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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: October 25, 2000

FROM: Barry McVay, CPCM

SUBJECT: National Aeronautics and Space Administration Federal Acquisition Regulation (FAR) Supplement (NFS); Final Indirect Cost Rates

SOURCE: Federal Register, October 25, 2000, Vol. 65, No. 207, page 63807

AGENCIES: National Aeronautics and Space Administration (NASA)

ACTION: Final Rule

SYNOPSIS: NASA is amending NFS 1842.705-1, Contracting Officer Determination Procedure, to clarify that NASA participation in final indirect cost rate determinations should occur only when the issues involved would have a significant financial impact on the agency.

EFFECTIVE DATE: October 25, 2000.

FOR FURTHER INFORMATION CONTACT: Joseph Le Cren, NASA Headquarters, Office of Procurement, Contract Management Division (Code HK), Washington, DC 20546; 202-358-0444, e-mail: joseph.lecren@hq.nasa.gov.

SUPPLEMENTAL INFORMATION: The first sentence in NFS 1842.705-1 states, "Since many NASA contractors are under DOD's [Department of Defense's] final overhead rate determination procedure, NASA's policy is to participate jointly with DOD for those companies where NASA has a major financial interest."

A NASA Office of Inspector General report interpreted this language as always requiring NASA to participate in final indirect cost rate determinations where it has a major financial interest. The intent of NFS 1842.705-1 was that NASA should participate in final indirect cost rate determinations when invited by the cognizant contracting officer, and the issues involved would have a significant financial impact on the agency. Therefore, to more clearly communicate that intent, NASA is revising the first sentence of NFS 1842.705-1 to state, "When NASA is not the cognizant Federal agency, NASA should participate with the cognizant contracting officer (or cognizant Federal agency official) in the final indirect cost rate determination procedure where the issues involved would have a significant financial impact on the agency."

Also added to NFS 1842.705-1 is the following sentence: "If a determination is made that NASA's participation is not warranted, that decision must be communicated to the cognizant contracting officer (or cognizant Federal agency official)."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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