PART 1842
CONTRACT ADMINISTRATION AND AUDIT SERVICES
TABLE OF CONTENTS
SUBPART 1842.1 CONTRACT AUDIT
SERVICES
1842.101 Contract
audit responsibilities.
1842.102 Assignment
of contract audit services.
1842.102-70 Review
of administration and audit services.
1842.170 Assignment
of NASA personnel at contractor plants.
SUBPART 1842.2 CONTRACT ADMINISTRATION
SERVICES
1842.202 Assignment
of contract administration.
1842.202-70 Retention
of contract administration.
1842.270 Contracting
officer technical representative (COTR) delegations.
1842.271 NASA
clause.
SUBPART 1842.3
CONTRACT ADMINISTRATION OFFICE
FUNCTIONS
1842.302 Contract
administration functions.
SUBPART 1842.5 POSTAWARD ORIENTATION
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 Indirect rate
ceiling approval procedures.
1842.708 Quick-closeout
procedure.
1842.708-70 NASA
Quick-closeout procedure.
SUBPART 1842.8 DISALLOWANCE
OF COSTS
1842.803 Disallowing
costs after incurrence.
SUBPART 1842.12 NOVATION AND
CHANGE-OF-NAME AGREEMENTS
1842.1203 Processing
agreements.
1842.1203-70 DOD
processing of novation and change-of-name agreements
on
behalf of NASA.
SUBPART 1842.13 SUSPENSION OF WORK,
STOP-WORK ORDERS, AND GOVERNMENT DELAY OF WORK
1842.1305 Contract
clauses.
SUBPART 1842.15 CONTRACTOR
PERFORMANCE INFORMATION
1842.1501 General.
1842.1502 Policy.
1842.1503 Procedures.
SUBPART 1842.70 ADDITIONAL NASA CONTRACT
CLAUSES
1842.7001 Observance
of legal holidays.
1842.7002 Travel
outside of the United States.
1842.7003 Emergency medical
services and evacuation.
SUBPART 1842.71 SUBMISSION
OF VOUCHERS
1842.7101 Submission
of vouchers.
SUBPART 1842.72 NASA CONTRACTOR
FINANCIAL MANAGEMENT REPORTING
1842.7201 General.
1842.7202 Contract
clause.
SUBPART 1842.73 AUDIT TRACKING AND
RESOLUTION
1842.7301 NASA
external audit follow-up system.
1842.7302 Reportable
audit disposition documentation.
PART 1842
CONTRACT
ADMINISTRATION AND AUDIT SERVICES
Subpart 1842.1--Contract
Audit Services
1842.101 Contract
audit responsibilities.
(a)(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.
(ii) Cross-servicing arrangements are the responsibility of the Headquarters
Office of External Relations (Code ID).
Contracting officers should direct questions to the Headquarters Office
of Procurement (Code HK).
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
Management Division when an assessment indicates a significant change in
required DOD support.
1842.170
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,
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 Indirect
rate ceiling approval procedures.
(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 Management
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 SEB 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 15 percent parameter does not
apply to NASA contracts. Instead,
perform a risk analysis that takes into consideration the contractor systems
identified in FAR 42.708(a)(2)(ii),
as well as the concerns of the cognizant contract auditor, and any other
pertinent information.
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:
(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) Reviewing
vouchers received directly from contractors;
(B) Approving vouchers for provisional payment and
sending them to the disbursing office;
(C) Reviewing completion/final vouchers and sending
them to the designated contracting officer for approval.
(D) Authorizing direct submission of interim vouchers
for provisional payment to disbursing offices for contractors with approved
billing systems.
(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:
(a) Assign a notice
number and sign the NASA Form 456.
(b) Issue a new NASA
Form 456 suspending the costs rather than disapproving them pending resolution
of the issues.
(c) 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)(a) 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.
(b) 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 (Code HS) 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 Code HS.
1842.1203-70
DOD processing of novation and
change-of-name agreements on behalf of NASA.
(a) Copies of novation
and change-of-name agreements executed by DOD on behalf of NASA are maintained
by the Headquarters Office of Procurement (Code HS).
(b) Code HS is the Agency point of contact for
issues related to proposed novation agreements. With the concurrence of Code HS, 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 1842.14--Traffic
and Transportation Management
1842.1405 Discrepancies
incident to shipment of supplies.
(a) NASA personnel shall also report discrepancies
and adjust claims for loss of and damage to Government property in transit in
accordance with NPR 6200.1, NASA Transportation and General Traffic
Management.
Subpart 1842.15--Contractor Performance Information
1842.1501 General.
Communications with contractors are vital to
improved performance and this is NASA’s primary objective in evaluating past
performance. Other objectives include providing data for future source
selections. While the evaluations must reflect both shortcomings and
achievements during performance, they should also elicit from the contractors
their views on impediments to improved performance emanating from the
Government or other sources.
1842.1502 Policy.
(a)
Within 60 days of every anniversary of the award of a contract having a term
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. A
final evaluation summarizing all performance must be conducted on all
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)
NASA Form 1680, entitled, "Evaluation of Performance," shall be used
to document evaluations. This provides
for a five-tiered rating (using the definitions for award fee evaluation
scoring found in 1816.405-275) covering the following attributes: quality,
timeliness, price or control of costs (not required for firm-fixed-price
contracts or firm-fixed-price contracts with economic price adjustment), and
other considerations. Evaluations used
in determining award fee payments satisfy the requirements of this subpart and
do not require completion of NASA Form 1680.
In addition, hybrid contracts containing both award fee and non-award
fee portions do not require completion of NASA Form 1680. 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
forbids use of the evaluations for source selections more than three years
after contract completion, they shall nevertheless be retained in the contract
file as provided in FAR 4.8, Government
Contract Files.
Subpart
1842.70--Additional NASA Contract Clauses
1842.700 Observance of legal holidays.
(a) The contracting officer
shall insert the clause at 1852.242-72, Observance of Legal Holidays, in contracts when
work will be performed at a NASA installation.
(b) The clause shall be
used with its Alternate I in cost-reimbursement contracts when it is desired
that contractor employees not have access to the installation during Government
holidays. This alternate may be appropriately
modified for fixed-price contracts.
(c) The clause may be used
with its Alternate II in cost-reimbursement contracts when it is desired that
administrative leave be granted contractor personnel in special circumstances,
such as inclement weather or potentially hazardous conditions. This alternate may
be appropriately modified for fixed-price contracts.
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
|
533M
|
533Q
|
|
$500K to $999K
|
1 year or more
|
Required
|
Optional
|
|
$1,000,000 and over
|
Less than 1 year
|
Required
|
Optional
|
|
$1,000,000 and over
|
1 year or more
|
Required
|
Required
|
(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. Reporting categories shall be coordinated
with the center financial management office 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 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 Followup”,
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 followup
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
Corrective Action Tracking System (CATS), 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;
and
(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; or
(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.
