NASA Implementation of Federal Acquisition Regulation (FAR) Award Fee Language Revision, 6696-6699 [2011-2772]
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Federal Register / Vol. 76, No. 26 / Tuesday, February 8, 2011 / Rules and Regulations
recipients thereof; or (4) raise novel
legal or policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
The economic, interagency,
budgetary, legal, and policy
implications of this final rule have been
examined and it has been determined
not to be a significant regulatory action
under Executive Order 12866.
Regulatory Flexibility Act
The Secretary hereby certifies that
this final rule would not have a
significant economic impact on a
substantial number of small entities as
they are defined in the Regulatory
Flexibility Act, 5 U.S.C. 601–612. This
final rule affects only VA beneficiaries
and their VA clinicians. Therefore,
pursuant to 5 U.S.C. 605(b), this final
rule is exempt from the initial and final
regulatory flexibility analysis
requirements of 5 U.S.C. 603 and 604.
This final rule is also exempt from the
regulatory flexibility analysis
requirements of sections 603 and 604
because it was not preceded by a notice
of proposed rulemaking.
Signing Authority
The Secretary of Veterans Affairs, or
designee, approved this document and
authorized the undersigned to sign and
submit the document to the Office of the
Federal Register for publication
electronically as an official document of
the Department of Veterans Affairs. John
R. Gingrich, Chief of Staff, Department
of Veterans Affairs, approved this
document on February 2, 2011, for
publication.
List of Subjects in 38 CFR Part 1
Administrative practice and
procedure, Archives and records,
Cemeteries, Claims, Courts, Crime,
Flags, Freedom of Information,
Government contracts, Government
employees, Government property,
Infants and children, Inventions and
patents, Parking, Penalties, Privacy,
Reporting and recordkeeping
requirements, Seals and Insignia,
Security measures, Wages.
Authority: 38 U.S.C. 501(a), and as noted
in specific sections.
2. Amend § 1.460 by adding, in
alphabetical order, the definitions of
‘‘decision-making capacity,’’
‘‘practitioner,’’ and ‘‘surrogate,’’ and by
revising the authority citation at the end
of the section to read as follows:
■
§ 1.460
Definitions.
*
*
*
*
*
Decision-making capacity. The term
‘‘decision-making capacity’’ has the
same meaning set forth in 38 CFR
17.32(a).
*
*
*
*
*
Practitioner. The term ‘‘practitioner’’
has the same meaning set forth in 38
CFR 17.32(a).
*
*
*
*
*
Surrogate. The term ‘‘surrogate’’ has
the same meaning set forth in 38 CFR
17.32(a).
*
*
*
*
*
(Authority: 38 U.S.C. 7332, 7334)
3. Add § 1.484 after the undesignated
center heading ‘‘Disclosures Without
Patient Consent’’ preceding § 1.485, to
read as follows:
■
§ 1.484 Disclosure of medical information
to the surrogate of a patient who lacks
decision-making capacity.
A VA medical practitioner may
disclose the content of any record of the
identity, diagnosis, prognosis, or
treatment of a patient that is maintained
in connection with the performance of
any VA program or activity relating to
drug abuse, alcoholism or alcohol abuse,
infection with the human
immunodeficiency virus, or sickle cell
anemia to a surrogate of the patient who
is the subject of such record if:
(a) The patient lacks decision-making
capacity; and
(b) The practitioner deems the content
of the given record necessary for the
surrogate to make an informed decision
regarding the patient’s treatment.
(Authority: 38 U.S.C. 7331, 7332)
[FR Doc. 2011–2750 Filed 2–7–11; 8:45 am]
BILLING CODE 8320–01–P
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Dated: February 3, 2011.
Robert C. McFetridge,
Director, Regulations Policy and
Management, Department of Veterans Affairs.
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
For the reasons set forth in the
preamble, VA amends 38 CFR part 1 as
follows:
RIN 2700–AD69
PART 1—GENERAL PROVISIONS
1. The authority citation for part 1
continues to read as follows:
■
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48 CFR Part 1816
NASA Implementation of Federal
Acquisition Regulation (FAR) Award
Fee Language Revision
National Aeronautics and
Space Administration.
AGENCY:
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ACTION:
Interim rule.
This interim rule revises the
NASA FAR Supplement (NFS) to
implement the FAR Award Fee revision
issued in Federal Acquisition Circular
(FAC) 2005–46.
DATES: Effective Date: February 8, 2011.
Comment Date: Interested parties
should submit written comments to
NASA at the address below on or before
April 11, 2011 to be considered in the
formulation of the final rule.
ADDRESSES: Interested parties may
submit comments, identified by RIN
number 2700–AD69, via the Federal
eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Comments may also be submitted to Bill
Roets, NASA Headquarters, Office of
Procurement, Contract Management
Division, Washington, DC 20546.
Comments may also be submitted by
e-mail to william.roets-1@nasa.gov.
FOR FURTHER INFORMATION CONTACT: Bill
Roets, NASA, Office of Procurement,
Contract Management Division (Suite
5G86); (202) 358–4483; e-mail:
william.roets-1@nasa.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
A. Background
Federal Acquisition Circular (FAC)
2005–46 significantly revised FAR Parts
16.305, 16.401, and 16.405–2,
incorporating new requirements relative
to the use of award fee incentives.
Specifically, this FAR rule implements
section 814 of the John Warner 2007
National Defense Authorization Act
(NDAA) and section 867 of the Duncan
Hunter 2009 NDAA and requires
agencies to:
(1) Link award fees to acquisition
objectives in the areas of cost, schedule,
and technical performance;
(2) Clarify that the base fee may be
included in a cost plus award fee type
contract at the discretion of the
contracting officer;
(3) Prescribe narrative ratings when
making a percentage of award fee
available;
(4) Prohibit the issuance of award fees
for a rating period if the contractor’s
performance is judged to be below
satisfactory;
(5) Conduct an analysis and consider
the results of the analysis when
determining whether to use an award
fee type contract or not;
(6) Include specific content in the
award fee plans; and
(7) Prohibit the rolling over of
unearned award fees to subsequent
rating periods.
These significant revisions in FAR
award fee guidance resulted in the need
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to make associated changes to the NFS
award fee regulations.
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993.
This rule is not a major rule under 5
U.S.C. 804.
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, at 5 U.S.C.
601, et seq., because it merely
implements the FAR Award Fee
revisions and does not impose an
economic impact beyond that addressed
in the FAC 2005–46 publication of the
FAR final rule.
Therefore, an Initial Regulatory
Flexibility Analysis has not been
performed. NASA will consider
comments from small entities
concerning the affected NFS Part 1816
in accordance with 5 U.S.C. 610.
Interested parties must submit such
comments separately and should cite 5
U.S.C. 601, et seq. in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because this interim rule does
not contain any information collection
requirements that require the approval
of the Office of Management and Budget
under 44 U.S.C. 3501, et seq.
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 without prior
opportunity for public comment. This
action is necessary to harmonize the
NFS Award Fee coverage with that in
the FAR which was effective per FAC
2005–46. However, pursuant to Public
Law 98–577 and FAR 1.501, NASA will
consider public comments received in
response to this interim rule in the
formation of the final rule.
List of Subjects in 48 CFR Part 1816
Government procurement.
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William P. McNally,
Assistant Administrator for Procurement.
Accordingly, 48 CFR part 1816 is
amended as follows:
PART 1816—TYPES OF CONTRACTS
1. The authority citation for 48 CFR
part 1816 continues to read as follows:
■
Authority: 42 U.S.C. 2455(a), 2473(c)(1).
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2. Section 1816.405–270 is revised to
read as follows:
■
1816.405–270
CPAF contracts.
(a) Use of an award fee incentive
requires advance approval by the
Assistant Administrator for
Procurement. Requests for approval,
that include Determination & Findings
(D&F) cited in paragraph (b) of this
section, shall be submitted to
Headquarters Office of Procurement,
Program Operations Division.
(b) Contracting officers shall prepare a
D&F in accordance with FAR 16.401(d)
prior to using an award fee incentive. In
addition to the items identified in FAR
16.401(e)(1), D&Fs will include a
discussion of the other types of
contracts considered and shall indicate
why an award fee incentive is the
appropriate choice. Award fee
incentives should not be used on
contracts with a total estimated cost and
fee less than $2 million per year. Use of
award fee incentive for lower-valued
acquisitions may be authorized in
exceptional situations such as contract
requirements having direct health or
safety impacts, where the judgmental
assessment of the quality of contractor
performance is critical.
(c) Except as provided in paragraph
(d) of this section, an award fee
incentive may be used in conjunction
with other contract types for aspects of
performance that cannot be objectively
assessed. In such cases, the cost
incentive is based on objective formulas
inherent in the other contract types (e.g.,
FPI, CPIF), and the award fee provision
should not separately incentivize cost
performance.
(d) Award fee incentives shall not be
used with a cost-plus-fixed-fee (CPFF)
contract.
■ 3. Section 1816.405–271 is revised to
read as follows:
1816.405–271
Base fee.
(a) A base fee shall not be used on
CPAF contracts for which the periodic
award fee evaluations are final
(1816.405–273(a)). In these
circumstances, contractor performance
during any award fee period is
independent of and has no effect on
subsequent performance periods or the
final results at contract completion. For
other contracts, such as those for
hardware or software development, the
procurement officer may authorize the
use of a base fee not to exceed 3 percent.
Base fee shall not be used when an
award fee incentive is used in
conjunction with another contract type
(e.g., CPIF/AF).
(b) When a base fee is authorized for
use in a CPAF contract, it shall be paid
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only if the final award fee evaluation is
‘‘satisfactory’’ or better. (See 1816.405–
273 and 1816.405–275) Pending final
evaluation, base fee may be paid during
the life of the contract at defined
intervals on a provisional basis. If the
final award fee evaluation is
‘‘unsatisfactory’’, all provisional base fee
payments shall be refunded to the
Government.
■ 4. Section 1816.405–274 is revised to
read as follows:
1816.405–274
factors.
Award fee evaluation
(a) Explicit evaluation factors shall be
established for each award fee period.
Factors shall be linked to acquisition
objectives which shall be defined in
terms of contract cost, schedule, and
technical performance. If used,
subfactors should be limited to the
minimum necessary to ensure a
thorough evaluation and an effective
incentive.
(b) Evaluation factors will be
developed by the contracting officer
based upon the characteristics of an
individual procurement. Cost control,
schedule, and technical performance
considerations shall be included as
evaluation factors in all CPAF contracts,
as applicable. When explicit evaluation
factor weightings are used, cost control
shall be no less than 25 percent of the
total weighted evaluation factors. The
predominant consideration of the cost
control evaluation should be a
measurement of the contractor’s
performance against the negotiated
estimated cost of the contract. This
estimated cost may include the value of
undefinitized change orders when
appropriate.
(c)(1) The technical factor must
include consideration of risk
management (including mission
success, safety, security, health, export
control, and damage to the environment,
as appropriate) unless waived at a level
above the contracting officer, with the
concurrence of the project manager. The
rationale for any waiver shall be
documented in the contract file. When
safety, export control, or security are
considered under the technical factor,
the award fee plan shall allow the
following fee determinations, regardless
of contractor performance in other
evaluation factors, when there is a major
breach of safety or security.
(i) For evaluation of service contracts
under 1816.405–273(a), an overall fee
rating of unsatisfactory for any
evaluation period in which there is a
major breach of safety or security.
(ii) For evaluation of end item
contracts under 1816.405–273(b), an
overall fee rating of unsatisfactory for
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any interim evaluation period in which
there is a major breach of safety or
security. To ensure that the final award
fee evaluation at contract completion
reflects any major breach of safety or
security, in an interim period, the
overall award fee pool shall be reduced
by the amount of the fee available for
the period in which the major breach
occurred if an unsatisfactory fee rating
was assigned because of a major breach
of safety or security.
(2) A major breach of safety must be
related directly to the work on the
contract. A major breach of safety is an
act or omission of the Contractor that
consists of an accident, incident, or
exposure resulting in a fatality or
mission failure; or in damage to
equipment or property equal to or
greater than $1 million; or in any
‘‘willful’’ or ‘‘repeat’’ violation cited by
the Occupational Safety and Health
Administration (OSHA) or by a state
agency operating under an OSHA
approved plan.
(3) A major breach of security may
occur on or off Government
installations, but must be directly
related to the work on the contract. A
major breach of security is an act or
omission by the contractor that results
in compromise of classified information,
illegal technology transfer, workplace
violence resulting in criminal
conviction, sabotage, compromise or
denial of information technology
services, equipment or property damage
from vandalism greater than $250,000,
or theft greater than $250,000.
(4) The Assistant Administrator for
Procurement shall be notified prior to
the determination of an unsatisfactory
award fee rating because of a major
breach of safety or security.
(d) In rare circumstances, contract
costs may increase for reasons outside
the contractor’s control and for which
the contractor is not entitled to an
equitable adjustment. One example is a
weather-related launch delay on a
launch support contract. The
Government shall take such situations
into consideration when evaluating
contractor cost control.
(e) Emphasis on cost control should
be balanced against other performance
requirement objectives. The contractor
should not be incentivized to pursue
cost control to the point that overall
performance is significantly degraded.
For example, incentivizing an underrun
that results in direct negative impacts
on technical performance, safety, or
other critical contract objectives is both
undesirable and counterproductive.
Therefore, evaluation of cost control
shall conform to the following
guidelines:
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(1) Normally, the contractor should be
given an unsatisfactory rating for cost
control when there is a significant
overrun within its control. However, the
contractor may receive a satisfactory or
higher rating for cost control if the
overrun is insignificant. Award fee
ratings should decrease sharply as the
size of the overrun increases. In any
evaluation of contractor overrun
performance, the Government shall
consider the reasons for the overrun and
assess the extent and effectiveness of the
contractor’s efforts to control or mitigate
the overrun.
(2) The contractor should normally be
rewarded for an underrun within its
control, up to the maximum award fee
rating allocated for cost control,
provided the adjectival rating for all
other award fee evaluation factors is
very good or higher (see FAR
16.401(e)(iv)).
(3) The contractor should be rewarded
for meeting the estimated cost of the
contract, but not to the maximum rating
allocated for cost control, to the degree
that the contractor has prudently
managed costs while meeting contract
requirements. No award shall be given
in this circumstance unless the average
adjectival rating for all other award fee
evaluation factors is satisfactory or
higher.
(f) When an AF arrangement is used
in conjunction with another contract
type, the award fee’s cost control factor
will only apply to a subjective
assessment of the contractor’s efforts to
control costs and not the actual cost
outcome incentivized under the basic
contract type (e.g. CPIF, FPIF).
(g)(1) The contractor’s performance
against the subcontracting plan
incorporated in the contract shall be
evaluated. Emphasis may be placed on
the contractor’s accomplishment of its
goals for subcontracting with small
business, HUBZone small business,
women-owned small business, veteranowned small business, and servicedisabled veteran-owned small business
concerns.
(2) The contractor’s performance
against the contract target for
participation as subcontractors by small
disadvantaged business concerns in the
NAICS Major Groups designated by the
Department of Commerce (see FAR
19.201(c)) shall also be evaluated if the
clause at FAR 52.219–26, Small
Disadvantaged Business Participation—
Incentive Subcontracting, is not
included in the contract (see FAR
19.1204(c)).
(3) The contractor’s achievements in
subcontracting high technology efforts
as well as the contractor’s performance
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´ ´
under the Mentor-Protege Program, if
applicable, may also be evaluated.
(4) The evaluation weight given to the
contractor’s performance against the
considerations in paragraphs (g)(1)
through (g)(3) of this section should be
significant (up to 15 percent of available
award fee). The weight should motivate
the contractor to focus management
attention to subcontracting with small,
HUBZone, women-owned, veteranowned, and service-disabled veteranowned small business concerns, and
with small disadvantaged business
concerns in designated NAICS Major
Groups to the maximum extent
practicable, consistent with efficient
contract performance.
(h) When contract changes are
anticipated, the contractor’s
responsiveness to requests for change
proposals should be evaluated. This
evaluation should include the
contractor’s submission of timely,
complete proposals and cooperation in
negotiating the change.
(i) Only the award fee performance
evaluation factors set forth in the
performance evaluation plan shall be
used to determine award fee scores.
(j) The Government may unilaterally
modify the applicable award fee
performance evaluation factors and
performance evaluation areas prior to
the start of an evaluation period. The
contracting officer shall notify the
contractor in writing of any such
changes 30 days prior to the start of the
relevant evaluation period.
■ 5. Section 1816.405–275 is revised to
read as follows:
1816.405–275
Award fee evaluation rating.
(a) All award fee contracts shall
utilize the adjectival rating categories
and associated descriptions as well as
the award fee pool available to be
earned percentages for each adjectival
rating category contained in FAR
16.401(e)(iv).
(b) The following numerical scoring
system shall be used in conjunction
with the FAR adjectival rating categories
and associated descriptions (see FAR
16.401(e)(iv)).
(1) Excellent (100–91)
(2) Very good (90–76)
(3) Good (75–51)
(4) Satisfactory (50)
(5) Unsatisfactory (less than 50) No
award fee shall be paid for an
unsatisfactory rating.
(c) As a benchmark for evaluation, in
order to be rated ‘‘Excellent’’ overall, the
contractor would typically be under
cost, on or ahead of schedule, and
providing outstanding technical
performance.
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(d) A weighted scoring system
appropriate for the circumstances of the
individual contract requirement should
be developed. In this system, each
evaluation factor (e.g., technical,
schedule, cost control) is assigned a
specific percentage weighting with the
cumulative weightings of all factors
totaling 100. During the award fee
evaluation, each factor is scored from 0–
100 according to the ratings defined in
1816.405–275(b). The numerical score
for each factor is then multiplied by the
weighting for that factor to determine
the weighted score. For example, if the
technical factor has a weighting of 60
percent and the numerical score for that
factor is 80, the weighted technical
score is 48 (80 × 60 percent). The
weighted scores for each evaluation
factor are then added to determine the
total award fee score.
[FR Doc. 2011–2772 Filed 2–7–11; 8:45 am]
BILLING CODE 7510–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 216
[Docket No. 110121052–1045–02]
RIN 0648–BA67
Taking and Importing Marine
Mammals: U.S. Navy Training in the
Hawaii Range Complex; U.S. Navy
Training in the Southern California
Range Complex; and U.S. Navy’s
Atlantic Fleet Active Sonar Training
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Interim final rule; request for
comments and issuance of letters of
authorization.
AGENCY:
In January 2009, pursuant to
the Marine Mammal Protection Act
(MMPA), NMFS issued three 5-year
final regulations to govern the
unintentional taking of marine
mammals incidental to Navy training
and associated activities conducted in
the Hawaii Range Complex (HRC), the
Southern California Range Complex
(SOCAL Range Complex), and the
Atlantic Fleet Active Sonar Training
(AFAST) Study Area. These regulations,
which allow for the issuance of ‘‘Letters
of Authorization’’ (LOAs) for the
incidental take of marine mammals
during the specified activities and
described timeframes, prescribe the
permissible methods of taking and other
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means of effecting the least practicable
adverse impact on marine mammal
species or stocks and their habitat, as
well as requirements pertaining to the
monitoring and reporting of such taking.
These rules quantify the specific
amounts of individual sound source use
that will occur over the course of the
5-year rules, and indicate that marine
mammal take may only be authorized in
an LOA incidental to the source types
and amounts described. Specifically, no
language was initially included
expressly allowing for deviation from
those precise levels of source use if the
total number of takes remain within the
analyzed and authorized limits. Since
the issuance of the 2009 rules, the Navy
realized that their evolving training
programs, which are linked to real
world events, necessitate greater
flexibility in the types and amounts of
sound sources that they use. In response
to this need, when the Navy requested
incidental take authorizations for other
areas (e.g., the Mariana Islands and the
Northwest Training Range Complexes),
NMFS included language explicitly
allowing for greater flexibility. NMFS
has, through this interim final rule,
amended the HRC, SOCAL Range
Complex, and AFAST regulations to
explicitly allow for greater flexibility in
the types and amount of sound sources
that they use.
NMFS has issued new LOAs for each
of these actions, which supersede those
issued in January 2011, and which
authorize the Navy to take marine
mammals incidental to their planned
training in 2011, and reflect the greater
flexibility addressed in this amendment.
The take authorized in these LOAs does
not exceed that analyzed and allowed
by the original 2009 final rules.
DATES: Effective on February 7, 2011.
Comments and information must be
received no later than March 10, 2011.
ADDRESSES: You may submit comments,
identified by 0648–BA67, by any one of
the following methods:
• Electronic Submissions: Submit all
electronic public comments via the
Federal eRulemaking Portal https://
www.regulations.gov.
• Hand delivery or mailing of paper,
disk, or CD–ROM comments should be
addressed to Michael Payne, Chief,
Permits, Conservation and Education
Division, Office of Protected Resources,
National Marine Fisheries Service, 1315
East-West Highway, Silver Spring, MD
20910–3225.
Instructions: All comments received
are a part of the public record and will
generally be posted to https://
www.regulations.gov without change.
All Personal Identifying Information (for
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6699
example, name, address, etc.)
voluntarily submitted by the commenter
may be publicly accessible. Do not
submit Confidential Business
Information or otherwise sensitive or
protected information.
NMFS will accept anonymous
comments (enter N/A in the required
fields if you wish to remain
anonymous). Attachments to electronic
comments will be accepted in Microsoft
Word, Excel, WordPerfect, or Adobe
PDF file formats only.
A copy of the Navy’s applications,
NMFS’ Records of Decision (RODs),
NMFS’ proposed and final rules and
subsequent LOAs, and other documents
cited herein may be obtained by writing
to Michael Payne, Chief, Permits,
Conservation and Education Division,
Office of Protected Resources, National
Marine Fisheries Service, 1315 EastWest Highway, Silver Spring, MD
20910–3225 or by telephone via the
contact listed here (see FOR FURTHER
INFORMATION CONTACT).
FOR FURTHER INFORMATION CONTACT: Jolie
Harrison, Office of Protected Resources,
NMFS, (301) 713–2289, ext. 166.
SUPPLEMENTARY INFORMATION:
Background
Sections 101(a)(5)(A) and (D) of the
MMPA (16 U.S.C. 1361 et seq.) direct
the Secretary of Commerce (Secretary)
to allow, upon request, the incidental,
but not intentional taking of marine
mammals by U.S. citizens who engage
in a specified activity (other than
commercial fishing) during periods of
not more than five consecutive years
each if certain findings are made and
regulations are issued or, if the taking is
limited to harassment and of no more
than 1 year, to issue a notice of
proposed authorization for public
review.
Authorization shall be granted if
NMFS finds that the taking will have a
negligible impact on the species or
stock(s), will not have an unmitigable
adverse impact on the availability of the
species or stock(s) for subsistence uses,
and if the permissible methods of taking
and requirements pertaining to the
mitigation, monitoring and reporting of
such taking are set forth.
NMFS has defined ‘‘negligible impact’’
in 50 CFR 216.103 as:
An impact resulting from the specified
activity that cannot be reasonably expected
to, and is not reasonably likely to, adversely
affect the species or stock through effects on
annual rates of recruitment or survival.
The National Defense Authorization
Act (NDAA) (Pub. L. 108–136) removed
the ‘‘small numbers’’ and ‘‘specified
geographical region’’ limitations, and
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]]>Agencies
[Federal Register Volume 76, Number 26 (Tuesday, February 8, 2011)]
[Rules and Regulations]
[Pages 6696-6699]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2772]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 1816
RIN 2700-AD69
NASA Implementation of Federal Acquisition Regulation (FAR) Award
Fee Language Revision
AGENCY: National Aeronautics and Space Administration.
ACTION: Interim rule.
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SUMMARY: This interim rule revises the NASA FAR Supplement (NFS) to
implement the FAR Award Fee revision issued in Federal Acquisition
Circular (FAC) 2005-46.
DATES: Effective Date: February 8, 2011.
Comment Date: Interested parties should submit written comments to
NASA at the address below on or before April 11, 2011 to be considered
in the formulation of the final rule.
ADDRESSES: Interested parties may submit comments, identified by RIN
number 2700-AD69, via the Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments.
Comments may also be submitted to Bill Roets, NASA Headquarters, Office
of Procurement, Contract Management Division, Washington, DC 20546.
Comments may also be submitted by e-mail to william.roets-1@nasa.gov.
FOR FURTHER INFORMATION CONTACT: Bill Roets, NASA, Office of
Procurement, Contract Management Division (Suite 5G86); (202) 358-4483;
e-mail: william.roets-1@nasa.gov.
SUPPLEMENTARY INFORMATION:
A. Background
Federal Acquisition Circular (FAC) 2005-46 significantly revised
FAR Parts 16.305, 16.401, and 16.405-2, incorporating new requirements
relative to the use of award fee incentives. Specifically, this FAR
rule implements section 814 of the John Warner 2007 National Defense
Authorization Act (NDAA) and section 867 of the Duncan Hunter 2009 NDAA
and requires agencies to:
(1) Link award fees to acquisition objectives in the areas of cost,
schedule, and technical performance;
(2) Clarify that the base fee may be included in a cost plus award
fee type contract at the discretion of the contracting officer;
(3) Prescribe narrative ratings when making a percentage of award
fee available;
(4) Prohibit the issuance of award fees for a rating period if the
contractor's performance is judged to be below satisfactory;
(5) Conduct an analysis and consider the results of the analysis
when determining whether to use an award fee type contract or not;
(6) Include specific content in the award fee plans; and
(7) Prohibit the rolling over of unearned award fees to subsequent
rating periods.
These significant revisions in FAR award fee guidance resulted in
the need
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to make associated changes to the NFS award fee regulations.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993.
This rule is not a major rule under 5 U.S.C. 804.
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, at 5 U.S.C. 601, et seq.,
because it merely implements the FAR Award Fee revisions and does not
impose an economic impact beyond that addressed in the FAC 2005-46
publication of the FAR final rule.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. NASA will consider comments from small entities concerning
the affected NFS Part 1816 in accordance with 5 U.S.C. 610. Interested
parties must submit such comments separately and should cite 5 U.S.C.
601, et seq. in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this interim
rule does not contain any information collection requirements that
require the approval of the Office of Management and Budget under 44
U.S.C. 3501, et seq.
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 without
prior opportunity for public comment. This action is necessary to
harmonize the NFS Award Fee coverage with that in the FAR which was
effective per FAC 2005-46. However, pursuant to Public Law 98-577 and
FAR 1.501, NASA will consider public comments received in response to
this interim rule in the formation of the final rule.
List of Subjects in 48 CFR Part 1816
Government procurement.
William P. McNally,
Assistant Administrator for Procurement.
Accordingly, 48 CFR part 1816 is amended as follows:
PART 1816--TYPES OF CONTRACTS
0
1. The authority citation for 48 CFR part 1816 continues to read as
follows:
Authority: 42 U.S.C. 2455(a), 2473(c)(1).
0
2. Section 1816.405-270 is revised to read as follows:
1816.405-270 CPAF contracts.
(a) Use of an award fee incentive requires advance approval by the
Assistant Administrator for Procurement. Requests for approval, that
include Determination & Findings (D&F) cited in paragraph (b) of this
section, shall be submitted to Headquarters Office of Procurement,
Program Operations Division.
(b) Contracting officers shall prepare a D&F in accordance with FAR
16.401(d) prior to using an award fee incentive. In addition to the
items identified in FAR 16.401(e)(1), D&Fs will include a discussion of
the other types of contracts considered and shall indicate why an award
fee incentive is the appropriate choice. Award fee incentives should
not be used on contracts with a total estimated cost and fee less than
$2 million per year. Use of award fee incentive for lower-valued
acquisitions may be authorized in exceptional situations such as
contract requirements having direct health or safety impacts, where the
judgmental assessment of the quality of contractor performance is
critical.
(c) Except as provided in paragraph (d) of this section, an award
fee incentive may be used in conjunction with other contract types for
aspects of performance that cannot be objectively assessed. In such
cases, the cost incentive is based on objective formulas inherent in
the other contract types (e.g., FPI, CPIF), and the award fee provision
should not separately incentivize cost performance.
(d) Award fee incentives shall not be used with a cost-plus-fixed-
fee (CPFF) contract.
0
3. Section 1816.405-271 is revised to read as follows:
1816.405-271 Base fee.
(a) A base fee shall not be used on CPAF contracts for which the
periodic award fee evaluations are final (1816.405-273(a)). In these
circumstances, contractor performance during any award fee period is
independent of and has no effect on subsequent performance periods or
the final results at contract completion. For other contracts, such as
those for hardware or software development, the procurement officer may
authorize the use of a base fee not to exceed 3 percent. Base fee shall
not be used when an award fee incentive is used in conjunction with
another contract type (e.g., CPIF/AF).
(b) When a base fee is authorized for use in a CPAF contract, it
shall be paid only if the final award fee evaluation is
``satisfactory'' or better. (See 1816.405-273 and 1816.405-275) Pending
final evaluation, base fee may be paid during the life of the contract
at defined intervals on a provisional basis. If the final award fee
evaluation is ``unsatisfactory'', all provisional base fee payments
shall be refunded to the Government.
0
4. Section 1816.405-274 is revised to read as follows:
1816.405-274 Award fee evaluation factors.
(a) Explicit evaluation factors shall be established for each award
fee period. Factors shall be linked to acquisition objectives which
shall be defined in terms of contract cost, schedule, and technical
performance. If used, subfactors should be limited to the minimum
necessary to ensure a thorough evaluation and an effective incentive.
(b) Evaluation factors will be developed by the contracting officer
based upon the characteristics of an individual procurement. Cost
control, schedule, and technical performance considerations shall be
included as evaluation factors in all CPAF contracts, as applicable.
When explicit evaluation factor weightings are used, cost control shall
be no less than 25 percent of the total weighted evaluation factors.
The predominant consideration of the cost control evaluation should be
a measurement of the contractor's performance against the negotiated
estimated cost of the contract. This estimated cost may include the
value of undefinitized change orders when appropriate.
(c)(1) The technical factor must include consideration of risk
management (including mission success, safety, security, health, export
control, and damage to the environment, as appropriate) unless waived
at a level above the contracting officer, with the concurrence of the
project manager. The rationale for any waiver shall be documented in
the contract file. When safety, export control, or security are
considered under the technical factor, the award fee plan shall allow
the following fee determinations, regardless of contractor performance
in other evaluation factors, when there is a major breach of safety or
security.
(i) For evaluation of service contracts under 1816.405-273(a), an
overall fee rating of unsatisfactory for any evaluation period in which
there is a major breach of safety or security.
(ii) For evaluation of end item contracts under 1816.405-273(b), an
overall fee rating of unsatisfactory for
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any interim evaluation period in which there is a major breach of
safety or security. To ensure that the final award fee evaluation at
contract completion reflects any major breach of safety or security, in
an interim period, the overall award fee pool shall be reduced by the
amount of the fee available for the period in which the major breach
occurred if an unsatisfactory fee rating was assigned because of a
major breach of safety or security.
(2) A major breach of safety must be related directly to the work
on the contract. A major breach of safety is an act or omission of the
Contractor that consists of an accident, incident, or exposure
resulting in a fatality or mission failure; or in damage to equipment
or property equal to or greater than $1 million; or in any ``willful''
or ``repeat'' violation cited by the Occupational Safety and Health
Administration (OSHA) or by a state agency operating under an OSHA
approved plan.
(3) A major breach of security may occur on or off Government
installations, but must be directly related to the work on the
contract. A major breach of security is an act or omission by the
contractor that results in compromise of classified information,
illegal technology transfer, workplace violence resulting in criminal
conviction, sabotage, compromise or denial of information technology
services, equipment or property damage from vandalism greater than
$250,000, or theft greater than $250,000.
(4) The Assistant Administrator for Procurement shall be notified
prior to the determination of an unsatisfactory award fee rating
because of a major breach of safety or security.
(d) In rare circumstances, contract costs may increase for reasons
outside the contractor's control and for which the contractor is not
entitled to an equitable adjustment. One example is a weather-related
launch delay on a launch support contract. The Government shall take
such situations into consideration when evaluating contractor cost
control.
(e) Emphasis on cost control should be balanced against other
performance requirement objectives. The contractor should not be
incentivized to pursue cost control to the point that overall
performance is significantly degraded. For example, incentivizing an
underrun that results in direct negative impacts on technical
performance, safety, or other critical contract objectives is both
undesirable and counterproductive. Therefore, evaluation of cost
control shall conform to the following guidelines:
(1) Normally, the contractor should be given an unsatisfactory
rating for cost control when there is a significant overrun within its
control. However, the contractor may receive a satisfactory or higher
rating for cost control if the overrun is insignificant. Award fee
ratings should decrease sharply as the size of the overrun increases.
In any evaluation of contractor overrun performance, the Government
shall consider the reasons for the overrun and assess the extent and
effectiveness of the contractor's efforts to control or mitigate the
overrun.
(2) The contractor should normally be rewarded for an underrun
within its control, up to the maximum award fee rating allocated for
cost control, provided the adjectival rating for all other award fee
evaluation factors is very good or higher (see FAR 16.401(e)(iv)).
(3) The contractor should be rewarded for meeting the estimated
cost of the contract, but not to the maximum rating allocated for cost
control, to the degree that the contractor has prudently managed costs
while meeting contract requirements. No award shall be given in this
circumstance unless the average adjectival rating for all other award
fee evaluation factors is satisfactory or higher.
(f) When an AF arrangement is used in conjunction with another
contract type, the award fee's cost control factor will only apply to a
subjective assessment of the contractor's efforts to control costs and
not the actual cost outcome incentivized under the basic contract type
(e.g. CPIF, FPIF).
(g)(1) The contractor's performance against the subcontracting plan
incorporated in the contract shall be evaluated. Emphasis may be placed
on the contractor's accomplishment of its goals for subcontracting with
small business, HUBZone small business, women-owned small business,
veteran-owned small business, and service-disabled veteran-owned small
business concerns.
(2) The contractor's performance against the contract target for
participation as subcontractors by small disadvantaged business
concerns in the NAICS Major Groups designated by the Department of
Commerce (see FAR 19.201(c)) shall also be evaluated if the clause at
FAR 52.219-26, Small Disadvantaged Business Participation--Incentive
Subcontracting, is not included in the contract (see FAR 19.1204(c)).
(3) The contractor's achievements in subcontracting high technology
efforts as well as the contractor's performance under the Mentor-
Prot[eacute]g[eacute] Program, if applicable, may also be evaluated.
(4) The evaluation weight given to the contractor's performance
against the considerations in paragraphs (g)(1) through (g)(3) of this
section should be significant (up to 15 percent of available award
fee). The weight should motivate the contractor to focus management
attention to subcontracting with small, HUBZone, women-owned, veteran-
owned, and service-disabled veteran-owned small business concerns, and
with small disadvantaged business concerns in designated NAICS Major
Groups to the maximum extent practicable, consistent with efficient
contract performance.
(h) When contract changes are anticipated, the contractor's
responsiveness to requests for change proposals should be evaluated.
This evaluation should include the contractor's submission of timely,
complete proposals and cooperation in negotiating the change.
(i) Only the award fee performance evaluation factors set forth in
the performance evaluation plan shall be used to determine award fee
scores.
(j) The Government may unilaterally modify the applicable award fee
performance evaluation factors and performance evaluation areas prior
to the start of an evaluation period. The contracting officer shall
notify the contractor in writing of any such changes 30 days prior to
the start of the relevant evaluation period.
0
5. Section 1816.405-275 is revised to read as follows:
1816.405-275 Award fee evaluation rating.
(a) All award fee contracts shall utilize the adjectival rating
categories and associated descriptions as well as the award fee pool
available to be earned percentages for each adjectival rating category
contained in FAR 16.401(e)(iv).
(b) The following numerical scoring system shall be used in
conjunction with the FAR adjectival rating categories and associated
descriptions (see FAR 16.401(e)(iv)).
(1) Excellent (100-91)
(2) Very good (90-76)
(3) Good (75-51)
(4) Satisfactory (50)
(5) Unsatisfactory (less than 50) No award fee shall be paid for an
unsatisfactory rating.
(c) As a benchmark for evaluation, in order to be rated
``Excellent'' overall, the contractor would typically be under cost, on
or ahead of schedule, and providing outstanding technical performance.
[[Page 6699]]
(d) A weighted scoring system appropriate for the circumstances of
the individual contract requirement should be developed. In this
system, each evaluation factor (e.g., technical, schedule, cost
control) is assigned a specific percentage weighting with the
cumulative weightings of all factors totaling 100. During the award fee
evaluation, each factor is scored from 0-100 according to the ratings
defined in 1816.405-275(b). The numerical score for each factor is then
multiplied by the weighting for that factor to determine the weighted
score. For example, if the technical factor has a weighting of 60
percent and the numerical score for that factor is 80, the weighted
technical score is 48 (80 x 60 percent). The weighted scores for each
evaluation factor are then added to determine the total award fee
score.
[FR Doc. 2011-2772 Filed 2-7-11; 8:45 am]
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