NASA Federal Acquisition Regulation Supplement: Contractor Financial Reporting of Property (2016-N024), 48726-48728 [2016-17559]

Download as PDF 48726 Federal Register / Vol. 81, No. 143 / Tuesday, July 26, 2016 / Proposed Rules NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1845 and 1852 RIN 2700–AE33 NASA Federal Acquisition Regulation Supplement: Contractor Financial Reporting of Property (2016–N024) National Aeronautics and Space Administration. ACTION: Proposed rule. AGENCY: NASA is proposing to amend the NASA Federal Acquisition Regulation Supplement (NFS) to add a monthly reporting requirement for contractors having custody of $10 million or more in NASA-owned Property, Plant and Equipment (PP&E). DATES: Interested parties should submit comments to NASA at the address below on or before September 26, 2016 to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by NFS Case 2016–N024, using any of the following methods: Æ Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘NFS Case 2016–N024’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘NFS Case 2016–N024.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘NFS Case 2016–N024’’ on your attached document. Æ Email: andrew.orourke@nasa.gov. Include NFS Case 2016–N024 in the subject line of the message. Æ Fax: (202) 358–3082. Æ Mail: National Aeronautics and Space Administration, Headquarters, Office of Procurement, Contract and Grant Policy Division, Attn: Andrew O’Rourke, LP–011 (Suite 5L32), 300 E. Street SW., Washington, DC 20546– 0001. SUMMARY: FOR FURTHER INFORMATION CONTACT: rmajette on DSK2TPTVN1PROD with PROPOSALS Andrew O’Rourke, NASA, Office of Procurement, Contract and Grant Policy Division, LP–011 (Suite 5L32); (202) 358–4560; email: andrew.orourke@ nasa.gov. SUPPLEMENTARY INFORMATION: I. Background NASA is proposing to revise the NFS to add a monthly reporting requirement at 1852.245–73 for contracts in which the contractor has custody of NASAowned PP&E valued at $10 million or more to ensure contractor-held PP&E are VerDate Sep<11>2014 13:47 Jul 25, 2016 Jkt 238001 more accurately represented in NASA financial statements. In accordance with the Statement of Federal Financial Accounting Standard (SFFAS) No. 6, Accounting for Property, Plant, and Equipment, Federal agencies are— • Required to record as property and equipment all items that meet certain characteristics, such as a useful life of two (2) years or more; and • Permitted to establish individual capitalization thresholds and useful life policies due to their diverse size and uses of PP&E. NASA Procedural Requirement (NPR) 9250.1, Property, Plant, and Equipment and Operating Materials and Supplies, which implements SSFAS No. 6, requires contractors with custody of NASA-owned PP&E to report financial property information to NASA on a yearly basis, and also requires contractors with custody of $10 million or more in NASA-owned PP&E to report financial property information to NASA on a monthly basis. NFS subpart 1845.71 requires contractors in possession of NASA PP&E to submit annually a NASA Form (NF) 1018, NASA Property in the Custody of Contractors. NFS clause 1852.245–73, Financial Reporting of NASA Property in the Custody of Contractors, paragraph (a), states the Contractor shall submit annually a NASA Form (NF) 1018, NASA Property in the Custody of Contractors, in accordance with this clause, the instructions on the form and NFS subpart 1845.71, and any supplemental instructions for the current reporting period issued by NASA. Currently, if at any time during performance of the contract the amount of NASA property in the custody of the contractor is equal to or in excess of $10 million, the contractor has received instructions from the NASA contracting officer to submit a monthly report. In order to ensure that PP&E are being presented fairly in the Agency’s financial statements, independent auditors recommended to NASA that the NFS policy regarding property financial reporting be revised to specify that the supplemental instructions in paragraph (a) of the clause specifically includes the requirement that all contractors having custody of NASA PP&E with a value of $10 million or more are required to report this information on a monthly basis to NASA. II. Discussion The following sections of the NFS are being revised relative to PP&E reporting requirements: PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 • NASA is proposing to update NFS clause 1852.245–73 and the associated prescription at NFS 1845.107–70 regarding the reporting of NASA-owned and contractor-held PP&E that equals $10 million or more on a monthly basis. • NASA is proposing to update NFS clause 1852.245–73 to add the cognizant NASA Center Industrial Property Officer to the distribution list for the hard copy NF 1018. • NASA is proposing to update NFS clause 1852.245–73 to revise the annual report submission date from October 15th to October 31st to allow contractors additional time to develop and submit this report. III. Executive Orders 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. IV. Regulatory Flexibility Act NASA does not expect this proposed rule to 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 the affected NASA contractors with custody of NASAowned PP&E valued at $10 million or greater are primarily large businesses. However, an initial regulatory flexibility analysis has been performed and is summarized as follows: The objective of this rule is to add a monthly reporting requirement for contractors having custody of NASAowned PP&E valued at $10 million or greater to ensure that contractor-held PP&E are more accurately represented in NASA financial statements in accordance with the Statement of Federal Financial Accounting Standard (SFFAS) No. 6, Accounting for Property, Plant, and Equipment and NASA Procedural Requirement (NPR) 9250.1, Property, Plant, and Equipment and Operating Materials and Supplies. The requirements under this proposed rule would apply to any contract award E:\FR\FM\26JYP1.SGM 26JYP1 Federal Register / Vol. 81, No. 143 / Tuesday, July 26, 2016 / Proposed Rules (including contracts for supplies, services, construction, and major systems) that requires contractors to use Government property. According to NASA Property Records in Fiscal Year (FY) 2015 there were 643 contracts that required reporting NASA contractors with custody of Government property to report that property. Of the 643 contracts, approximately 20% or 129 contracts were with small business contractors. Of the 643 contracts, 32 contracts had NASA-owned and contractor-held PP&E with a value of $10 Million or more and required monthly reporting. Of those 32 contracts, only three were awarded to small business contractors. The rule contains information collection requirements, however, this rule does not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 2700–0017, titled NASA Property in the Custody of Contractors and OMB Control No. 9000–0075, titled Government Furnished Property Requirements. The impact of this reporting requirement is minimal on small entities based on FY 2015 NASA property records that show only three contractors with custody of NASA PP&E valued at $10 million or more. No alternatives were identified that would meet the objectives of this proposed rule. NASA invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities. NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this proposed rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (NFS Case 2016–N024) in correspondence. rmajette on DSK2TPTVN1PROD with PROPOSALS V. Paperwork Reduction Act The rule contains information collection requirements that require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. chapter 35); however, these changes to the NFS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 2700–0017, titled NASA Property in the Custody of Contractors and OMB Control No. 9000– 0075, titled Government Furnished Property Requirements. VerDate Sep<11>2014 13:47 Jul 25, 2016 Jkt 238001 List of Subjects in 48 CFR Parts 1845 and 1852 Government procurement. Manuel Quinones, NASA FAR Supplement Manager. Accordingly, 48 CFR parts 1845 and 1852 are proposed to be amended as follows: PART 1845—GOVERNMENT PROPERTY 1. The authority citation for part 1845 is revised to read as follows: ■ Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1. 2. Amend section 1845.107–70 by revising paragraph (d) to read as follows: ■ 1845.107–70 NASA solicitation provisions and contract clauses. * * * * * (d) The contracting officer shall insert the clause at 1852.245–73, Financial Reporting of NASA Property in the Custody of Contractors, in cost reimbursement solicitations and contracts and in all contracts in which the contractor has custody of NASA owned-property with a value of $10 million or more, unless all property to be provided is subject to the clause at 1852.245–71, Installation-Accountable Government Property. Insert the clause 1852.245–73 in other types of solicitations and contracts when it is known at award that property will be provided to the contractor or that the contractor will acquire property title to which will vest in the Government prior to delivery. * * * * * PART 1852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 3. The authority citation for part 1852 continues to read as follows: ■ Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1. 4. Amend section 1852.245–73 by— a. Revising the date of the clause; b. In paragraph (a), removing the words ‘‘in accordance this clause’’ and adding ‘‘in accordance with this clause’’ in its place; and ■ c. Revising paragraphs (b)(2) and (c). The revised text reads as follows: ■ ■ ■ 1852.245–73 Financial Reporting of NASA Property in the Custody of Contractors. * * * * * Financial Reporting of NASA Property in the Custody of Contractors (Date) * PO 00000 * Frm 00004 * * Fmt 4702 * Sfmt 4702 48727 (b)(1) * * * (2) The Contractor shall mail the original signed NF 1018 directly to the cognizant NASA Center Industrial Property Officer and a copy to the cognizant NASA Center Deputy Chief Financial Officer, Finance, unless the Contractor uses the NF 1018 Electronic Submission System (NESS) for report preparation and submission. (c)(1) 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 31st. 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 31st. (2) Some activity may be estimated for the month in which the report is submitted, if necessary, to ensure the NF 1018 is received when due. However, contractors’ procedures must document the process for developing these estimates based on planned activity such as planned purchases or NASA Form 533 (NF 533) Contractor Financial Management Report cost estimates. It should be supported and documented by historical experience or other corroborating evidence, and be retained in accordance with FAR Subpart 4.7, Contractor Records Retention. Contractors shall validate the reasonableness of the estimates and associated methodology by comparing them to the actual activity once that data is available, and adjust them accordingly. In addition, differences between the estimated cost and actual cost must be adjusted during the next reporting period. Contractors shall have formal policies and procedures, which address the validation of NF 1018 data, including data from subcontractors, and the identification and timely reporting of errors. The objective of this validation is to ensure that information reported is accurate and in compliance with the NASA FAR Supplement. If errors are discovered on NF 1018 after submission, the contractor shall contact the cognizant NASA Center Industrial Property Officer (IPO) within 30 days after discovery of the error to discuss corrective action. (3) In addition to an annual report, if at any time during performance of the contract, NASA-owned property in the custody of the contractor has a value of $10 million or more, the contractor shall also submit a report no later than the 21st of each month in accordance with the requirements of paragraph (c)(2) of this clause. (4) 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 in accordance with NFS subpart 1845.71, any monthly report in accordance with (c)(3) of this clause, and any supplemental instructions for the current reporting period issued by NASA. Such reserve shall be withheld until the Contracting Officer has determined that NASA has received the required reports. The withholding of any amount or the subsequent E:\FR\FM\26JYP1.SGM 26JYP1 48728 Federal Register / Vol. 81, No. 143 / Tuesday, July 26, 2016 / Proposed Rules payment thereof shall not be construed as a waiver of any Government right. * * * * * [FR Doc. 2016–17559 Filed 7–25–16; 8:45 am] BILLING CODE 7510–13–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 160613514–6514–01] RIN 0648–BG12 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Red Grouper Management Measures National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. AGENCY: NMFS proposes to implement management measures described in a framework action to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP), as prepared by the Gulf of Mexico Fishery Management Council (Council). If implemented, this action would revise the commercial quota and annual catch limit (ACL) and the recreational annual catch target (ACT) and ACL for red grouper in the Gulf of Mexico (Gulf) exclusive economic zone. The purpose of this proposed rule is to adjust the allowable red grouper harvest to achieve optimum yield based upon an updated Gulf red grouper stock assessment. DATES: Written comments must be received on or before August 25, 2016. ADDRESSES: You may submit comments on the proposed rule, identified by ‘‘NOAA–NMFS–2016–0077’’ by either of the following methods: • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-20160077, click the ‘‘Comment Now!’’ icon, complete the required fields, and enter or attach your comments. • Mail: Submit written comments to Richard Malinowski, Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701. Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments rmajette on DSK2TPTVN1PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 13:47 Jul 25, 2016 Jkt 238001 received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter ‘‘N/A’’ in the required fields if you wish to remain anonymous). Electronic copies of the framework action, which includes an environmental assessment, a regulatory impact review, and a Regulatory Flexibility Act (RFA) analysis may be obtained from the Southeast Regional Office Web site at http:// sero.nmfs.noaa.gov/sustainable_ fisheries/gulf_fisheries/reef_fish/2016/ red_grouper_allowable_harvest/ index.html. FOR FURTHER INFORMATION CONTACT: Richard Malinowski, Southeast Regional Office, NMFS, telephone: 727–824– 5305, email: rich.malinowski@noaa.gov. SUPPLEMENTARY INFORMATION: The Gulf reef fish fishery, which includes red grouper, is managed under the FMP. The FMP was prepared by the Council and is implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Background The Magnuson-Stevens Act requires NMFS and regional fishery management councils to achieve on a continuing basis the optimum yield from federally managed fish stocks. This mandate is intended to ensure that fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, while also protecting marine ecosystems. The 2015 Southeast Data Assessment Review (SEDAR 42) for Gulf red grouper determined that the stock is not overfished or undergoing overfishing based upon the assessment’s terminal year of 2013. As a result of SEDAR 42, the Council’s Science and Statistical Committee (SSC) recommended increasing the Gulf red grouper overfishing limit (OFL) and acceptable biological catch (ABC). The SSC provided two alternative OFL and ABC recommendations: (1) As a declining yield stream for the 2016 through 2020 fishing years; and (2) as a constant catch. The Council chose the constant catch OFL and ABC (14.16 million lb (6.42 million kg) and 13.92 million lb PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 (6.31 million kg), respectively), but chose a more conservative approach in setting the ACLs and ACTs, basing these catch levels on the minimum ABC of 10.77 million lb (4.89 million kg) from the declining yield stream. The Council’s decision was based on testimony from the general public and commercial fishermen, who suggested the Council use caution when setting the catch levels. Thus, through this framework action, the Council is increasing the red grouper commercial and recreational ACTs and ACLs. The commercial ACT is codified as the commercial quota. Management Measures Contained in This Proposed Rule The proposed rule would revise the commercial quota and ACL, and the recreational ACT and ACL for Gulf red grouper. All weights described in this proposed rule are in gutted weight. Commercial and Recreational Catch Limits The current red grouper commercial quota and ACL, and recreational ACT and ACL were implemented through Amendment 32 to the FMP (77 FR 6988, February 10, 2012). The current commercial quota is 5,720,000 lb (2,590,000 kg) and the commercial ACL is 6,030,000 lb (2,735,000 kg). The current recreational ACT is 1,730,000 lb (785,000 kg) and the recreational ACL is 1,900,000 lb (862,000 kg). This proposed rule would increase catch levels for both sectors. The commercial quota would be revised to 7,780,000 lb (3,528,949 kg) and the commercial ACL would be revised to 8,190,000 lb (3,714,922 kg). Additionally, the recreational ACT would be revised to 2,370,000 lb (1,075,014 kg) and the recreational ACL to 2,580,000 lb (1,170,268 kg). For Gulf red grouper, 76 percent of the stock ACL is allocated to the commercial sector and 24 percent of the ACL is allocated to the recreational sector. The commercial quota is set by applying a 5 percent buffer to the commercial ACL to account for management uncertainty and the recreational ACT is set by applying a buffer to the recreational ACL of 8 percent to account for management uncertainty. The revised commercial quota in this proposed rule would provide the commercial sector additional harvest opportunities as a result of the increased commercial quota beginning in 2016. The increase in the recreational ACL is expected to allow the recreational sector to remain open for the entire fishing E:\FR\FM\26JYP1.SGM 26JYP1

Agencies

[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Proposed Rules]
[Pages 48726-48728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17559]



[[Page 48726]]

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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1845 and 1852

RIN 2700-AE33


NASA Federal Acquisition Regulation Supplement: Contractor 
Financial Reporting of Property (2016-N024)

AGENCY: National Aeronautics and Space Administration.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: NASA is proposing to amend the NASA Federal Acquisition 
Regulation Supplement (NFS) to add a monthly reporting requirement for 
contractors having custody of $10 million or more in NASA-owned 
Property, Plant and Equipment (PP&E).

DATES: Interested parties should submit comments to NASA at the address 
below on or before September 26, 2016 to be considered in the formation 
of a final rule.

ADDRESSES: Submit comments identified by NFS Case 2016-N024, using any 
of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``NFS Case 2016-N024'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``NFS Case 
2016-N024.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``NFS Case 2016-N024'' on your attached document.
    [cir] Email: andrew.orourke@nasa.gov. Include NFS Case 2016-N024 in 
the subject line of the message.
    [cir] Fax: (202) 358-3082.
    [cir] Mail: National Aeronautics and Space Administration, 
Headquarters, Office of Procurement, Contract and Grant Policy 
Division, Attn: Andrew O'Rourke, LP-011 (Suite 5L32), 300 E. Street 
SW., Washington, DC 20546-0001.

FOR FURTHER INFORMATION CONTACT: Andrew O'Rourke, NASA, Office of 
Procurement, Contract and Grant Policy Division, LP-011 (Suite 5L32); 
(202) 358-4560; email: andrew.orourke@nasa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    NASA is proposing to revise the NFS to add a monthly reporting 
requirement at 1852.245-73 for contracts in which the contractor has 
custody of NASA-owned PP&E valued at $10 million or more to ensure 
contractor-held PP&E are more accurately represented in NASA financial 
statements. In accordance with the Statement of Federal Financial 
Accounting Standard (SFFAS) No. 6, Accounting for Property, Plant, and 
Equipment, Federal agencies are--
     Required to record as property and equipment all items 
that meet certain characteristics, such as a useful life of two (2) 
years or more; and
     Permitted to establish individual capitalization 
thresholds and useful life policies due to their diverse size and uses 
of PP&E.
    NASA Procedural Requirement (NPR) 9250.1, Property, Plant, and 
Equipment and Operating Materials and Supplies, which implements SSFAS 
No. 6, requires contractors with custody of NASA-owned PP&E to report 
financial property information to NASA on a yearly basis, and also 
requires contractors with custody of $10 million or more in NASA-owned 
PP&E to report financial property information to NASA on a monthly 
basis.
    NFS subpart 1845.71 requires contractors in possession of NASA PP&E 
to submit annually a NASA Form (NF) 1018, NASA Property in the Custody 
of Contractors. NFS clause 1852.245-73, Financial Reporting of NASA 
Property in the Custody of Contractors, paragraph (a), states the 
Contractor shall submit annually a NASA Form (NF) 1018, NASA Property 
in the Custody of Contractors, in accordance with this clause, the 
instructions on the form and NFS subpart 1845.71, and any supplemental 
instructions for the current reporting period issued by NASA. 
Currently, if at any time during performance of the contract the amount 
of NASA property in the custody of the contractor is equal to or in 
excess of $10 million, the contractor has received instructions from 
the NASA contracting officer to submit a monthly report.
    In order to ensure that PP&E are being presented fairly in the 
Agency's financial statements, independent auditors recommended to NASA 
that the NFS policy regarding property financial reporting be revised 
to specify that the supplemental instructions in paragraph (a) of the 
clause specifically includes the requirement that all contractors 
having custody of NASA PP&E with a value of $10 million or more are 
required to report this information on a monthly basis to NASA.

II. Discussion

    The following sections of the NFS are being revised relative to 
PP&E reporting requirements:
     NASA is proposing to update NFS clause 1852.245-73 and the 
associated prescription at NFS 1845.107-70 regarding the reporting of 
NASA-owned and contractor-held PP&E that equals $10 million or more on 
a monthly basis.
     NASA is proposing to update NFS clause 1852.245-73 to add 
the cognizant NASA Center Industrial Property Officer to the 
distribution list for the hard copy NF 1018.
     NASA is proposing to update NFS clause 1852.245-73 to 
revise the annual report submission date from October 15th to October 
31st to allow contractors additional time to develop and submit this 
report.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    NASA does not expect this proposed rule to 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 the affected NASA contractors with custody of NASA-owned PP&E 
valued at $10 million or greater are primarily large businesses. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    The objective of this rule is to add a monthly reporting 
requirement for contractors having custody of NASA-owned PP&E valued at 
$10 million or greater to ensure that contractor-held PP&E are more 
accurately represented in NASA financial statements in accordance with 
the Statement of Federal Financial Accounting Standard (SFFAS) No. 6, 
Accounting for Property, Plant, and Equipment and NASA Procedural 
Requirement (NPR) 9250.1, Property, Plant, and Equipment and Operating 
Materials and Supplies.
    The requirements under this proposed rule would apply to any 
contract award

[[Page 48727]]

(including contracts for supplies, services, construction, and major 
systems) that requires contractors to use Government property. 
According to NASA Property Records in Fiscal Year (FY) 2015 there were 
643 contracts that required reporting NASA contractors with custody of 
Government property to report that property. Of the 643 contracts, 
approximately 20% or 129 contracts were with small business 
contractors. Of the 643 contracts, 32 contracts had NASA-owned and 
contractor-held PP&E with a value of $10 Million or more and required 
monthly reporting. Of those 32 contracts, only three were awarded to 
small business contractors.
    The rule contains information collection requirements, however, 
this rule does not impose additional information collection 
requirements to the paperwork burden previously approved under OMB 
Control Number 2700-0017, titled NASA Property in the Custody of 
Contractors and OMB Control No. 9000-0075, titled Government Furnished 
Property Requirements. The impact of this reporting requirement is 
minimal on small entities based on FY 2015 NASA property records that 
show only three contractors with custody of NASA PP&E valued at $10 
million or more. No alternatives were identified that would meet the 
objectives of this proposed rule.
    NASA invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities. NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by this 
proposed rule in accordance with 5 U.S.C. 610. Interested parties must 
submit such comments separately and should cite 5 U.S.C. 610 (NFS Case 
2016-N024) in correspondence.

V. Paperwork Reduction Act

    The rule contains information collection requirements that require 
the approval of the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act (44 U.S.C. chapter 35); however, these changes 
to the NFS do not impose additional information collection requirements 
to the paperwork burden previously approved under OMB Control Number 
2700-0017, titled NASA Property in the Custody of Contractors and OMB 
Control No. 9000-0075, titled Government Furnished Property 
Requirements.

List of Subjects in 48 CFR Parts 1845 and 1852

    Government procurement.

Manuel Quinones,
NASA FAR Supplement Manager.

    Accordingly, 48 CFR parts 1845 and 1852 are proposed to be amended 
as follows:

PART 1845--GOVERNMENT PROPERTY

0
1. The authority citation for part 1845 is revised to read as follows:

    Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.

0
2. Amend section 1845.107-70 by revising paragraph (d) to read as 
follows:


1845.107-70   NASA solicitation provisions and contract clauses.

* * * * *
    (d) The contracting officer shall insert the clause at 1852.245-73, 
Financial Reporting of NASA Property in the Custody of Contractors, in 
cost reimbursement solicitations and contracts and in all contracts in 
which the contractor has custody of NASA owned-property with a value of 
$10 million or more, unless all property to be provided is subject to 
the clause at 1852.245-71, Installation-Accountable Government 
Property. Insert the clause 1852.245-73 in other types of solicitations 
and contracts when it is known at award that property will be provided 
to the contractor or that the contractor will acquire property title to 
which will vest in the Government prior to delivery.
* * * * *

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. The authority citation for part 1852 continues to read as follows:

    Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.

0
4. Amend section 1852.245-73 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a), removing the words ``in accordance this clause'' 
and adding ``in accordance with this clause'' in its place; and
0
c. Revising paragraphs (b)(2) and (c).
    The revised text reads as follows:


1852.245-73   Financial Reporting of NASA Property in the Custody of 
Contractors.

* * * * *

Financial Reporting of NASA Property in the Custody of Contractors 
(Date)

* * * * *
    (b)(1) * * *
    (2) The Contractor shall mail the original signed NF 1018 
directly to the cognizant NASA Center Industrial Property Officer 
and a copy to the cognizant NASA Center Deputy Chief Financial 
Officer, Finance, unless the Contractor uses the NF 1018 Electronic 
Submission System (NESS) for report preparation and submission.
    (c)(1) 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 31st. 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 31st.
    (2) Some activity may be estimated for the month in which the 
report is submitted, if necessary, to ensure the NF 1018 is received 
when due. However, contractors' procedures must document the process 
for developing these estimates based on planned activity such as 
planned purchases or NASA Form 533 (NF 533) Contractor Financial 
Management Report cost estimates. It should be supported and 
documented by historical experience or other corroborating evidence, 
and be retained in accordance with FAR Subpart 4.7, Contractor 
Records Retention. Contractors shall validate the reasonableness of 
the estimates and associated methodology by comparing them to the 
actual activity once that data is available, and adjust them 
accordingly. In addition, differences between the estimated cost and 
actual cost must be adjusted during the next reporting period. 
Contractors shall have formal policies and procedures, which address 
the validation of NF 1018 data, including data from subcontractors, 
and the identification and timely reporting of errors. The objective 
of this validation is to ensure that information reported is 
accurate and in compliance with the NASA FAR Supplement. If errors 
are discovered on NF 1018 after submission, the contractor shall 
contact the cognizant NASA Center Industrial Property Officer (IPO) 
within 30 days after discovery of the error to discuss corrective 
action.
    (3) In addition to an annual report, if at any time during 
performance of the contract, NASA-owned property in the custody of 
the contractor has a value of $10 million or more, the contractor 
shall also submit a report no later than the 21st of each month in 
accordance with the requirements of paragraph (c)(2) of this clause.
    (4) 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 in accordance 
with NFS subpart 1845.71, any monthly report in accordance with 
(c)(3) of this clause, and any supplemental instructions for the 
current reporting period issued by NASA. Such reserve shall be 
withheld until the Contracting Officer has determined that NASA has 
received the required reports. The withholding of any amount or the 
subsequent

[[Page 48728]]

payment thereof shall not be construed as a waiver of any Government 
right.
* * * * *
[FR Doc. 2016-17559 Filed 7-25-16; 8:45 am]
 BILLING CODE 7510-13-P