PART 1842


(September 2015)





1842.101                                 Contract audit responsibilities.

1842.102                                 Assignment of contract audit services.

1842.102-70                            Review of administration and audit services.

1842.102-71                            Assignment of NASA personnel at contractor plants.

1842.102-72                            Assignment of Contract Audit Services for Canadian Firms.




1842.202                                 Assignment of contract administration.

1842.202-70                            Retention of contract administration.



1842.302                                 Contract administration functions.



1842.503                                 Postaward conferences.


SUBPART      1842.7             INDIRECT COST RATES

1842.705                                 Final indirect cost rates.

1842.705-1                              Contracting officer determination procedure.

1842.707                                 Cost-sharing rates and limitations on indirect cost rates.

1842.708                                 Quick-closeout procedure.

1842.708-70                            NASA Quick-closeout procedure.


SUBPART      1842.8             DISALLOWANCE OF COSTS

1842.803                                 Disallowing costs after incurrence.



1842.1203                               Processing agreements.

1842.1203-70                          DOD processing of novation and change-of-name agreements on

                                                  behalf of NASA.



                                                  AND GOVERNMENT DELAY OF WORK

1842.1305                               Contract clauses.



1842.1502                               Policy.

1842.1503                               Procedures.



1842.7001                               Denied Access to NASA Facilities.

1842.7002                               Travel outside of the United States.

1842.7003                               Emergency medical services and evacuation.



1842.7101                               Submission of vouchers.




1842.7201                               General.

1842.7202                               Contract clause.



1842.7301                               NASA external audit follow-up system.

1842.7302                               Reportable audit disposition documentation.


PART 1842



Subpart 1842.1--Contract Audit Services


1842.101  Contract audit responsibilities.


      (b)(i)  The Defense Contract Audit Agency (DCAA) has been designated as the DOD agency responsible for the performance of audit functions for NASA contracts, except those awarded to educational institutions for which other agencies have audit cognizance under OMB Circular No. A-133, those with Canadian contractors, and those for which NASA will perform audits.  Accordingly, DCAA may self-initiate contract required audits (i.e., incurred cost audits, contractor business reviews) on NASA’s behalf without obtaining an audit request.  For those contracts where DCAA has not received a Letter of Audit Delegation (NASA Form 1433), DCAA will provide a notice relative to the self-initiated contract required audit to .

            (ii)  Cross-servicing arrangements are the responsibility of the Headquarters Office of the Chief Financial Officer.  Contracting officers should direct questions to the Headquarters Office of Procurement, Contract and Grant Policy Division.


1842.102  Assignment of contract audit services.


1842.102-70  Review of administration and audit services.

NASA contracting activities shall assess their delegations to DOD semiannually to determine changes in delegation patterns that could result in significant changes in DOD manpower requirements or have other important impacts on DOD contract administration activities.  Events such as major program cutbacks or expansions, changes in locations of major programs, and sizable new acquisitions should be considered in the assessment.  Contracting activities shall advise the Headquarters Office of Procurement, Contract and Grant Policy Division when an assessment indicates a significant change in required DOD support.  DCAA will provide the Headquarters Office of Procurement, Contract and Grant Policy Division with a contract required audit plan annually.  DCAA will distribute a copy of all completed contract required audits that include NASA to


1842.102-71  Assignment of NASA personnel at contractor plants.


      (a)(1)  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 with the concurrence of the Assistant Administrator for Procurement, Program Operations Division.  The following supporting information shall be forwarded with the request to make the assignment:

                  (i)  A statement of the special circumstances that necessitate the assignment.

                  (ii)  The contract administration services to be performed.

                  (iii)  A summary of any discussions held with the cognizant contract administration organization.

                  (iv)  A staffing plan covering three years or such shorter period as may be appropriate.

            (2)  The provisions of this paragraph 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.


      (c)  When a NASA resident office, including any assigned technical personnel, 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 will be involved in any aspect of contract administration.


1842.102-72  Assignment of Contract Audit Services for Canadian Firms.


      (a)  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.


      (b)  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.


Subpart 1842.2--Contract Administration Services


1842.202  Assignment of contract administration.


      (b)  Special instructions.  The functions described in 42.302(b)(1) and the following subparagraphs of 42.302(a) are normally retained: (3), (10), (13), (14), (15), (17), (18), (19), (20), (21), (22), (23), (24), (29), (32), (43), (44), (45), (46), (48), (51), (56), (58), (59), (62), (63), (64), (65), (69), and  (70).  In addition to the instructions at FAR 42.202(a)(1) through (4), contracting officers shall—

            (i)  Send delegations to DOD contract administration offices in accordance with the instructions in the Federal Directory of Contract Administration Services Components;

            (ii)  At time of contract award, prepare and forward NASA Form 1430, Letter of Contract Administration Delegation, General, and appropriate appendices (NASA Form 1430A, 1430B, 1430C, and 1430D) to the contract administration office;

            (iii)  Forward NASA Form 1431, Letter of Acceptance of Contract Administration, with each NASA Form 1430 and appropriate appendices.  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; and

            (iv)  Use NASA Form 1433, Letter of Audit Delegation, to delegate the audit function and to amend previous delegations.  Distribute copies of the contract and NASA Form 1433 as follows:

                  (A)  Audit office:  One copy of the contract and NASA Form 1433. When the Department of Health and Human Services is designated as the audit office, item 12 on NASA Form 1433 shall be marked "Not applicable."

                  (B)  Contractor:  One NASA Form 1433.

                  (C)  Cognizant NASA fiscal or financial management office:  One NASA Form 1433;


1842.202-70  Retention of contract administration. 


      (a)  The assignment of contract administration is optional for the following contracts:

            (1)  Research and development study contracts not involving deliverable hardware or Government furnished property.

            (2)  Contracts with periods of performance of 90 days or less.

            (3)  Contracts with periods of performance of 91 to 180 days that do not include all of the following:

                  (i)  A small business subcontracting plan.

                  (ii)  Government-furnished property.

                  (iii)  Progress payments, if a fixed-price type contract.

            (4)  Purchase orders without Government source inspection requirements.

            (5)  Contracts requiring only on-site performance.

            (6)  Contracts requiring work in the vicinity of the awarding center where DOD contract administration services are not reasonably available.


      (b)  The determination to assign Quality Assurance, Property Administration or Plant Clearance for administration shall be made after review by the cognizant technical personnel.


Subpart 1842.3--Contract Administration Office Functions


1842.302  Contract administration functions.

In addition to the responsibilities listed in FAR 42.302(a), responsibility for reviewing earned value management system (EVMS) plans and verifying initial and continuing contractor compliance with NASA and DoD EVMS criteria and conformity with ANSI/EIA Standard 748, Industry Guidelines for EVMS, is normally delegated to DCMA.


Subpart 1842.5--Postaward Orientation


1842.503  Postaward conferences. 


      (1)  A postaward conference shall be held with representatives of the contract administration office when—

            (i) A contract is expected to exceed $10,000,000;

            (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, particularly risk management areas identified during program and acquisition planning, e.g., significant or unusual mission success, technical, cost, schedule, safety, security, occupational health, environmental protection, and export control risks.


      (2)  Procurement officer approval is required to waive a post-award conference for contracts meeting any of the criteria in paragraph (1) 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.


Subpart 1842.7--Indirect Cost Rates


1842.705  Final indirect cost rates.


1842.705-1  Contracting officer determination procedure.


      (b) Procedures.

            (3)(i) When NASA is not the cognizant Federal agency, NASA should participate with the cognizant contracting officer (or cognizant Federal agency official) in the final indirect cost rate determination procedure where the issues involved would have a significant financial impact on the agency.  The NASA participant should be a representative from that installation providing the preponderance of NASA funding.  If a determination is made that NASA’s participation is not warranted, that decision must be communicated to the cognizant contracting officer (or cognizant Federal agency official).

                  (ii)  When NASA is the cognizant Federal agency, settlement of indirect costs should be conducted by the cognizant NASA contracting officer (normally from the installation providing the preponderance of NASA funding).


1842.707  Cost-sharing rates and limitations on indirect rates.


      (a)  The AA for Procurement is the approval authority for use of an indirect rate ceiling provision in a solicitation or contract.  Requests for approval shall be submitted through the Headquarters Office of Procurement, Program Operations Division.  Such requests shall be constructed in the form of a Determination & Finding (D&F) which shall, at a minimum, contain a copy of the proposed indirect rate ceiling provision, a justification as to why such a provision is necessary, and the associated benefits to the Government.  The Program Operations Division analyst shall coordinate all indirect rate ceiling approval requests with Headquarters Legal, the Cognizant Administrative Contracting Officer, and the cognizant Contract and Grant Policy Division analyst.


      (b)(1)  Indirect rate ceilings should only be used in those situations described in FAR 42.707(b)(1)(i) and (ii).  On competitive procurements, if the situation cited in FAR 42.707(b)(1)(iii) arises during the cost realism evaluation, use of an indirect rate ceiling provision should be proposed as part of the source selection presentation and the above approval procedures initiated at that time.


      (c)  All indirect rate ceiling provisions must address, at a minimum, the indirect rates being capped; the procedures for possible adjustment of ceiling rates if certain circumstances warrant such adjustment; and the elements identified in FAR 42.707(c).


1842.708  Quick-closeout procedure.


      (a)(2)(ii)  The 10 percent parameter does not apply to NASA contracts.


1842.708-70  NASA Quick-closeout procedures.

After a decision is made that the use of quick closeout is appropriate, the contracting officer shall—


      (a)  Obtain a written agreement from the contractor to participate in the quick-closeout process under FAR 42.708 for the selected contract(s);


      (b)  Require 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;


      (c)  Notify the cognizant audit activity in writing, identify the contract(s), and request that—

            (1)  The contractor's indirect cost history covering a sufficient number of fiscal years to see the trend of claimed, audit questioned, and disallowed costs; and

            (2) Any other information that could impact the decision to use quick-closeout procedures.  Indirect cost histories should be requested from the contractor only when the cognizant audit activity is unable to provide the information.


      (d)  Review the contract(s) for indirect cost rate ceilings and any other contract limitations, as well as the rate history information.


      (e)  Establish final indirect cost rates using one of the following rates:

            (1)  The contract's ceiling indirect cost rates, if applicable, and if less than paragraphs (e)(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 (e)(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 (e)(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.


      (f)  If an agreement is reached with the contractor, obtain a release of all claims and other applicable closing documents.


      (g)  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.


Subpart 1842.8--Disallowance of Costs


1842.803  Disallowing costs after incurrence.


      (b)  Auditor receipt of vouchers.

            (1)  NASA has designated the contract auditor as the contracting officer's representative for—

                  (A)  Receiving vouchers from contractors;

                  (B)  Approving interim vouchers, that were selected using sampling methodologies for provisional payment and sending them to the disbursing office after a pre-payment review.  Interim vouchers not selected for a pre-payment review will be considered to be provisionally approved and will be sent directly to the disbursing office. All provisionally-approved interim vouchers are subject to a later audit of actual costs incurred; and

                  (C)  Reviewing completion/final vouchers and sending them to the designated contracting officer for approval.

            (2)(A)  When contract costs are questioned, the auditor shall prepare and send to the cognizant contracting officer NASA Form 456, Notice of Contract Costs Suspended and/or Disapproved.

                  (B)  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)  Assign a notice number and sign the NASA Form 456.

                        (2)  Issue a new NASA Form 456 suspending the costs rather than disapproving them pending resolution of the issues.

                        (3)  Return the unsigned NASA Form 456 to the auditor with a detailed explanation of why the suspension or disapproval is not being signed, and process the contractor's claim for payment.

                  (C)  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 of the NASA Form 456 with the other contracting officers, including those of other federal agencies, listed in the notice.

                  (D) An original and three copies (which includes two acknowledgment copies, one each for return to the contracting officer and the auditor) of the NASA Form 456 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 on which the deduction for the suspension/disapproval is made.

                  (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.


Subpart 1842.12--Novation and Change-of-Name Agreements


1842.1203  Processing agreements.


      (b)  The installation shall immediately notify the Headquarters Office of Procurement, Program Operations Division of the request to execute a novation (successor-in-interest) or change-of-name agreement.


      (h)  The contracting officer shall forward one copy of the agreement to the Program Operations Division.


1842.1203-70  DOD  processing of novation and change-of-name agreements on behalf of


      (a)  Copies of novation and change-of-name agreements executed by DOD on behalf of NASA are maintained by the Headquarters Office of Procurement Program Operations Division.

      (b)  Program Operations Division is the Agency point of contact for issues related to proposed novation agreements.  With the concurrence of Program Operations Division, an installation may execute a separate agreement with the contractor.


Subpart 1842.13--Suspension of Work, Stop-Work Orders, and Government Delay

of Work


1842.1305  Contract clauses.


      (b)  FAR 52.242-15, Stop-Work Order, shall not be used in solicitations or contracts for research performed by educational or other nonprofit institutions.


Subpart 1842.15--Contractor Performance Information


1842.1502  Policy.


      (a)  Not later than 120 days after the end of the period of performance on contracts having a period of performance exceeding one year, contracting officers must conduct interim evaluations of performance on contracts subject to FAR Subpart 42.15 and this subpart.  Interim evaluations are not required on contracts whose award anniversary is within 3 months of the end of the contract period of performance.  The final evaluation will include an evaluation of the period between the last interim evaluation and the end of the contract period of performance.  Interim performance evaluations are optional for SBIR/STTR Phase II contracts.


1842.1503  Procedures.


      (a)  The contracting officer shall determine who (e.g., the technical office or end users of the products or services) evaluates appropriate portions of the contractor’s performance.  The evaluations are subjective in nature.  Nonetheless, the contracting officer, who has responsibility for the evaluations, shall ensure that they are reasonable.


      (b)  The Contractor Performance Assessment Reporting System (CPARS) shall be used to document evaluations.  This provides for a five-tiered rating covering the following attributes: quality, schedule, cost control (not required for firm-fixed-price contracts or firm-fixed-price contracts with economic price adjustment), business relations, management of key personnel, utilization of small business, and other considerations within the CPARS module; Quality, Key Consultants, Design/Engineering, and Construction within the ACASS module; and Quality, Management, Timely Performance, Labor Standards, Environmental Management, Occupational Health and Safety Standards within the CCASS module.

            (i)  For occupational health and safety, the following should be included in the rating based on applicability to the specific contract:

                  (A)  Compliance with the approved health and safety plan.

                  (B)  Safety record and incidence history.

                  (C)  Procedures for the correction and control of hazards.

            (ii)  For environmental management, the following should be included in the rating based applicability to the specific contract:

                  (A)  Compliance with the Center environmental management system (for on-site contracts).

                  (B)  Use of environmentally preferable products and services.

                  (C)  Compliance with contract sustainable acquisition requirements.


      (c)  In accordance with FAR 16.401(f) for Cost Plus Award Fee or Fixed Price Award Fee type contracts, contracting officers shall complete the following evaluation information in the Award Fee Evaluation System (AFES) module in the NASA Acquisition Internet Service:

            (i)  Available award fee amount.

            (ii)  Amount of award fee earned.

            (iii)  Award fee rating.

            (iv)  How the use of award fee did or did not motivate the contractor’s overall cost, schedule and technical performance as measured against contract requirements in accordance with the criteria stated in the award fee plan.

            (v)  How the objectives were enhanced by using an award fee contract as stated in the determination and findings required at FAR 16.401(d).


Contracting Officers shall ensure that the Government discusses all evaluations with contractors and shall record the date and the participants on the evaluation form.  Contracting officers shall sign and date the evaluation after considering any comments received from the contractor within 30 days of the contractor’s receipt of the evaluation.  If a contractor in its timely comments disagrees with an evaluation and requests a review at a level above the contracting officer, it shall be provided within 30 days.  While the FAR requires agencies to use contractor performance information that is within three years (six years for construction and architect-engineer contracts) of the completion of contract performance, this information shall nevertheless be retained in the contract file as provided in FAR 4.8, Government Contract Files.  Center Procurement Offices shall monitor the information entered into Award Fee Evaluation System (AFES) for accuracy and completeness.  The review should be conducted at least twice a year with the results included in the annual Center Self-Assessment.


      (e) Center Procurement Offices shall conduct an evaluation of the Center’s compliance with the reporting requirements in NFS 1842.1502(a).  The evaluation shall include compliance with timeliness and the quality of the performance evaluations and shall be conducted at least twice a year.  The results of these evaluations shall be included in the annual Center Self-Assessment.


Subpart 1842.70--Additional NASA Contract Clauses


1842.7001  Denied Access to NASA Facilities.

The contracting officer shall insert the clause at 1852.242-72, Denied Access to NASA Facilities, in solicitations and contracts where contractor personnel will be working onsite at a NASA facility such as: NASA Headquarters and NASA Centers; including Component Facilities and Technical and Service Support Centers.  For a list of NASA facilities see NPD 1000.3 “The NASA Organization”.  The contracting officer shall not insert the clause where contractor personnel will be working onsite at the Jet Propulsion Laboratory including the Deep Space Network Communication Facilities (Goldstone, CA; Canberra, Australia; and Madrid, Spain).


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  Emergency medical services and evacuation.

The contracting officer must insert the clause at 1852.242-78, Emergency Medical Services and Evacuation, in all solicitations and contracts when employees of the contractor are required to travel outside the United States or to remote locations in the United States.


Subpart 1842.71--Submission of Vouchers


1842.7101  Submission of vouchers. 


      (a)  Vouchers shall be submitted in accordance with the clause at 1852.216-87, Submission of Vouchers for Payment.


      (b)  The auditor shall retain an unpaid copy of the voucher.


      (c)  When a voucher submitted in accordance with the clause at 1852.216-87 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.


Subpart 1842.72--NASA Contractor Financial Management Reporting


1842.7201  General.


      (a)  Contracting officer responsibilities.

            (1)  Contracting officers must ensure contracts require cost reporting consistent with both policy requirements and project needs.  Contracting Officers shall monitor contractor cost reports on a regular basis to ensure cost data reported is accurate and timely.  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.


      (b)  Reporting requirements.

            (1)  Use of the NASA Contractor Financial Management Reports, the NASA Form 533 series, is required on cost-type, price redetermination, and fixed-price incentive contracts when the following dollar, period of performance, and scope criteria are met:


Contract value/scope

Period of Performance



$500K to $999K

1 year or more



$1,000,000 and over

Less than 1 year



$1,000,000 and over

1 year or more




            (2)  When it is probable that a contract will ultimately meet the criteria in paragraph (b)(1) of this section through change orders, supplemental agreements, etc., the reporting requirement must be implemented in the contract based on the estimated final contract value at the time of award.

            (3)  NF 533Q reporting may be waived by the contracting officer, with the concurrence of the center chief financial officer and cognizant project manager, for support service or task order contracts, when NF 533M reports and other data are sufficient to ensure accurate monthly cost accruals, evaluation of the contractor’s cost performance, and forecasting of resource requirements.

            (4)  Where a specific contractual requirement differs from the standard system set forth in NPR 9501.2, NASA Contractor Financial Management Reporting, but is determined to be in the best interests of the Government and does not eliminate any of the data elements required by the standard NF 533 formats, it may be approved by the contracting officer with the concurrence of the center chief financial officer and the project manager.  Such approval shall be documented and retained, with the supporting rationale, in the contract file.

            (5)  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.  The contracting officer shall coordinate any proposed substitute with the installation financial management office.


      (c)  Contract requirements.

            (1) Reporting requirements, including a description of reporting categories, shall be detailed in the procurement request, and reports shall be required by inclusion of the clause prescribed in 1842.7202.  The contract schedule shall include report addressees and numbers of copies.  The final agreed upon reporting categories shall be approved by the Center Chief Financial Officer or designee to ensure that data required for agency cost accounting will be provided by the reports.  Reporting dates shall be in accordance with NPR 9501.2, except that earlier submission is encouraged whenever feasible.  No due date shall be permitted which is later than the date by which the center financial management office needs the data to enter an accurate monthly cost accrual in the accounting system.

            (2)  The development of the cost reporting structure must be a collaborative effort by government personnel to include, as appropriate: technical, program management, procurement, financial, and resources personnel who will have a role in monitoring contractor performance, contract administration, or otherwise use the reporting data.  The reporting structure, i.e., the specific reporting categories shall be included in the solicitation to inform prospective contractors of the reporting requirements.  The final reporting structure will be finalized and agreed to by the government and the contractor.

            (3)  The contractor shall be required to submit an initial report in the NF 533Q format, time phased for the expected life of the contract, within 30 days after authorization to proceed has been granted.  NF 533M reporting will begin no later than 30 days after incurrence of cost.  NF 533Q reporting begins with the initial report.


1842.7202  Contract clause.

The contracting officer shall insert the clause at 1852.242-73, NASA Contractor Financial Management Reporting, in solicitations and contracts when any of the NASA Form 533 series of reports is required from the contractor.


Subpart 1842.73--Audit Tracking and Resolution


1842.7301  NASA external audit follow-up system.


      (a)  This section implements OMB Circular No. A-50 and NASA Policy Directive (NPD) 9910.1, “Government Accountability Office/NASA Office of Inspector General Audit Liaison, Resolution, and Follow-up”, which provides more detailed guidance.  Recommendations from external audits (OMB Circular No. A-133, Audits of States, Local Governments, and Non-Profit Institutions) shall be resolved by formal review and approval procedures analogous to those at 1815.406-171.


      (b)  The external audit follow-up system tracks all contract and OMB Circular No. A-133 audits where NASA has resolution and disposition authority.  The objective of the tracking system is to ensure that audit recommendations are resolved within 6 months after receipt of the audit report and corrected as expeditiously as possible.


      (c)(1)  The identification and tracking of contract audit reports under NASA cognizance are accomplished in cooperation with the DCAA.

            (2)  Identification and tracking of OMB Circular No. A-133 audit reports are accomplished in cooperation with the NASA Office of the Inspector General (OIG).

      (d)(1)  All reportable contract audit reports as defined by Chapter 15, Section 6, of the DCAA Contract Audit Manual (CAM) for which NASA has resolution and disposition responsibility shall be entered into NASA’s Audit and Assurance Information Reporting System (AAIRS), with the information updated at least quarterly until the audit recommendations are all resolved and dispositioned (see paragraph (e) (1) of this section).  Reportable audits issued to DCMA on actions for which contract administration has been delegated are not subject to this requirement because DOD is required to track and maintain these audit reports.

            (2)  Only OMB Circular No. A-133 audit reports involving the following shall be reported quarterly to the Headquarters Office of Procurement Analysis Division:

                  (i)  A significant management control issue.

                  (ii)  Questioned costs of $10,000 or more due to an audit finding (see Subpart E-Auditor, paragraph 510 of OMB Circular No. A-133).

            (3)  NASA contracting officers will maintain a dialogue with DOD Administrative Contracting Officers (ACO) who have been delegated activities on NASA contracts.  A review will be conducted no less frequently than semiannually, and the status and disposition of significant audit findings will be documented in the contract file.  During this review, NASA contracting officers should discuss with the ACO both prime and subcontract audit reports that have been delegated to DOD.  Should these reports contain any findings or recommendations, the NASA contracting officer should obtain their status and document the contract file accordingly.


      (e)(1)  The terms “resolution” and “corrective action/disposition” are defined as follows:

                  (i)  Resolution - The point at which the IG and Management agree on the action to be taken on audit report findings and recommendations.

                  (ii)  Corrective action/disposition - Management action responsive to an agreed upon audit recommendation.

            (2)  The resolution and disposition of DCAA audit reports issued to NASA contracting officers are handled as follows:

                  (i)  Audit findings pertaining to an individual NASA contract are the responsibility of the NASA contracting officer.

                  (ii)  Audit findings impacting more than one NASA contract are the responsibility of the NASA contracting officer providing the preponderance of funding to the particular contractor for the contractor fiscal year covered by the audit report (lead contracting officer).  The lead contracting officer should furnish a copy of the audit report to all NASA contracting officers with contracts impacted by the audit report.  Those contracting officers should be provided the opportunity to participate in the negotiations or provide input into the negotiation strategy.  At the conclusion of the negotiations, the lead contracting officer is to provide a copy of the negotiation memorandum to the DCAA office that issued the audit report, as well as to the contracting officers for the other impacted NASA contracts.

            (3)  The resolution and disposition of OMB Circular No. A-133 audits are handled as follows:

                  (i)  Audit findings pertaining to an individual NASA award are the responsibility of the procurement officer for the Center that awarded the contract.

                  (ii)  Audit findings having a Governmentwide impact are the responsibility of the cognizant Federal agency responsible for oversight.  For organizations subject to OMB Circular No. A-133, there is either a cognizant agency or an oversight agency.  The cognizant agency is the Federal agency that provides the predominant amount of direct funding to the recipient organization unless OMB makes a specific cognizant agency for audit assignment.  To provide for the continuity of cognizance, the determination of the predominant amount of direct funding will be based on the direct Federal awards expended in the recipient’s fiscal years ending in 1995, 2000, 2005, and every fifth year thereafter.  When there is no direct funding, the Federal agency with the predominant indirect funding is to assume the oversight responsibilities.  In cases where NASA is the cognizant or oversight Federal agency, audit resolution and disposition is the responsibility of the procurement officer for the Center having the largest amount of direct funding, or, if there is no direct funding, the largest amount of indirect funding for the audited period.  A copy of the memorandum dispositioning the findings shall be provided by each Center having resolution responsibility for the particular report to the Headquarters OIG office, the Headquarters Office of Procurement Analysis Division, and each Center procurement office that has awards impacted by the dispositioned findings.


1842.7302  Reportable audit disposition documentation.

For each reportable audit provided by DCAA, the contracting officer shall submit disposition documentation to the office that provided the report.