[Federal Register Volume 77, Number 59 (Tuesday, March 27, 2012)]
[Rules and Regulations]
[Pages 18106-18108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-5797]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 1852
RIN 2700-AD70
Award Fee for Service and End-Item Contracts
AGENCY: National Aeronautics and Space Administration.
ACTION: Final rule.
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SUMMARY: NASA has adopted, without change, a final rule amending the
NASA FAR Supplement (NFS) to update the Award Fee for Service Contracts
clause (NFS 1852.216-76) to clarify that the amount of award fee held
in reserve, if any, shall not exceed $100,000 for the contract, and add
similar language to the Award Fee for End-Item Contracts clause (NFS
1852.216-77) to allow the contracting officer to withhold fee payments,
at a not-to-exceed amount of $100,000 for the contract, in reserve to
protect the Government's interests relative to an orderly and timely
closeout of the contract.
DATES: Effective: April 26, 2012.
FOR FURTHER INFORMATION CONTACT: Bill Roets, NASA, Office of
Procurement, Contract Management Division, Room 5G86; (202) 358-4483;
email: [email protected].
SUPPLEMENTARY INFORMATION:
A. Background
A proposed rule was published on September 15, 2011 (76 FR 57014)
updating NFS clause 52.216-76 to clarify that the amount of withheld
award fee shall not exceed $100,000 for the contract revising paragraph
(d) of this clause. As currently written, the clause specified a not-
to-exceed amount of 15 percent of the contract's potential award fee,
and on large multi-million dollar procurements, this reserve could
total millions of dollars which would be excessive for the intended
purpose of this reserve. By capping this reserve at $100,000, NASA will
set the appropriate maximum dollar amount for this potential reserve
and will align this clause with similar language in FAR clauses 52.216-
8, Fixed-Fee, and 52.216-10, Incentive Fee. Similar language relative
to withholding a reserve amount of fee, not to exceed $100,000, to
protect the Government's interests relative to an orderly and timely
closeout of the contract, is also being added to the Award Fee for End
Item Contracts clause (NFS 1852.216-77). NASA received no comments on
the proposed rule and has adopted the proposed rule as a final rule
without change.
B. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
C. Regulatory Flexibility Act
NASA certifies that this final rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, at 5 U.S.C. 601, et seq.,
because it merely updates, for clarification purposes, the maximum
amount of award fee that can be withheld on a contract which will
provide a benefit to all entities both large and small. In addition,
award fee contracts are largely the province of large businesses with
large dollar contracts and the changes promulgated in this final rule
do not directly affect the current processes of Federal contractors. No
comments from small entities were submitted in reference to the
Regulatory Flexibility Act request under the proposed rule.
D. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L., 104-13) does not apply
because this final rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 1852
Government procurement.
Sheryl Goddard,
Acting Assistant Administrator for Procurement.
Accordingly, 48 CFR part 1852 is amended as follows:
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1. The authority citation for 48 CFR part 1852 continues to read as
follows:
Authority: 42 U.S.C. 2455(a), 2473(c)(1).
[[Page 18107]]
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
2. Section 1852.216-76 is revised to read as follows:
1852.216-76 Award fee for service contracts.
As prescribed in 1816.406-70(a), insert the following clause:
AWARD FEE FOR SERVICE CONTRACTS (APR 2012)
(a) The contractor can earn award fee from a minimum of zero
dollars to the maximum stated in NASA FAR Supplement clause
1852.216-85, ``Estimated Cost and Award Fee'' in this contract.
(b) Beginning 6* months after the effective date of this
contract, the Government shall evaluate the Contractor's performance
every 6* months to determine the amount of award fee earned by the
contractor during the period. The Contractor may submit a self-
evaluation of performance for each evaluation period under
consideration. These self-evaluations will be considered by the
Government in its evaluation. The Government's Fee Determination
Official (FDO) will determine the award fee amounts based on the
Contractor's performance in accordance with [identify performance
evaluation plan]. The plan may be revised unilaterally by the
Government prior to the beginning of any rating period to redirect
emphasis.
(c) The Government will advise the Contractor in writing of the
evaluation results. The [insert payment office] will make payment
based on [Insert method of authorizing award fee payment, e.g.,
issuance of unilateral modification by contracting officer].
(d) The Contracting Officer may direct the withholding of earned
award fee payments until a reserve is set aside in an amount that
the Contracting Officer considers necessary to protect the
Government's interest relative to an orderly and timely closeout of
the contract. This reserve shall not exceed 15 percent of the
contract's total potential award fee or $100,000, whichever is less.
(e) The amount of award fee which can be awarded in each
evaluation period is limited to the amounts set forth at [identify
location of award fee amounts]. Award fee which is not earned in an
evaluation period cannot be reallocated to future evaluation
periods.
(f)(1) Provisional award fee payments [insert ``will'' or ``will
not'', as applicable] be made under this contract pending the
determination of the amount of fee earned for an evaluation period.
If applicable, provisional award fee payments will be made to the
Contractor on a [insert the frequency of provisional payments (not
more often than monthly)] basis. The total amount of award fee
available in an evaluation period that will be provisionally paid is
the lesser of [Insert a percent not to exceed 80 percent] or the
prior period's evaluation score.
(2) Provisional award fee payments will be superseded by the
final award fee evaluation for that period. If provisional payments
exceed the final evaluation score, the Contractor will either credit
the next payment voucher for the amount of such overpayment or
refund the difference to the Government, as directed by the
Contracting Officer.
(3) If the Contracting Officer determines that the Contractor
will not achieve a level of performance commensurate with the
provisional rate, payment of provisional award fee will be
discontinued or reduced in such amounts as the Contracting Officer
deems appropriate. The Contracting Officer will notify the
Contractor in writing if it is determined that such discontinuance
or reduction is appropriate.
(4) Provisional award fee payments [insert ``will'' or ``will
not'', as appropriate] be made prior to the first award fee
determination by the Government.
(g) Award fee determinations are unilateral decisions made
solely at the discretion of the Government.
* [A period of time greater or lesser than 6 months may be
substituted in accordance with 1816.405-272(a).]
(End of clause)
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3. Section 1852.216-77 is revised to read as follows:
1852.216-77 Award fee for end item contracts.
As prescribed in 1816.406-70(b), insert the following clause:
AWARD FEE FOR END ITEM CONTRACTS (APR 2012)
(a) The contractor can earn award fee, or base fee, if any, from
a minimum of zero dollars to the maximum stated in NASA FAR
Supplement clause 1852.216-85, ``Estimated Cost and Award Fee'' in
this contract. All award fee evaluations, with the exception of the
last evaluation, will be interim evaluations. At the last
evaluation, which is final, the Contractor's performance for the
entire contract will be evaluated to determine total earned award
fee. No award fee or base fee will be paid to the Contractor if the
final award fee evaluation is ``poor/unsatisfactory.''
(b) Beginning 6* months after the effective date of this
contract, the Government will evaluate the Contractor's interim
performance every 6* months to monitor Contractor performance prior
to contract completion and to provide feedback to the Contractor.
The evaluation will be performed in accordance with [identify
performance evaluation plan] to this contract. The Contractor may
submit a self-evaluation of performance for each period under
consideration. These self-evaluations will be considered by the
Government in its evaluation. The Government will advise the
Contractor in writing of the evaluation results. The plan may be
revised unilaterally by the Government prior to the beginning of any
rating period to redirect emphasis.
(c)(1) Base fee, if applicable, will be paid in [Insert
``monthly'', or less frequent period] installments based on the
percent of completion of the work as determined by the Contracting
Officer.
(2) Interim award fee payments will be made to the Contractor
based on each interim evaluation. The amount of the interim award
fee payment is limited to the lesser of the interim evaluation score
or 80 percent of the fee allocated to that period less any
provisional payments made during the period. All interim award fee
payments will be superseded by the final award fee determination.
(3) Provisional award fee payments will [insert ``not'' if
applicable] be made under this contract pending each interim
evaluation. If applicable, provisional award fee payments will be
made to the Contractor on a [insert the frequency of provisional
payments (not more often than monthly) basis. The amount of award
fee which will be provisionally paid in each evaluation period is
limited to [Insert a percent not to exceed 80 percent] of the prior
interim evaluation score (see [insert applicable cite]). Provisional
award fee payments made each evaluation period will be superseded by
the interim award fee evaluation for that period. If provisional
payments made exceed the interim evaluation score, the Contractor
will either credit the next payment voucher for the amount of such
overpayment or refund the difference to the Government, as directed
by the Contracting Officer. If the Government determines that (i)
the total amount of provisional fee payments will apparently
substantially exceed the anticipated final evaluation score, or (ii)
the prior interim evaluation is ``poor/unsatisfactory,'' the
Contracting Officer will direct the suspension or reduction of the
future payments and/or request a prompt refund of excess payments as
appropriate. Written notification of the determination will be
provided to the Contractor with a copy to the Deputy Chief Financial
Officer (Finance).
(4) All interim (and provisional, if applicable) fee payments
will be superseded by the fee determination made in the final award
fee evaluation. The Government will then pay the Contractor, or the
Contractor will refund to the Government the difference between the
final award fee determination and the cumulative interim (and
provisional, if applicable) fee payments. If the final award fee
evaluation is ``poor/unsatisfactory'', any base fee paid will be
refunded to the Government.
(5) Payment of base fee, if applicable, will be made based on
submission of an invoice by the Contractor. Payment of award fee
will be made by the [insert payment office] based on [Insert method
of making award fee payment, e.g., issuance of a unilateral
modification by the Contracting Officer].
(d) The Contracting Officer may direct the withholding of
interim award fee payments until a reserve is set aside in an amount
that the Contracting Officer considers necessary to protect the
Government's interest relative to an orderly and timely closeout of
the contract. This reserve shall not exceed 15 percent of the
contracts total potential award fee or $100,000, whichever is less.
[[Page 18108]]
(e) Award fee determinations are unilateral decisions made
solely at the discretion of the Government.
* [A period of time greater or lesser than 6 months may be
substituted in accordance with 1816.405-272(a).]
(End of clause)
[FR Doc. 2012-5797 Filed 3-26-12; 8:45 am]
BILLING CODE 7510-01-P