of the COTR delegation

letter shall be filed 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) Mandatory training for COTRs and

their alternates shall include the

following core topic areas: contracting

authority; procurement integrity;

performance-based contracting; contract

modifications; surveillance plans;

contracting for inherently governmental

functions, personal services, and NASA

policy on the acquisition of services; the

Service Contract Act; the AntiDeficiency Act; contract financial

management; the ‘‘Changes’’ clause; the

‘‘Disputes’’ clause; the ‘‘Inspection’’

clause; Government property and policy

procedures; and the ‘‘Limitation of

Funds’’ and ‘‘Limitation of Cost’’

clauses. Procurement officers are

responsible for assuring that the

course(s) utilized by their installation

address the mandatory core topics in

sufficient detail for the purpose of

COTR training.

(g) The contracting officer shall verify

that the COTR has received the

mandatory training before signing

NASA Form 1634. If an urgent need

arises for the appointment of a COTR

and no trained and otherwise qualified

individual is available, then the

procurement officer may make a

temporary COTR appointment not to

exceed six months. Temporary

appointments must be so identified and

clearly reflect the appointment

expiration date.

(h) No technical direction may be

issued by a COTR relative to

performance-based contract

requirements or when serving under a

temporary appointment.

1842.271 NASA clause.

Insert the clause at 1852.242–70,

Technical Direction, when paragraph

3(m) of the NASA Form 1634

specifically authorizes a COTR to issue

technical direction.

Subpart 1842.5—Postaward

Orientation

1842.503 Postaward conferences. (NASA

paragraphs (1) and (2))

(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 NASAcontrolled 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.

(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 1842.7—Indirect Cost Rates

1842.705 Final indirect cost rates.

1842.705–1 Contracting officer

determination procedure. (NASA

supplements paragraph (a))

(a) Applicability and responsibility.

(i) Since many NASA contractors are

under DOD’s final overhead rate

determination procedure, NASA’s

policy is to participate jointly with DOD

for those companies where NASA has a

major financial interest. The NASA

participant shall be a representative

from that installation having the

predominance of NASA work.

(ii) When NASA has been assigned

the final indirect cost rate determination

authority, settlement of indirect costs

shall be conducted by the cognizant

NASA contracting officer (normally

from the installation providing the

preponderance of NASA funding).

1842.708 Quick-closeout procedure.

(NASA supplements paragraph (a))

(a)(2)(ii) The 15 percent parameter

does not apply to NASA contracts.

Instead, quick-closeout may be used if

an individual contract’s value,

excluding fee, is not greater than

$2,000,000. Quick closeout may be used

for contracts above $2,000,000 with the

prior approval of the installation

procurement officer.
14020 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

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 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 quickcloseout 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 (e)(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 (e)(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

(e)(6) of this section.

(5) The previous year’s final rates.

(6) Final rates for another fiscal year

closest to the period for which quickcloseout 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 1842.8—Disallowance of

Costs

1842.803 Disallowing costs after

incurrance. (NASA supplements paragraph

(b))

(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.

(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 setoff 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 1842.12—Novation and

Change-of-Name Agreements

1842.1203 Processing agreements. (NASA

supplements paragraphs (b) and (f))

(b) The installation shall immediately

notify the Headquarters Office of

Procurement (Code HS) of the request to

execute a novation (successor-ininterest) or change-of-name agreement.

(f) The contracting officer shall

forward one copy of the agreement to

the Code HS.

1842.1203–70 DOD processing of novation

and change-of-name agreements on behalf

of NASA.

(a) Appendix E of the NASA/DOD

Agreement for Contract Administration

and Contract Audit Services authorizes

DOD to process novation and change-ofname agreements on behalf of NASA.

Copies of 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 1842.13—Suspension of Work,

Stop-Work Orders, and Government

Delay of Work

1842.1305 Contract clauses. (NASA

supplements paragraph (b))

(b) FAR 52.242–15, Stop-Work Order,

shall not be used in solicitations or

contracts for research performed by

educational or other nonprofit

institutions.
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14021

Subpart 1842.14—Traffic and

Transportation Management

1842.1405 Discrepancies incident to

shipment of supplies. (NASA supplements

paragraph (a))

(a) NASA personnel shall also report

discrepancies and adjust claims for loss

of and damage to Government property

in transit in accordance with NHB

6200.1, NASA Transportation and

General Traffic Management.

Subpart 1842.70—Additional NASA

Contract Clauses

1842.7001 Observance of legal holidays.

(a) The contracting officer shall insert

the clause at 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 Alternate I is used and

it is desired that administrative leave be

granted contractor personnel in special

circumstances, such as inclement

weather or potentially hazardous

conditions.

1842.7002 Travel outside of the United

States.

The contracting officer shall insert the

clause at 1852.242–71, Travel Outside of

the United States, in costreimbursement solicitations and

contracts where a contractor may travel

outside of the United States and it is

appropriate to require Government

approval of the travel.

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, 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 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 value/scope Period of performance 533M 533Q

$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 NPG 9501.2, 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. 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 NPG

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, NASA
14022 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

Contractor Financial Management

Reporting, when any of the NASA Form

533 series of reports are 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, NASA Management

Instruction (NMI) 9970.1A, Audit

Follow-up, and NASA Audit Follow-up

Handbook 9970.2, which provide more

detailed guidance. Recommendations

for external audits (contracts and OMB

Circulars No. A–128, Audits of State

and Local Governments, and A–133,

Audits of Institutions of Higher

Learning and Other Non-Profit

Institutions) shall be resolved by formal

review and approval procedures

analogous to those at 1815.807–71.

(b) The external audit follow-up

system tracks all contract and OMB

Circular A–128 or A–123 audits where

NASA has resolution and disposition

authority. The objective of the tracking

system is to ensure that audit

recommendations are resolved as

expeditiously as possible, but a

maximum, within 6 months of the date

of the audit report.

(c) (1) The identification and tracking

of contract audit reports under NASA

cognizance are accomplished in

cooperation with DCAA by means of the

DCAA form, Contract Audit Follow-up

Summary Sheet. The use of this form by

DCAA and NASA is covered in Chapter

6 of the NASA Audit Follow-up

Handbook.

(2) Identification and tracking of A–

128 and A–133 audit reports are

accomplished in cooperation with the

NASA Office of the Inspector General

(OIG) by means of a transmittal

memorandum. A transmittal

memorandum is sent by the OIG to the

procurement officer of each NASA field

installation having an award (contract,

grant, or other agreement) covered by

the audit report. The transmittal

memorandum will identify whether

there were any audit findings.

(d)(1) Chapter 6 of the NASA Audit

Follow-up Handbook identifies which

contract audit reports are reportable

semiannually to the Headquarters Office

of Procurement (Code HC).

(2) Only trackable A–128 and A–133

audit reports involving the following

shall be reported semiannually to Code

HC—

(i) A significant management control

issue; or

(ii) For an individual NASA award,

either the lower of 10 percent or $10,000

of the costs incurred in the period

covered by the audit are questioned; or

for institution-wide issues, the lower of

10 percent or $10,000 of the total costs

incurred involving Government funds

for the period covered by the audit are

questioned.

(e)(1) The resolution and disposition

of contract audits is covered by Chapter

6 of the NASA Audit Follow-up

Handbook.

(2) The resolution and disposition of

A–128 and A–133 are handled as

follows:

(i) Audit findings pertaining to an

individual NASA award are the

responsibility of the procurement officer

administering that award.

(ii) Audit findings having an

institution-wide impact are the

responsibility of the cognizant Federal

agency or the agency responsible for

oversight. OMB’s January 6, 1986,

Federal Register Notice (51 FR 552),

titled ‘‘Federal Agencies Responsible for

Cost negotiation and Audit of State and

Local Governments,’’ provides

cognizant agency assignments for OMB

Circular A–128. For organizations

subject to OMB Circular 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 agency cognizant,

in which case a notice will be published

in the Federal Register. 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

1996, 2000, and every fifth year

thereafter. If there is no cognizant

Federal agency, there is an agency

responsible for oversight. The oversight

agency is that agency which provides

the predominant amount of direct

funding. 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 field installation 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 disappointing the

findings shall be provided by each field

installation having resolution

responsibility for the particular report to

the OIG Center office within whose

geographic area of responsibility the

audited organization is located.

12. Part 1843 is revised to read as

follows:

PART 1843—CONTRACT

MODIFICATIONS

Subpart 1843.2—Change Orders

Sec.

1843.205 Contract clauses.

1843.205–70 NASA contract clause.

Subpart 1843.70—Undefinitized Contract

Actions

1843.7001 Definitions.

1843.7002 Policy.

1843.7003 Procedures.

1843.7004 Exceptions.

1843.7005 Definitions.

Subpart 1843.71—Shared Savings

1843.7101 Shared Savings Program.

1843.7102 Solicitation provision and

contract clause.

Authority: 42 U.S.C. 2473(c)(1).

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; FAR 52.243–3,

Changes—Time-and-Material or LaborHours; and FAR 52.243–4, Changes, the

period within which a contractor must

assert its rights to an equitable

adjustment may be varied not to exceed

60 calendar days.

1843.205–70 NASA contract clause.

(a) 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. A local format

may be substituted for the MIL–STD–

973 format.

(b) If it is desirable to preclude a large

number of small-dollar, contractorinitiated engineering changes and to

reduce the administrative cost of

reviewing them, the contracting officer

shall use the clause with its Alternate I.

(c) If the contract is a costreimbursement type, the contracting

officer shall use the clause with its

Alternate II.

Subpart 1843.70—Undefinitized

Contract Actions

1843.7001 Definitions.

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
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14023

and their modifications are governed by

subpart 1816.6.)

1843.7002 Policy.

Undefinitized contract actions shall

be executed by contracting officers on

an exception basis and shall be limited

to the minimum urgent requirements.

The contract file for all UCAs shall be

documented to justify issuance and

shall include a Government estimate for

the changed requirements.

1843.7003 Procedures.

(a) Issuance of undefinitized contract

actions with a Government estimated

cost or price over $1,000,000 must be

approved in writing by the Center

Director. This approval authority is not

delegable. Issuance of undefinitized

contract actions with a Government

estimated cost or price less than or

equal to $1,000,000 shall also be

minimized but may be approved on an

exception basis in accordance with

installation procedures.

(b) (1) Undefinitized contract actions

exceeding $1,000,000 approved by the

Center Director shall 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 approval for issuance of

undefinitized contract actions are—

(1) Modifications to facilities

contracts;

(2) Modifications to construction

contracts using Construction of

Facilities funding;

(3) Urgent modification 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) Modification 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 rational 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 definitive UCAs

within 180 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.

13. Part 1844 is revised to read as

follows:

PART 1844—SUBCONTRACTING

POLICIES AND PROCEDURES

Subpart 1844.2—Consent to Subcontracts

Sec.

1844.201 Consent requirements.

1844.201–1 Fixed-price prime contracts.

1844.201–2 Cost reimbursement and letter

prime contracts.

1844.202 Contracting officer’s evaluation.

1844.202–1 Responsibilties.

1844.204 Contract clauses.

1844.204–70 NASA contract clause.

Subpart 1844.3—Contractors’ Purchasing

Systems Reviews

1844.302 Requirements.

1844.302–70 DCMC-conducted contractor

purchasing system reviews.

1844.302.71 NASA-conducted contractor

purchasing systems reviews.

1844.304 Surveillance.

1844.304–70 Contracting officer

surveillance.

1844.305 Granting, withholding, or

withdrawing approval.

1844.305–70 Review of CPSR report.

Authority: 42 U.S.C. 2473(a)(1).

Subpart 1844.2—Consent to

Subcontracts

1844.201 Consent requirements.

1844.201–1 Fixed-price prime contracts.

(NASA supplements paragraph (b))

(b)(2) (A) In determining special

surveillance consent requirements, the

contracting officer should consider

specific subcontract awards, as well as

any individual systems, subsystems,

components, technologies, and services

that should have contracting officer

consent prior to being subcontracted.

(B) For each planned contract award

expected to exceed $1 million in total

estimated value (inclusive of options),

the contracting officer should consider

such factors as the following to

determine whether certain

subcontractors require special

surveillance:

(a) The degree of subcontract pricing

uncertainties at the time of contract

award;
14024 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

(b) The overall quality of the

contractor’s approach to pricing

subcontractors;

(c) The extent of competition

achieved, or to be achieved, by the

contractor in the award of subcontracts;

(d) Technical complexity and the

critically of specific supplies, services,

and technologies on the successful

performance of the contract; and

(e) The potential impact of planned

subcontracts on source selection or

incentive arrangements.

(C) The contracting officer shall

document results of the review in the

contract file. For contract modifications

and change orders, the contracting

officer shall make the determination

required by paragraph (b)(2)(B) of this

section whenever the value of any

subcontract resulting from the change

order or modification is proposed to

exceed $100,000 or is one of the number

of subcontracts with a single

subcontractor for the same or related

supplies or services that are expected

cumulatively to exceed $100,000.

1844.201–2 Cost reimbursement and letter

prime contracts. (NASA supplements

paragraph (c))

(c)(2) The policy in 1844.201–1(b)(2)

shall be followed to determine whether

certain subcontracts require special

surveillance. In addition, any

subcontract under a cost type prime

contract shall be identified for special

surveillance if consent was not provided

at the time of contract award and cost

of pricing data would be required in

accordance with FAR 15.806–2(a) (1) or

(2).

1844.202 Contracting officer’s evaluation.

1844.202 Responsibilities. (NASA

supplements paragraph (a))

(a) NASA contracting officers shall

retain consent to subcontract authority

unless delegation is approved in writing

by the procurement officer.

1844.204 Contract clauses.

1844.204–70 NASA contract clause.

The contracting officer shall insert the

clause at 1852.244–70, Geographic

Participation in the Aerospace Program,

in all research and development

solicitations and contracts of $500,000

or over that will be performed within

the United States.

Subpart 1844.3—Contractors’

Purchasing Systems Reviews

1844.302 Requirements.

1844.302–70 DCMC-conducted contractor

purchasing system reviews.

For contracts within their cognizance,

NASA contracting officers shall be

aware of purchasing system approval

status and should become actively

involved with the Defense Contract

Management Command (DCMC) in the

Contractor Purchasing System Review

(CPSR) process. Involvement should

include the following:

(a) Verifying that CPSRs are being

conducted as required for each

contractor meeting the thresholds in

FAR 44.302.

(b) Ensuring that purchasing system

review specifically includes the

business unit performing the NASA

contract.

(c) Actively participating as a team

member, or arranging NASA

representation, on DCMC CPSRs to

review areas of NASA-specific interest.

At a minimum, such participation or

representation shall be arranged when

the DCMC CPSR review involves—

(1) Contractors with major NASA

programs;

(2) Contractors’ business units where

the total dollar value of NASA contracts

is substantial; or

(3) Any contractor system where the

contracting officer has special concerns.

(d) Ensuring that the selected CPSR

sample to be reviewed reflects the level

of NASA business in the contractor’s

purchasing organization.

(e) Providing to the cognizant DCMC

CPSR team leader any areas of special

emphasis regarding the contractor’s

purchasing system to ensure that the

review is tailored to address any NASA

concerns.

1844.302–71 NASA-conducted contractor

purchasing system reviews.

If a NASA activity is the cognizant

contract administration officer, or after

coordination with the cognizant DCMC

CPSR office it is determined that a CPSR

is required but cannot be accomplished

by DCMC, then a CPSR should be

conducted by NASA personnel. The

NASA CPSR team leader:

(a) May use the DOD FAR

Supplement, Contractor Purchasing

System Review (CPSR) guidance, as a

general guide to conducting the CPSR.

(b) May vary the scope of review

depending on the contractor and

contracts involved.

(c) Shall maintain close coordination

with the cognizant ACO during CPSRs

at contractors under DOD cognizance.

1844.304 Surveillance.

1844.304–70 Contracting officer

surveillance.

(a) In the period between complete

CPSRs, NASA contracting officers shall

maintain a sufficient level of

surveillance to ensure contractor

purchasing efforts in support of NASA

contracts are accomplished in an

appropriate manner and protect the

interests of the Agency.

(b) Surveillance shall be

accomplished primarily through

performance of subcontract consent

reviews. Other methods of surveillance,

including periodic reviews of contractor

purchasing records, may also be

conducted. Contracting officers shall

document the results of subcontract

consent reviews and periodic reviews,

maintaining a record of contractor

subcontract or purchase order award

performance on NASA contracts.

Contractor performance shall be

summarized on an annual basis and

provided to the ACO cognizant of the

contractor’s purchasing system. Annual

reports should summarize the number

of consent reviews and other reviews

conducted during the year by NASA

representatives, and summarize the

types and quantity of deficiencies

identified during reviews, the need for

special reviews, and recommended

areas of emphasis during future CPSRs.

1844.305 Granting, withholding, or

withdrawing approval.

1844.305–70 Review of CPSR reports.

ACO actions related to purchasing

system approval have a potential impact

on NASA contracting officer consent

requirements. Accordingly, NASA

contracting officers shall review system

deficiencies documented in CPSR

reports and when results of consent

reviews and other sources conflict with

CPSR or DOD surveillance conclusions,

formally communicate such concerns to

the ACO having cognizance of

purchasing system approval. Significant

issues or significant conflicts with DOD

CPSR results should be formally

referred to the Office of Procurement

(Code HS).

14. Part 1846 is revised to read as

follows:

PART 1846—QUALITY ASSURANCE

Subpart 1846.3—Contract Clauses

Sec.

1846.370 NASA contract clauses.

Subpart 1846.4—Government Contract

Quality Assurance

1846.470 Contract clause.

Subpart 1846.6—Material Inspection and

Receiving Reports

1846.670 Introduction.

1846.670–1 General.

1846.670–2 Applicability.

1846.670–3 Use.

1846.670–4 Multiple shipments.

1846.670–5 Forms.

1846.671 Contract quality assurance on

shipments between contractors.
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14025

1846.672 Preparing DD Forms 250 and

250c.

1846.672–1 Preparation instructions.

1846.672–2 Consolidated shipments.

1846.672–3 Multiple consignee

instructions.

1846.672–4 Correction instructions.

1846.672–5 Invoice instructions.

1846.672–6 Packing list instructions.

1846.672–7 Receiving instructions.

1846.673 Distribution of DD Forms 250 and

250c.

1846.674 Contract clause.

Subpart 1846.7—Warranties

1846.703 Criteria for use of warranties.

1846.703–70 Additional criteria.

1846.704 Authority for use of warranties.

1846.770 Administration.

Authority: U.S.C. 2473(c)(1).

Subpart 1846.3—Contract Clauses

1846.370 NASA contract clauses.

(a) The contracting officer shall insert

the clause at 1852.246–70, Mission

Critical Space System Personnel

Reliability Program, in solicitations and

contracts involving critical positions

designated in accordance with 14 CFR

1214.5, Mission Critical Space System

Personnel Reliability Program.

(b) The contracting officer shall insert

the clause at 1852.246–73, Human

Space Flight Item, in solicitations and

contracts for human space flight

hardware and flight-related equipment

if the highest available quality standards

are necessary to ensure astronaut safety.

Subpart 1846.4—Government Contract

Quality Assurance

1846.470 Contrct clause.

The contracting officer may insert a

clause substantially as stated at

1852.246–71, Government Contract

Quality Assurance Functions, in

solicitations and contracts to specify the

location(s) of quality assurance

functions.

Subpart 1846.6—Material Inspection

and Receiving Reports.

1846.670 Introduction.

1846.670–1 General.

(a) This Subpart contains procedures

and instructions for use of the Material

Inspection and Receiving Report (MIRR)

(DD Form 250 series) and commercial

shipping/packing lists used to evidence

Government contract quality assurance

(CQA).

(b) MIRRs are used to document CQA,

acceptance of supplies and services, and

shipments. MIRRs are not used for—

(1) Shipments by subcontractors not

made to the Government;

(2) Shipment of contractor inventory

(see FAR 45.601); or

(3) Movement of Government

property unless for original acquisition.

1846.670–2 Applicability.

(a) This subpart applies to all

deliveries of supplies or services

acquired by or for NASA except:

(1) Acquisitions under FAR part 13;

(2) Negotiated subsistence

acquisitions; or

(3) Contracts for which the end item

is a technical or scientific report.

(b) The DD Form 250 may be used for

imprest fund purchases, purchase

orders, delivery orders placed against

Federal Supply Schedule contracts,

delivery orders placed against

indefinite-delivery contracts, or delivery

orders placed against blanket purchase

agreements, or when the purchasing,

requisitioning, or ordering document

provides for inspection and/or

acceptance.

(c) When NASA provides CQA and/or

acceptance services for non-NASA

activities, the MIRR shall be prepared in

accordance with the instructions of this

subpart unless the contract specifies

otherwise.

1846.670–3 Use.

The DD Form 250 is a multipurpose

report used for—

(a) Providing evidence of CQA at

origin or destination;

(b) Providing evidence of acceptance

at origin or destination;

(c) Packing list documentation;

(d) Receiving;

(e) Shipping;

(f) Contractor invoice; and

(g) Contractor invoice support.

1846.670–4 Multiple shipments.

(a) If the ‘‘shipped to,’’ ‘‘marked for,’’

‘‘shipped from,’’ ‘‘CQA,’’ and

‘‘acceptance’’ data are the same for more

than one shipment made on the same

day under the same contract in a single

car, truck, or other vehicle, one MIRR

shall be prepared to cover all such

shipments.

(b) If the volume of the shipments

precludes the use of a single car, truck,

or other vehicle, a separate MIRR shall

be provided for each vehicle.

1846.670–5 Forms.

(a) Contractors may obtain MIRR

forms from the contracting office at no

cost.

(b) Contractors may print forms,

provided their format and dimensions

are identical to the MIRR forms printed

by the Government.

1846.671 Contract quality assurance on

shipments between contractors.

(a) The supplier’s commercial

shipping document/packing list shall

indicate performance of required CQA

actions at subcontract level.

The following entries shall be made

on the document/packing list:

Required CQA of items has been

performed.

lllllllllllllllllllll

(Signature of Authorized Government

Representative)

lllllllllllllllllllll

(Date)

lllllllllllllllllllll

(Typed Name and Office)

(b) Distribution for Government

purposes shall be one copy each—

(1) With shipment;

(2) For the Government representative

at consignee (via mail); and

(3) For the Government representative

at consignor.

1846.672 Preparing DD Forms 250 and

250c.

1846.672–1 Preparation instructions.

(a) General. (1) Dates shall utilize

seven spaces consisting of the last two

digits of the year, three-alpha month

abbreviation, and two digits for the day

(e.g., 96SEP24).

(2) Addresses shall consist of the

name, street address/P.O. box, city,

State, and ZIP code.

(3) The data entered in the blocks at

the top of DD Form 250C shall be

identical to the comparable entries in

Blocks 1, 2, 3, and 6 of the DD Form

250.

(4) Overflow data of the DD Form 250

shall be entered in Block 16 or in the

body of the DD Form 250c with block

cross reference. Additional DD Form

250c sheets solely for continuation of

Block 23 data shall not be numbered or

distributed as part of the MIRR.

(b) Classified information. Classified

information shall not appear on the

MIRR, nor shall the MIRR be classified.

(c) Block 1—PROC. INSTRUMENT

IDEN. (CONTRACT). Enter the contract

number, with its identifying center

prefix, as contained in the contractual

document, including any call/order

number.

(d) Block 2—SHIPMENT NO. (1) The

shipment number is a three-alpha

character prefix and a four-character

numeric or alpha-numeric serial

number.

(i) The prefix shall be controlled and

assigned by the prime contractor and

shall consist of three alpha characters

for each ‘‘shipped from’’ address (Block

11). The prefix shall be different for

each ‘‘Shipped From’’ address and shall

remain constant throughout the contract

period.

(ii) The serial number for the first

shipment under a prime contract from
14026 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

each ‘‘shipped from’’ address shall be

0001; subsequent shipments under that

prime contract shall be consecutively

numbered. Alpha-numerics shall be

used when more than 9,999 numbers are

required. Alpha-numerics shall be

serially assigned, with the alpha in the

first position, followed by the threeposition numeric serial number. The

alpha-numeric sequence shall be (the

letters I and O shall not be used) A001

through A999 (10,001 through 10,999);

B001 through B999 (11,001 through

11,999); to Z999. When this series is

completely used, numbering shall revert

to 0001.

(2) The shipment number of the initial

shipment shall be reassigned when a

‘‘replacement shipment’’ is involved

(see paragraph (r)(4)(iv) of this section).

(3) The prime contractor shall control

deliveries and on the last shipment of

the contract shall suffix the shipment

number with a ‘‘Z’’ in addition to that

required for line items (see Block 17). If

the contract final shipment is from other

than the prime contractor’s plant, the

prime contractor may elect

(i) To direct the subcontractor to

suffix the ‘‘Z’’ or

(ii), On receipt of the subcontractor

final shipment information, to correct

the DD Form 250 covering the last

shipment from the prime contractor’s

plant by adding a ‘‘Z’’ to that shipment

number.

(e) Block 3—DATE SHIPPED. Enter

the date the shipment is released to the

carrier or the date of completion of

services. If the shipment will be

released after the date of CQA and/or

acceptance, enter the estimated date of

release. When the date is estimated,

enter an ‘‘E’’ after it. Distribution of the

MIRR shall not be delayed for entry of

the actual shipping date. Reissurance of

the MIRR is not required to show the

actual shipping date.

(f) Block 4—B/L TCN. When

applicable, enter the commercial or

Government bill of lading number after

‘‘B/L’’; and the Transportation Control

Number after ‘‘TCN.’’

(g) Block 5—DISCOUNT TERMS. (1)

The Contractor may enter the discount

in terms of percentages on all copies of

the MIRR.

(2) When the MIRR is used as an

invoice, see 1846.672–5.

(h) Block 6—INVOICE. (1) The

contractor may enter the invoice

number and actual or estimated date on

all copies of the MIRR. When the date

is estimated, enter an ‘‘E’’ after the date.

Do not correct MIRRs other than invoice

copies to reflect the actual date of

invoice submission.

(2) When the MIRR is used as an

invoice, see 1846.672–5.

(i) Block 7—PAGE/OF. Consecutively

number the pages comprising the MIRR.

On each page, enter the total number of

pages of the MIRR.

(j) Block 8—ACCEPTANCE POINT.

Enter an ‘‘S’’ for origin or ‘‘D’’ for

destination as specified in the contract

as the point of acceptance. Enter an

alphabetic ‘‘O’’ for other if the point of

acceptance is not specified in the

contract.

(k) Block 9—PRIME CONTRACTOR.

Enter the code and address.

(l) Block 10—ADMINISTERED BY.

Enter the code and address of the

contracting office cited in the contract.

(m) Block 11—SHIPPED FROM/

CODE/FOB. (1) Enter the code and

address of the ‘‘shipped from’’ location.

If identical to Block 9, enter ‘‘See Block

9.’’

(2) For performance of services that

do not require delivery of items upon

completion, enter the code and address

of the location at which the services

were performed. If the DD Form 250

covers performance at multiple

locations or if identical to Block 9, enter

‘‘See Block 9.’’

(3) Enter on the same line and to the

right of ‘‘FOB’’ an ‘‘S’’ for origin or ‘‘D’’

for destination as specified in the

contract. Enter an alphabetic ‘‘O’’ if the

FOB point cited in the contract is other

than origin or destination.

(n) Block 12—PAYMENT WILL BE

MADE BY. Enter the address of the

payment office cited in the contract.

(o) Block 13—SHIPPED TO/CODE.

Enter the code and address from the

contract or shipping instructions.

(p) Block 14—MARKED FOR/CODE.

Enter the code and address from the

contract or shipping instructions.

(q) Block 15—ITEM NO. Enter the

item number used in the contract. If four

or fewer digits are used, position them

to the left of the vertical dashed line.

Where a six-digit identification is used,

enter the last two digits to the right of

the vertical dashed line.

(r) Block 16—STOCK/PART NO./

DESCRIPTION. (1) Enter, as applicable,

for each item, using single spacing

between each line item, the following:

(i) The Federal Stock Number (FSN)

or noncatalog number and, if applicable,

prefix or suffix. When a number is not

provided or it is necessary to

supplement the number, include other

identification such as the

manufacturer’s name or Federal Supply

Code (as published in Cataloging

Handbook H4–1), and part numbers.

Additional part numbers may be shown

in parentheses. Also enter the

descriptive noun of the item

nomenclature and, if provided, the

Government-assigned management/

material control code. In the case of

equal-kind supply items, the first entry

shall be the description without regard

to kind (e.g., ‘‘Resistor’’). Below this

description, enter the contract item

number in Block 15 and stock/part

number followed by the size or type in

Block 16.

(ii) On the next printing line, if

required by the contract for control

purposes, enter the make, model, serial

number, lot, batch, hazard indicator,

and/or similar description.

(iii) On the next printing line, enter

the FEDSTRIP requisition number(s)

when provided in the contract or

shipping instructions.

(2) For service items, enter the word

‘‘SERVICE’’ followed by a short

description of less than 20 characters.

Do not complete items 4, 13, and 14

when material is not shipped.

(3) For all contracts administered by

the Defense Contract Management

Command, with the exception of fast

pay procedures, enter and complete the

following:

Gross Shipping Wt.ll(State weight in

pounds only).

(4) Enter on the next line the

following as appropriate (entries may be

extended through Block 20). When

entries apply to more than one item in

the MIRR, enter them only once after the

last item and reference the applicable

item numbers.

(i) Enter in capital letters any special

handling instructions/limits for material

environmental control (e.g.,

temperature, humidity, aging, freezing,

and shock).

(ii) When an FSN is required by, but

not cited in, a contract and has not been

furnished by the Government, shipment

may be made at the direction of the

contracting officer. Enter the authority

for the shipment.

(iii) When Government-furnished

property (GFP) is included with or

incorporated into the line item, enter

‘‘GFP’’.

(iv) When the shipment consists of

replacements for supplies previously

furnished, enter in capital letters

‘‘REPLACEMENT SHIPMENT’’ (see

paragraph (s)(3) of this section for

replacement indicators.)

(v) For items shipped with missing

components, enter and complete the

following: ‘‘Item(s) shipped short of the

following component(s): FSN or

comparable identification llll,

Quantity llll, Estimated Value

llll, Authority llll.’’

(vi) When shipment is made of

components that were short on a prior

shipment, enter and complete the

following: ‘‘These components were
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14027

listed as shortages on Shipment Number

llll, date shippedllll.’’

(vii) When shipments involve drums,

cylinders, reels, containers, skids, etc.,

designated as returnable under contract

provisions, enter and complete the

following: ‘‘Return to llll, Quantity

llll, Item llll, Ownership

(Government/contractor).’’

(viii) Enter shipping container

number(s), the type, and the total

number of the shipping container(s)

included in the shipment.

(ix) The MIRR shall be used to record

and report the waivers and deviations

from contract specifications, including

the source and authority for the waiver

or deviation (e.g., the contracting office

authorizing the waiver or deviation and

the identification of the authorizing

document).

(x) For shipments involving discount

terms, enter ‘‘DISCOUNT EXPEDITE’’ in

at least one-inch outline-type letters.

(xi) When test/evaluation results are a

condition of acceptance and are not

available before shipment, the following

note shall be entered if the shipment is

approved by the contracting officer:

‘‘Note: Acceptance and payment are

contingent upon receipt of approved

test/evalution results.’’ The contracting

officer shall advise (A) the consignee of

the results (approval/disapproval) and

(B) the contractor to withhold invoicing

pending attachment to its invoice of the

approved test/evaluation results.

(xii) The copy of the DD Form 250

required to support payment for

destination acceptance (top copy of the

four with shipment) or Alternative

Release Procedure (ARP) origin

acceptance (additional copy furnished

to the Quality Assurance Representative

(QAR)) shall be identified by entering

‘‘PAYMENT COPY’’ in approximately

one-half-inch outline-type letters with

‘‘FORWARD TO BLOCK 12 ADDRESS’’

in approximately one-quarter-inch

letters immediately below. Do not

obliterate any other entries.

(xiii) A double line shall be drawn

completely across the form following

the last entry.

(s) Block 17—QUANTITY SHIP/

REC’D. (1) Enter the quantity shipped,

using the unit of measure indicated in

the contract for payment. When a

second unit of measure is used for

purposes other than payment, enter the

appropriate quantity directly below in

parentheses.

(2) Enter a ‘‘Z’’ below the first digit of

the quantity when the total quantity of

the item is delivered, including

variations within contract terms; and all

shortages on items previously shipped

short are delivered.

(3) If a replacement shipment is

involved, enter below the first digit of

the quantity the letter ‘‘A’’ top designate

first replacement, ‘‘B’’ for second

replacement, and so forth. The final

shipment indicator ‘‘Z’’ shall not be

used when a final line item shipment is

replaced.

(t) Block 18 UNIT. Enter the

abbreviation of the unit of measure

indicated in the contract for payment.

When a second unit of measure is

indicated in the contract for purposes

other than payment or is used for

shipping purposes, enter the

abbreviation of the second unit of

measure directly below in parentheses.

Authorized abbreviations are listed in

MIL–STD–129, Marking for Shipping

and Storage.

(u) Block 19—UNIT PRICE. Enter the

unit price on all NASA copies whenever

the MIRR is used for voucher or

receiving purposes.

(v) Block 20—AMOUNT. Enter the

extended amount when the unit price is

entered in Block 19.

(w) Block 21—CONTRACT QUALITY

ASSURANCE. The words ‘‘conform to

contract’’ contained in the printed

statements in Blocks A and B relate to

contract obligations pertaining to

quality and to the quantity of the items

on the report. The statements shall not

be modified. Notes taking exception

shall be entered in Block 16 or on

attached supporting documents with

block cross reference.

(1) ‘‘A. ORIGIN.’’

(i) The authorized Government

representative shall—

(A) Place an ‘‘X’’ when applicable in

the appropriate CQA and/or acceptance

box(es) to evidence origin CQA and/or

acceptance. When the contract requires

CQA at destination in addition to origin

CQA, an asterisk shall be entered at the

end of the statement and an explanatory

note in Block 16;

(B) Sign and date; and

(C) Enter the typed, stamped, or

printed name of the signer and office

code.

(2) ‘‘B. DESTINATION.’’

(i) When acceptance at origin is

indicated in Block 21A, no entries shall

be made in Block 21B.

(ii) When acceptance of CQA and

acceptance are at destination, the

authorized Government representative

shall—

(A) Place an ‘‘X’’ in the appropriate

box(es);

(B) Sign and date; and

(C) Enter the typed, stamped, or

printed name of the signer and office

code.

(x) Block 22—RECEIVER’S USE. This

block shall be used by the receiving

authority (Government or contractor) to

denote receipt, quantity, and condition.

The receiving activity shall enter in this

block the date the supplies arrived. For

example, when off-loading or inchecking occurs subsequent to the day

of arrival of the carrier at the

installation, the date of the carrier’s

arrival is the date received for purposes

of this block.

(y) Block 23—CONTRACTOR USE

ONLY. This block is provided and

reserved for contractor use.

1846.672–2 Consolidated shipments.

When individual shipments are held

at the contractor’s plant for authorized

transportation consolidation to a single

destination on a single bill of lading, the

applicable DD Forms 250 may be

prepared at the time of CQA or

acceptance prior to the time of actual

shipment (see Block 3).

1846.672–3 Multiple consignee

instructions.

The contractor may prepare one MIRR

when the identical item(s) of a contract

is to be shipped to more than one

consignee, with the same or varying

quantities, and the shipment requires

origin acceptance. Prepare the MIRR

using the procedures in this subpart

with the following changes:

(a) Blocks 2, 4, 13, and, if applicable,

14—Enter ‘‘See Attached Distribution

List.’’

(b) Block 15—The contractor may

group item numbers for identical stock/

part number and description.

(c) Block 17—Enter the ‘‘total’’

quantity shipped by item or, if

applicable, grouped identical items.

(d) Use the DD Form 250c to list each

individual ‘‘Shipped To’’ and ‘‘Marked

For’’ with—

(1) Code(s) and complete shipping

address and a sequential shipment

number for each;

(2) Item number(s);

(3) Quantity;

(4) The FEDSTRIP requisition number

and quantity for each when provided in

the contract or shipping instructions;

and

(5) If applicable, bill of lading number

and mode of shipment code.

1846.672–4 Correction instructions.

When, because of errors or omissions,

it is necessary to correct the MIRR after

distribution, it shall be revised by

correcting the original master and

distributing the corrected form. The

corrections shall be made as follows:

(a) Circle the error and place the

corrected information in the same block.

If space is limited, enter the corrected

information in Block 16, referencing the

error page and block.
14028 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

(b) When corrections are made to

Blocks 15 and 17, enter the words

‘‘CORRECTIONS HAVE BEEN

VERIFIED’’ on page 1. The authorized

Government representative shall date

and sign immediately below the

statement. This verification statement

and signature are not required for other

corrections.

(c) MIRRs shall not be corrected for

Block 19 and 20 entries.

(d) Clearly mark pages of the MIRR

requiring correction with the words

‘‘CORRECTED COPY’’, avoiding

obliteration of any other entries. Even

though corrections are made on

continuation sheets only, also mark

page 1 ‘‘CORRECTED COPY’’.

(e) Page 1 and only those continuation

pages marked ‘‘CORRECTED COPY’’

shall be distributed to the initial

distribution. A complete MIRR with

corrections shall be distributed to new

addressee(s) created by error

corrections.

1846.672–5 Invoice instructions.

The Government encourages, but does

not require, contractors to use copies of

the MIRR as an invoice in lieu of a

commercial form. If the MIRR is used as

an invoice, four copies shall be prepared

and forwarded to the payment office as

follows:

(a) Complete Blocks 5, 6, 19, and 20.

(b) Mark, in letters approximately one

inch high, the first copy ‘‘ORIGINAL

INVOICE’’ and the remaining three

copies ‘‘INVOICE COPY’’.

(c) Forward the four copies to the

payment office (Block 12 address).

1846.672–6 Packing list instructions.

Copies of the MIRR may be used as a

packing list. The packing list copies

shall be in addition to the copies of the

MIRR required for distribution (see

1846.673) and shall be marked

‘‘PACKING LIST’’.

1846.672–7 Receiving instructions.

When the MIRR is used for receiving

purposes, procedures shall be as

prescribed by local directives. If

acceptance or CQA and acceptance of

supplies are required upon arrival at

destination, see Block 21B for

instructions.

1846.673 Distribution of DD Forms 250

and 250c.

(a) DD Forms 250 and 250c shall be

distributed in accordance with

installation procedures.

(b) The contractor is responsible for

distributing DD Forms 250 and 250c in

accordance with the provisions of the

contract or instructions of the

contracting officer.

1846.674 Contract clause.

The contracting officer shall insert the

clause at 1852.246–72, Material

Inspection and Receiving Report, in

solicitations and contracts, except those

using simplified acquisition procedures

or where the only deliverable items are

technical or scientific reports. Insert the

number of copies to be prepared.

Paragraph (a) may be changed to specify

advance copies or separate distribution

of the DD Form 250.

Subpart 1846.7—Warranties

1846.703 Criteria for use of warranties.

1846.703–70 Additional criteria.

In deciding whether to use a warranty

clause, at least the following factors

shall be considered in addition to those

at FAR 46.703:

(a) Cost of correction or replacement,

either by the contractor or by another

source, in the absence of a warranty;

(b) The warranty as a deterrent against

the furnishing of defective or

nonconforming supplies;

(c) Whether the contractor’s quality

program is reliable enough to provide

adequate protection without a warranty,

or, if not, whether a warranty would

cause the contractor to institute an

effective quality program;

(d) Reliance on ‘‘brand-name’’

integrity; and

(e) Whether a warranty is regularly

given for a commercial component of a

more complex end item.

1846.704 Authority for use of warranties.

(NASA paragraphs (1), (2) and (3))

(1) A warranty clause may be used

when it is found to be in the best

interests of the Government, after an

analysis of the factors listed in

1846.703–70 and FAR 46.703.

(2) Except for the warranty of

commercial items (see FAR 12.404 and

46.709), and warranties contained in

Federal, military, or construction

specifications, the decision to use a

warranty clause or to include a warranty

provision in a specification other than a

Federal, military, or construction

specification shall be made only upon

the written authorization of the

procurement officer or a designee. This

decision may be made either for

individual acquisitions or classes of

acquisitions.

(3) Warranties required by applicable

architect-engineer specifications shall

be included in construction contracts.

1846.770 Administration.

When notified of a defect in

warranted items, the contracting officer

should ascertain whether the warranty

is currently in effect and ensure that the

contractor is given proper and timely

notice of the defect.

15. Part 1847 is revised to read as

follows:

PART 1847—TRANSPORTATION

Subpart 1847.2—Contracts for

Transportation or for TransportationRelated Services

Sec.

1847.200 Scope of subpart.

1847.200–70 Charter of aircraft.

Subpart 1847.3—Transportation in Supply

Contracts

1847.304 Determination of delivery terms.

1847.304–3 Shipments from CONUS for

overseas delivery.

1847.304–370 NASA export privilege.

1847.305 Solicitation provisions, contract

clauses, and transportation factors.

1847.305–10 Packing, marking, and

consignment instructions.

1847.305–13 Transit arrangements.

1847.305–70 NASA contract clauses.

Subpart 1847.5—Ocean Transportation by

U.S.-Flag Vessels

1847.506 Procedures.

Subpart 1847.70—Protection of the Florida

Manatee

1847.7001 Contract clause.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1847.2—Contracts for

Transportation or for TransportationRelated Services

1847.200 Scope of subpart.

1847.200–70 Charter of aircraft.

When acquiring aircraft by charter,

contracting officers shall comply with

NHB 7900.3, Aircraft Operations

Management Manual.

Subpart 1847.3—Transportation in

Supply Contracts

1847.304 Determination of delivery terms.

1847.304–3 Shipments from CONUS for

overseas delivery.

1847.304–370 NASA export privilege.

NASA has export licensing privileges

for moving commodities to foreign

destinations. Contracting officers shall

request the advice of the Center Export

Administrator to ensure full and

appropriate use is made of these

privileges.

1847.305 Solicitation provisions, contract

clauses, and transportation factors.

1847.305–10 Packing, marking, and

consignment instructions.

In contracts providing for delivery

f.o.b. origin and shipment under

Government bills of lading,

consignment instructions may be

limited to the mail address of the
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14029

consignee (receiving activity), provided

the contract instructions state:

‘‘Shipment other than mail shall be

consigned as indicated on the

Government bill of lading furnished to

the contractor.’’

1847.305–13 Transit arrangements. (NASA

supplements paragraph (a))

(a)(3)(ii) When the provision at FAR

52.247–56 is used, the solicitation shall

state that offers will be evaluated on the

basis of the lowest overall cost to the

Government, including transportation

costs to NASA from point of origin to

final destination, taking into account

any applicable transit privileges.

1847.305–70 NASA contract clauses.

(a) The contracting officer may insert

a clause substantially as stated at

1852.247–72, Advance Notice of

Shipment, in solicitations and contracts

when the f.o.b. point is destination and

special Government assistance is

required in the delivery or receipt of the

items.

(b) The contracting officer may insert

a clause substantially as stated at

1852.247–73, Shipment of Government

Bills of Lading, in f.o.b. origin

solicitations and contracts.

Subpart 1847.5—Ocean Transportation

by U.S.-Flag Vessels

1847.506 Procedures. (NASA supplements

paragraph (d))

(d)(i) The transportation officer in

each installation shall establish and

maintain a register to reflect adherence

to the Cargo Preference Act. The register

shall contain data related to shipments

made by the installation and by NASA

contractors. Where no transportation

officer is available, it shall be

maintained by the contracting office.

The register shall contain pertinent

details of ocean shipments including,

but not limited to, the ports of origin

and destination of shipments,

commodity descriptions, gross weight,

freight revenue, name of vessel, operator

of vessel, and date of loading. The

register shall be maintained current and

organized so that adherence to the Cargo

Preference Act can be ascertained at all

times. To the maximum practicable

extent, compliance with the 50-percent

minimum requirements of the Cargo

Preference Act shall be maintained on a

quarter-year basis; any deficiencies in

maintaining compliance shall be

corrected by the end of the calendar

year.

(ii) On the basis of the registers

maintained under paragraph (d)(i) of

this section, the official maintaining the

register shall submit quarterly reports

reflecting ocean shipments to the

Division of National Cargo, Office of

Market Development, Maritime

Administration, Department of

Transportation, Washington, DC, 20590.

Negative reports are required when

applicable.

Subpart 1847.70—Protection of the

Florida Manatee

1847.7001 Contract clause.

The contracting officer shall insert the

clause at 1852.247–71, Protection of the

Florida Manatee, in solicitations and

contracts when deliveries or vessel

operations, dockside work, or

disassembly functions under the

contract will involve use of waterways

inhabited by manatees. The clause shall

also be included in applicable

subcontracts (including vendor

deliveries).

16. Part 1848 is revised to read as

follows:

PART 1848—VALUE ENGINEERING

Subpart 1848.1—Policies and Procedures

Sec.

1848.102 Policies.

1848.103 Processing value engineering

change proposals.

1848.104 Sharing arrangements.

1848.104–2 Sharing collateral savings.

Subpart 1848.2—Contract Clauses

1848.201 Clauses for supply or service

contracts.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1848.1—Policies and

Procedures

1848.102 Policies. (NASA supplements

paragraphs (a) and (f))

(a) The Associate Administrator for

Procurement (Code HS) is the approval

authority for exemptions.

(f) In calculating instant or future

contract savings on firm-fixed-price

contracts when the parties have not set

out a specific figure for profit, the

contracting officer shall use the total

contract price as the basis for

calculating the savings.

1848.103 Processing value engineering

change proposals. (NASA supplements

paragraph (a))

(a) Upon receipt of a VECP, the

contracting officer shall promptly

forward it to the technical officer

responsible for the contract with the

following information:

(i) Date of VECP receipt;

(ii) Date for notifying the contractor of

VECP acceptance or rejection;

(iii) Notification of the potential for

awarding concurrent, future, or

collateral savings to the contractor if the

VECP is accepted;

(iv) Request for a technical evaluation,

with complete rationale for

recommended acceptance or rejection,

to include if acceptance is

recommended:

(A) An estimate of the type of savings,

Government costs, etc., that can be

expected from its acceptance;

(B) A procurement request setting

forth the specification changes to be

used in any contract modification

accepting the VECP in whole or in part;

and

(C) Additional funds if acceptance of

the VECP results in negative instant

contract savings.

(v) Technical evaluation due date.

1848.104 Sharing arrangements.

1848.104–2 Sharing collateral savings.

The contracting officer is authorized

to make the determination that the cost

of calculating and tracking collateral

savings will exceed the benefits to be

derived.

Subpart 1848.2—Contract Clauses

1848.201 Clauses for supply or service

contracts. (NASA supplements paragraphs

(a), (b), (c), and (d))

(a)(6) The Associate Administrator for

Procurement (Code HS) is the approval

authority for exemptions.

(b) The contracting officer shall not

insert the clause at FAR 52.248–1, Value

Engineering, either with or without its

Alternates, in an R&D contract where

the statement of work is essentially an

incorporation by reference of the

prospective contractor’s proposal. If any

other part of the statement of work in

such a contract reflects a Government

specification that might benefit from

application of VE techniques, the

contracting officer shall consider

inserting the VE incentive clause at FAR

52.248–1 with any applicable

Alternate(s), and establish the

applicability of the clause to that part.

(c) Except as prescribed in paragraph

(b) of this section, the contracting officer

shall insert the clause at FAR 52.248–1

with its Alternate I in initial production

contracts for major systems, and major

systems R&D contracts for full-scale

development, unless the contracting

officer determines in writing that its use

is inappropriate. Use of Alternate I is

appropriate for an R&D major systems

contract only if the contract

specifications contain detailed

requirements that lend themselves to

VE.

(d) The contracting officer shall insert

the clause at FAR 52.248–1 with its

Alternate II under the conditions

prescribed in paragraph (c) of this

section
14030 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

17. Part 1849 is revised to read as

follows:

PART 1849—TERMINATION OF

CONTRACTS

Subpart 1849.1—General Principles

Sec.

1849.101 Authorities and responsibilities.

1849.101–70 NASA authorities and

responsibilities.

1849.101–71 Termination authority.

1849.102 Notice of termination.

1849.102–70 Prior clearance of significant

contract terminations.

1849.105 Duties of termination contracting

officer after issuance of notice of

termination.

1849.105–70 Termination docket checklist.

1849.110 Settlement negotiation

memorandum.

1849.110–70 Memorandum contents.

1849.111 Review of proposed settlements.

Subpart 1849.5—Contract Termination

Clauses

1849.505 Other termination clauses.

1849.505–70 NASA contract clause.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1849.1—General Principles

1849.101 Authorities and responsibilities.

1849.101–70 NASA authorities and

responsibilities.

(a) Installations shall appoint a

termination contracting officer (TCO)

(see FAR 2.101) to perform specific

duties relating to contract termination as

one of that individual’s primary

functions. In addition to the

responsibilities described in this part

and FAR part 49, such duties should

include—

(1) Reviewing NASA Forms 1412,

Termination Authority;

(2) Reviewing the contract and related

documents before issuing the notice of

termination, to ensure protection of the

Government’s rights under the contract;

and

(3) Issuing notices of termination,

reinstatement, and recision to

contractors;

(b) Contracting offices shall utilize the

services of the Department of Defense

and other Government agencies

whenever possible to administer and

negotiate settlement of terminated

contracts. Delegation of the negotiation

of termination settlement function shall

be made in accordance with FAR

subpart 42.2 and 1842.2.

1849.101–71 Termination authority.

NASA Form 1412, Termination

Authority, is prescribed for use by

NASA installations when initiating

action to terminate a contract for

convenience or default. The project

manager or the activity initiating the

procurement request should initiate the

action by completing NASA Form 1412

and submitting it to the contracting

officer.

1849.102 Notice of termination.

1849.102–70 Prior clearance of significant

contract terminations.

(a) Congressional notification is

required for any termination involving a

reduction in employment of 100 or more

contractor employees. Proposed

terminations must be cleared through

the Headquarters Office of Legislative

Affairs (Code LB) before release of the

termination notice, or any information

on the proposed termination, to the

contractor. Proposed terminations

expected to result in a reduction of

fewer than 100 should be similarly

cleared if the installation believes it to

be significant.

(b) The contracting officer shall

submit the following information to

Code LB, and a copy to the Office of

Procurement (Code HS), as soon as

possible after the decision to terminate

is made. Until clearance is obtained,

this information shall be treated as ‘‘For

Official Use Only’’ unless the

information is classified.

(1) Contract number.

(2) Date of award.

(3) Type of award.

(4) Name of company.

(5) Nature of contract or end item.

(6) Reasons for the termination.

(7) Contract price of items terminated.

(8) Total number of contractor

employees involved, including the

Government’s estimate of the number

that may be discharged.

(9) Anticipated impact on the

company and the community.

(10) Name of the community affected.

(11) Area labor category.

(12) Whether contractor is large or

small business.

(13) Any known impact on

disadvantaged employment programs.

(14) Total number of subcontractors

involved and the impact in this area, if

known.

(15) Unclassified draft of suggested

press release.

(c) To minimize termination costs,

Code LB shall act promptly on the

request and provide a response not later

than two working days after receipt of

the information in paragraph (b) of this

section.

1849.105 Duties of termination contracting

officer after issuance of notice of

termination.

1849.105–70 Termination docket checklist.

The termination contracting officer

shall complete NASA Form 1413,

Termination Docket Checklist.

1849.110 Settlement negotiation

memorandum.

1849.110–70 Memorandum contents.

The TCO shall include the following

information in the settlement

negotiation memorandum. Contractors

and subcontractors are encouraged to

use this format appropriately modified

for subcontract settlements submitted

for review and approval.

(a) General information—(1)

Identification. (i) Name and address of

the contractor and any pertinent

affiliation between prime contractors

and subcontractors relative to the

overall settlement.

(ii) Names and titles of contractor and

Government personnel who participated

in the negotiation.

(2) Description of terminated contract.

(i) Contract number;

(ii) Date of award;

(iii) Contract type;

(iv) General description of contract

items;

(v) Total contract price; and

(vi) Applicable contract termination

provisions and clause.

(3) Termination notice.

(i) Date of the termination notice;

(ii) Effective date of termination;

(iii) Scope and nature of termination

(complete or partial);

(iv) Items terminated;

(v) Unit prices;

(vi) Total price of items terminated for

fixed-price contracts or the estimated

cost and fee applicable to items

terminated for cost-reimbursement type

contracts;

(vii) Whether the termination notice

was amended and, if so, why;

(viii) Whether the contractor stopped

work on the termination effective date

(if it did not, furnish details) and

whether subcontracts were terminated

promptly;

(ix) Any redirection of common items

and return of goods to the contractor’s

suppliers; and

(x) Extent of contract performance and

timely deliveries by the contractor.

(b) Contractor’s settlement proposal—

(1) Date and amount. Date and location

where the claim was filed and its gross

amount (if interim settlement proposals

were filed, information shall be

furnished for each claim).

(2) Basis of claim. E.g., inventory,

total cost, or other basis, including an

explanation of any approvals granted in

connection with submission on other

than an inventory basis.

(3) Examination of proposal. Types of

reviews made and by whom (audit,

engineering, legal, or other).

(c) Tabular summary of contractor’s

claim and the settlement. The cost
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14031

elements/items, the amounts claimed,

the Government recommended position

(including auditor, field, and technical

personnel recommendations), and the

negotiated settlement amounts. This

summary shall include, if appropriate,

previously reimbursed and

unreimbursed costs applicable to the

prime contractor and subcontractor,

previous profit/fees paid and unpaid;

settlement cost less disposal credit or

other credits, and a recapitulation of

previous settlements. The summary of

the negotiated settlement shall include

the amount claimed and allowed for

contractor and/or subcontractor

changes, disposal, prior payment

credits, and contract price.

(d) Settlement narrative summary.

(1) Contractor’s cost.

(2) Profit/Fee.

(3) Settlement expenses not included

in the audit.

(4) Number and dollar amount of any

subcontractor settlements approved by

the TCO and concluded by the

contractor under delegation of authority.

(5) Total amount of any partial

payments.

(6) Total of unliquidated progress or

advance payments.

(7) Claims of the Government against

the contractor included in settlement

agreement reservations.

(8) Assignments, including the name

and address of each assignee.

(9) Disposal credits.

(10) Status of plant clearance actions

and all inventory sold, retained, or

otherwise properly disposed of in

accordance with applicable plant

clearance regulations, including a

consolidated closing plant clearance

report, if applicable.

(11) Status of Government property

accountability.

(12) Disposition of any special

tooling, if applicable.

(13) Proposed reservations of rights to

the Government or to the contractor.

(e) Recommendation. Amount of the

gross settlement recommended and TCO

statement that it is fair and reasonable

to the Government and the contractor.

(f) TCO Signature and date.

1849.111 Review of proposed settlements.

(NASA paragraphs (1) and (2))

(1) Settlements shall be reviewed in

accordance with center-prescribed

procedures.

(2) The TCO may authorize the

contract administration office cognizant

of a lower-tier subcontractor grant

approval or ratification of proposed

subcontractor settlements described in

FAR 49.108–3(c) that are first reviewed

and referred by the prime contractor to

the TCO. This procedure is not

applicable to settlements between the

contractor and its first tier

subcontractors.

Subpart 1849.5—Contract Termination

Clauses

1849.505 Other termination clause.

1849.505–70 NASA contract clause.

The contracting officer shall insert the

clause at 1852.249–72, Termination

(Utilities), in all solicitations and

contracts for utilities services.

18. Part 1850 is revised to read as

follows:

PART 1850—EXTRAORDINARY

CONTRACTUAL ACTIONS

Subpart 1850.2—Delegation of and

Limitations on Exercise of Authority

Sec.

1850.202 Contract adjustment boards.

Subpart 1850.3—Contract Adjustments

1850.305 Processing cases.

1850.305–70 Submission of request to the

Contract Adjustment Board.

1850.306 Disposition.

1850.306–70 Implementation of the

Contract Adjustment Board’s decision.

Subpart 1850.4—Residual Powers

1850.403 Special procedures for unusually

hazardous or nuclear risks.

1850.403–1 Indemnification requests.

1850.403–170 Subcontractor

indemnification requests.

1850.403–2 Action on indemnification

requests.

1850.470 Lead NASA installation.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1850.2—Delegation of and

Limitations on Exercise of Authority

1850.202 Contract adjustment boards.

14 CFR part 1209, subpart 3, Contract

Adjustment Board, establishes the

Contract Adjustment Board (CAB) as the

approving authority to consider and

dispose of requests from NASA

contractors for extraordinary contractual

actions.

Subpart 1850.3—Contract Adjustments

1850.305 Processing cases.

1850.305–70 Submission of request to the

Contract Adjustment Board.

(a) After investigating the facts and

issues relevant to the contractor’s

request, the contracting officer shall

forward the request to the Associate

General Counsel for General Law (Code

GG), including in the forwarding

letter—

(1) The nature of the case;

(2) The recommended disposition;

and,

(3) If contractual action is

recommended, the contracting officer’s

opinion that the action will facilitate the

national defense.

(b) The forwarding letter shall enclose

the contractor’s request, all supporting

material submitted by the contractor,

and any material the contracting officer

has obtained while investigating the

facts and issues relevant to the request.

Any classified information in the

material forwarded shall be so

identified.

(c) Electronic submittal is preferred

for unclassified material.

1850.306 Disposition.

1850.306–70 Implementation of the

Contract Adjustment Board’s decision.

(a) The contracting officer shall take

action authorized in the CAB’s decision.

(b) Immediately upon execution,

including any required Headquarters

approval, of a contract or contract

modification or amendment

implementing the CAB decision, the

contracting officer shall forward a copy

of the contractual document to the

Associate General Counsel for General

Law (Code GG).

Subpart 1850.4—Residual Powers

1850.403 Special procedures for unusually

hazardous or nuclear risks.

1850.403–1 Indemnification requests.

(NASA supplements paragraph (a))

(a) The contractor shall also provide

evidence, such as a certificate of

insurance or other customary proof of

insurance, that such insurance is either

in force or is available and will be in

force during the indemnified period.

1850.403–170 Subcontractor

indemnification requests.

Subcontractors shall submit requests

for indemnification to the prime

contractor and through higher tier

subcontractor(s), as applicable. If the

prime contractor agrees an indemnity

clause should be flowed down to the

subcontractor, the prime contractor

shall forward its written request for

subcontractor indemnification to the

cognizant contracting officer for

approval in accordance with FAR

50.403–1. The prime contractor’s

request shall provide information

responsive to 1850.403–1, FAR 50.403–

1, and FAR 50.403–2(a) (1), (2), (4), (5)

and (7). The agreed upon definition of

the unusually hazardous risk to be

incorporated into the subcontract shall

be the same as that incorporated in the

prime contract.
14032 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

1850.403–2 Action on indemnification

requests. (NASA supplements paragraphs

(a) and (d))

(a) If recommending approval, the

contracting officer shall forward the

required information to the Associate

Administrator for Procurement (Code

HS), along with the following:

(i) For contracts of five years duration

or longer, a determination, with

supporting rationale, whether the

indemnification approval and insurance

coverage and premiums should be

reviewed for adequacy and continued

validity at points in time within the

extended contract period.

(ii) A recommended Memorandum of

Decision. In addition to the applicable

requirements of FAR 50.306, the

Memorandum of Decision shall contain

the following:

(A) The specific definition of the

unusually hazardous risk to which the

contractor is exposed in the

performance of the contract(s);

(B) A complete discussion of the

contractor’s financial protection

program; and

(C) The extend to, and conditions

under, which indemnification is being

approved for subcontracts.

(d) If approving subcontractor

indemnification, the contracting officer

shall document the file with a

memorandum for record addressing the

items set forth in FAR 50.403–2(a) and

include an analysis of the

subcontractor’s financial protection

program. In performing this analysis,

the contracting officer shall take into

consideration the availability, cost,

terms and conditions of insurance in

relation to the unusually hazardous risk.

1850.470 Lead NASA installation.

(a) Contractors applying for

indemnification shall determine which

NASA installation has the highest dollar

amount of contracts for which

indemnification is requested. The

indemnification request should be

submitted to the procurement officer for

that installation, who will then

designate a cognizant contracting

officer. Contractors shall submit a single

request and ensure duplicate requests

are not submitted by associate divisions,

subsidiaries, or central offices of the

contractor.

(b) The receiving installation will

become the lead installation and will

remain so indefinitely. Lead installation

designation may change to another

installation if the affected procurement

officers agree to the change. Should a

change occur in the lead installation, all

records related to indemnification of

that contractor shall be transferred to

the gaining installation.

19. Part 1851 is revised to read as

follows:

PART 1851—USE OF GOVERNMENT

SOURCES BY CONTRACTORS

Subpart 1851.1—Contractor Use of

Government Supply Sources

Sec.

1851.101 Policy.

1851.102 Authorization to use Government

supply sources.

1851.102–70 Contractor acquisition of filing

cabinets.

Authority: 42 U.S.C. 2473(c)(1).

Subpart 1851.1—Contractor Use of

Government Supply Sources

1851.101 Policy.

Use of official Government mailing

privileges by NASA contractors is

covered in NMI 1450.11, NASA Mail

Management Program.

1851.102 Authorization to use Government

supply sources. (NASA supplements

paragraph (e)).

(e) The contracting officer shall use

substantially the following format for

letters authorizing contractor use of

Government supply sources:

SUBJECT: Authorization to Lease, Rent, or

Purchase from General Services

Administration (GSA) Supply Sources

(Contractor’s name) lllllllllll

(Address) llllllllllllllll

(1) You are hereby authorized to act for the

Government in the following matters:

(i) The acquisition of supplies and/or

services under Contract No. llll

available for purchase by Government

agencies either directly from GSA stock or

under Federal Supply Schedules, including

GSA nonmandatory ADTS/ADP schedule

contracts and GSA ADP requirements

contracts, subject to the limitations set forth

in this authorization.

(ii) The leasing or rental of equipment for

use on Contract No. llll available for

lease or rental by Government agencies under

Federal Supply Schedules, including GSA

nonmandatory ADTS/ADP schedule

contracts and GSA ADP requirements

contracts, subject to the limitations set forth

in this authorization.

(iii) The issuance of tax exemption

certificates in lieu of the payment of State or

other taxes for which the government is not

liable on supplies or services purchased

under this authorization.

(2)(i) Purchase orders under GSA

schedules and contracts shall be placed in

accordance with the terms and conditions of

the GSA schedule or contract and this

authorization. A copy of this authorization

shall be attached to the order (unless a copy

was previously furnished to the GSA

contractor) and shall contain the following

statement:

‘‘This order is placed on behalf of the

National Aeronautics and Space

Administration in furtherance of United

States Government Contract No. llll,

pursuant to written authorization dated

llll, a copy of which (is attached) (you

have on file). In the event of any

inconsistency between the terms and

conditions of this order and those of the

applicable GSA schedule/contract, the latter

will govern.’’

(ii) Orders for items in the GSA Supply

Catalog shall be placed in accordance with

the Catalog and this authorization and shall

include the address to which billings are to

be sent. Bills are not issued by GSA until

after shipment has been made and should

therefore be paid promptly. Any necessary

adjustments will be made by GSA subsequent

to payment. All orders shall contain the

following statement:

‘‘This order is placed on behalf of the

National Aeronautics and Space

Administration in furtherance of United

States Government Contract No. llll,

pursuant to written authorization dated

llll, a copy of which (is attached) (you

have on file).’’

(3) (Insert any other provisions and

restrictions.)

(4) The authority hereby granted is not

transferable or assignable.

lllllllllllllllllllll

(Contracting Officer)

(e)(3) Contracting officers shall use

NHB 4100.1, NASA Materials Inventory

Management Manual, to obtain activity

address codes to enable use of

FEDSTRIP and MILSTRIP.

1851.102–70 Contractor acquisition of

filing cabinets.

(a) The Contractor officer must

approve any planned contractor

acquisition of filing cabinets whose title

will vest in the Government. The

contracting officer shall ensure that the

contractor takes the following actions

before submitting a request for approval:

(1) Transfer inactive records to

contractor storage areas;

(2) Dispose of unnecessary records in

accordance with corporate procedures;

(3) Use less expensive shelf filing

methods; and

(4) Take other actions to reduce the

need for filing cabinets.

(b) If after taking the actions in

paragraphs (a)(1) through (4) of this

section, the contractor requires

additional filing capacity, it shall

submit for contracting officer approval a

request to order filing cabinets. This

request shall include a discussion of

why sufficient additional filing capacity

is necessary and shall address the

results of the actions in paragraphs

(a)(1) through (4) of this section. The

contracting officer shall review the

request in consultation with the Records

Management Officer, the Property and

Supply Officer, and the project officer,

is appropriate.

(c) If the need for filing cabinets is

approved, the contracting officer shall
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14033

attempt to fill the need by providing any

available excess items of the type

required through appropriate property

accountability channels. Approved

requests that cannot be filled from

excess shall be returned to the

contractor with an authorization to

obtain file cabinets, preferably through

GSA.

PART 1852—SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

1852.211–72, 1852.211–74 [Removed]

20–21. Sections 1852.211–72 and

1852.211–74 are removed.

1852.223–70 [Amended]

22. In the clause to section 1852.223–

70, the date ‘‘(FEB 1996)’’ is revised to

read ‘‘(MAR 1997)’’, and in paragraph

(g)(2) of the clause the phrase ‘‘A

certification program’’ is revised to read

‘‘Qualification standards’’.

1852.223–73 [Amended]

23. In the introductory text to section

1852.223–73, the citation ‘‘1823.7001’’

is revised to read ‘‘1823.7001(c)’’, and in

the introductory text to ALTERNATE I

of section 1852.223–73, the citation

‘‘1823–7001’’ is revised to read

‘‘1823.7001(d)’’.

1852.243–70, 1852.243–71 [Amended]

24. Sections 1852.243–70 and

1852.243–71 are revised to read as

follows:

1852.243–70 Engineering change

proposals.

As prescribed in 1843.205–70(a),

insert the following clause, modified to

suit contract type:

ENGINEERING CHANGE PROPOSALS (MAR

1997)

(a) Definitions.

ECP means an Engineering Change

Proposal (ECP) which is a proposed

engineering change and the documentation

by which the change is described, justified,

and submitted to the procuring activity for

approval or disapproval.

MIL-STD–973 means a DOD publication

entitled, Military Standard Configuration

Control—Egnineering Changes, Deviations

and Waivers, 15 July 1988.

(b) Either party to the contract may

originate ECPs. The originator shall forward

proposed ECPs to the Contracting Officer.

Unless another process has been approved by

the Government or specified by the

Contracting Officer, the ECP formats, forms

and controls specified in MIL-STD–973 shall

be used. Implementation of an approved ECP

may occur by either a supplemental

agreement or, if appropriate, as a written

change order to the contract.

(c) Any ECP submitted to the Contracting

Officer shall include a ‘‘not-to-exceed’’

lll [price or estimated cost] increase or

decrease adjustment amount, if any, and the

required [time of delivery or period of

performance] adjustment, if any, acceptable

to the originator of the ECP. If the change is

originated within the Government, the

Contracting Officer shall obtain a written

agreement with the Contractor regarding the

‘‘not-to-exceed’’ lll [price or estimated

cost] and [delivery or period of performance]

adjustments, if any, prior to issuing an order

for implementation of the change.

(d) After submission of a Contractor

initiated ECP, the Contracting Officer may

require the Contractor to submit the

following information:

(1) Cost or pricing data in accordance with

FAR 15.804–6 if the proposed change meets

the criteria for its submission under FAR

15.804–2; or

(2) Information other than cost or pricing

data adequate for Contracting Officer

determination of price reasonableness or cost

realism. The Contracting Officer reserves the

right to request additional information if that

provided by the Contractor is considered

inadequate for that purpose. If the Contractor

claims applicability of one of the exceptions

to submission of cost or pricing data, it shall

cite the exception and provide rationale for

its applicability.

(e) If the ECP is initiated by NASA, the

Contracting Officer shall specify the cost

information requirements, if any.

(End of clause)

ALTERNATE I (SEPT 1990)

As prescribed in 1843.205–70(b), add the

following paragraph (e), modified to suit

contract type, to the basic clause:

(e) If the lll [price of estimated cost]

adjustment proposed for any Contractororiginated ECP is lll [Insert a percent or

dollar amount of the contract price or

estimated cost.] or less, the ECP shall be

executed with no adjustment to the contract

lll [price or estimated cost].

ALTERNATE II (SEPT 1990)

As prescribed in 1843.205–70(c), add the

following sentence at the end of paragraph (c)

of the basic clause:

An ECP accepted in accordance with the

Changes clause of this contract shall not be

considered an authorization to the Contractor

to exceed the estimated cost in the contract

Schedule, unless the estimated cost is

increased by the change order or other

contract modification.

1852.243–71 Shared savings.

As prescribed in 1843.7102, insert the

following clause:

SHARED SAVINGS (MAR 1997)

(a) The Contractor is entitled, under the

provisions of this clause, to share in cost

savings resulting from the implementation of

cost reduction projects which are presented

to the Government in the form of Cost

Reduction Proposals (CRP) and approved by

the Contracting Officer. These cost reduction

projects may require changes to the terms,

conditions or statement of work of this

contract. Any cost reduction projects must

not change the essential function of any

products to be delivered or the essential

purpose of services to be provided under the

contract.

(b) Definitions:

(1) Cost savings, as contemplated by this

clause mean savings that result from

instituting changes to the covered contract, as

identified in an approved Cost Reduction

Proposal.

(2) Cost Reduction Proposal—For the

purposes of this clause, a Cost Reduction

Proposal means a proposal that recommends

alternatives to the established procedures

and/or organizational support of a contract or

group of contracts. These alternatives must

result in a net reduction of contract cost and

price to NASA. The proposal will include

technical and cost information sufficient to

enable the Contracting Officer to evaluate the

CRP and approve or disapprove it.

(3) Covered contract—As used in this

provision, covered contract means the

contract, including unexercised options but

excluding future contracts, whether

contemplated or not, against which the CRP

is submitted.

(4) Contractor implementation costs—As

used in this provision, Contractor

implementation costs, or ‘‘implementation

costs’’, shall mean those costs which the

Contractor incurs on covered contracts

specifically in developing, preparing,

submitting, and negotiating a CRP, as well as

those costs the Contractor will incur on

covered contracts to make any structural or

organizational changes in order to implement

an approved CRP.

(5) Government costs—As used in this

provision, the term Government costs means

internal costs of NASA, or any other

Government agency, which result directly

from development and implementation of the

CRP. These may include, but are not limited

to, costs associated with the administration

of the contract or with such contractually

related functions such as testing, operations,

maintenance and logistics support. These

costs also include costs associated with other

Agency contracts (including changes in

contract price or cost and fee) that may be

affected as a result of the implementation of

a CRP. They do not include the normal

administrative costs of reviewing and

processing the Cost Reduction Proposal.

(c) General. The Contractor will develop,

prepare and submit CRP’s with supporting

information as detailed in paragraph (e) of

this clause, to the Contracting Officer. The

CRP will describe the proposed cost

reduction activity in sufficient detail to

enable the Contracting Officer to evaluate it

and to approve or disapprove it. The

Contractor shall share in any net cost savings

realized from approved and implemented

CRPs in accordance with the terms of this

clause. The Contractor’s actual percentage

share of the cost savings shall be a matter for

negotiation with the Contracting Officer, but

shall not, in any event, exceed 50 percent of

the total cost savings recognized by the

Contracting Officer. The Contractor may

propose changes in other activities that

impact performance on its contract,

including Government and other Contractor

operations, if such changes will optimize cost

savings. A Contractor shall not be entitled to

share, however, in any cost savings that are
14034 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations

internal to the Government, or which result

from changes made to any contracts to which

it is not a party even if those changes were

proposed as a part of its CRP. Early

communication between the Contractor and

Government is encouraged. The

communication may be in the form of a

concept paper or preliminary proposal. The

Government is not committed to accepting

any proposal as a result of these early

discussions.

(d) Computation of cost savings. The cost

savings to be shared between the Government

and the Contractor will be computed by the

Contracting Officer by comparing a current

estimate to complete (ETC) for the covered

contract, as structured before implementation

of the proposed CRP, to a revised ETC which

takes into account the implementation of that

CRP. The cost savings to be shared shall be

reduced by any cost overrun, whether

experienced or projected, that is identified on

the covered contract before implementation

of the CRP. Although a CRP may result in

cost savings that extend far into the future,

the period in which the Contractor may share

in those savings will be limited to no more

than five years. Implementation costs of the

Contractor must be considered and

specifically identified in the revised ETC.

The Contracting Officer shall offset

Contractor cost savings by any increased

costs (whether implementing or recurring) to

the Government when computing the total

cost savings to be shared. The Contractor

shall not be entitled, under the provisions of

this clause, to share in any cost reductions

to the contract that are the result of changes

stemming from any action other than an

approved CRP. However, this clause does not

limit recovery of any such reimbursements

that are allowed as a result of other contract

provisions.

(e) Supporting Information. As a minimum,

the Contractor shall provide the following

supporting information with each CRP:

(1) Identification of the current contract

requirements or established procedures and/

or organizational support which are proposed

to be changed.

(2) A description of the difference between

the current process or procedure and the

proposed change. This description shall

address how proposed changes will meet

NASA requirements and discuss the

advantages and disadvantages of the existing

practice and the proposed changes.

(3) A list of contract requirements which

must be revised, if any, if the CRP is

approved, along with proposed revisions.

Any changes to NASA or delegated contract

management processes should also be

addressed.

(4) Detailed cost estimates which reflect

the implementation costs of the CRP.

(5) An updated ETC for the covered

contract, unchanged, and a revised ETC for

the covered contract which reflects changes

resulting from implementing the CRP. If the

CRP proposes changes to only a limited

number of elements of the contract, the ETCs

need only address those portions of the

contract that have been impacted. Each ETC

shall depict the level of costs incurred or to

be incurred by year, or to the level of detail

required by the Contracting Officer. If other

CRPs have been proposed or approved on a

contract, the impact of these CRPs must be

addressed in the computation of the cost

savings to ensure that the cost savings

identified are attributable only to the CRP

under consideration in the instant case.

(6) Identification of any other previous

submissions of the CRP, including the dates

submitted, the agencies and contracts

involved, and the disposition of those

submittals.

(f) Administration.

(1) The Contractor shall submit proposed

CRPs to the Contracting Officer who shall be

responsible for the review, evaluation and

approval. Normally, CRP’s should not be

entertained for the first year of performance

to allow the Contracting Officer to assess

performance against the basic requirements.

If a cost reduction project impacts more than

a single contract, the Contractor may, upon

concurrence of the Contracting Officers

responsible for the affected contracts, submit

a single CRP which addresses fully the cost

savings projected on all affected contracts

that contain this Shared Savings Clause. In

the case of multiple contracts affected,

responsibility for the review and approval of

the CRP will be a matter to be decided by the

affected Contracting Officers.

(2) Within 60 days of receipt, the

Contracting Officer shall complete an initial

evaluation of any proposed cost reduction

plan to determine its feasibility. Failure of

the Contracting Officer to provide a response

within 60 days shall not be construed as

approval of the CRP. The Government shall

promptly notify the Contractor of the results

of its initial evaluation and indicate what, if

any, further action will be taken. If the

Government determines that the proposed

CRP has merit, it will open discussions with

the Contractor to establish the cost savings to

be recognized, the Contractor’s share of the

cost savings, and a payment schedule. The

Contractor shall continue to perform in

accordance with the terms and conditions of

the existing contract until a contract

modification is executed by the Contracting

Officer. The modification shall constitute

approval of the CRP and shall incorporate the

changes identified by the CRP, adjust the

contract cost and/or price, establish the

Contractor’s share of cost savings, and

incorporate the agreed to payment schedule.

(3) The Contractor will receive payment by

submitting invoices to the Contracting Officer

for approval. The amount and timing of

individual payments will be made in

accordance with the schedule to be

established with the Contracting Officer.

Notwithstanding the overall savings

recognized by the Contracting Officer as a

result of an approved CRP, payment of any

portion of the Contractor’s share of savings

shall not be made until NASA begins to

realize a net cost savings on the contract (i.e.,

implementation, startup and other increased

costs resulting from the change have been

offset by cumulative cost savings). Savings

associated with unexercised options will not

be paid unless and until the contract options

are exercised. It shall be the responsibility of

the Contractor to provide such justification as

the Contracting Officer deems necessary to

substantiate that cost savings are being

achieved.

(4) Any future activity, including a merger

or acquisition undertaken by the Contractor

(or to which the Contractor becomes an

involved party), which has the effect of

reducing or reversing the cost savings

realized from an approved CRP for which the

Contractor has received payment may be

cause for recomputing the net cost savings

associated with any approved CRP. The

Government reserves the right to make an

adjustment to the Contractor’s share of cost

savings and to receive a refund of moneys

paid if necessary. Such adjustment shall not

be made without notifying the Contractor in

advance of the intended action and affording

the Contractor an opportunity for discussion.

(g) Limitations. Contract requirements that

are imposed by statute shall not be targeted

for cost reduction exercises. The Contractor

is precluded from receiving reimbursements

under both this clause and other incentive

provisions of the contract, if any, for the

same cost reductions.

(h) Disapproval of, or failure to approve,

any proposed cost reduction proposal shall

not be considered a dispute subject to

remedies under the Disputes clause.

(i) Cost savings paid to the Contractor in

accordance with the provisions of this clause

do not constitute profit or fee within the

limitations imposed by 10 U.S.C. 2306(d) and

41 U.S.C. 254(b).

(End of clause)

1852.244–70 [Amended]

25. In the introductory text to section

1852.244–70, the citation ‘‘1844.170’’ is

revised to read ‘‘1844.204–70’’.

1852.246–70 [Amended]

26. Section 1852.246–70 is revised to

read as follows:

1852.246–70 Mission Critical Space

System Personnel Reliability Program.

As prescribed in 1846.370(a), insert

the following clause:

MISSION CRITICAL SPACE SYSTEM

PERSONNEL RELIABILITY PROGRAM

(MAR 1997)

(a) In implementation of the Mission

Critical Space System Personnel Reliability

Program, described in 14 CFR 1214.5, the

Government shall identify personnel
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Rules and Regulations 14035

positions that are mission critical. Some of

the positions as identified may now or in the

future be held by employees of the

Contractor. Upon notification by the

Contracting Officer that a mission-critical

position is being or will be filled by one or

more of the Contractor’s employees, the

Contractor shall (1) provide the affected

employees with a clear understanding of the

investigative and medical requirements and,

(2) to the extent permitted by applicable law,

assist the Government by furnishing personal

data and medical records.

(b) The standard that will be used in

certifying individuals for a mission-critical

position is that they must be determined to

be suitable, competent, and reliable in the

performance of their assigned duties in

accordance with the screening requirements

14 CFR 1214.5. If the Government determines

that a Contractor employee occupying or

nominated to occupy a mission-critical

position will not be certified for such duty,

the Contracting Officer shall (1) furnish to the

employee the specific reasons for its action;

(2) advise the employee that he/she may avail

himself/herself of the review procedures that

are a part of the certification system; and (3)

furnish him/her a copy of those procedures

upon request.

(c) If a Contractor employee who has been

nominated for (but has not yet filled) a

mission-critical position is not certified, the

Contractor agrees to defer the appointment to

the position until the employee has had an

opportunity to pursue the referenced

procedures. If the employee is an incumbent

to the position, the Contractor agrees, upon

the request of the Government, to remove

him/her from the position temporarily

pending an appeal of the action under the

review procedures. If any employee not

certified elects not to take action under the

procedures, or, if having taken action, is not

successful in obtaining a reversal of the

determination, the Contractor agrees not to

appoint the employee to the position, or if

already appointed, to promptly remove the

employee.

(End of clause)

1852.246–71 [Amended]

27. In the introductory text to section

1852.246–71, the citation ‘‘1846.470–

2(a)’’ is revised to read ‘‘1846.470’’.

1852.246–73 [Amended]

28. Section 1852.246–73 is revised to

read as follows:

1652.246–73 Human Space Flight Item.

As prescribed in 1845.370(b), insert

the following clause:

HUMAN SPACE FLIGHT ITEM (MAR 1997)

The Contractor shall include the following

statement in all subcontracts and purchase

orders placed by it in support of this

contract, without exception as to amount or

subcontract level:

‘‘FOR USE IN HUMAN SPACE FLIGHT;

MATERIALS, MANUFACTURING, AND

WORKMANSHIP OF HIGHEST QUALITY

STANDARDS ARE ESSENTIAL TO

ASTRONAUT SAFETY.

IF YOU ARE ABLE TO SUPPLY THE

DESIRED ITEM WITH A HIGHER QUALITY

THAN THAT OF THE ITEMS SPECIFIED OR

PROPOSED, YOU ARE REQUESTED TO

BRING THIS FACT TO THE IMMEDIATE

ATTENTION OF THE PURCHASER.’’

(End of clause)

1852.246–74, 1852.246–75 [Removed]

29. Section 1852.246–74 and

1852.246–75 are removed.

1852.247–70 [Removed]

30. Section 1852.247–70 is removed.

1852.247–72 [Amended]

31. In the introductory text to section

1852.247–72, the citation ‘‘1847.305–

70(b)’’ is revised to read ‘‘1847.305–

70(a)’’.

1852.247–73 [Amended]

32. In the introductory text to section

1852.247–73, the citation ‘‘1847.305–

70(c)’’ is revised to read ‘‘1847.305–

70(b)’’.

33. In the clause to section 1852.247–

73, the date ‘‘(MARCH 1989)’’ is revised

to read ‘‘(MAR 1997)’’, and in paragraph

(b), the word ‘‘certificate’’ is revised to

read ‘‘statement’’.

[FR Doc. 97–7075 Filed 3–24–97; 8:45 am]

BILLING CODE 7510–01–M

48 CFR Parts 1819 and 1845

Revision to the NASA FAR Supplement

to Eliminate Non-Statutory

Certification Requirements

AGENCY: National Aeronautics and

Space Administration (NASA).

ACTION: Final rule.

SUMMARY: This is a final rule amending

the NASA FAR Supplement to eliminate

offeror and contractor certification

requirements not mandated by statute.

EFFECTIVE DATE: March 25, 1997.

FOR FURTHER INFORMATION CONTACT: Tom

O’Toole, (202) 358–0478.

SUPPLEMENTARY INFORMATION:

Background

NASA published a proposed rule in

the December 18, 1996 Federal Register

(61 FR 66643–66646) of its intent to

delete a number of offeror and

contractor certification requirements in

the NASA FAR Supplement (NFS). Only

editorial comments were received, and

these are considered in the final rule.

The proposed changes to sections

1819.7211 and 1845.302–73 are

incorporated as a final rule without

revision.

The changes to the following NFS

sections listed in the proposed rule have

already been accomplished via the

ongoing NFS rewrite:

1. 1816.303 Cost Sharing Contracts.

Certification requirement deleted from

renumbered section 1816.303–70 in the

October 7, 1996 interim rule (61 FR

52325–52347) and subsequent January

23, 1997 final rule (62 FR 3464–3487).

2. 1823.7002 Responsibility. Section

deleted in the October 29, 1996 final

rule (61 FR 55753–55764).

3. 1832.7004(b) Contractual

Implementation (Milestone Billing).

Section deleted in the October 29, 1996

final rule (61 FR 55765–55774).

4. 1834.005–1 Competition.

Certification requirement deleted from

renumbered Subpart 1834.70 in the

January 30, 1997 final rule (62 FR 4466–

4492).

5. 1870.102–703, VI, Proposed

Submission Information (Investigation

Acquisition System). Certification

requirement deleted in renumbered Part

1872 in the January 30, 1997 final rule

(62 FR 4466–4492).

The changes to the following sections

listed in the proposed rule will be

accomplished as part of the NFS rewrite

in a separate final rule:

1. 1852.223–70, Safety and Health.

2. 1852.247–73, Shipment by

Government Bills of Lading.

Impact

NASA certifies that this regulation

will not have a significant economic

impact on a substantial number of small

entities under the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.). This final rule

does not impose any reporting or record

keeping requirements subject to the

Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1819

and 1845

Government procurement.

Tom Luedtke,

Deputy Associate Administrator for

Procurement.

Accordingly, 48 CFR Parts 1819 and

1845 are amended as follows:

1. The authority citation for 48 CFR

Parts 1819 and 1845 continues to read

as follows:

Authority: 42 U.S.C. 2473(c)(1).

PART 1819—SMALL BUSINESS AND

SMALL DISADVANTAGED BUSINESS

CONCERNS

1819.7211 [Amended]

2. In section 1819.7211, paragraph

(b)(1) is revised to read as follows:

1819.7211 Application process for mentor

firms to participate in the program.

(a) * * *

(b) * * *