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10-18

Procurement Information Circular


November 15, 2010

CLASS DEVIATION TO NASA FAR SUPPLEMENT 1819.202, 1831.205-670,

1831.205-671, AND 1843.7003, ADJUSTMENT OF PROCUREMENT THRESHOLDS  

 

PURPOSE:  To align NASA FAR Supplement thresholds with revised FAR acquisition-related thresholds which went into effect on Oct. 1, 2010.  As a result of the changes to some FAR acquisition-related thresholds, the NASA FAR supplement, on October 1, 2010, became inconsistent with the FAR.  This deviation is issued to eliminate the inconsistencies until permanent changes can be made to the NFS.

 

BACKGROUND:  The FAR Council issued a final rule on Aug 30, 2010 which adjusts various FAR thresholds, as required by Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005.  Section 807 requires an adjustment, every 5 years, of acquisition-related thresholds for inflation using the Consumer Price Index (CPI) in a complex formula. All thresholds are evaluated for adjustment, but not every threshold is changed every five years, as application of the adjustment formula may indicate that a change is not required.  The Davis-Bacon Act, Service Contract Act, and trade agreements thresholds are exempt from adjustment.  Likewise, non-acquisition thresholds are not adjusted as part of this exercise.  They include, but are not limited to, small business size standards, claims, penalties, and required levels of insurance.

 

GUIDANCE:  This deviation authorizes contacting officers to utilize the enclosed, deviated version of NFS 1819.202, 1831.205-671/672, and 1843.7003, which include the new thresholds.   

  

EFFECTIVE DATE:  This PIC is effective as dated and shall remain in effect until implemented in the NFS. 

 

HEADQUARTERS CONTACT:  Leigh Pomponio, Contract Management Division, (202) 358-0592, e-mail: leigh.pomponio@nasa.gov.

 

         /s/

William P. McNally

Assistant Administrator for Procurement

Enclosure

 

DISTRIBUTION:

  PIC LIST


 


1819.202 Specific policies

 The contracting officer shall complete a NASA Form 1787 for the following:

  1. all acquisitions, $100,000 and below the simplified acquisition threshold, not set aside for small business;
  2. all acquisitions over $100,000 at or above the simplified acquisition threshold, to include:
    1.  those restricted for small business participation,
    2. orders against Federal Supply Schedule contracts (notification only),
    3. modifications adding new work,
    4. orders against Basic Ordering Agreements and Blanket Purchase Agreements
  3. any other acquisition, at the option of the contracting officer, for acquisitions that do not meet the criteria in paragraphs 1 and 2. 

 

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1831.205-670 Evaluation of contractor and subcontractor compensation for service contracts.
     (a)  The contracting officer must evaluate the reasonableness of compensation for service contracts:
           (1)  Prior to the award of a cost reimbursement or non-competitive fixed-price type contract which has a total potential value in excess of $500,000 the threshold for obtaining certified cost or pricing data (FAR 15.403-4), and
           (2)  Periodically after award for cost reimbursement contracts, but at least every three years.
     (b)  The contracting officer must ensure the reasonableness of compensation is evaluated for cost reimbursement or non-competitive fixed-price type service subcontracts under a prime contract meeting the criteria in paragraph (a)(1) of this section where:
           (1)  The subcontract has a total potential value in excess of $500,000 the threshold for obtaining certified cost or pricing data (FAR 15.403-4); and
           (2)  The cumulative value of all of a subcontractor's service subcontracts under the prime contract is in excess of 10 percent of the prime contract's total potential value.
     (c)  (1)  Offerors must be required to submit as part of their proposals a compensation plan addressing all proposed labor categories. Offerors also must demonstrate in writing that their proposed compensation is reasonable.
           (2)  Subcontractors meeting the criteria in paragraph (b) of this section must be required to comply with paragraph (c)(1).
     (d)  The contracting officer's preaward evaluation of each offeror's and their subcontractors' compensation should be done as part of, or in addition to DCAA audits, price analyses, or any other means deemed to be necessary.
     (e)  The results of the contracting officer's evaluation, including any excessive compensation found and its planned resolution, must be addressed in the prenegotiation position memorandum, with the final resolution discussed in the price negotiation memorandum.
     (f)  The contracting officer must ensure that the reasonableness of compensation for cost reimbursement subcontracts meeting the criteria in paragraphs (b)(1) and (2) of this section is periodically reviewed after award, but at least every three years.
     (g)  The results of the periodic evaluations of contractor and subcontractor compensation after contract award must be documented in the contract file.

1831.205-671 Solicitation provision.
     The contracting officer must insert a provision substantially the same as the provision at 1852.231-71, Determination of Compensation, in solicitations for services which contemplate the award of a cost reimbursement or non-competitive fixed-price type service contract having a total potential value in excess of $500,000 the threshold for obtaining certified cost or pricing data (FAR 15.403-4).

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1843.7003 Procedures.

  (a)(1) Issuance of undefinitized contract actions with a Government estimated cost or price over $100,000 must be approved in writing by the head of the contracting activity.          

      (2) All other undefinitized contract actions must be approved in writing by the procurement officer.

      (3) In emergency situations, approval may be given orally and subsequently confirmed in writing.

      (4) The approval authorities in paragraphs (a)(1) and (2) of this section are not delegable.

(b) (1) Undefinitized contract actions exceeding $100,000 must be issued as bilateral agreements setting forth a ceiling price or "not to exceed" estimated cost figure for the changed contractual requirements.  For fixed price contracts the negotiated price for the changed contract requirements shall not exceed the established ceiling price.  In the case of cost type contracts any costs eventually negotiated for the changed requirements in excess of the "not to exceed" estimated cost figure shall be non-fee bearing.  The ceiling price or "not to exceed" estimated cost figures shall be separately identified in the UCA instrument from the pricing structure of the basic contract.

       (2)  The head of the contracting activity may waive the ceiling price or "not to exceed" estimated cost figure and bilateral agreement requirements prior to UCA issuance on the basis of urgency. This waiver authority is not delegable. Any waivers shall be documented in the contract file.
     (c)  The changed contractual requirements set forth in the UCA shall be clearly defined and shall be limited to the minimum effort required to satisfy urgent program requirements while a cost proposal is prepared, analyzed and negotiated.
     (d)  For undefinitized contract actions with a Government estimate greater than $1,000,000 and not excepted under subpart 1843.7004, a 180 day funding profile shall be obtained from the contractor prior to execution of the undefinitized contract action.
     (e)  Undefinitized contract actions with a Government estimated cost or price greater than $1,000,000 shall include a requirement that the change shall be separately accounted for by the contractor to the degree necessary to provide the contracting officer visibility into actual costs incurred pending definitization. The contracting officer may waive this requirement for individual actions if there is a documented finding that such accounting procedures would not be cost effective. Any such waiver shall not affect existing NASA Form 533 or other financial reporting requirements set forth in the contract.