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Procurement Information Circular

May 21, 1998



PURPOSE: To establish a standard approach to address Year 2000 compliance in existing NASA contracts.

BACKGROUND: The Year 2000 problem is recognized throughout the Federal Government and industry as a threat to information technology (IT) applications of an unprecedented magnitude. Dates and date-related data are stored, manipulated and exchanged by virtually all hardware, software and firmware applications. The Office of Management and Budget (OMB), the Federal Acquisition Regulation, Section 39.106, and NASA Policy require all IT, acquired and/or in use, to be Year 2000 compliant.

To achieve this result, OMB has directed agencies do the following:

(i) ensure all IT delivered to the Government is Year 2000 compliant;
(ii) ensure existing IT systems are Year 2000 compliant within a specified timetable; and
(iii) require the contractor to demonstrate through documentation that the IT provided to, or operated and/or maintained for, NASA is Year 2000 compliant.

GUIDANCE: Contracting officers shall modify all existing contracts to ensure Year 2000 compliance unless it is determined that IT will not be acquired, operated, or maintained. Contracting officers should prioritize the order in which they modify contracts based on mission criticality. For mission critical systems, contracting officers shall modify existing contracts by July 31, 1998. For all other existing contracts involving IT, contracting officers shall modify them as time and workload permit, but in sufficient time to comply with the OMB directed timetables, listed below.

Contracting officers should attempt to modify contracts bilaterally. This may involve an equitable adjustment if the contractor can demonstrate increased cost for Year 2000 compliance. To meet the required time frames, however, contracting officers may need to invoke the Changes clause authority to unilaterally modify contracts. When operating unilaterally, contracting officers should seek to limit the Agency’s cost liability by proposing a "not-to-exceed" amount for each change order, as issued.

Existing contracts for IT can be various and complex. Some existing contracts may require delivery of new IT, some may require the operation and/or maintenance of existing IT systems, and some may require both. The contracting officer must include paragraphs (a) and (b) of the statement of work requirements listed below in contracts which require only the delivery of new IT. The contracting officer shall include the complete statement of work requirements in contracts that require the operation and/or maintenance of existing IT systems, as well as the possible delivery of new IT. It should be noted that most contracts involving the delivery of IT also require that the contractor operate and/or maintain systems.

The contracting officer should consult with the contracting officer’s technical representative (COTR) or the requiring organization for assistance in tailoring paragraph (b) of the statement of work requirements, to specify the level of documentation that is commensurate with the complexity of the IT. The contracting officer shall retain compliance documentation in the contract file. In tailoring statements of work, the contracting officer may not modify the goals established by OBM for Year 2000 compliance, including the requirement that contractors meet the dates specified for renovation, validation and testing, and implementation.

For award fee contracts, contracting officers should address the administration of award fee to achieve Year 2000 compliance as a performance metric, including cooperative efforts where more than one contractor shares responsibilities and/or interfaces with a system(s). Note, only a bilateral modification can address this issue effectively.

Statement of Work Requirements: For contracts that require operations and/or maintenance of IT systems, contracting officers shall add the following requirements to the statement of work:

(a) "Year 2000 compliant," as used herein, means that the information technology (hardware, software and firmware, including embedded systems or any other electro-mechanical or processor-based systems used in accordance with its associated documentation) accurately processes date and date-related data (including, but not limited to, calculating, comparing, and sequencing) from, into, and between the twentieth and twenty-first centuries, and the years 1999 and 2000 and leap year calculations, to the extent that other information technology, used in combination with the information technology being acquired, properly exchanges date and date-related data with it.

(b) Any information technology provided, operated and/or maintained under this contract must be Year 2000 compliant. [Contracting officer may delete the phrase "operated and/or maintained" if the contractor is only responsible to delivery of IT.] To ensure this result, the Contractor shall provide documentation describing how the IT items or services demonstrate Year 2000 compliance, consisting of: [List required documentation commensurate with the complexity of the information technology being acquired, e.g., standard product literature or test reports for commercial items, test procedures, and/or certification for complex systems.]

(c) Milestones for Renovation, Validation and Implementation: Any IT determined to be non-Year 2000 compliant shall be replaced, retired, or repaired in accordance with the following schedule:

o        "Validation" includes unit, integration, system, and end-to-end testing for Year 2000 compliance. The Contractor must complete validation and testing of converted or replaced systems by January 31, 1999.

o        "Implementation" includes acceptance testing and integration of converted and replaced systems into a production environment. The Contractor must complete implementation by March 31, 1999.

(d) At a minimum, the Contractor shall provide documentation, including project plans and status reports, which demonstrate that the Contractor is meeting the milestones listed above.

CANCELLATION: This PIC, in conjunction with PIC 98-8, supersedes and cancels the NASA letter of March 31, 1998 (subject Information Technology and the Year 2000), signed by the Chief Information Officer and the Associate Administrator for Procurement.

EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until canceled or superseded.

HEADQUARTERS CONTACT: Steven Parker, Code HC, (202) 358-0462, e-mail:

Deidre A. Lee
Associate Administrator for Procurement

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