1842.101 Policy.
It is NASA policy to optimize the use of contract administration, audit, and related support functions of the Department of Defense (DOD) and other Government agencies. NASA agreements with Government agencies regarding the delegation and performance of contract administration and related field support functions are the responsibility of the Defense Division (Code ID). However, questions may be directed to the Analysis Division (Code HC). NASA retains technical direction of all its contracts regardless of the agency responsible for contract administration.
1842.102 Procedures.
DOD contract administration and audit offices will accomplish the delegated functions in accordance with DOD regulations and procedures, except that the following take precedence over DOD regulations and procedures:
(a) NASA letters of delegation, including any special instructions attached to them.
(b) Applicable requirements of NASA Quality Publication NHB 5300.4(2B), Quality Assurance Provisions for Government Agencies.
(c) Any written agency agreements between NASA and DOD.
1842.102-70 Management of subcontracts.
Because prime contractors are responsible for managing subcontracts, contract administration functions shall be performed by the Government for subcontracts only if necessary to meet specific NASA requirements. Delegations for contract administration at subcontractors' plants normally shall be made by or through the contract administration offices responsible for the prime contractors. When a direct delegation is made for performance of contract administration functions at a subcontractor's plant (such as for quality assurance), the contracting officer shall coordinate in advance with the contract administration office responsible for the prime contractor and provide copies of the delegation to that office.
1842.170 Assignment of NASA personnel at contractor plants.
(a) 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 and the concurrence of the Associate Administrator for Procurement. The following supporting information shall be forwarded with the request to make the assignment:
(1) A statement of the special circumstances that necessitate the assignment.
(2) The contract administration services to be performed.
(3) A summary of any discussions held with the cognizant contract administration organization.
(4) A staffing plan covering three years or such shorter period as may be appropriate. 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. When NASA technical personnel are performing any of the contract administration functions listed in FAR 42.302(a), paragraph (c) of this section applies.
(c) When a NASA resident office 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 are, or intend to be, involved in any aspect of contract administration.
1842.171 Contractor performance at a NASA installation.
When a NASA contract requires contractor performance at another NASA installation or NASA-controlled launch site, a delegation shall be made to the contracting office of the NASA installation at which performance will occur. Delegations normally will include the functions listed in FAR 42.302(a), less any functions retained under 1842.202. In addition, delegations shall include the contracting officer security functions (when required in the performance of the contract at the installation or site) and the administration of any NASA support provided to the contractor.
1842.172 Contract administration by DOD personnel at a NASA installation.
If DOD personnel will perform contract administration functions at a NASA installation for more than 30 workdays (either continuous or intermittent), the NASA contracting officer shall obtain prior approval from the head of the installation where the DOD personnel will be located. The concurrence of the Director, Contract Management Division (Code HK) shall also be obtained.
1842.173 Reimbursement for contract administration services.
The basis for reimbursement to DOD for contract administration and related support services is the NASA-DOD Agreement for Contract Administration and Contract Audit Services. Budgeting, funding, and payment for these services shall be accomplished in accordance with NMI 7410.1, Management, Funding, and Payment for Contract and Grant Administration and Audit Services Obtained from Other Federal Agencies. The NASA installation issuing the delegation has responsibility for budgeting, funding, and payment of bills of lading for transportation performed as a result of a traffic management delegation.
1842.174 Reporting requirements.
(a) NASA installations shall assess their delegations to DOD semiannually to determine changes in delegation patterns that could (1) result in significant increases or decreases in future 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 sizeable new procurements should be considered in the assessment.
(b) When an event will affect DOD administration of contracts for NASA significantly, a summary of the assessment shall be submitted to the Director, Contract Management Division (Code HK). The summary shall include at least --
(1) A description of the change in work requirements or delegation pattern;
(2) The estimated duration of the impact; and
(3) A prediction of the impact on DOD in terms of changes in manpower requirements or other costs.
(c) NASA installations shall discuss with appropriate DOD contract administration offices the predicted impact on DOD. The results of these discussions, such as DOD agreement or disagreement with the predicted impact, shall be included in the report.
1842.175 Functional management responsibility.
NASA contracting officers retain functional management responsibility for their contracts. Utilization of the contract administration services of another Government agency or NASA installation does not relieve the NASA contracting officer of responsibility for proper and effective management of the contract. Therefore, the NASA contracting officer must ensure that the contract administration office understands the respective duties and responsibilities of each office in connection with each NASA contract. NASA contracting officers shall keep themselves fully informed on contractor performance and progress by establishing and maintaining effective communications with contract administration offices.
1842.202 Assignment of contract administration.
(a) Policy.
(1) It is NASA policy that maximum use be made of those contract administration and contract audit services available from DOD, subject to the recognition that certain functions may be withheld as being necessary for program management, or other reasons. Those services will normally be performed by the Department of Defense (DOD) in accordance with the terms of the NASA contracts and applicable DOD regulations and procedures, unless special NASA requirements necessitate other arrangements.
(2) Contracting officers should carefully determine for each contract award the optimum division of contract administration functions between those performed with NASA resources and those performed by DOD and other Government agencies. Factors affecting the assignment of contract administration include --
(i) Place of contract performance;
(ii) Nature of the supplies or services being acquired;
(iii) Extent of general existing DOD contractor oversight;
(iv) Extent of subcontracting to be performed by the prime contractor;
(v) Quality assurance requirements;
(vi) Security requirements; and
(vii) Government property administration requirements.
(3) Since NASA reimburses DOD for all contract administration performed on NASA contracts, only those functions that can be performed more efficiently and
effectively by DOD, given the circumstances of the procurement, should be delegated.
(b) Assignable functions. With the exception of the functions listed under paragraph (c) of this section, any or all of the functions listed in FAR 42.302 may be delegated to DOD for performance based on the contracting officer's assessment of what will lead to the most efficient and effective contract management for the individual procurement. A blanket delegation of all assignable functions listed in FAR 42.302(a), with the exception of the non-assignable functions listed under paragraph (c) of this section, is generally appropriate when the contract place of performance is the contractor's facility and onsite DOD contract administration services are available. However, each function must be reviewed to ascertain if the function could better be performed by the NASA contracting officer.
(c) Restricted functions. The functions listed below may not be delegated, except as indicated.
(1) Approval of the final voucher (FAR 42.302(a)(7)).
(2) Countersigning NASA Form 456, Notice of Contract Costs Suspended and/or Disapproved (FAR 42.302(a)(8)).
(3) Issuance of decisions under the disputes clause (FAR 42.302(a)(10)).
(4) Contract payment (FAR 42.302(a)(13)).
(5) Execution of supplemental 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)).
(6) Execution of change orders (FAR 42.302(b)(8)). However, delegation of
the negotiation of supplemental agreements for change order definitization and forwarding for approval and signature of the NASA contracting officer is permitted (FAR 42.302(b)(1)).
(7) 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)).
(8) Consent to placement of subcontracts under FAR 42.302(a)(51). However, in those situations where the contracting officer considers it necessary to delegate consent to subcontract, the requirements of 1844.102(b) shall be met prior to delegation.
1842.202-70 Delegations to contract administration offices.
(a) General. The following procedures apply to delegations to contract administration offices (for delegations to audit and security offices, see 1842.202-71 and 1842.202-72, respectively):
(1) At the time of contract award the NASA contracting officer shall review contract performance requirements to determine the nature and extent of expected contract administration functions. This review shall be coordinated with appropriate installation functional representatives, including program managers, to ensure that all essential requirements are incorporated in the delegation. A similar review shall be made before amending letters of delegation.
(2) In most cases, contracting officers should contact the cognizant contract administration office and discuss planned delegation(s) with the administrative contracting officer. The
contracting officer should elevate disagreements with the cognizant contract administration office to higher levels for resolution.
(3) A post-award planning conference (see FAR 45.503) shall be held with representatives of the contract administration office when --
(i) A contract is expected to exceed $5,000,000;
(ii) Contract performance is required at or near a NASA installation or NASA-controlled 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.
(4) Procurement officer approval is required to waive a post-award planning conference for contracts meeting any of the criteria in (a)(3) 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.
(5) When functions are to be delegated (or when prior delegations require modification), contracting officers shall --
(i) Within 15 days after contract award, prepare 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.
(ii) Forward NASA Form 1431, Letter of Acceptance of Contract Administration, with each NASA Form 1430 or 1430A. If the NASA Form 1431 has not been returned within 45 days of
transmittal, the contracting officer shall initiate follow-up inquiry to determine the status of the delegation request. 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 contact for each of the functional areas delegated.
(iii) Modify existing delegations, as necessary, consistent with paragraphs (a)(5)(i) and (ii).
(6) Letters of delegation shall clearly and specifically state which functions are delegated. Delegations and delegation amendments shall be accompanied by documentation and supporting information that will ensure a complete understanding of the contract administration services to be performed. The contracting officer shall keep the contract administration office fully informed of any actions that may affect the performance of the delegated functions. Copies of all significant documents shall be furnished to the contract administration office throughout the period of performance. Significant documents include, but are not limited to --
(i) All contractual documents such as the contract and any specifications and drawings, change orders, supplemental agreements or contractor proposals referenced in the contract;
(ii) Negotiation memoranda covering negotiations of contracts or contract changes in excess of $100,000;
(iii) Copies of any delegation and amendments if sent to other contract administration offices that have a bearing on the contract, including those issued pursuant to 1842.102-70; and
(iv) Any other correspondence affecting contract performance under the contract.
(7) Delegations shall be sent to DOD contract administration offices in accordance with the instructions in the DOD Directory of Contract Administration Services Components (DLAH 4105.4).
(8) The contracting officer shall distribute copies of the contract and letters of delegation for contract administration (including amendments) as follows:
(i) To Defense Contract Management Command (DCMC) and all other Government contract administration offices except DOD military contract administration offices, when two or more functional areas are delegated: Five copies of the contract and NASA Form 1430 and three NASA Forms 1431.
(ii) To DOD military component offices when two or more functional areas are delegated: Three copies of the contract and three NASA Forms 1430 and 1431.
(iii) To any contract administration office when a single functional area is delegated: Two copies of the contract and two NASA Forms 1430 and 1431.
(iv) To the contractor: One NASA Form 1430.
(b) Reliability and quality assurance. When special instructions for reliability or quality assurance are necessary, they shall be (1) clearly identified by the NASA installation personnel responsible for the reliability and quality assurance function and (2) furnished to the contracting officer on NASA Form 1430A for inclusion in the letter of delegation. The procedures for arranging, preparing, and finalizing such delegations and the requirements for NASA direction and management of these functions are contained in installation procedures. The latest edition of NHB 5300.4(2B), Quality Assurance Provisions for Delegated Government Agencies, describes the requirements for performing quality assurance functions under NASA contracts.
(c) Transportation and packaging. Transportation and packaging functions
may be delegated at the option of the NASA installation personnel responsible for the transportation and packaging function. When such delegations are contemplated on a particular contract, special instructions shall be furnished to the NASA contracting officer on NASA Form 1430A. The form shall also (1) specify the limit of the value of Government bills of lading that may be issued without further consent of the NASA contracting officer and (2) provide appropriate funding information.
(d) Property administration and plant clearance. Property administration and plant clearance are ordinarily delegated by NASA to DOD pursuant to FAR 42.302. When these functions are delegated, special instructions prepared and distributed by the Headquarters Logistics Management Office, Code JLG, should be issued to the contract administration office. Property administration and plant clearance are typically retained, however, and performed by NASA when the contract work is to be performed at a NASA installation. When retained, the functions should be performed in accordance with Subpart 1845.72.
(e) Services not requiring letters of delegation.
(1) When it is desired that a contract administration or audit office perform services that precede the award of a contract, such as cost, price, or technical evaluations (but exclusive of pre-award surveys), NASA Form 1434, Letter of Request for Pricing-Audit-Technical Evaluation Services, shall be used. Pre-award surveys shall be requested on SF 1403, Pre-award Survey of Prospective Contractor (General). Oral requests made to contract administration offices to expedite these services are authorized, but shall be confirmed in writing immediately through the use of NASA Form 1434 or SF 1403, as appropriate.
(2) Pre-award and post-award services, such as verification of labor and overhead rates, and furnishing of similar information readily available within contract administration and audit offices and not normally subject to reimbursement by NASA, may be obtained either orally without written confirmation or through the use of NASA Form 1434, as appropriate.
(f) Contractor Purchasing System Reviews. When delegating contract administration to a DOD contract administration office under FAR 42.202 and 42.302(a)(50), the NASA contracting officer shall include in the letter of delegation of contract administration functions a requirement for the contract administration office to provide the NASA contracting officer with:
(1) Adequate advance notification of scheduled CPSRs, to allow for the necessary NASA coordination of participation; and
(2) One copy of each CPSR report.
1842.202-71 Delegations to audit offices.
The following procedures apply when delegations are made to audit offices:
(a) NASA installations shall utilize the services of other Government audit organizations for performance of contract cost audit and other audit functions, except when audits will be performed by NASA auditors. The Defense Contract Audit Agency (DCAA) has been designated as the DOD agency responsible for the perform-ance of audit functions for NASA con-tracts, except those awarded to educational institutions for which other agencies have audit cognizance under OMB Circular No. 88, those with Canadian contractors (see paragraph (d) of this section), and those for which NASA will perform audits. To ensure that audit services are performed expeditiously, audit delegations shall be sent to the appropriate audit office immediately after execution of all cost-reimbursement, labor-hour, and time-and-materials contracts and all fixed-price contracts containing cost-reimbursement or price adjustment clauses. Audit functions include but are not limited to contract cost and price audits, estimating systems surveys, reviews of accounting systems (see also 1815.871(b)), and approval of vouchers for provisional payment.
(b) (1) Delegations shall be sent to cognizant audit offices as listed in the Defense Contract Audit Agency Directory (Headquarters and Field Offices) or in other Government agency directories.
(2) Audit responsibilities for the Department of Health and Human Services (HHS) do not include reviewing and processing vouchers. Consequently, where audit responsibility has been delegated to HHS under OMB Circular No. A-88, contracts shall not designate HHS as the billing office for invoice submission. Instead, contracts should direct invoices to the office administering the contract or as otherwise arranged (see SF 26, Block 10, and SF 33, Block 23).
(c) (1) NASA Form 1433, Letter of Audit Delegation, shall be used to delegate the audit function and to amend previous delegations. Distribute copies of the contract and NASA Form 1433 as follows:
(i) Audit office: One copy of the contract and three NASA Forms 1433.
(ii) Contractor: One NASA Form 1433.
(iii) Cognizant NASA fiscal or financial management office: One NASA Form 1433.
(2) When HHS is designated as the audit office, item 12 on NASA Form 1433 shall be marked "Not applicable."
(d) (1) 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. Audit reports are furnished to 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.
(2) 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 furnished directly to the contracting officer.
(3) Audits performed by the Audit Services Branch are normally conducted under DDP regulations.
1842.202-72 Delegations to security offices.
NASA's policies and procedures on security are set forth in NMI 1600.2, NASA Security Program. Contracting officers shall delegate responsibility for administering the Industrial Security Program [which has been designated as an administrative contracting officer (ACO) responsibility in Appendix C, Industrial Security Regulation, DOD 5220.22R, see also FAR 42.302(a)(20)] to DOD unless the contractor will perform the classified contract on a NASA installation or the classified work has been "carved-out." (A "carve-out" is defined in Section 1, paragraph 3, item f.1., of the DOD Industrial Security Manual for Safeguarding Classified Information, September 1987, DOD 5220.22M, as a classified contract issued in connection with an approved Special Access Program in which the Defense Investigative Service has been relieved of inspection responsibility in whole or in part.) The basis for DOD's performance of administrative contracting officer responsibility for the Industrial Security Program on NASA contracts is a NASA-DOD Agreement. The contracting officer shall specifically identify security functions delegated to DOD or to another NASA installation (see 1842.171) on NASA Form 1430A.
1842.203 Retention of contract administration.
The assignment of contract administration is optional for the contracts and situations listed below:
(a) Research and development study contracts not involving deliverable hardware or Government property in the hands of contractors.
(b) All contracts with delivery schedules of 90 days or less.
(c) Purchase orders having no Government source inspection requirements.
(d) Work performed at the installation awarding the contract.
(e) Contract work performed in the vicinity of the installation awarding the contract for which DOD contract administration services are not reasonably available.
18-42.270 Contracting officer technical representative (COTR) delegations.
(a) A contracting officer may appoint another Government employee to act as the contracting officer's authorized technical representative 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; the policies and procedures for COTRs also shall apply to alternate COTRs. 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. The contracting officer shall ensure that the duties and responsibilities delegated do not exceed the limitations at 18-1.670(b).
(b) COTRs shall be designated by name and position title (see the 18-1.670(b) prohibition against delegating COTR duties solely to a position rather than to a named individual). Each COTR appointment shall be in writing and shall clearly define the purpose and limitations of the COTR's authorities, duties and responsibilities. NASA Form 1634, Contracting Officer Technical Representative (COTR) Delegation, shall be used to appoint COTRs. The COTR delegation shall be signed by the cognizant contracting officer, or at any level above that contracting officer (see 18-1.670(b)), and shall state that the duties and responsibilities may not be redelegated by the COTR and that 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; alternates may act only during official absences of the COTR, such as leave, TDY or other special assignments. The delegated duties and responsibilities of the alternate may not exceed those of the COTR.
(c) A COTR delegation remains in effect throughout the life of the contract unless cancelled 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 cancelling and superseding the existing delegation.
(d) A COTR shall not be authorized to initiate procurement actions by use of purchase orders, or to place calls or delivery orders under indefinite-delivery contracts or basic ordering agreements, or in any way cause a change to the contract or increase the Government's financial obligations. A COTR shall not be authorized to award, agree to, or sign any contract or modification or in any way obligate the payment of money by the Government. The COTR is not authorized to issue technical direction unless the clause at 18-52.242-70, Technical Direction, prescribed in 18-42.7001, is included in the contract and the authorization is specifically listed in paragraph 3(m) of the COTR delegation letter (NASA Form 1634). However, delegations may be made to construction contract COTRs to sign emergency 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, on-site at construction sites, if sufficient funds have been previously certified to cover the emergency change. After issuing an emergency change order, the COTR shall notify the contracting officer as soon as possible, in person or telephonically, and subsequently provide a written determination supporting the need for the action.
(e) The contracting officer shall send the original and one copy of the COTR delegation letter to each COTR, who shall acknowledge receipt and accept the delegation by signing the original and returning it to the contracting officer. 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 contractor and to each cognizant contract administration office. Acknowledgement and distribution for terminations of COTR delegations and COTR delegations which revise authority, duties and responsibilities shall follow the same rules.
(f) The proposed COTR (and alternates) shall be trained in the duties, responsibilities, and authority of the role of the COTR. That mandatory training shall include, at a minimum, the following core topic areas: contracting authority; procurement integrity; contract modifications; surveillance plans; contracting for inherently governmental functions, personal services, and NASA policy on the acquisition of services; the Service Contract Act; the Anti-Deficiency 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 the NASA Form 1634. Contracting officers shall terminate COTR delegations of COTRs who have not met the above training requirements by April 1, 1995. If, however, 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, which may not be extended by more than six months. Temporary appointments must be so identified and clearly reflect the appointment expiration date. No technical direction may be issued by a COTR serving under a temporary appointment. If a COTR serving under a temporary appointment believes that technical direction should be issued to the contractor, the COTR shall so advise the contracting officer and provide such assistance regarding the proposed direction as the contracting officer may require.
1842.302 Contract administration functions.
The cognizant CAO shall perform the additional contract administration functions listed below:
(a) Determine billing rates and final indirect cost rates.
(b) Issue cure and show cause letters after approval of the NASA contracting officer.
(c) Monitor the contractor's system for control of overtime.
(d) Assure that overtime compensation is in accordance with the terms of the contract, or in the absence of contractual coverage, that any excepted overtime charged is reasonable and properly allocable.
(e) Negotiate changes to interim billing prices when authorized by the NASA contracting officer.
1842.302-70 Modified functions.
In connection with the functions listed at FAR 42.302(a)(11)(ii) and (iii), the following exception applies: for those contractors with whom advance agreements of the type discussed in FAR 31.205-18 are negotiated, the Government contracting officer responsible for the agreements shall have full authority for determinations related to CAS 420.
1842.705 Final indirect cost rates.
1842.705-70 NASA Policy.
(a) 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.
(b) 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).
(c) Final indirect cost rates are to be established in accordance with FAR 42.705 unless quick-closeout procedures are used, in which case FAR 42.708 and NFS 1842.708 are to be followed.
1842.708 Quick-closeout procedure.
1842.708-70 NASA policy.
The use of quick-closeout procedures is strongly encouraged for contracts that are physically complete, the amount of unsettled indirect costs applicable to any one contract does not exceed $500,000, and 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. The $2,000,000 contract limitation supersedes the 15 percent parameter of FAR 42.708(a)(2)(ii), which does not apply to NASA.
1842.708-71 Factors to be considered.
Factors to be considered in deciding whether quick closeout is appropriate, include:
(a) Whether the use of quick closeout will adversely affect the negotiation of final indirect cost rates in those cases where the responsibility for negotiating indirect cost rates has been delegated or falls under the cognizance of another agency.
(b) Prior experience with the contractor, for example, the amount of questioned and/or disallowed costs for prior fiscal years.
(c) Whether there are any outstanding Cost Accounting Standards or accounting system deficiencies that would have a bearing on the determination of direct costs and final indirect cost rates.
(d) The extent of the contractor's Government contracting experience.
(e) The number of years final indirect costs have not been settled.
(f) The amount of unaudited contractor claimed costs (direct and indirect) for the contract(s) being considered.
(g) The number and value of other NASA contracts with the contractor having unaudited costs for the same fiscal years.
(h) Whether audits will be performed and/or indirect cost rates finalized within a reasonable time. Audits are not to be requested if a determination is made to use quick closeout.
1842.708-72 Procedures.
After a decision is made that the use of quick closeout is appropriate, the contracting officer shall conduct the following:
(a) Seek a written agreement from the contractor to participate in the quick-closeout process under FAR 42.708 for the selected contract(s). Also, request 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.
(b) Notify the cognizant audit activity in writing regarding the decision to use quick closeout. Identify the contract(s) in question and request that they provide the contractor's indirect cost history covering a sufficient number of fiscal years to see the trend of claimed, audit questioned, and disallowed costs. Request this information from the contractor only when the cognizant audit activity is unable to provide the information. In all cases, request the cognizant audit activity to provide any information that could adversely impact the decision to use quick-closeout procedures. The quick-closeout process should not proceed without such a response.
(c) Review the contract(s) for indirect cost rate ceilings and any other contract limitations, as well as the rate history information obtained from the contractor or the cognizant audit activity, and develop a negotiation position.
(d) Based on an analysis of all the available information, final indirect costrates should be established using one of the following rates:
(1) The contract's ceiling indirect cost rates, if applicable, and if less than paragraphs (d)(2) through (6) of this section.
(2) The contractor's claimed actual rates adjusted based on the contractor's indirect cost history, if less than paragraphs (d)(3) through (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 (d)(5) or (6) of this section.
(5) The previous year's final rates.
(6) Final rates for another fiscal year closest to the period for which quick-closeout rates are being established.
(e) If an agreement is reached with the contractor, obtain a release of all claims and other applicable closing documents.
(f) 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.
(g) If agreement cannot be reached with the contractor, a determination shall be made as to whether a final Contracting Officer decision should be issued, or whether the closeout procedures specified in FAR 4.804 and NFS 1804.804 will be followed.
1842.801 Disallowance of Costs
(a) Following a prompt and careful review of the facts and circumstances leading the auditor to initiate the NASA Form 456, Notice of Contract Costs Suspended and/or Disapproved, and 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:
(1) Countersign the NASA Form 456 disapproving the costs.
(2) Countersign the NASA Form 456 suspending the costs.
(3) Issue a new NASA Form 456 suspending the costs rather than disapproving them pending resolution of the issues.
(4) Have the contractor issue a new voucher removing the costs in question from its claim and return the NASA Form 456 to the auditor unsigned.
(5) Return the unsigned NASA Form 456 to the auditor with a detailed explanation of why the suspension or disapproval is not being countersigned, and process the contractor's claim for payment.
(b) 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 on the NASA Form 456 with the other affected contracting officers, including those of other federal agencies, listed in the notice.
(c) The NASA contracting officer, when in agreement with the NASA Form 456 initiated by the auditor, shall assign a notice number and shall countersign the form. An original and three copies (which includes two acknowledgement copies, one each for return to the contracting officer and the auditor) of the form 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 (see 1842.7101(c)) on which the deduction for the suspension/disapproval is made, and one copy shall be sent to the auditor.
(d) The total amount suspended or disapproved, as shown on the NASA Form 456, shall be inserted in the Differences block of the Standard Form 1034 and 1034A, citing the applicable NASA Form 456.
(e) (1) 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.
(2) 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 set-off 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.
1842.1004 Location of negotiators in a central office.
Within NASA, the central office responsible for advance agreements is the Analysis Division (Code HC), Office of Procurement, NASA Headquarters.
1842.1008 Administrative appeals.
The NASA administrative appeals hearing group consists of the Associate Administrator for Procurement, who shall be chairperson, the Deputy Associate Administrator for Aeronautics and Space Technology, and the Deputy General Counsel.
1842.1200 Scope of subpart.
This subpart implements and supplements FAR Subpart 42.12 and prescribes policies and procedures for processing novation or change-of-name agreements initiated by either a NASA installation or by DOD on behalf of NASA.
1842.1202 Responsibility for executing agreements.
When none of the affected contracts has been assigned to an administrative contracting officer (see FAR 42.1202(a)(2)), the contracting officer shall require the contractor to provide the documentation enumerated in FAR 42.1204(c)(or, as appropriate, FAR 42.1205(a)) to the NASA installation with which it has the largest amount of unliquidated obligations. This installation shall be the "designated installation" for processing and executing novation agreements and change-of-name agreements with the contractor.
1842.1203 Processing agreements.
(a) The installation shall immediately notify the Director, Analysis Division (Code HC) of the request to execute a novation (successor-in-interest) or change-of-name agreement. The notification shall include (1) the names of the firms involved, (2) the name of the installation that will execute the agreement, and (3) the type of agreement.
(b) When the Standard Form 30 required by FAR 42.1203(f)(1) is prepared, a supplemental agreement number need not be obtained for contracts other than the one under which the supplemental agreement is written. For distribution purposes, the Standard Form 30 shall also include the names and addresses of the installations with contracts subject to the agreement.
(c) After execution of the supplemental agreement, the designated installation shall--
(1) Forward one authenticated copy to Code HC; and
(2) Advise each of the affected installations by letter of the consummation of the supplemental agreement, requesting that an administrative change be issued for each affected contract and enclosing a copy of the supplemental agreement.
(d) For each affected contract, the contracting officer shall prepare an administrative change acknowledging the successor-in-interest or the change in name. The administrative change shall receive the same distribution as the affected contract. It shall indicate the nature of the transaction and the result attained and shall cite the number of the contract with which the original relevant documents and supplemental agreement are filed.
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 covers the accomplishment of novation and change-of-name agreements by DOD on behalf of NASA.
(b) Code HS shall notify installations when DOD is processing a proposed novation agreement on behalf of NASA. Within 20 days after receiving it, the installation shall submit comments to Code HC for transmittal to DOD. With the concurrence of Code HS, an installation may execute a separate agreement with the contractor. In that event, Code HC shall notify DOD accordingly, and the installation shall process a separate agreement in accordance with FAR 42.1203.
(c) Code HC shall maintain copies of agreements executed by DOD on behalf of NASA.
1842.1405 Discrepancies incident to shipment of supplies.
In addition to following the applicable regulations and procedures referenced at FAR 42.1405(a), NASA personnel shall report discrepancies and adjust claims for loss of and damage to Government property in transit as prescribed in NHB 6200.1, NASA Transportation and General Traffic Management.
1842.7001 Technical direction.
The contracting officer shall insert the clause at 1852.242-70, Technical Direction, in cost-reimbursement solicitations and contracts if (1) technical direction as defined in the clause (which includes the Government's approving approaches and solutions of the contractor and shifting emphasis among work areas or tasks) is appropriate to accomplish the contract requirements effectively, (2) the statement of work is conducive to technical direction by the Government, and (3) technical direction is to be in writing. Identify this duty in subparagraph 3(m), "Other duties as follows" of NASA Form 1634 (see 18 42.270). This clause addresses COTR responsibilities that are in addition to those discussed in subparagraphs 3(a)-(1) of the COTR delegation and is not intended to be followed in fulfilling those other responsibilities. The clause is not authorized for use with institutions of higher education and other non-profit organizations.
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 cost-reimbursement solicitations and contracts where a contractor may travel outside of the United States and it is appropriate to require Government approval of the travel.
1842.7003 Observance of legal holidays.
(a) The contracting officer shall insert the clause at 1852.242-72, Observance of Legal Holidays, in contracts when notification to the contractor of Government holidays would be useful in administering the contract.
(b) The clause shall be used with its Alternate I in cost-reimbursement contracts when work will be performed at a NASA installation and 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 (1) Alternate I is used, (2) work will be performed at a NASA installation, and (3) it is desired that administrative leave be granted contractor personnel in special circumstances, such as inclement weather or potentially hazardous conditions.
1842.7101 Processing of vouchers.
(a) Under the authority of FAR 42.803, NASA has designated the contract auditor as the contracting officer's representative for (1) promptly examining reimbursement vouchers received directly from contractors, (2) promptly transmitting vouchers approved for provisional payment to the cognizant fiscal or financial management officer, and (3) regarding costs claimed, but not considered allowable, preparing and sending to the cognizant contracting officer NASA Form 456, Notice of Contract Costs Suspended and/or Disapproved. Normally, the NASA Form 456 is initiated by the auditor; however, the contracting officer also may initiate it or direct its initiation. In accordance with any instructions received from the contracting officer, the contract auditor shall promptly examine and approve (but see paragraph (b) of this section) separate fee vouchers and fee portions of vouchers for provisional payment under the contract. After examination, the auditor shall forward completion vouchers to the contracting officer for approval and transmittal to the cognizant fiscal or financial management officer.
(b) When the audit functions are delegated, special instructions may be issued to the contract auditor to --
(1) Require submission of separate vouchers for reimbursable costs and for payment of earned fee; and/or
(2) Reserve to the contracting officer approval of separate fee vouchers and all vouchers submitted by contractors performing at a NASA installation.
(c) Unless otherwise notified, the contractor shall be required to submit public vouchers to the auditor as follows:
(1) One original Standard Form 1034, Standard Form 1035, or equivalent contractor's attachment shall be submitted.
(2) Seven copies of Standard Form 1034A, Standard Form 1035A, or equivalent contractor's attachment shall be submitted.
(3) The contractor shall mark Standard Form 1034A copies 1, 2, 3, 4, and such other copies as may be ected by the contracting officer by inserting in the memorandum block names and addresses as follows:
(i) Copy 1, NASA contracting officer.
(ii) Copy 2, cognizant audit office.
(iii) Copy 3, Contractor.
(iv) Copy 4, Contract administration office.
(v) Copy 5, project management office (when required by the NASA contracting officer).
(4) The auditor shall retain an unpaid copy of the voucher.
(5) When a voucher 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.
(d) When necessary, the contracting officer should consult with the auditor or the financial management officer concerning preparation, examination, and payment of vouchers. Functions to be performed by auditors and financial management and fiscal office personnel during the examination of vouchers are in FMM 9630.
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
Contract Period of Value/Scope Performance 533M 533Q 533P $500K up to 1 year or Required Optional Optional $1M/All more $1,000,000 and Less than 1 Required Optional Optional greater/All year $1,000,000 and 1 year or Required Required Optional greater/All more $25,000,000 and 1 year or Required Required Required greater/supply more 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.
AUDIT TRACKING
AND RESOLUTION
1842.7301 NASA external audit followup system.
(a) This section implements OMB Circular No. A-50, NASA Management Instruction (NMI) 9970.1A, Audit Followup, and NASA Audit Followup 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 followup system tracks all contract and OMB Circular A-128 or A-133 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 at 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 Followup Summary Sheet. The use of this form by DCAA and NASA is covered in Chapter 6 of the NASA Audit Followup 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 Followup Handbook identifies which contract audit reports are reportable semiannually to 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 Followup 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. 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, the cognizant agency is either assigned pursuant to OMB Circular A-88, "Indirect Cost Rates, Audit, and Audit Followup at Educational Institutions," or if not formally assigned, it is based on which Federal agency provided the largest amount of funds for the audited period. In such cases where NASA is the cognizant Federal agency, audit resolution and disposition is the responsibility of the procurement officer for the "cognizant field installation," i.e., the field installation having the largest total award dollar amount for the audited period. A copy of the memorandum dispositioning 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.