[Federal Register Volume 59, Number 88 (Monday, May 9, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-11017] [[Page Unknown]] [Federal Register: May 9, 1994] ======================================================================= ----------------------------------------------------------------------- NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1804, 1842, and 1852 [NFS Case 933705] NASA FAR Supplement; Contractor Cost Reporting AGENCY: Office of Procurement, Procurement Policy Division, National Aeronautics and Space Administration (NASA). ACTION: Interim rule. ----------------------------------------------------------------------- SUMMARY: Until now, the NFS has had only a prescription for use of the cost reporting (NASA Form 533 series) clauses, with no policy guidance. Also, the prescriptions' dollar thresholds for use of the clauses are stated only by reference to a NASA Management Instruction (NMI), thus requiring the reader to find and use the NMI in order to determine when the clauses are required. This change provides the thresholds and adds some guidance regarding the contracting officer's duties, allowable changes, and deviation approval authority. There is also some minor clarification in the wording of the clauses, and the coverage is relocated to a more appropriate subpart. DATES: This interim rule is effective May 9, 1994. NASA will accept written comments until July 8, 1994. ADDRESSES: Comments regarding this rule should be addressed as follows: National Aeronautics and Space Administration, Procurement Policy Division (Code HP), Washington, DC 20546. Please cite HP number 933705 in all correspondence related to this case. FOR FURTHER INFORMATION CONTACT: Frances Sullivan, (202) 358-0488, or William T. Childs, (202) 358-0454. SUPPLEMENTARY INFORMATION: Availability of NASA FAR Supplement The NASA FAR Supplement, of which this rule is a part, is available in its entirety on a subscription basis from the Superintendent of Documents, Government Printing Office, Washington, DC 20402, telephone number (202) 783-3238. Cite GPO Subscription Stock Number 933-003- 00000-1. It is not distributed to the public, either in whole or in part, directly by NASA. Background This case was opened based on General Accounting Office Report AFMD-93-3, October 29, 1992, NASA's Financial Management Operations, which included a finding that procurement officials did not always follow agency directives to include contractor reporting requirements in solicitations and contracts. Regulatory Flexibility Act The interim rule is not expected 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 this rule does not significantly change existing policies or procedures. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. Comments from small entities concerning the affected NASA FAR Supplement subparts will be considered in accordance with 5 U.S.C. 601. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the proposed changes to the NASA FAR Supplement do not impose any new recordkeeping or information collection requirements, or new collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq. The information collection represented by the NASA Forms 533 has previously been approved under OMB Control No. 2700- 0003, through 12/21/96. List of Subjects in 48 CFR Parts 1804, 1842, and 1852 Government procurement. Tom Luedtke, Deputy Associate Administrator for Procurement. Accordingly, 48 CFR parts 1804, 1842, and 1852 are amended as follows. 1. The authority citation for 48 CFR parts 1804, 1842, and 1852 continues to read as follows: Authority: 42 U.S.C. 2473(c)(1). PART 1804--ADMINISTRATIVE MATTERS 2. Sections 1804.675 and 1804.675-1 are removed and reserved. PART 1842--CONTRACT ADMINISTRATION 3. Subpart 1842.72 is added to read as follows: Subpart 1842.72--NASA Contractor Financial Management Reporting Sec. 1842.7201 General. 1842.7202 Contract clauses. Subpart 1842.72--NASA Contractor Financial Management Reporting 1842.7201 General. (a) Contracting officer responsibilities. (1) Successful cost management will only result from a team approach among the procurement, financial/resources management, and project management communities. Contracting Officers should play a primary role in managing cost performance. They must ensure contracts require cost reporting consistent with both policy requirements and project needs. Contracting Officers should monitor contractor cost reports on a regular basis to ensure cost data reported is accurate and timely. Contracting Officers should independently review cost report data. 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. When contracts are modified to accommodate contractor- responsible cost performance problems, consideration is required from the contractor; e.g., reduced fee earning potential. (b) Reporting requirements. (1) Reporting utilizing NASA Contractor Financial Management Reports, the NASA Form 533 series, is required (see NMI 9501.1, NASA Contractor Financial Management Reporting System) on cost-type, price redetermination, and fixed-price incentive contracts when the following dollar, period of performance, and scope criteria are met: ---------------------------------------------------------------------------------------------------------------- Criteria Report format ---------------------------------------------------------------------------------------------------------------- Period of performance Contract value/scope 533M 533Q 533P ---------------------------------------------------------------------------------------------------------------- $500K up to $1M/all........ 1 year or more....... Required............. Optional............. Optional. $1,000,000 and greater/all. Less than 1 year..... Required............. Optional............. Optional. $1,000,000 and greater/all. 1 year or more....... Required............. Required............. Optional. $25,000,000 and greater/ 1 year or more....... Required............. Required............. Required. supply contracts. ---------------------------------------------------------------------------------------------------------------- (2) Where it is probable that a contract will ultimately meet the criteria through change orders, supplemental agreements, etc., the reporting requirement must be implemented in the contract as initially awarded. (3) Performance analysis reporting using the 533P format is mandatory for supply contracts over $25,000,000. Although non-supply contracts over $25,000,000 require only 533M and 533Q reporting, Performance Measurement System reports can be an effective management tool and should be routinely considered as a possible requirement for non-supply contracts over $25,000,000. (c) Substitution of contractor reports. With the Contracting Officer's approval, 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. If substitution is made for the 533P report, schedule data must be reported as of same date and in the same reporting categories as the financial data. The Contracting Officer shall coordinate any proposed substitute with the installation financial management office. (d) Contract requirements. (1) The reporting requirements, including a description of the reporting categories, shall be detailed in the procurement request, and the reports shall be required by inclusion of the appropriate clause or clauses prescribed in 1842.7202. The contract schedule must also indicate the addressees and number of copies. The reporting categories specified shall be coordinated with the Installation Financial Management Office to ensure that data required for agency cost accounting will be provided by the reports. Reporting due dates shall be in accordance with the provisions of NHB 9501.2, Procedures for Contractor Reporting of Correlated Cost and Performance Data. No changes to these submission requirements shall be negotiated except in unusual circumstances and no due dates shall be later than the date by which the Installation Financial Management Office requires the reports for entering cost data in the accounting system. (2) The contractor shall be required to submit an ``Initial Report,'' in complete detail, time-phased for the expected life of the contract, within 10 days after authorization to proceed has been granted, unless otherwise specified by the Contracting Officer. Regular monthly and quarterly reporting will begin within 30 days of contract award. (e) Deviations. Deviations from the financial management reporting provisions of the clauses prescribed herein will require approval in accordance with subpart 1801.4. The Associate Administrator for Procurement will obtain concurrences of the Director, Financial Management Division, and the Associate Administrator of the cognizant Headquarters Program Office. 1842.7202 Contract clauses. (a) The clause at 1852.242-73, NASA Contractor Financial Management Reporting, shall be used when any of the NASA Form 533 series of reports are required from the contractor. (b) The clause at 1852.242-74, NASA Contractor Financial Management Reporting (Performance Analysis Report), shall be used in conjunction with the clause at 1852.242-73 when the Monthly Contractor Financial Management Performance Analysis Report (533P) is required from the contractor. PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1852.204-71 and 1852.204-72 [Removed] 3. Sections 1852.204-71 and 1852.204-72 are removed. 4. Sections 1852.242-73 and 1852.242-74 are added to read as follows: 1852.242-73 NASA Contractor Financial Management Reporting. As prescribed in 1842.7202(a), insert the following clause in contracts that require submission of any of the NASA Form 533 series of reports. NASA Contractor Financial Management Reporting (April 1994) (a) The Contractor shall submit NASA Contractor Financial Management Reports on NASA Forms 533 in accordance with the instructions in Procedures for Contractor Reporting of Correlated Cost and Performance Data (NHB 9501.2) and on the reverse side of the forms, as supplemented in the Schedule of this contract. The detailed reporting categories to be used, which shall be correlated with technical and schedule reporting, shall be set forth in the contract Schedule. Contractor implementation of reporting requirements under this clause shall include NASA approval of the definitions of the content of each reporting category and give due regard to the Contractor's established financial management information system. (b) Lower level detail used by the Contractor for its own management purposes to validate information reported to NASA shall be compatible with NASA requirements. (c) Reports shall be submitted in the number of copies, at the time, and in the manner set forth in the contract Schedule or as designated in writing by the Contracting Officer. Upon completion and acceptance by NASA of all contract Schedule line items, the Contracting Officer may direct the Contractor to submit Form 533 reports on a quarterly basis only. (d) The Contractor shall require first-tier subcontracts that meet the established reporting criteria set forth in 1842.7201(b)(1) to report cost data using the NASA Form 533 reports. Copies of subcontractor Form 533 reports shall be submitted along with the Contractor's Form 533 reports in the manner set forth in the contract Schedule or as designated in writing by the Contracting Officer. (e) If during the performance of this contract NASA requires a change in the information or reporting requirements specified in the Schedule, or as provided for in paragraph (a) or (c) of this clause, the Contracting Officer shall effect that change in accordance with the Changes clause of this contract. (End of clause) 1852.242-74 NASA Contractor Financial Management Reporting (Performance Analysis Report). As prescribed in 1842.7202(b), insert the following clause, in addition to the clause at 1852.242-73, in contracts that require submission of NASA Form 533P. NASA Contractor Financial Management Reporting (Performance Analysis Report) (April 1994) Monthly reporting of contract performance shall be accomplished on the NASA Monthly Contractor Financial Management Performance Analysis Report (NASA Form 533P) in accordance with the instructions in Procedures for Contractor Reporting of Correlated Cost and Performance Data (NHB 9501.2) and on the reverse side of the form, as supplemented in the Schedule of this contract. (End of clause) [FR Doc. 94-11017 Filed 5-6-94; 8:45 am] BILLING CODE 7510-01-P