1816.202 Firm-fixed-price contracts.
1816.202-70 NASA contract clause.
The contracting officer shall insert the clause at 1852.216-78, Firm-Fixed-Price, in firm-fixed-price solicitations and contracts. Insert the appropriate amount in the resulting contract.
1816.203 Fixed-price contracts with economic price adjustment.
1816.203-4 Contract clauses.
(a) In addition to the approval requirements in the prescriptions at FAR 52.216-2, -3 and -4, the contracting officer shall coordinate with the installation's Financial Management Officer before exceeding the ten-percent limit in paragraph (c)(1) of the clauses at FAR 52.216-2, -3, and -4.
(b) This paragraph (b) applies to adjustments based on cost indexes of labor or material.
(1) All price adjustment clauses using cost indexes require advance approval by the Associate Administrator for Procurement. Requests for approval shall be submitted to the Office of Procurement, NASA Headquarters (Code HC).
(2) The factors in paragraphs (b)(2)(i) through (x) of this section should be considered in preparing any price adjustment clause in situations meeting the criteria of FAR 16.203-4(d):
(i) The clause should not be overly complex.
(ii) The clause shall provide for a ceiling for adjustment if a floor is included in the clause.
(iii) The clause shall cover only those elements of cost that are subject to unpredictable economic fluctuation.
(iv) (A) The clause must positively and accurately identify the index(es) upon which adjustments will be based and must provide an alternative in the event publication of the designated index is discontinued. The alternative might include the substitution of another index, if the time remaining would justify it and an appropriate index is reasonably available, or some other method for repricing the remaining portion of the work.
(B) There should normally be no need to make an adjustment if computation of the identified index is altered; however, provision may be made to adjust the economic fluctuation computations if the method of computing the index is so substantially altered as to negate the original intent of the parties. When an index to be used is subject to revision (e.g., the Bureau of Labor Statistics Producer Price Indexes), the price adjustment clause shall further specify that any adjustment shall be based upon the applicable revised index.
(v) An index should be structured to encompass a large sample of relevant items, yet bear a logical relationship to the type of contract costs measured. The basis of the index should not be so large and diverse that it is significantly affected by fluctuations not relevant to contract performance. However, it must be broad enough to ensure that the effect created by any single company, including the anticipated contractor, is minimal.
(vi) The clause must establish and properly identify a contract cost base against which an index, established in the contract, will be applied.
(vii) The clause should provide for definite times or events for price adjustments from the point when economic uncertainty commences. It should not provide for adjustment beyond the original contract performance period. Adjustments should be frequent enough to afford the contractor appropriate economic relief without creating a burdensome administrative effort. The adjustment frequency should normally range from six to twelve months.
(viii) The expenditure profile for both labor and material should be based on a predetermined rate of expenditure (expressed as the percentage of material or labor use as related to total contract price) in lieu of actual cost incurred. If the clause is to be used in a competitive procurement, the labor and material allocations, with regard to both mix and percentage rate of expenditure, shall be determined by the contracting officer in a manner approximating, as nearly as possible, the average-expenditure profile of all companies likely to make offers. If the clause is to be used in a noncompetitive procurement, the labor and material allocations determined by the contracting officer may be subject to negotiation and agreement.
(ix) (A) The clause should state the percentage of the contract price or the amount subject to adjustment. Adjustments shall not be applied to profit.
(B) Additionally, the labor and material portions of the contract must be examined to exclude areas not requiring adjustment. It may not be necessary, for example, to include all subcontracting, because some subcontract efforts could be completed during the early life of the contract and/or be firm-fixed-price. Certain areas of overhead should be excluded from escalation protection; e.g., depreciation charges, prepaid insurance
costs, rental costs, leases, certain taxes, and utility charges. Economic fluctuation protection should not apply to that portion of labor for the period for which a definitive union agreement exists or for which Department of Labor wage determinations are known.
(C) That portion of the contract determined to be proper for economic fluctuation protection shall then be allocated to specific time periods (e.g., semiannually) on the basis of the expenditure profile.
(x) The economic price adjustment clause should provide that once the labor and material allocations have been established, they remain fixed through the life of the contract. Subsequent modifications which affect contract price are generally not subject to economic price adjustment. If the contracting officer determines that such an action should be subject to economic price adjustment, a new economic price adjustment clause should be incorporated into the contract. Such a clause would require prior approvals in accordance with 1816.203-4(b)(1).
(c) When economic price adjustment clauses are included in contracts that do not require submission of cost or pricing data (see FAR 15.804-2 and -3), the contracting officer shall obtain adequate information to establish the contract cost base from which adjustments will be made. In addition, the contracting officer may require verification of this information to the extent necessary to permit reliance upon it as reasonable.
(d) The contracting officer shall insert the provision at 1852.216-72, Evaluation of Offers Subject to Economic Price Adjustment, in all negotiated, fixed-price solicitations that contain an economic price adjustment clause.
1816.207 Firm-fixed-price, level-of-effort term contracts.
1816.207-70 NASA contract clause.
(a) The contracting officer shall insert a clause substantially as stated at 1852.216-79, Level-of-Effort (Fixed-Price), in fixed-price term solicitations and contracts. Insert the minimum direct labor hours, the labor categories and
associated direct labor hours, and a formula or rate(s) (dollar amount(s)) by which the fixed price may be reduced if the minimum direct labor hours have not been provided. The labor category information may be simplified (e.g., "engineering" or "drafting") for smaller, less complex procurements.
(b) For task ordering procedures for firm-fixed-price, level-of-effort term contracts, see 1816.307-70(d).
1816.303 Cost-sharing contracts.
(a) When cost sharing is applicable.
(1) Except as provided for in paragraph (b) of this section, cost sharing by non-Federal organizations is mandatory in any contract for basic or applied research resulting from an unsolicited proposal.
(2) (i) Cost sharing by non-Federal organizations may be accepted in any contract when offered by a performing organization.
(ii) Cost sharing by educational institutions may be accepted, when voluntarily offered, if the institution is aware of NASA's policy that the amount of cost sharing is not a factor in determining whether to support a given proposal.
(b) When cost sharing is not applicable.
(1) Cost sharing is not applicable to contracts for basic or applied research resulting from an unsolicited proposal when (i) the offeror certifies in writing to the contracting officer that it has no commercial, production, educational, or service activities on which to use the results of the research, and no means of recovering any cost sharing on such projects, and (ii) the contracting officer determines that cost sharing does not apply and documents the file with a memorandum. In these situations, where there is no measurable potential gain to the performing organization, mutuality of interest does not exist and it would not be equitable for the Government to require cost sharing.
(2) (i) NASA's normal policy is to fully reimburse universities for research performed on its behalf. However, to establish on a case-by-case basis that there is no clear potential for significant future benefit or measurable gain to the university, and that cost sharing is not appropriate, the contracting officer shall document the file with a determination substantively the same as that required by 1816.303(b)(1) of this section. The determination shall identify the information on which it is based. If the determination cannot reasonably be made from the available information, the contracting officer shall request the university to certify as in 1816.303(b)(1) of this section. Blanket procedures shall not be established for routinely obtaining certifications from all universities.
(ii) NASA does not request inclusion of cost-sharing information in proposals from educational institutions. If cost sharing is determined applicable, a cost-sharing offer will be requested during negotiations.
(c) Amount of cost sharing.
(1) Educational institutions and affiliated not-for-profit institutions. Cost sharing, if used for educational institutions and affiliated not-for-profit institutions, normally varies from one percent to as much as five percent of the project's cost.
(2) Other performing organizations.
(i) Cost sharing for organizations other than those in paragraph (1) of this section may be any percentage of the research cost. Mutuality of interest in the results of the work being performed is of primary significance in assessing the appropriateness of any particular level of cost sharing.
(ii) Factors that should be considered in determining mutuality of interest include --
(A) The potential of the contractor to recover its contribution from non-Federal sources;
(B) The extent to which the particular area of research requires special stimulus in the national interest; and
(C) The extent to which a research effort or result is likely to enhance the contractor's capability, expertise, or competitive position.
(d) Implementation.
(1) Payment of fee or profit. No fee or profit may be paid to a cost-sharing contractor, and only an agreed-to portion of allowable costs shall be reimbursed.
(2) Method of cost sharing. Cost sharing shall be accomplished by a contribution of part or all of one or more elements of the allowable cost of the work being performed. It normally shall be expressed as a stated minimum percentage of the total allowable costs of the project. Costs so contributed may not be charged to the Government under any other grant or contract (including allocation to other grants or contracts as part of an independent research and development program).
(3) Documentation. Contract files shall contain appropriate documentation of the reasons for cost sharing and support for the amount or percentage of cost sharing agreed upon. For educational institutions, the reasons for any cost sharing exceeding (i) five percent or (ii) the amount originally offered shall be documented.
1816.307 Contract clauses.
(a) In solicitations and contracts containing the clause at FAR 52.216-8, Fixed Fee, or FAR 52.216-10, Incentive Fee, the Schedule shall include appropriate terms, if any, for provisional billing against fee.
(b) In paragraph (h)(2)(ii)(B) of the Allowable Cost and Payment clause at FAR 52.216-7, the period of years may be increased to correspond with any statutory period of limitation applicable to claims of third parties against the contractor; provided, that a corresponding increase is made in the period for retention of records required in paragraph (d) of the clause at FAR 52.215-1, Examination of Records by Comptroller General.
(c) In paragraph (g)(2)(ii) of the Allowable Cost and Payment--Facilities clause at FAR 52.216-13, the period of years may be increased to correspond with any statutory period of limitation applicable to claims of third parties against the contractor; provided, that a corresponding increase is made in the period for retention of records required in paragraph (d) of the clause at FAR 52.215-1, Examination of Records by Comptroller General.
1816.307-70 NASA contract clauses.
(a) The contracting officer shall insert the clause at 1852.216-73, Estimated Cost and Cost Sharing, in each contract in which costs are shared by the contractor pursuant to 1816.303.
(b) The contracting officer shall insert the clause, or one substantially like the clause, at 1852.216-74, Estimated Cost and Fixed Fee, in cost-plus-fixed-fee contracts.
(c) The contracting officer may insert the clause at 1852.216-75, Payment of Fixed Fee, in cost-plus-fixed-fee contracts. Modifications to the clause are authorized.
(d) (1) The contracting officer may insert a clause substantially as stated at 1852.216-80, Task Ordering Procedure, in level-of-effort term solicitations and contracts where (i) the statement of work is general in nature and (ii) task orders are needed to further define and clarify the effort required. This clause is applicable to both fixed-price and cost-reimbursement type term contracts.
(2) The contracting officer may issue task orders which tailor the list of information which the contractor is directed to provide in paragraph (b)(2) of the clause at 1852.216-80.
(e) The contracting officer shall insert the clause at 1852.216-81, Estimated Cost, in cost-no-fee contracts that are not cost sharing or facilities contracts.
(f) (1) The contracting officer shall insert a clause substantially as stated at 1852.216-82, Level-of-Effort (Cost), in term cost reimbursement type solicitations and contracts. Insert the required information in the blanks provided.
(2) Prior to reducing the contract fee in accordance with paragraph (d) of clause 1852.216-82, the contracting officer shall analyze the information, if any, provided by the contractor. The analysis and its bearing on the amount of the reduction shall be documented in the contract file.
(g) The contracting officer may insert a clause substantially as stated at 1852.216-87, Submission of Vouchers for Payment, in cost-reimbursement solicitations and contracts.
(h) The contracting officer shall insert the clause at 1852.216-89 in solicitations and contracts in which the clause at (FAR) 48 CFR 52.216-7 is included and to which (FAR) 48 CFR Subpart 31.2 is applicable.
1816.370 Forms.
Contractors shall use NASA Form 778, Contractor's Release; NASA Form 779, Assignee's Release; NASA Form 780, Contractor's Assignment of Refunds, Rebates, Credits, and Other Amounts, to fulfill the assignment and release requirements of the clauses prescribed at FAR 16.307(a) and (g) (i.e., the clauses at FAR 52.216-7, Allowable Cost and Payment, and 52.216-13, Allowable Cost and Payment---Facilities). Computer-generated forms may be accepted provided they comply with FAR clause 52.253-1.
1816.404 Cost-reimbursement incentive contracts.
1816.404-2 Cost-plus-award-fee (CPAF) contracts.
1816.404-270 Approval of CPAF contracts.
(a) Use of a cost-plus-award-fee (CPAF) contract shall be approved in writing by the procurement officer. The procurement officer's approval shall include a discussion of the other types of contracts considered and shall indicate why a CPAF contract is the appropriate choice.
(b) Normally, CPAF contracts are only used on contracts with a total estimated cost and fee greater than $1 million per year. The procurement officer may authorize use of a CPAF contract for lower-valued acquisitions, but should do so only in exceptional situations, such as contract requirements having direct health or safety impacts, where the judgmental assessment of the quality of contractor performance is critical.
1816.404-271 Base fee.
(a) A base fee shall not be used on CPAF service contracts for which the periodic award fee evaluations are final (1816.404-273(a)). Base fee normally shall not be used in other contracts, such as study, design, or hardware. However, the procurement officer may authorize the use of a base fee for these contracts by making a written
determination that such use is in the best interest of the Government. In such cases, a base fee of no more than 3 percent of the estimated contract cost may be included in the contract.
(b) When a base fee is authorized for use in a CPAF contract, it shall be paid only if the final award fee evaluation is "satisfactory" or better. (See 1816.404-273 and 1816.404-275 for information on final evaluations and evaluation rating categories, respectively.) Pending final evaluation, the base fee may be paid during the life of the contract at defined intervals on a provisional basis. If the final award fee evaluation is "poor/unsatisfactory," all provisional base fee payments shall be refunded to the Government.
1816.404-272 Award fee evaluation periods.
(a) Award fee evaluation periods should be at least 6 months in length. When appropriate, the procurement officer may authorize shorter evaluation periods after ensuring that the additional administrative costs associated with the shorter periods are balanced by benefits accruing to the Government. In some cases, such as developmental contracts with defined performance milestones (e.g., Preliminary Design Review, Critical Design Review, initial system test), the procurement officer may authorize evaluation periods at conclusion of the milestones rather than calendar dates, or in combination with calendar dates. In no case, however, shall an evaluation period be longer than 12 months.
(b) A portion of the total available award fee on a CPAF contract shall be allocated to each of the evaluation periods. This allocation may result in either an equal or unequal distribution of fee among the
evaluation periods. The contracting officer should consider the nature of each contract and the incentive effects of fee distribution in determining the appropriate allocation structure. Allocation of fee on contracts for which periodic award fee evaluations are interim is for provisional fee payment purposes only. See 1816.404-273(b) and (c).
1816.404-273 Award fee evaluations.
(a) Award fee evaluations are either interim or final. On service contracts where the contract deliverable is the performance of the service over any given time period, contractor performance is definitively measurable at each evaluation period. In these cases, all evaluations are final, and the contractor keeps the fee earned in any period regardless of the evaluations of subsequent periods. Unearned award fee in any given period in a service contract is lost and shall not be carried forward, or "rolled-over," into subsequent periods.
(b) On other contracts such as study, design, or hardware, where the true quality of contractor performance cannot be measured until the end of the contract, only the last evaluation is final. At that point, the total contract award fee pool is available, and the contractor's total performance is evaluated against the award fee plan to determine total earned award fee. Interim evaluations are also done to monitor performance prior to contract completion and provide feedback to the contractor on the Government's assessment of the quality of its performance. Interim evaluations are also used to establish the basis for making provisional award fee payments.
(c) Provisional award fee payments may be included in the contract and should be negotiated on a case-by-case basis. For service contracts, provisional payments may be made in amounts up to 80 percent of the current period's available amount. For other contracts, the amount of the provisional award fee payment is determined by applying the lesser of the interim evaluation score (see 1816.404-275) or 80 percent of the fee allocated to that period. The provisional award fee payments are superseded by the fee determination made in the final evaluation at contract completion. 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 provisional fee payment.
(d) The Fee Determination Official's rating for both interim and final evaluations will be provided to the contractor within 45 calendar days of the end of the period being evaluated. Any fee, provisional or final, due the contractor will be paid no later than 60 calendar days after the end of the period being evaluated.
1816.404-274 Award fee evaluation factors.
(a) Evaluation factors will be developed by the contracting officer based upon the characteristics of an individual procurement. Normally, technical and schedule considerations will be included in all CPAF contracts as evaluation factors.
(b) Cost control shall be included as an evaluation factor in all CPAF contracts. When explicit evaluation factor weightings are used, cost control shall be no less than 25 percent of the total fee, excluding any base fee. When explicit weightings are not used (which should only occur on service contracts), cost control shall be a substantial factor in the performance evaluation plan. The predominant consideration of the cost control evaluation should be an objective measurement of the contractor's performance against the negotiated estimated cost of the contract. This estimated cost may include the value of undefinitized change orders when appropriate.
(c) In rare circumstances, contract costs may increase for reasons outside the contractor's control and for which the contractor is not entitled to an equitable adjustment. One example is a weather-related launch delay on a launch support contract. The Government shall take such situations into consideration when evaluating contractor cost control.
(d) Emphasis on cost control should be balanced against other performance requirement objectives. The contractor should not be incentivized to pursue cost control to the point that overall performance is significantly degraded. For example, incentivizing an underrun that results in direct negative impacts on technical performance, safety, or other critical contract objectives is both undesirable and counterproductive. Evaluation of cost control shall conform to the following guidelines:
(1) Normally, the contractor should be given a score of 0 for cost control when there is a significant overrun within its control. However, the contractor may receive higher scores for cost control if the overrun is insignificant. Scores should decrease sharply as the size of the overrun increases. In any evaluation of contractor overrun performance, the Government shall consider the reasons for the overrun and assess the extent and effectiveness of the contractor's efforts to control or mitigate the overrun.
(2) The contractor should normally be rewarded for an underrun within its control, up to the maximum score allocated for cost control, provided the average numerical rating for all other award fee evaluation factors is 81 or greater. See 1816.404-275 for information on numerical scoring. An underrun shall be rewarded as if the contractor has met the estimated cost of the contract (see 1816.404-274(d)(3)) when the average numerical rating for all other factors is less than 81 but greater than 60.
(3) The contractor should be rewarded for meeting the estimated cost of the contract, but not to the maximum score allocated for cost control, to the degree that the contractor has prudently managed costs while meeting contract requirements. No award shall be given in this circumstance unless the average numerical rating for all other award fee evaluation factors is 61 or greater.
(e) Only the award fee performance evaluation factors set forth in the award fee plan shall be used to determine award fee scores. The Government may unilaterally modify the award fee performance evaluation factors and performance evaluation areas applicable to the evaluation period. The contracting officer shall notify the contractor in writing of any such changes prior to the start of the relevant evaluation period.
1816.404-275 Award fee evaluation scoring.
(a) A scoring system of 0-100 shall be used for all award fee ratings. Award fee earned is determined by applying the numerical score to the award fee pool. For example, a score of 85 yields an award fee of 85 percent of the award fee pool. No award fee shall be paid unless the total score is 61 or greater.
(b) The following standard adjectival ratings and the associated numerical scores shall be used on all award fee contracts.
(1) Excellent (100-91): Of exceptional merit; exemplary performance in a timely, efficient, and economical manner; very minor (if any) deficiencies with no adverse effect on overall performance.
(2) Very good (90-81): Very effective performance, fully responsive to contract requirements accomplished in a timely, efficient, and economical manner for the most part; only minor deficiencies.
(3) Good (80-71): Effective performance; fully responsive to contract requirements; reportable deficiencies, but with little identifiable effect on overall performance.
(4) Satisfactory (70-61): Meets or slightly exceeds minimum acceptable standards; adequate results; reportable deficiencies with identifiable, but not substantial, effects on overall performance.
(5) Poor/Unsatisfactory (60 and below): Does not meet minimum acceptable standards in one or more areas; remedial action required in one or more areas; deficiencies in one or more areas which adversely affect overall performance.
(c) As a benchmark for evaluation, in order to be rated "Excellent," the contractor must be under cost, on or ahead of schedule, and have provided excellent technical performance.
(d) A scoring system appropriate for the circumstances of the individual contract requirement should be developed. Weighted scoring is recommended. In this system, each evaluation factor (e.g., technical, schedule, cost control) is assigned a specific percentage weighting with the cumulative weightings of all factors totalling 100. During the award fee evaluation, each factor is scored from 0-100 according to ratings defined in 1816.404-275(b). The numerical score for each factor is then multiplied by the weighting for that factor to determine the weighted score. For example, if the technical factor has a weighting of 60 percent and the numerical score for that factor is 80, the weighted technical score is 48 (80 x 60%). The weighted scores for each evaluation factor are then added to determine the total award fee score.
1816.404-276 Performance incentives on CPAF hardware contracts.
(a) A performance incentive shall be included in all CPAF contracts where the primary deliverable(s) is (are) hardware and where total estimated cost and fee is greater than $25 million. Any exception to this requirement shall be approved in writing by the Center Director. Performance incentives may be included in CPAF hardware contracts valued under $25 million at the discretion of the procurement officer. Performance incentives, which are objective and measure hardware performance after delivery and acceptance, are separate from award fee, which is subjective and measures contractor performance. The final award fee rating is final and cannot be retroactively changed.
(b) When a performance incentive is used, it shall be structured to be both positive and negative based on hardware performance after delivery and acceptance. In doing so, the contract shall establish a standard level of performance based on the salient hardware performance requirement. This standard performance level is normally the contract's minimum performance requirement. No incentive amount is earned at this standard performance level. Discrete units of measurement based on the same performance parameter shall be identified for performance both above and below the standard. Specific incentive amounts shall be associated with each performance level from maximum beneficial performance (maximum positive incentive) to minimal beneficial performance or total failure (maximum negative incentive) in accordance with 1816.404-276(g)(3). The relationship between any given incentive, both positive and negative, and its associated unit of measurement should reflect the value to the Government of that level of hardware performance. The contractor should not be rewarded for above-standard performance levels that are of no benefit to the Government.
(c) The final calculation of the positive or negative performance incentive shall be done when performance, as defined in the contract, ceases or when the maximum positive incentive is reached. When the performance is below the standard established in the contract, the Government shall calculate the amount due and the contractor shall pay the Government that amount. When performance exceeds the standard, the contractor may request payment of the incentive amount associated with a given level of performance, provided that such payments shall not be more frequent than monthly. When performance ceases or when the maximum positive incentive is reached, the Government shall calculate the final performance incentive earned and unpaid and promptly remit it to the contractor. The exclusion at FAR 16.405(e)(3) does not apply to decisions made as to the amount(s) of positive or negative incentive.
(d) One example of how a performance incentive would work is on a contract requiring delivery of a spacecraft. In this case, the performance incentive unit of measurement could be useful months in orbit. If 12 months is the expected performance level, the 12th month could be identified as standard performance for which no incentive is earned. If 24 months is the maximum useful life for the spacecraft relative to the technical requirements, the 24th month could be identified as the maximum performance level at which the contractor would earn the maximum positive incentive. Interim measures of spacecraft life from 12 to 24 months would then be identified with fees from $0 to the maximum positive incentive. The amounts associated with these interim measures should correspond to the relative value to the Government of each additional month in orbit. A similar scale would be established for the negative incentive ranging from the 12th month for standard performance, $0, to total and immediate system failure at the start of performance, the maximum negative incentive.
(e) When the deliverable hardware lends itself to multiple, meaningful measures of performance, multiple performance incentives may be established. In addition, when the contract requires the sequential delivery of several hardware items (e.g., multiple satellites), separate performance incentive structures may be established to parallel the sequential delivery and use of the deliverables. In either case, the amounts of the maximum performance incentives and the total potential award fee, including any base fee, shall be in accordance with the structure and limitations specified in 1816.404-276(g).
(f) The definitions of standard performance, maximum positive and negative performance, and the units of measurement may be negotiated and will vary from contract to contract. Care must be taken, however, to ensure that the performance incentive structure is both reflective of the value to the Government of the various performance levels and a meaningful incentive to the contractor.
(g) In determining the value of the maximum performance incentive available under the contract, the contracting officer shall follow the following rules.
(1) The sum of the total potential award fee (including any base fee) plus the maximum positive performance incentive may not exceed the limitations in FAR 15.903(d).
(2) The individual values of the maximum positive performance incentive and the total potential award fee (including any base fee) shall each be at least one-third of the total potential contract fee. The remaining one-third of the total potential contract fee may be divided between award fee and the maximum performance incentive at the discretion of the contracting officer.
(3) The maximum negative performance incentive for research and development hardware (e.g., the first and second units) shall be equal in amount to the total earned award fee (including any base fee). The maximum negative performance incentives for production hardware (e.g., the third and all subsequent units of any hardware items) shall be equal in amount to the total potential award fee (including any base fee). Where one contract contains both cases described above, any base fee shall be allocated reasonably among the items.
1816.405 Contract clauses.
1816.405-70 NASA contract clauses.
(a) As authorized by FAR 16.405(e), the contracting officer shall insert the clause at 1852.216-76, Award Fee for Service Contracts, in solicitations and contracts when a cost-plus-award-fee contract is contemplated and the contract deliverable is the performance of a service. When provisional award fee payments are authorized, use Alternate I.
(b) As authorized by FAR 16.405(e), the contracting officer shall insert the clause at 1852.216-77, Award Fee for Non- Service Contracts, in solicitations and contracts when a cost-plus-award-fee contract is contemplated and the contract deliverables are a study, design, hardware or other end items for which total contractor performance cannot be measured until the end of the contract.
(c) The contracting officer may insert a clause substantially as stated at 1852.216-83, Fixed Price Incentive, in fixed- price-incentive solicitations and contracts utilizing firm or successive targets. For items to be subject to incentive price revision, identify the target cost, target profit, target price, and ceiling price for each item.
(d) The contracting officer shall insert the clause at 1852.216-84, Estimated Cost and Incentive Fee, in cost-plus- incentive-fee solicitations and contracts.
(e) The contracting officer may insert the clause at 1852.216-85, Estimated Cost and Award Fee, in cost-plus-award- fee solicitations and contracts. When the contract includes performance incentives, use Alternate I.
(f) Except as provided at 1816.404-276, the contracting officer shall insert a clause substantially as stated at 1852.216- 88, Performance Incentive, when (1) a CPAF contract is contemplated, (2) the primary deliverable(s) is (are) hardware, and (3) total estimated cost and fee is greater than $25 million. A clause substantially as stated at 1852.216-88 may be included in lower dollar value CPAF hardware contracts with the approval of the Procurement Officer.
1816.603 Letter contracts.
1816.603-2 Application.
Although there is no set format for a letter contract, certain items must be included. In addition to the clauses prescribed in FAR 16.603-4, the following information, must be included in all letter contracts:
(a) Statement of work.
(b) Delivery or performance schedule and place(s) of inspection and acceptance.
(c) A statement that no profit or fee shall be paid under the letter contract except as provided in the Termination clause (see 1815.971).
1816.603-3 Limitations.
(a) Letter contracts having an estimated definitive contract amount below the dollar thresholds specified in 1807.7102. Authority to approve the issuance of such letter contracts is delegated to the procurement officer. Each request for approval shall include the following:
(1) Proposed contractor's name and address.
(2) Location where contract is to be performed.
(3) Contract number, including modification number, if applicable.
(4) Brief description of the work or services to be performed.
(5) Performance period or delivery schedule.
(6) Amount of letter contract.
(7) Performance period of letter contract.
(8) Estimated total amount of definitive contract.
(9) Type of definitive contract to be executed.
(10) A statement that the definitive contract will contain all required clauses or that deviations have been approved.
(11) A statement as to the necessity and advantage to the Government of the proposed letter contract.
(b) Letter contracts having an estimated definitive contract amount equal to or exceeding the dollar thresholds specified in 1807.7102.
(1) Requests for authority to issue such letter contracts shall be signed by the procurement officer and submitted to the Associate Administrator for Procurement (Code HS) for approval. They shall include the information cited in subparagraph (a)(1) of this section.
(2) Any modification of an undefinitized letter contract approved under (b)(1)of this section must be approved by the Associate Administrator for Procurement.
(3) Any modification of an undefinitized letter contract approved by a procurement officer in accordance with (a)(1) of this section that increases the estimated definitized contract amount to or above the dollar thresholds specified in 1807.7102 must have the prior approval of the Associate Administrator for Procurement.
1816.603-4 Contract clause.
1816.603-470 NASA contract clause.
The contracting officer may insert a clause substantially as stated at 1852.216-86, Settlement of Letter Contract, in contracts definitizing letter contracts.