81 FR 50365 - NASA Federal Acquisition Regulation Supplement: Clarification of Award Fee Evaluations and Payments (NFS Case 2016-N008)

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 81, Issue 147 (August 1, 2016)

Page Range		50365-50366
FR Document		2016-17844
NASA is issuing a final rule amending the NASA Federal Acquisition Regulation Supplement (NFS) to clarify NASA's award fee process by incorporating terms used in award fee contracting; guidance relative to final award fee evaluations; release of source selection information; and the calculation of the provisional award fee payment percentage in NASA end-item award fee contracts.
Federal Register, Volume 81 Issue 147 (Monday, August 1, 2016)
[Federal Register Volume 81, Number 147 (Monday, August 1, 2016)]
[Rules and Regulations]
[Pages 50365-50366]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17844]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1816 and 1852

RIN 2700-AE31


NASA Federal Acquisition Regulation Supplement: Clarification of 
Award Fee Evaluations and Payments (NFS Case 2016-N008)

AGENCY: National Aeronautics and Space Administration.

ACTION: Final rule.

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SUMMARY: NASA is issuing a final rule amending the NASA Federal 
Acquisition Regulation Supplement (NFS) to clarify NASA's award fee 
process by incorporating terms used in award fee contracting; guidance 
relative to final award fee evaluations; release of source selection 
information; and the calculation of the provisional award fee payment 
percentage in NASA end-item award fee contracts.

DATES: Effective: August 31, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. William Roets, telephone 202-358-
4483.

SUPPLEMENTARY INFORMATION: 

I. Background

    NASA published a proposed rule in the Federal Register at 81 FR 
23667 on April 22, 2016, to revise NFS 1816.4 and 1852.216-77 to 
clarify NASA's award fee evaluation and payment processes. One public 
comment was received in response to the proposed rule.

II. Discussion and Analysis

    NASA reviewed the public comment in the development of the final 
rule. A discussion of the comment and the changes made to the rule as a 
result of this comment is provided, as follows:

A. Changes

    No change was made in the final rule in response to the public 
comment received.

B. Analysis of Public Comment

    Comment: Respondent stated that they do not support this rule.
    Response: The respondent did not identify any specific areas of 
concern. Accordingly, this rule provides needed clarification to NASA's 
award fee processes to enhance the efficient administration of award 
fee incentives.

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

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    NASA is amending the NFS to clarify award fee process by 
incorporating terms used in award fee contracting; guidance relative to 
final award fee evaluations; release of source selection information; 
and the calculation of the provisional award fee payment percentage in 
NASA end-item award fee contracts.
    No changes were made to the proposed rule in developing the final 
rule. No comments from small entities were submitted in reference to 
the Regulatory Flexibility Act request in the proposed rule. Therefore, 
the proposed rule has been adopted as final.
    NASA does not expect this final 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 
guidance largely clarifies aspects relative to the award fee evaluation 
and payment process resulting in a more consistent use and 
administration of award fees within NASA providing all entities both 
large and small a positive benefit. An analysis of data in the Federal 
Procurement Data System (FPDS) revealed that award fee contracts are 
primarily awarded to large businesses with large dollar contracts. An 
analysis of FPDS data over the past three years (FY2013 through FY2015) 
showed an average of 157 award fee contracts were awarded at NASA per 
year, of which 33 (approximately 20%) were awarded to small businesses. 
Thus, the application of the award fee revisions contained in this rule 
do not apply to a substantial number of small entities.
    The rule imposes no reporting, recordkeeping, or other information 
collection requirements. There are no significant alternatives that 
could further minimize the already minimal impact on businesses, small 
or large.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

[[Page 50366]]

List of Subjects in 48 CFR Parts 1816 and 1852

    Government procurement.

Manuel Quinones,
NASA FAR Supplement Manager.

    Accordingly, 48 CFR parts 1816 and 1852 are amended as follows:

0
1. The authority citation for parts 1816 and 1852 continues to read as 
follows:

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

PART 1816--TYPES OF CONTRACTS

0
2. Add section 1816.001 to read as follows:


1816.001  Definitions.

    As used in this part--
    Earned award fee means the payment of the full amount of an award 
fee evaluation period's score/rating.
    Unearned award fee means the difference between the available award 
fee pool amount for a given award fee evaluation period less the 
contractor's earned award fee amount for that same evaluation period.


1816.307   [Amended]

0
3. Amend section 1816.307 by removing paragraph (g)(1).

0
4. Amend section 1816.307-70 by revising paragraph (f) to read as 
follows:


1816.307-70  NASA contract clauses.

* * * * *
    (f) When FAR clause 52.216-7, Allowable Cost and Payment, is 
included in the contract, as prescribed at FAR 16.307(a), the 
contracting officer should include the clause at 1852.216-89, 
Assignment and Release Forms.
* * * * *

0
5. Amend section 1816.405-273 by revising paragraphs (b) and (c) to 
read as follows:


1816.405-273  Award fee evaluations.

* * * * *
    (b) End item contracts. On contracts, such as those for end item 
deliverables, where the true quality of contractor performance cannot 
be measured until the end of the contract, only the last evaluation is 
final. At that point, the total contract award fee pool is available, 
and the contractor's total performance is evaluated against the award 
fee plan to determine total earned award fee. In addition to the final 
evaluation, interim evaluations are done to monitor performance prior 
to contract completion, provide feedback to the contractor on the 
Government's assessment of the quality of its performance, and 
establish the basis for making interim award fee payments (see 
1816.405-276(a)). These interim evaluations and associated interim 
award fee payments are superseded by the fee determination made in the 
final evaluation at contract completion. However, if the final award 
fee adjectival rating is higher or lower than the average adjectival 
rating of all the interim award fee periods, or if the final award fee 
score is eight base percentage points higher or lower than the average 
award fee score of all interim award fee periods (e.g. 80% to 88%), 
then the Head of the Contracting Activity (HCA) or the Deputy Chief 
Acquisition Officer (if the HCA is the Fee Determination Official) 
shall review and concur in the final award fee determination. The 
Government will then pay the contractor, or the contractor will refund 
to the Government, the difference between the final award fee 
determination and the cumulative interim fee payments.
    (c) Control of evaluations. Interim and final evaluations may be 
used to provide past performance information during the source 
selection process in future acquisitions and should be marked and 
controlled as ``Source Selection Information--see FAR 3.104''. See FAR 
42.1503(h) regarding the requirements for releasing Source Selection 
Information included in the Contractor Performance Assessment Reporting 
System (CPARS).

0
6. Amend section 1816.405-276 by revising the last sentence of 
paragraph (b) to read as follows:


1816.405-276  Award fee payments and limitations.

* * * * *
    (b) * * * For an end item contract, the total amount of provisional 
payments in a period is limited to a percentage not to exceed 80 
percent of the prior interim period's evaluation score, except for the 
first evaluation period which is limited to 80 percent of the available 
award fee for that evaluation period.
* * * * *

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
7. Amend section 1852.216-77 by revising the date of the clause and 
paragraph (c)(3) to read as follows:


1852.216-77   Award fee for end item contracts.

* * * * *

Award Fee for End Item Contracts (Aug 2016)

* * * * *
    (c) * * *
    (3) Provisional award fee payments will [insert ``not'' if 
applicable] be made under this contract pending each interim 
evaluation. If applicable, provisional award fee payments will be made 
to the Contractor on a [insert the frequency of provisional payments 
(not more often than monthly)] basis. The amount of award fee which 
will be provisionally paid in each evaluation period is limited to 
[Insert a percent not to exceed 80 percent] of the prior interim 
evaluation score (see [insert applicable cite]), except for the first 
evaluation period which is limited to [insert a percent not to exceed 
80 percent] of the available award fee for that evaluation period. 
Provisional award fee payments made each evaluation period will be 
superseded by the interim award fee evaluation for that period. If 
provisional payments made exceed the interim evaluation score, the 
Contractor will either credit the next payment voucher for the amount 
of such overpayment or refund the difference to the Government, as 
directed by the Contracting Officer. If the Government determines that 
(i) the total amount of provisional fee payments will apparently 
substantially exceed the anticipated final evaluation score, or (ii) 
the prior interim evaluation is ``poor/unsatisfactory,'' the 
Contracting Officer will direct the suspension or reduction of the 
future payments and/or request a prompt refund of excess payments as 
appropriate. Written notification of the determination will be provided 
to the Contractor with a copy to the Deputy Chief Financial Officer 
(Finance).
* * * * *

0
8. Amend section 1852.216-89 by revising the date of the clause and the 
introductory text of the clause to read as follows:


1852.216-89   Assignment and release forms.

* * * * *

Assignment and Release Forms (Aug 2016)

    The Contractor shall use the following forms to fulfill the 
assignment and release requirements of FAR clause 52.216-7, Allowable 
Cost and Payment:
* * * * *
[FR Doc. 2016-17844 Filed 7-29-16; 8:45 am]
 BILLING CODE 7510-13-P
Federal Register / Vol. 81, No. 147 / Monday, August 1, 2016 / Rules and Regulations 50365

Dated: June 15, 2016. ACTION: Final rule. rule is not a major rule under 5 U.S.C.
Alexis Strauss, 804.
Acting Regional Administrator, Region IX.
SUMMARY: NASA is issuing a final rule
amending the NASA Federal IV. Regulatory Flexibility Act
Part 52, Chapter I, Title 40 of the Code
of Federal Regulations is amended as Acquisition Regulation Supplement
(NFS) to clarify NASA’s award fee A final regulatory flexibility analysis
follows: has been prepared consistent with the
process by incorporating terms used in
PART 52—APPROVAL AND award fee contracting; guidance relative Regulatory Flexibility Act, 5 U.S.C. 601,
PROMULGATION OF to final award fee evaluations; release of et seq., and is summarized as follows:
IMPLEMENTATION PLANS source selection information; and the NASA is amending the NFS to clarify
calculation of the provisional award fee award fee process by incorporating
■ 1. The authority citation for part 52 payment percentage in NASA end-item terms used in award fee contracting;
continues to read as follows: award fee contracts. guidance relative to final award fee
Authority: 42 U.S.C. 7401 et seq. DATES: Effective: August 31, 2016. evaluations; release of source selection
FOR FURTHER INFORMATION CONTACT: Mr. information; and the calculation of the
Subpart F—California William Roets, telephone 202–358– provisional award fee payment
4483. percentage in NASA end-item award fee
■ 2. Section 52.220 is amended by
adding paragraphs (c)(6)(xi)(D), and SUPPLEMENTARY INFORMATION: contracts.
(c)(182)(i)(F)(5), (6), (7), and (8) to read I. Background No changes were made to the
as follows: proposed rule in developing the final
NASA published a proposed rule in
rule. No comments from small entities
§ 52.220 Identification of plan. the Federal Register at 81 FR 23667 on
were submitted in reference to the
* * * * * April 22, 2016, to revise NFS 1816.4 and
1852.216–77 to clarify NASA’s award Regulatory Flexibility Act request in the
(c) * * *
(6) * * * fee evaluation and payment processes. proposed rule. Therefore, the proposed
(xi) * * * One public comment was received in rule has been adopted as final.
(D) Previously approved September response to the proposed rule. NASA does not expect this final rule
22, 1972 in paragraph (c)(6) of this to have a significant economic impact
section and now deleted with II. Discussion and Analysis
on a substantial number of small entities
replacement in paragraph NASA reviewed the public comment within the meaning of the Regulatory
(c)(182)(i)(F)(5), (6), (7), and (8), Rule 2.3 in the development of the final rule. A Flexibility Act, 5 U.S.C. 601, et seq.,
‘‘Transfer,’’ Rule 2.5 ‘‘Cancellation of discussion of the comment and the because the guidance largely clarifies
Application,’’ Rule 2.7 ‘‘Provision of changes made to the rule as a result of aspects relative to the award fee
Sampling and Testing Facilities,’’ and this comment is provided, as follows: evaluation and payment process
Rule 2.9 ‘‘Conditional Approval’’.
A. Changes resulting in a more consistent use and
* * * * * administration of award fees within
(182) * * * No change was made in the final rule
(i) * * * in response to the public comment NASA providing all entities both large
(F) * * * received. and small a positive benefit. An analysis
(5) Regulation II, ‘‘Permit System,’’ of data in the Federal Procurement Data
B. Analysis of Public Comment System (FPDS) revealed that award fee
Rule 2.3 ‘‘Transfers’’ amended on
January 15, 1989. Comment: Respondent stated that contracts are primarily awarded to large
(6) Regulation II, ‘‘Permit System,’’ they do not support this rule. businesses with large dollar contracts.
Rule 2.5 ‘‘Expiration of Applications’’ Response: The respondent did not An analysis of FPDS data over the past
amended on January 15, 1989. identify any specific areas of concern. three years (FY2013 through FY2015)
(7) Regulation II, ‘‘Permit System,’’ Accordingly, this rule provides needed showed an average of 157 award fee
Rule 2.7 ‘‘Conditional Approval’’ clarification to NASA’s award fee contracts were awarded at NASA per
amended on January 15, 1989. processes to enhance the efficient year, of which 33 (approximately 20%)
(8) Regulation II, ‘‘Permit System,’’ administration of award fee incentives. were awarded to small businesses.
Rule 2.10 ‘‘Further Information’’
III. Executive Orders 12866 and 13563 Thus, the application of the award fee
amended on January 15, 1989.
Executive Orders (E.O.s) 12866 and revisions contained in this rule do not
* * * * * apply to a substantial number of small
[FR Doc. 2016–18009 Filed 7–29–16; 8:45 am] 13563 direct agencies to assess all costs
and benefits of available regulatory entities.
BILLING CODE 6560–50–P
alternatives and, if regulation is The rule imposes no reporting,
necessary, to select regulatory recordkeeping, or other information
approaches that maximize net benefits collection requirements. There are no
NATIONAL AERONAUTICS AND
(including potential economic, significant alternatives that could
SPACE ADMINISTRATION
environmental, public health and safety further minimize the already minimal
48 CFR Parts 1816 and 1852 effects, distributive impacts, and impact on businesses, small or large.
equity). E.O. 13563 emphasizes the
RIN 2700–AE31 importance of quantifying both costs V. Paperwork Reduction Act
sradovich on DSK3GMQ082PROD with RULES

and benefits, of reducing costs, of
NASA Federal Acquisition Regulation The rule does not contain any
harmonizing rules, and of promoting
Supplement: Clarification of Award Fee information collection requirements that
flexibility. This is not a significant
Evaluations and Payments (NFS Case require the approval of the Office of
regulatory action and, therefore, was not
2016–N008) Management and Budget under the
subject to review under section 6(b) of
AGENCY:National Aeronautics and E.O. 12866, Regulatory Planning and Paperwork Reduction Act (44 U.S.C.
Space Administration. Review, dated September 30, 1993. This chapter 35).

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Document Created: 2016-07-30 06:26:08
Document Modified: 2016-07-30 06:26:08
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective: August 31, 2016.
Contact		Mr. William Roets, telephone 202-358- 4483.
FR Citation		81 FR 50365
RIN Number		2700-AE31
CFR Citation		48 CFR 1816 48 CFR 1852