[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Proposed Rules]
[Pages 48726-48728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17559]
[[Page 48726]]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1845 and 1852
RIN 2700-AE33
NASA Federal Acquisition Regulation Supplement: Contractor
Financial Reporting of Property (2016-N024)
AGENCY: National Aeronautics and Space Administration.
ACTION: Proposed rule.
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SUMMARY: NASA is proposing to amend the NASA Federal Acquisition
Regulation Supplement (NFS) to add a monthly reporting requirement for
contractors having custody of $10 million or more in NASA-owned
Property, Plant and Equipment (PP&E).
DATES: Interested parties should submit comments to NASA at the address
below on or before September 26, 2016 to be considered in the formation
of a final rule.
ADDRESSES: Submit comments identified by NFS Case 2016-N024, using any
of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``NFS Case 2016-N024''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``NFS Case
2016-N024.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please include your name, company name (if any), and
``NFS Case 2016-N024'' on your attached document.
[cir] Email: [email protected]. Include NFS Case 2016-N024 in
the subject line of the message.
[cir] Fax: (202) 358-3082.
[cir] Mail: National Aeronautics and Space Administration,
Headquarters, Office of Procurement, Contract and Grant Policy
Division, Attn: Andrew O'Rourke, LP-011 (Suite 5L32), 300 E. Street
SW., Washington, DC 20546-0001.
FOR FURTHER INFORMATION CONTACT: Andrew O'Rourke, NASA, Office of
Procurement, Contract and Grant Policy Division, LP-011 (Suite 5L32);
(202) 358-4560; email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
NASA is proposing to revise the NFS to add a monthly reporting
requirement at 1852.245-73 for contracts in which the contractor has
custody of NASA-owned PP&E valued at $10 million or more to ensure
contractor-held PP&E are more accurately represented in NASA financial
statements. In accordance with the Statement of Federal Financial
Accounting Standard (SFFAS) No. 6, Accounting for Property, Plant, and
Equipment, Federal agencies are--
Required to record as property and equipment all items
that meet certain characteristics, such as a useful life of two (2)
years or more; and
Permitted to establish individual capitalization
thresholds and useful life policies due to their diverse size and uses
of PP&E.
NASA Procedural Requirement (NPR) 9250.1, Property, Plant, and
Equipment and Operating Materials and Supplies, which implements SSFAS
No. 6, requires contractors with custody of NASA-owned PP&E to report
financial property information to NASA on a yearly basis, and also
requires contractors with custody of $10 million or more in NASA-owned
PP&E to report financial property information to NASA on a monthly
basis.
NFS subpart 1845.71 requires contractors in possession of NASA PP&E
to submit annually a NASA Form (NF) 1018, NASA Property in the Custody
of Contractors. NFS clause 1852.245-73, Financial Reporting of NASA
Property in the Custody of Contractors, paragraph (a), states the
Contractor shall submit annually a NASA Form (NF) 1018, NASA Property
in the Custody of Contractors, in accordance with this clause, the
instructions on the form and NFS subpart 1845.71, and any supplemental
instructions for the current reporting period issued by NASA.
Currently, if at any time during performance of the contract the amount
of NASA property in the custody of the contractor is equal to or in
excess of $10 million, the contractor has received instructions from
the NASA contracting officer to submit a monthly report.
In order to ensure that PP&E are being presented fairly in the
Agency's financial statements, independent auditors recommended to NASA
that the NFS policy regarding property financial reporting be revised
to specify that the supplemental instructions in paragraph (a) of the
clause specifically includes the requirement that all contractors
having custody of NASA PP&E with a value of $10 million or more are
required to report this information on a monthly basis to NASA.
II. Discussion
The following sections of the NFS are being revised relative to
PP&E reporting requirements:
NASA is proposing to update NFS clause 1852.245-73 and the
associated prescription at NFS 1845.107-70 regarding the reporting of
NASA-owned and contractor-held PP&E that equals $10 million or more on
a monthly basis.
NASA is proposing to update NFS clause 1852.245-73 to add
the cognizant NASA Center Industrial Property Officer to the
distribution list for the hard copy NF 1018.
NASA is proposing to update NFS clause 1852.245-73 to
revise the annual report submission date from October 15th to October
31st to allow contractors additional time to develop and submit this
report.
III. 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.
IV. Regulatory Flexibility Act
NASA does not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because the affected NASA contractors with custody of NASA-owned PP&E
valued at $10 million or greater are primarily large businesses.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
The objective of this rule is to add a monthly reporting
requirement for contractors having custody of NASA-owned PP&E valued at
$10 million or greater to ensure that contractor-held PP&E are more
accurately represented in NASA financial statements in accordance with
the Statement of Federal Financial Accounting Standard (SFFAS) No. 6,
Accounting for Property, Plant, and Equipment and NASA Procedural
Requirement (NPR) 9250.1, Property, Plant, and Equipment and Operating
Materials and Supplies.
The requirements under this proposed rule would apply to any
contract award
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(including contracts for supplies, services, construction, and major
systems) that requires contractors to use Government property.
According to NASA Property Records in Fiscal Year (FY) 2015 there were
643 contracts that required reporting NASA contractors with custody of
Government property to report that property. Of the 643 contracts,
approximately 20% or 129 contracts were with small business
contractors. Of the 643 contracts, 32 contracts had NASA-owned and
contractor-held PP&E with a value of $10 Million or more and required
monthly reporting. Of those 32 contracts, only three were awarded to
small business contractors.
The rule contains information collection requirements, however,
this rule does not impose additional information collection
requirements to the paperwork burden previously approved under OMB
Control Number 2700-0017, titled NASA Property in the Custody of
Contractors and OMB Control No. 9000-0075, titled Government Furnished
Property Requirements. The impact of this reporting requirement is
minimal on small entities based on FY 2015 NASA property records that
show only three contractors with custody of NASA PP&E valued at $10
million or more. No alternatives were identified that would meet the
objectives of this proposed rule.
NASA invites comments from small business concerns and other
interested parties on the expected impact of this proposed rule on
small entities. NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this
proposed rule in accordance with 5 U.S.C. 610. Interested parties must
submit such comments separately and should cite 5 U.S.C. 610 (NFS Case
2016-N024) in correspondence.
V. Paperwork Reduction Act
The rule contains information collection requirements that require
the approval of the Office of Management and Budget (OMB) under the
Paperwork Reduction Act (44 U.S.C. chapter 35); however, these changes
to the NFS do not impose additional information collection requirements
to the paperwork burden previously approved under OMB Control Number
2700-0017, titled NASA Property in the Custody of Contractors and OMB
Control No. 9000-0075, titled Government Furnished Property
Requirements.
List of Subjects in 48 CFR Parts 1845 and 1852
Government procurement.
Manuel Quinones,
NASA FAR Supplement Manager.
Accordingly, 48 CFR parts 1845 and 1852 are proposed to be amended
as follows:
PART 1845--GOVERNMENT PROPERTY
0
1. The authority citation for part 1845 is revised to read as follows:
Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.
0
2. Amend section 1845.107-70 by revising paragraph (d) to read as
follows:
1845.107-70 NASA solicitation provisions and contract clauses.
* * * * *
(d) The contracting officer shall insert the clause at 1852.245-73,
Financial Reporting of NASA Property in the Custody of Contractors, in
cost reimbursement solicitations and contracts and in all contracts in
which the contractor has custody of NASA owned-property with a value of
$10 million or more, unless all property to be provided is subject to
the clause at 1852.245-71, Installation-Accountable Government
Property. Insert the clause 1852.245-73 in other types of solicitations
and contracts when it is known at award that property will be provided
to the contractor or that the contractor will acquire property title to
which will vest in the Government prior to delivery.
* * * * *
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. The authority citation for part 1852 continues to read as follows:
Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.
0
4. Amend section 1852.245-73 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a), removing the words ``in accordance this clause''
and adding ``in accordance with this clause'' in its place; and
0
c. Revising paragraphs (b)(2) and (c).
The revised text reads as follows:
1852.245-73 Financial Reporting of NASA Property in the Custody of
Contractors.
* * * * *
Financial Reporting of NASA Property in the Custody of Contractors
(Date)
* * * * *
(b)(1) * * *
(2) The Contractor shall mail the original signed NF 1018
directly to the cognizant NASA Center Industrial Property Officer
and a copy to the cognizant NASA Center Deputy Chief Financial
Officer, Finance, unless the Contractor uses the NF 1018 Electronic
Submission System (NESS) for report preparation and submission.
(c)(1) The annual reporting period shall be from October 1 of
each year through September 30 of the following year. The report
shall be submitted in time to be received by October 31st. The
information contained in these reports is entered into the NASA
accounting system to reflect current asset values for agency
financial statement purposes. Therefore, it is essential that
required reports be received no later than October 31st.
(2) Some activity may be estimated for the month in which the
report is submitted, if necessary, to ensure the NF 1018 is received
when due. However, contractors' procedures must document the process
for developing these estimates based on planned activity such as
planned purchases or NASA Form 533 (NF 533) Contractor Financial
Management Report cost estimates. It should be supported and
documented by historical experience or other corroborating evidence,
and be retained in accordance with FAR Subpart 4.7, Contractor
Records Retention. Contractors shall validate the reasonableness of
the estimates and associated methodology by comparing them to the
actual activity once that data is available, and adjust them
accordingly. In addition, differences between the estimated cost and
actual cost must be adjusted during the next reporting period.
Contractors shall have formal policies and procedures, which address
the validation of NF 1018 data, including data from subcontractors,
and the identification and timely reporting of errors. The objective
of this validation is to ensure that information reported is
accurate and in compliance with the NASA FAR Supplement. If errors
are discovered on NF 1018 after submission, the contractor shall
contact the cognizant NASA Center Industrial Property Officer (IPO)
within 30 days after discovery of the error to discuss corrective
action.
(3) In addition to an annual report, if at any time during
performance of the contract, NASA-owned property in the custody of
the contractor has a value of $10 million or more, the contractor
shall also submit a report no later than the 21st of each month in
accordance with the requirements of paragraph (c)(2) of this clause.
(4) The Contracting Officer may, in NASA's interest, withhold
payment until a reserve not exceeding $25,000 or 5 percent of the
amount of the contract, whichever is less, has been set aside, if
the Contractor fails to submit annual NF 1018 reports in accordance
with NFS subpart 1845.71, any monthly report in accordance with
(c)(3) of this clause, and any supplemental instructions for the
current reporting period issued by NASA. Such reserve shall be
withheld until the Contracting Officer has determined that NASA has
received the required reports. The withholding of any amount or the
subsequent
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payment thereof shall not be construed as a waiver of any Government
right.
* * * * *
[FR Doc. 2016-17559 Filed 7-25-16; 8:45 am]
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