[Federal Register Volume 65, Number 176 (Monday, September 11, 2000)]
[Rules and Regulations]
[Pages 54813-54816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23005]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1845 and 1852
Property Reporting Requirements
AGENCY: National Aeronautics and Space Administration (NASA)
ACTION: Interim rule.
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SUMMARY: This interim rule amends the NASA FAR Supplement (NFS) to
comply with OMB Bulletin 97-01 and makes other changes to NASA's
property reporting requirements. Specific changes include: Additional
instructions on how to adjust previously reported values; a new
definition of Agency Peculiar Property to exclude completed end items
destined for permanent operation in space; and a new definition of Work
in Process to include completed end items destined for permanent
operation in space which otherwise meet the definition of Agency
Peculiar Property.
DATES: Effective Date: September 11, 2000.
Comment Date: Comments should be submitted to NASA at the address
below on or before November 13, 2000.
ADDRESSES: Comments should be sent to James H. Dolvin, NASA
Headquarters, Code HK, Washington, DC 20546, (202) 358-1279,
[email protected].
FOR FURTHER INFORMATION CONTACT: James H. Dolvin, (202) 358-1279.
SUPPLEMENTARY INFORMATION:
A. Background
OMB Bulletin 97-01, Form and Content of Agency Financial
Statements, prescribes financial accounting and reporting requirements
for Federal agencies. Included are accounting standards which apply to
property, plant and equipment. Comments have been received from
contractors regarding NASA's initial implementation of the standards
through the NASA Form 1018 reporting format. In addition to changes
being made to respond to contractors' concerns, changes are needed in
NASA's reporting requirements to ensure compliance with the accounting
standards and accurate and timely financial statements.
B. Regulatory Flexibility Act
NASA certifies that this interim rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
because less than three per cent of NASA contracts with small
businesses have property reporting requirements.
C. Paperwork Reduction Act
The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., applies to
this proposed rule because it contains information collection
requirements. Approval for the additional requirements has been
obtained under OMB Control No. 2700-0017, approving an increase in
burden hours from 5,700 to 8,144.
[[Page 54814]]
D. Determination to Issue an Interim Rule
In accordance with 41 U.S.C. 418(d), NASA has determined that
urgent and compelling reasons exist to promulgate this interim rule.
The basis for this determination is that the new definitions and
reporting requirements in this interim rule are needed to comply with
OMB Bulletin 97-01, and that it is necessary to issue these changes
immediately so they can be incorporated into NASA contractor property
reports for the year ending September 30, 2000. Public comments
received in response to this interim rule will be considered in the
formation of the final rule.
List of Subjects in 48 CFR Part 1845 and 1852
Government Procurement.
Tom Luedtke,
Associate Administrator for Procurement.
Accordingly, 48 CFR Parts 1845 and 1852 are amended as follows:
1. The authority citation for 48 CFR Parts 1845 and 1852 continues
to read as follows:
Authority: 42 U.S.C. 2473(c)(1).
PART 1845--GOVERNMENT PROPERTY
2. Subpart 1845.71 is revised to read as follows:
Table of Contents
Subpart 1845.71--Forms Preparation
Sec.
1845.7101 Instructions for preparing NASA Form 1018.
1845.7101-1 Property classification.
1845.7101-2 Transfers of property.
1845.7101-3 Unit acquisition cost.
1845.7101-4 Types of deletions from contractor property records.
1845.7101-5 Contractor's privileged financial and business
information.
Subpart 1845.71--Forms Preparation
1845.7101 Instructions for preparing NASA Form 1018.
NASA must account for and report assets in accordance with 31
U.S.C. 3512 and 31 U.S.C. 3515, Federal Accounting Standards, and
Office of Management and Budget (OMB) instructions. Since contractors
maintain NASA's official records for its assets in their possession,
NASA must obtain annual data from those records to meet these
requirements. Changes in Federal Accounting Standards and OMB reporting
requirements may occur from year to year, requiring contractor
submission of supplemental information with the NASA Form (NF) 1018.
Contractors shall retain documents which support the data reported on
NF 1018 in accordance with FAR subpart 4.7, Contractor Records
Retention. Classifications of property, related costs to be reported,
and other reporting requirements are discussed in this subpart. NASA
Form 1018 (see 1853.3) provides critical information for NASA financial
statements and property management. Accuracy and timeliness of the
report are very important. If errors are discovered on NF 1018 after
submission, the contractor shall contact the cognizant Center
Industrial Property Officer (IPO) to discuss corrective action. IPO's
shall work with Center finance personnel to determine appropriate
corrective action and provide guidance to contractors.
1845.7101-1 Property classification.
(a) General. Contractors shall report costs in the classifications
on NF 1018, as described in this section.
(b) Land. Includes costs of land and improvements to land.
Contractors shall report land with a unit acquisition cost of $100,000
or more.
(c) Buildings. Includes costs of buildings, improvements to
buildings, and fixed equipment required for the operation of a building
which is permanently attached to and a part of the building and cannot
be removed without cutting into the walls, ceilings, or floors.
Contractors shall report land with a unit acquisition cost of $100,000
or more. Examples of fixed equipment required for functioning of a
building include plumbing, heating and lighting equipment, elevators,
central air conditioning systems, and built-in safes and vaults.
(d) Other structures and facilities. Includes costs of acquisitions
and improvements of structures and facilities other than buildings; for
example, airfield pavements, harbor and port facilities, power
production facilities and distribution systems, reclamation and
irrigation facilities, flood control and navigation aids, utility
systems (heating, sewage, water and electrical) when they serve several
buildings or structures, communication systems, traffic aids, roads and
bridges, railroads, monuments and memorials, and nonstructural
improvements such as sidewalks, parking areas, and fences. Contractors
shall report other structures and facilities with a unit acquisition
cost of $100,000 or more and a useful life of two years or more.
(e) Leasehold improvements. Includes NASA-funded costs of
improvements to leased buildings, structures, and facilities, as well
as easements and right-of-way, where NASA is the lessee or the cost is
charged to a NASA contract. Contractors shall report leasehold
improvements with a unit acquisition cost of $100,000 or more and a
useful life of two years or more.
(f) Construction in progress. Includes costs of work in process for
the construction of Buildings, Other Structures and Facilities, and
Leasehold Improvements to which NASA has title, regardless of value.
(g) Equipment. Includes costs of commercially available personal
property capable of stand-alone use in manufacturing supplies,
performing services, or any general or administrative purpose (for
example, machine tools, furniture, vehicles, computers, software, test
equipment, including their accessory or auxiliary items). Contractors
shall separately report:
(1) The amount for all items with a unit acquisition cost of
$100,000 or more and a useful life of two years or more; and
(2) All items under $100,000, regardless of useful life.
(h) Special tooling. Includes costs of equipment and manufacturing
aids (and their components and replacements) of such a specialized
nature that, without substantial modification or alteration, their use
is limited to development or production of particular supplies or
parts, or performance of particular services. Examples include jigs,
dies, fixtures, molds, patterns, taps and gauges. Contractors shall
separately report:
(1) The amount for all items with a unit acquisition cost of
$100,000 or more and a useful life of two years or more; and
(2) All items under $100,000, regardless of useful life.
(i) Special test equipment. Includes costs of equipment used to
accomplish special purpose testing in performing a contract, and items
or assemblies of equipment. Contractors shall separately report:
(1) The amount for all items with a unit acquisition cost of
$100,000 or more and a useful life of two years or more; and
(2) All items under $100,000, regardless of useful life.
(j) Material. Includes costs of NASA-owned property held in
inventory that may become a part of an end item or be expended in
performing a contract. Examples include raw and processed material,
parts, assemblies, small tools and supplies. Material that is part of
work-in-process is not included. Contractors shall report the amount
for all Materials in inventory, regardless of unit acquisition cost.
[[Page 54815]]
(k) Agency-peculiar property. Includes costs of completed items,
systems and subsystems, spare parts and components unique to NASA
aeronautical and space programs. Examples include research aircraft,
reusable space vehicles, ground support equipment, prototypes, and
mock-ups. The amount of property, title to which vests in NASA as a
result of progress payments to fixed price subcontractors, shall be
included to reflect the pro rata cost of undelivered agency-peculiar
property. Contractors shall separately report:
(1) The amount for all items with a unit acquisition cost of
$100,000 or more and a useful life of two years or more; and
(2) All items under $100,000, regardless of useful life. Completed
end items which otherwise meet the definition of Agency-Peculiar
Property, but are destined for permanent operation in space, such as
satellites and space probes, shall be reported as Contract Work in
Process.
(l) Contract work-in-process. Includes costs of all work-in-process
regardless of value; excludes costs of completed items reported in
other categories. Includes completed end items of property which
otherwise meet the definition of Agency-Peculiar Property, but are
destined for permanent operation in space, such as satellites and space
probes.
1845.7101-2 Transfers of property.
A transfer is a change in accountability between and among prime
contracts, NASA centers, and other Government agencies (e.g., between
contracts of the same NASA Center, contracts of different NASA Centers,
a contract of one NASA Center to another, a NASA Center to a contract
of another NASA Center, and a contract to another Government agency or
its contract). To enable NASA to properly control and account for
transfers, they shall be adequately documented. Therefore, procurement,
property, and financial organizations at NASA Centers must effect all
transfers of accountability, although physical shipment and receipt of
property may be made directly by contractors. The procedures described
in this section shall be followed to provide an administrative and
audit trail, even if property is physically shipped directly from one
contractor to another. Property shipped between September 1 and
September 30, inclusively, shall be accounted for and reported by the
shipping contractor, regardless of the method of shipment, unless
written evidence of receipt at destination has been received.
Repairables provided under fixed price repair contracts that include
the clause at 1852.245-72, Liability for Government Property Furnished
for Repair or Other Services, remain accountable to the cognizant NASA
Center and are not reportable on NF 1018; repairables provided under a
cost-reimbursement contract, however, are accountable to the contractor
and reportable on NF 1018. All materials provided to conduct repairs
are reportable, regardless of contract type.
(a) Approval and notification. The contractor must obtain approval
of the contracting officer or designee for transfers of property before
shipment. Each shipping document must contain contract numbers,
shipping references, property classifications in which the items are
recorded (including Federal Supply Classification group (FSC) codes for
equipment), unit acquisition costs (as defined in 1845.7101-3, Unit
Acquisition Cost), original acquisition dates for items with a unit
acquisition cost of $100,000 or more and a useful life of two years or
more, and any other appropriate identifying or descriptive data. Where
the DD Form 250, Material Inspection and Receiving Report, is used, the
FSC code will be part of the national stock number (NSN) entered in
Block 16 or, if the NSN is not provided, the FSC alone shall be shown
in Block 16. The original acquisition date shall be shown in Block 23,
by item. Other formats, such as the DD Form 1149, Requisition and
Invoice/Shipping Document, should be clearly annotated with the
required information. Unit acquisition costs shall be obtained from
records maintained pursuant to FAR Part 45 and this Part 1845, or, for
uncompleted items where property records have not yet been established,
from such other record systems as are appropriate such as manufacturing
or engineering records used for work control and billing purposes.
Shipping contractors shall furnish a copy of the shipping document to
the cognizant property administrator. Shipping and receiving
contractors shall promptly notify the financial management office of
the NASA Center responsible for their respective contracts when
accountability for NASA property is transferred to, or received from,
other contracts, contractors, NASA Centers, or Government agencies.
Copies of shipping or receiving documents will suffice as notification
in most instances.
(b) Reclassification. If property is transferred to another
contract or contractor, the receiving contractor shall record the
property in the same property classification and amount appearing on
the shipping document. For example, when a contractor receives an item
from another contractor that is identified on the shipping document as
equipment, but that the recipient intends to incorporate into special
test equipment, the recipient shall first record the item in the
equipment account and subsequently reclassify it as special test
equipment. Reclassification of equipment, special tooling, special test
equipment, or agency-peculiar property requires prior approval of the
contracting officer or a designee.
(c) Incomplete documentation. If contractors receive transfer
documents having insufficient detail to properly record the transfer
(e.g., omission of property classification, FSC, unit acquisition cost,
acquisition date, etc.) they shall request the omitted data directly
from the shipping contractor or through the property administrator as
provided in FAR 45.505-2.
1845.7101-3 Unit acquisition cost
(a) The unit acquisition cost shall include all costs incurred to
bring the property to a form and location suitable for its intended
use. For example, the cost shall include the following, as appropriate:
(1) Amounts paid to vendors or other contractors.
(2) Transportation charges to the point of initial use.
(3) Handling and storage charges.
(4) Labor and other direct or indirect production costs (for assets
produced or constructed).
(5) Engineering, architectural, and other outside services for
designs, plans, specifications, and surveys.
(6) Acquisition and preparation costs of buildings and other
facilities.
(7) An appropriate share of the cost of the equipment and
facilities used in construction work.
(8) Fixed equipment and related installation costs required for
activities in a building or facility.
(9) Direct costs of inspection, supervision, and administration of
construction contracts and construction work.
(10) Legal and recording fees and damage claims.
(11) Fair values of facilities and equipment donated to the
Government.
(12) Material amounts of interest costs paid.
(b) Acquisition cost shall include, where appropriate, for
contractor acquired Special Test Equipment, Special Tooling, Agency-
Peculiar Property and Contract Work-In-Process, related fees, or a pro
rata portion of fees, paid by NASA to the contractor. Situations where
inclusion of fees in the acquisition cost would be appropriate
[[Page 54816]]
are those in which the contractor designs, develops, fabricates or
purchases property for NASA and part of the fees paid to the contractor
by NASA are related to that effort.
(c) The use of weighted average methodologies is acceptable for
valuation of Material.
(d) Contractors shall report unit acquisition costs using records
that are part of the prescribed property or financial control system as
provided in this section. Fabrication costs shall be based on approved
systems or procedures and include all direct and indirect costs of
fabrication.
(e) The contractor shall redetermine unit acquisition costs of
items returned for modification or rehabilitation. If an item's
original acquisition cost is $100,000 or more, only modifications that
improve that item's capacity or extend its useful life two years or
more and that cost $100,000 or more shall be added to the original
acquisition cost reported on the NF 1018. The costs of any other
modifications will be considered to be expensed. If an item's original
unit acquisition cost is less than $100,000, but a single subsequent
modification costs $100,000 or more, that modification only will be
reported as an item $100,000 or more on subsequent NF 1018s. The
original acquisition cost of the item will continue to be included in
the under $100,000 total. The quantity for the modified item will
remain ``1'' and be reported with the original acquisition cost of the
item. If an item's acquisition cost is reduced by removal of components
so that its remaining acquisition cost is under $100,000, it shall be
reported as under $100,000.
(f) The computation of work in process shall include all direct and
indirect costs of fabrication, including associated systems,
subsystems, and spare parts and components furnished or acquired and
charged to work in process pending incorporation into a finished item.
These types of items make up what is sometimes called production
inventory and include programmed extra units to cover replacement
during the fabrication process (production spares). Also included are
deliverable items on which the contractor or a subcontractor has begun
work, and materials issued from inventory. Work in Process shall
include the unit acquisition cost of completed end items of property
which otherwise meet the definition of Agency-Peculiar Property, but
which are destined for permanent operation in space, such as satellites
and space probes.
1845.7101-4 Types of deletions from contractor property records.
Contractors shall report the types of deletions from contract
property records as described in this section.
(a) Lost, damaged or destroyed. Deletion amounts that result from
relief from responsibility under FAR 45.503 granted during the
reporting period.
(b) Transferred in place. Deletion amounts that result from
transfer of property to a follow-on contract with the same contractor.
(c) Transferred to NASA Center accountability. Deletion amounts
that result from transfer of accountability to the NASA Center
responsible for the contract, whether or not items are physically
moved.
(d) Transferred to another NASA Center. Deletion amounts that
result from transfer of accountability to a NASA Center other than the
one responsible for the contract, whether or not items are physically
moved.
(e) Transferred to another Government agency. Deletion amounts that
result from transfer of property to another Government agency.
(f) Purchased at cost/returned for credit. Deletion amounts that
result from contractor purchase or retention of contractor acquired
property as provided in FAR 45.605-1, or from contractor returns to
suppliers under FAR 45.605-2.
(g) Disposed of through plant clearance process. Deletions other
than transfers within the Federal Government, e.g., donations to
eligible recipients, sold at less than cost, or abandoned/directed
destruction.
(h) Other. Types of deletion other than those reported in
paragraphs (a) through (g) of this section.
1845.7101-5 Contractor's privileged financial and business
information.
If a transfer of property between contractors involves disclosing
costs of a proprietary nature, the contractor shall furnish unit
acquisition costs only on copies of shipping documents sent to the
shipping and receiving NASA Centers. Transfer of the property to the
receiving contractor shall be on a no-cost basis.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
3. Revise section 1852.245-73 to read as follows:
1852.245-73 Financial Reporting of NASA Property in the Custody of
Contractors.
As prescribed in 1845.106-70(d), insert the following clause:
Financial Reporting of NASA Property in the Custody of Contractors
September, 2000.
(a) The Contractor shall submit annually a NASA Form (NF) 1018,
NASA Property in the Custody of Contractors, in accordance with the
provisions of 1845.505-14, the instructions on the form, subpart
1845.71, and any supplemental instructions for the current reporting
period issued by NASA.
(b)(1) Subcontractor use of NF 1018 is not required by this
clause; however, the Contractor shall include data on property in
the possession of subcontractors in the annual NF 1018.
(2) The Contractor shall mail the original signed NF 1018
directly to the Center Deputy Chief Financial Officer, Finance.
(3) Three copies shall be submitted (through the Department of
Defense (DOD) Property Administrator if contract administration has
been delegated to DOD) to the following address: [Insert name and
address of appropriate Center office.], unless the Contractor uses
the NF 1018 Electronic Submission System (NESS) for report
preparation and submission.
(c) The annual reporting period shall be from October 1 of each
year through September 30 of the following year. The report shall be
submitted in time to be received by October 31. The information
contained in these reports is entered into the NASA accounting
system to reflect current asset values for agency financial
statement purposes. Therefore, it is essential that required reports
be received no later than October 31. The Contracting Officer may,
in NASA's interest, withhold payment until a reserve not exceeding
$25,000 or 5 percent of the amount of the contract, whichever is
less, has been set aside, if the Contractor fails to submit annual
NF 1018 reports when due. Such reserve shall be withheld until the
Contracting Officer has determined that the required reports have
been received by NASA. The withholding of any amount or the
subsequent payment thereof shall not be construed as a waiver of any
Government right.
(d) A final report shall be submitted within 30 days after
disposition of all property subject to reporting when the contract
performance period is complete in accordance with (b)(1) through (3)
of this clause.
(End of clause)
[FR Doc. 00-23005 Filed 9-8-00; 8:45 am]
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