or installation, the report prepared by the architect-engineer selection board, in accordance with § 18-4.203-2(a) (3), will be forwarded by the director of the field installation, with his concurrence in the selection, to the cognizant Institutional Director, NASA Headquarters, for the approval of the Administrator and the concurrences of the Deputy Administrator and the Associate Administrator. The cognizant Institutional Director will refer the report for review to the Office of Procurement (Code KD), the Office of Construction (Code KC), and to other offices as appropriate under the circumstances. After receipt of comments and recommendations from the reviewing offices, the cognizant Institutional Director will revise, modify or concur in the report, as appropriate, and forward it to the Administrator via the Associate Administrator.

§ 18-4.204 Negotiation procedures. § 18-4.204-1 General.

(a) The contracting officer is responsible for conducting the negotiations and for the results thereof. In discharging his responsibilities, the contracting officer shall use the services of technical, legal, financial, pricing, and other specialists in NASA, as required. Negotiations shall be directed toward:

(1) Making certain that the proposed contractor has a clear understanding of the essential details of the required work;

(2) Determining that the proposed

contractor will make available the necessary personnel and organization to accomplish the work within the required time; and

(3) Effecting mutual agreement on the provisions of the contract and on a fair and reasonable fee (contract price) for the required work.

(b) Limitation on fee. Pursuant to 10 U.S.C. 2306(d), the amount of the fee that may be paid to an architectengineer under a cost-plus-a-fixed-fee contract for the production and delivery of the designs, plans, drawings, and specifications required for the accomplishment of any public works or utilities project may not exceed 6 percent of the estimated cost of such project, exclusive of the amount of such fee. In addition, it is NASA policy to apply this statutory limitation to the fee paid to an archi

Negotiations shall be conducted initially with the architect-engineer firm given first preference under the procedures set forth in § 18-4.203. If a mutually satisfactory contract cannot be negotiated with such firm, the negotiations shall be terminated and the firm notified. Negotiations then shall be initiated with the firm given second preference and this procedure shall be continued until a mutually satisfactory contract has been negotiated.

§ 18-4.204-3 Independent government estimate.

Prior to the initiation of negotiations, the contracting officer shall develop an independent Government estimate of the services, based on a detailed analysis of cost of the required architect-engineer the costs expected to be generated by the work. Information, such as hourly pay rates and overhead and general and administrative expense loading factors, may be requested from the architectengineer firm under consideration to the extent required in preparing the Government estimate. The independent required during negotiations to reflect Government estimate shall be revised as changes in, or clarification of, the scope of the work to be performed by the architect-engineer. A cost estimate, based on the application of percentage factors to cost estimates of the various segments of the construction project, may be developed for comparison purposes, but such a cost estimate shall not be used as a substitute for the independent Government estimate. § 18-4.204-4

mate.

Architect-engineer's esti

The contracting officer shall request the architect-engineer firm to submit its proposed fee and supporting detailed cost breakdown. Such request shall be made prior to the initiation of negotiations, where practicable, or promptly after agreement on the scope of the work

to be performed has been reached during negotiations. Revisions of the proposed fee and supporting detailed cost breakdown shall be requested as required during negotiations to reflect changes in, or clarification of, the scope of the work to be performed by the architectengineer.

§ 18-4.204-5 Fair and reasonable fee.

The contracting officer shall negotiate a fee considered fair and reasonable based on a comparative study of the independent Government estimate and the architect-engineer's estimate. Significant differences between elements of the two estimates and between the overall estimates shall be investigated, and the contracting officer shall satisfy himself as to the reasons therefor.

An architect-engineer firm, selected for negotiation of an architect-engineer services contract under the procedures set forth in § 18-4.203, shall be advised of the policy set forth in § 18-4.205-1

headquarters approval.

Contracts for architect-engineer services that require the prior approval of the Director of Procurement are specified in § 18-50.105(b)(iii) of this chapter. The request for approval shall include all information required to be developed by this § 18-4.204 and, in particular, shall set forth the detailed cost breakdown on which the determination was based that the proposed fee is fair, reasonable and consistent with the provisions of § 18-4.204-1(b).

§ 18-4.204-7

Record of negotiation.

Promptly at the conclusion of each negotiation, the contracting officer shall prepare a memorandum, setting forth the principal elements of the contract negotiations, for use of reviewing authorities and for inclusion in the contract file. The memorandum shall contain sufficient detail to reflect the significant considerations controlling the establishment of the fee and other terms of the contract. § 18-50.106 of this chapter prescribes the type of information to be included.

§ 18 4.205 Contracting with architectengineer firms for construction work. § 18-4.205-1 Policy.

Except as provide in § 18-4.205-3, the award of a contract for architectengineer services for a particular facility and the award of a contract for the related construction work to the same firm, its subsidiaries, or affiliates is prohibited.

that firm possesses construction capabilities either within its own organization or through subsidiaries or affiliates. The firm shall have the option of either:

(a) Declining to enter into contract negotiations in order to be eligible to compete for the related construction contract; or

(b) Entering into contract negotiations with the clear understanding that, if such negotiations are successful, the firm, its subsidiaries or affiliates will be ineligible to compete for the related construction contract.

§ 18-4.205-3 Exceptions.

The policy set forth in § 18-4.205-1 is not applicable to:

(a) Those cases where the Director of Procurement specifically authorizes, prior to the initiation of negotiations, the use of a cost-plus-a-fixed-fee contract for both the design and construction of a specialized facility; or

(b) Those cases in which a contract is awarded on the basis of performance specifications for the construction of a facility, and the contract requires the contractor to furnish construction drawings, specifications, or site adaptation drawings of the facility.

Requests for authorization, pursuant to paragraph (a) of this section, shall be in sufficient detail to establish the need for procuring both design and construction under one contract. In neither of the excepted cases in paragraphs (a) and

As used in this subpart, the term "utility services" includes electric, gas, water, steam, and sewage services.

§ 18-4.5002 Policy.

It is NASA policy to obtain required utility services from existing sources when such sources are adequate and economical arrangements can be made for their use. In each case, the required services shall be obtained, at the lowest possible cost to the Government, after fully investigating all sources. To the extent consistent with this policy, use should be made (a) of General Services Administration area-wide public utility contracts (see Subpart 18-5 8 of this chapter); and (b) on a cross-servicing basis, of utility services available from other Government agencies.

Installation requirements for utility services shall be determined by technically qualified personnel. They will furnish the contracting officer with a full description of the services required and with as complete a description of the load data pertaining thereto as is necessary for the contracting officer to procure the services required.

§ 18-4.5004 Headquarters participation in negotiations.

(a) Except as provided in paragraph (c) of this section, the contracting officer shall submit the following information on a proposed procurement to the Office of Procurement (Code KDF), prior to initiating negotiation procedures:

(1) A full description of the services required, including data on estimated maximum demand, average monthly consumption, and duty cycle;

available

(2) Identification of all sources of supply and a statement as to the ability of each source to provide the required services;

(3) Location and description of each proposed supplier's facilities at the nearest point of service;

(4) A description of the facilities needed by each proposed supplier and by the Government to obtain the required services from each source of supply;

(5) Copies of all applicable published rate schedules and any special rate schedules accorded by contract to users with similar requirements;

(6) Date initial service is required; (7) Known or estimated time schedule for growth of requirements;

(8) An estimate of the annual cost of the services to be procured; and

(9) Identification of any unusual factors affecting the procurement.

(b) Based upon a review of the information submitted in paragraph (a) ^f this section, the Office of Procurement will determine whether NASA Headquarters participation in the negotiation proceedings in an advisory capacity to the contracting officer is considered desirable. The contracting officer will be informed promptly of the decision of the Office of Procurement.

(c) The requirements of paragraph (a) of this section are not applicable when:

(1) The estimated annual cost of the services to be procured is $50,000 or less;

(b) The estimated annual cost of the services to be procured is $2,500 or less; (c) Neither a connection, termination, installation, or similar charge, nor a deposit, other than a meter deposit required of all customers, is involved;

(d) The utility supplier does not require the execution of a contract or application form; and

(e) It is not deemed advantageous to the Government to negotiate and execute a contract.

§ 18-4.5005-2 Memorandum of understanding.

A memorandum of understanding, specifying the services to be provided and the conditions under which they will be supplied, shall be used when procuring utility services from another Government agency by cross-servicing.

(d) It uses NASA Form 550 (see § 1816.501-50 of this chapter) and involves proposed deviations from the provisions of the form other than deviations required to be used when applicable or authorized by Subpart 18-7.50 of this chapter; and

(e) It involves exchange or interchange of utility services.

§ 18-4.5007 Headquarters requirement for copies of contracts.

The contracting officer shall forward to the Office of Procurement (Code KDF), one copy of each contract, service authorization form, memorandum of understanding, or modification thereto, promptly after execution thereof. When contractual approval by NASA Headquarters is required (in accordance with § 18-4.5006), the requirement for copies

utility contracts.

For the procurement of utility services by use of General Services Administration area-wide public utility contracts, see Subpart 18-5.8 of this chapter.

§ 18-4.5005-4

Negotiated utility serv

ices contracts. When the conditions of §§ 18-4.5005-1 through 18-4.5005-3 do not apply, see Subpart 18-7.50 of this chapter for the clauses and § 18-16.501 of this chapter for the forms to be used in the procurement of utility services by negotiation. § 18-4.5006 Contracts requiring headquarters approval.

A proposed contract or memorandum of understanding for utility services, or modifications thereto, shall be submitted to the Office of Procurement (Code KDF) for approval in accordance with Subpart 18-50.1 of this chapter when it falls in any of the following categories:

(a) It involves an annual cost in excess of $50,000;

(b) It involves payment of a connection charge, deposit (other than a meter deposit or membership fee, in the case of a cooperative, required of all customers), termination charge, installation charge, or other special service charge, except as provided in § 184.5004 (c) (2);

(c) It involves services available from two or more sources of supply;

in Subpart 18-50.1, of this chapter shall be increased by one copy.

§ 18-4.5008 Changes in rates.

(a) When the contractor furnishes written notice to the contracting officer of a filing of an application for rate changes, as provided for in the clause entitled "Public Regulation and Change of Rates" of § 18-7.5001-11 of this chapter, or whenever the contractor requests that rate changes be negotiated, as provided for in the clause entitled "Change of Rates," of § 18-7.5003-2 of this chapter, the contracting officer will notify the Office of Procurement. The notification shall include sufficient information to permit a determination of the monetary effect of the proposed changes and a recommendation of action to be taken under subparagraph (1) or (2) of this paragraph, and the basis therefor.

(1) When a notice is received of a filing of an application for rate changes before the local regulatory body, the contracting officer will make a recommendation as to whether the Government should intervene in the hearing on the application, the basis for such intervention, and the extent to which the installation can support intervention through the presentation of testimony, preparation of exhibits, and the furnishing of legal counsel.

(2) When a notice is received that the contractor requests that rate changes be