
04-54
Procurement Notice
November 3, 010
FACILITIES CAPITAL COST OF MONEY
PURPOSE: To delete
section, 1815.404-471-5 that requires the use of a cost of money (COM) offset
(reduction) in developing a profit/fee objective, and in computing profit/fee
via NASA’s structured fee approach for profit or fee objective (NASA Form 634).
BACKGROUND: The FAR requires that Federal Agencies
exclude any COM included in the cost objective base amounts before applying the
profit/fee percentage or factors from any structured fee approach. NASA Form (NF) 634 fulfills this
requirement. However, the NFS and the NF
634 further requires utilization of a COM offset procedure that further reduces
the computed profit/fee. This COM
offset is the equivalent of either the proposed COM amount or 1 percent of the
cost objective base amount, whichever is less, which is then subtracted from
the calculated objective profit/fee amount.
As required by the FAR, the calculated objective profit/fee amount is computed
without COM included in the cost objective base amount. Consequently, the offset has the effect of
selectively reducing profit/fee for contractors that include COM in their accounting
structure. This practice is no longer
considered necessary for NASA.
Therefore, this PN deletes the COM offset requirement from the NFS and
revises the NF 634 accordingly. The revised NF 634 can be found at URL: http://prod.nais.nasa.gov/portals/pl/cost_price_audit.html.
ACQUISITIONS AFFECTED BY CHANGES: This
requirement is applicable to all acquisitions issued after the effective date
of this PN that require the use of the NF 634.
ACTION REQUIRED BY CONTRACTING OFFICERS: Ensure
compliance with policy change set forth in this PN.
CLAUSE CHANGES: None.
PARTS AFFECTED: Part
1815.
REPLACEMENT PAGES: You
may use the enclosed pages to replace 15:1,
15:2, 15:27, and 15:28 of the NFS.
TYPE OF RULE AND PUBLICATION DATE: These changes do not have a significant affect beyond the internal operating procedures of NASA and do not have a significant cost or administrative impact on contractors or offerors, and therefore do not require codification in the Code of Federal Regulations (CFR) or publication for public comment.
HEADQUARTERS CONTACT: Bill
Roets, Contract Management Division; 202-358-4483, email: william.roets-1@nasa.gov.
/s/
William P. McNally
Assistant Administrator for
Procurement
Enclosures
DISTRIBUTION LIST:
PN List
PART 1815
CONTRACTING
BY NEGOTIATION
1815.101 Best value
continuum.
SUBPART 1815.2 SOLICITATION AND RECEIPT OF PROPOSALS AND
INFORMATION
1815.201 Exchanges
with industry before receipt of proposals.
1815.203 Requests for
proposals.
1815.203-70 Installation
reviews.
1815.203-71 Headquarters
reviews.
1815.203-72 Risk management.
1815.204 Contract format.
1815.204-2 Part I-The Schedule.
1815.204-5 Part
IV-Representations and instructions.
1815.204-70 Page
limitations.
1815.207 Handling proposals
and information.
1815.207-70 Release
of proposal information.
1815.207-71 Appointing
non-Government evaluators as special Government
employees.
1815.208 Submission,
modification, revision, and withdrawal of proposals.
1815.209 Solicitation
provisions and contract clauses.
1815.209-70 NASA
solicitation provisions.
SUBPART 1815.3 SOURCE SELECTION
1815.300 Scope of subpart.
1815.300-70 Applicability
of subpart.
1815.303 Responsibilities.
1815.304 Evaluation factors
and significant subfactors.
1815.304-70 NASA
evaluation factors.
1815.305 Proposal
evaluation.
1815.305-70 Identification
of unacceptable proposals.
1815.305-71 Evaluation
of a single proposal.
1815.306 Exchanges with
offerors after receipt of proposals.
1815.307 Proposal
revisions.
1815.308 Source selection
decision.
1815.370 NASA source
evaluation boards.
SUBPART 1815.4 CONTRACT PRICING
1815.403 Obtaining cost or
pricing data.
1815.403-1 Prohibition on
obtaining cost or pricing data.
1815.403-170 Waivers of cost or
pricing data.
1815.403-3 Requiring information
other than cost or pricing data.
1815.403-4 Requiring cost or
pricing data.
1815.404 Proposal analysis.
1815.404-1 Proposal
analysis techniques.
1815.404-2 Information
to support proposal analysis.
1815.404-4 Profit.
1815.404-470 NASA Form 634
1815.404-471 NASA structured approach
for profit or fee objective.
1815.404-471-1 General.
1815.404-471-2 Performance
risk.
1815.404-471-3 Contract
type risk and working capital adjustment.
1815.404-471-4 Other
considerations.
1815.404-471-6 Modification
to structured profit/fee approach for nonprofit
Organizations.
1815.404-472 Payment
of profit or fee under letter contracts.
1815.406 Documentation.
1815.406-1 Prenegotiation
objectives.
1815.406-170 Content of the
prenegotiation position memorandum.
1815.406-171 Installation reviews.
1815.406-172 Headquarters reviews.
1815.406-3 Documenting the
negotiation.
1815.407 Special cost or
pricing areas.
1815.407-2 Make-or-buy programs.
1815.408 Solicitation
provisions and contract clauses.
1815.408-70 NASA
solicitation provisions and contract clauses.
SUBPART 1815.5 PREAWARD,
AWARD, AND POSTAWARD
NOTIFICATIONS, PROTESTS, AND MISTAKES
1815.504 Award to successful
offeror.
1815.506 Postaward
debriefing of offerors.
1815.506-70 Debriefing
of offerors - Major System acquisitions.
SUBPART 1815.6 UNSOLICITED PROPOSALS
1815.602 Policy.
1815.604 Agency points of
contact.
1815.606 Agency
procedures.
1815.606-70 Relationship
of unsolicited proposals to NRAs.
1815.609 Limited use of
data.
1815.609-70 Limited
use of proposals.
1815.670 Foreign
proposals.
SUBPART 1815.70
OMBUDSMAN
1815.7001 NASA
Ombudsman Program.
1815.7002 Synopses of solicitations
and contracts.
1815.7003 Contract clause.
(i) Is based on the
time necessary for the contractor to complete the substantive portion of the
work;
(ii) Is not necessarily the period of time between
contract award and final delivery, as periods of minimal effort should be
excluded;
(iii)
Should not include periods of performance contained in option provisions when
calculating the objective for the base period; and
(iv) Should not, for multiyear contracts, include periods of
performance beyond that required to complete the initial year's requirements.
(2) The contracting officer –
(i) Should use the following to select the
contract length factor:
|
Period to
perform substantive portion (in months) |
Contract length factor |
|
21 or less … |
.40 |
|
22 to 27 … |
.65 |
|
28 to 33 … |
.90 |
|
34 to 39 … |
1.15 |
|
40 or more … |
1.40 |
(ii) Should develop a weighted average contract
length when the contract has multiple deliveries; and
(iii)
May use sampling techniques provided they produce a representative result.
(3) Example: A prospective contract has a performance
period of 40 months with end items being delivered in the 34th, 36th,
38th and 40th months of the contract. The average period is 37 months and the
contract length factor is 1.15.
1815.404-471-4 Other considerations.
(a) Other Considerations may be included by the
contracting officer to account for special circumstances, such as contractor
efficiencies or unusual acceptance of contractual or program risks that are not
adequately addressed in the structured approach calculations described in
1815.404-471-2 or 1815.404-471-3. The
total adjustment resulting from Other Considerations may be positive or
negative but in no case should the total adjustment exceed +/-5 percent.
(b) The contracting officer shall analyze and
verify information provided by the contractor that demonstrates that the
special circumstances being recognized under this section –
(1) Provide substantial benefits to the
Government under the contract and/or overall program;
(2) Have not been recognized in the structured
approach calculations; and
(3) Represent unusual and innovative actions or
acceptance of risk by the contractor.
(c) Examples of special circumstances include,
but are not limited to the following:
(1) Consistent demonstration by the contractor of
excellent past performance within the last three years, with a special emphasis
on excellence in safety, may merit an upward adjustment of as much as 1
percent. Similarly, an assessment of
poor past performance, especially in the area of safety, may merit a downward
adjustment of as much -1 percent. This
consideration is especially important when negotiating modifications or changes
to an ongoing contract.
(2) Extraordinary steps to achieve the
Government’s socio-economic goals, environmental goals, and public policy goals
established by law or regulation that are sufficiently unique or unusual may
merit an upward adjustment of as much as .5 percent. Similarly, for
non-participation in or violation of Federal programs, the contracting officer
may adjust the objective by as much as -.5 percent. However, this consideration does not apply to
the utilization of small disadvantaged businesses. Incentives for use of these firms may only be
structured according to FAR 19.1203 and 19.1204(c).
(3) Consideration of up to 1 percent should be
given when contract performance requires the expenditure of significant
corporate capital resources.
(4) Unusual requests for use of government
facilities and property may merit a downward adjustment of as much as - 1
percent.
(5) Cost efficiencies arising from innovative
product design, process improvements, or integration of a life cycle cost
approach for the design and development of systems that minimize maintenance
and operations costs, that have not been recognized in Performance Risk or
Contract Type Risk, may merit an upward adjustment. This factor is intended to
recognize and reward improvements resulting from better ideas and management
that will benefit the Government in the contract and/or program.
(d) Other considerations need not be limited to
situations that increase profit/fee levels.
A negative consideration may be appropriate when there is a significant
expectation of near-term spin-off benefits as a direct result of the contract.
1815.404-471-6
Modification to structured profit/fee approach for nonprofit organizations.
(a) The structured approach was designed for determining
profit or fee objectives for
commercial organizations.
However, the structured approach must be used as a basis for
arriving at profit/fee objectives for nonprofit organizations (FAR Subpart 31.7), excluding
educational institutions (FAR Subpart 31.3), in accordance with
paragraph (b) of this section. It is
NASA policy not to pay profit or fee on contracts with educational
institutions.
(b) For contracts with nonprofit organizations
under which profit or fee is involved, an adjustment of up to 3 percent of the
costs in Block 13 of NASA Form 634 must be
subtracted from the total profit/fee objective. In developing
this adjustment, it is necessary to consider the following factors:
(1) Tax position benefits;
(2) Granting of financing through letters of
credit;
(3) Facility requirements of the nonprofit
organization; and
(4) Other
pertinent factors that may work to either the advantage or disadvantage of the
contractor in its position as a nonprofit organization.
1815.404-472 Payment of profit or fee under letter contracts.