lack of capacity, prior higher priority orders, shortage of materials or parts, etc.). On the basis of the information developed, action will be taken to resolve the case by informal arrangements with the supplier and applicant. If this action is unsuccessful, the case will be endorsed, through the Department of Defense, to the Business and Defense Services Administration. One of the following actions will be taken by BDSA:

(1) Arrangement of improved delivery dates by informal agreement with the supplier;

(2) Issuance of a DX rating; or

(3) Issuance of a directive requiring the supplier to produce or deliver the specified item by a specific date.

(b) The Office of Procurement will maintain a follow-up of all cases received and notify field installations as to final disposition of individual cases.

Subpart 18-52.5-Reporting

Materials Requirements

SOURCE: The provisions of this Subpart 18-52.5 appears at 31 FR 684, Jan. 18, 1966, unless otherwise noted.

§ 18-52.500 Scope of subpart.

This Subpart 18-52.5 sets forth procedures for field installations and Headquarters Program Offices to develop and report requirements for propellants, pressurants and the related materials listed in § 18-52.507.

Requirements within NASA for materials shall be developed where it is the responsibility of NASA to provide or to insure provision of the materials to its contractors. Specifically excluded are the requirements for those programs, projects, boosters, vehicles or spacecraft where, by agreement, provision of material requirements is the responsibility of the Department of Defense or other Government agency.

§ 18-52.502 Reporting responsibility.

(a) Scope of report. Field installations shall submit quarterly estimates of requirements for the materials listed in $ 18-52.508 for all programs under their cognizance, including in-house and contractor requirements. Headquarters Program Offices shall submit quarterly estimates of requirements for any existing or potential programs which may not be known to, or not under the cognizance of, a field installation. Reports shall be

submitted in quadruplicate on NASA Form 558, Materials Requirements Report.

(b) Report due dates.

(1) The reports required by § 1852.502 shall be forwarded so as to reach NASA Headquarters, Office of Procurement (Code KDF) no later than March 15, June 10, September 15, and December 10. Supplemental reports which advise of additions to or significant changes in previous reports shall be submitted at any time.

(2) The reports, covering all materials listed in § 18-52.508, due in June and December shall begin with requirements as of the following July 1 and January 1, respectively, and shall cover a 3-year period. Requirements shall be shown by month for the first 6 months, and by quarters for the remaining 22-year period.

(3) The reports due in March and September shall begin with the following April 1 and October 1 respectively and cover a 6-month period, by month. These reports shall be limited to requirements for liquid oxygen, liquid nitrogen, liquid hydrogen, hydrazine, UDMH, MMH, UDMH/hydrazine mix, and nitrogen tetroxide.

§ 18-52.503 Report content.

The reports required by § 18-52.502 shall be made using a separate report form for each material and shall provide the following information for each item of material:

(a) Contract number;

(b) Program and/or project;

(c) Specific task within project;

(d) End use when not associated with named program or project;

(e) Name of contractor;

(f) Specific location of use (shipping destination), and

(g) Planned source of supply.

In addition to the above, requirements for helium should be further classified by use as either Missile Systems and Astronautics, Aerology (include Weather Research), Aeronautical Research (include Wind Tunnels), Welding, or other specific use. Detailed instructions for the preparation of NASA Form 558 appear at the bottom of the form.

§ 18-52.504 Basis for developing materials requirements.

In computing requirements, consideration shall be given to such elements as lead time, waste factors, transfer, and

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Appendix A through F [reserved | APPENDIX G, NASA MANAGEMENT MANUAL INSTRUCTION 3-3-16

DECEMBER 9, 1963. Subject: Avoiding Conflict-of-Interest Situations in the Placing of NASA Contracts. 1. Purpose. This Instruction provides guidelines for avoiding situations where the placing of a contract may give rise to conflicts of interest. These guidelines were based on the "Rules for the Avoidance of Organizational Conflicts of Interest," promulgated by the Department of Defense on June 1, 1963, by DOD Directive No. 5500.10.

2. Authority. Report to the President on Government Contracting for Research and

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Development, submitted to the President on April 30, 1962, by the Bureau of the Budget (the so-called Bell Report).

3. Applicability. This Instruction applies to all NASA Headquarters and Field Installations.

4. General policy. It is NASA policy to avoid situations in the procurement process where, by virtue of work or services performed for NASA, or as a result of information or data acquired from NASA or from industry, a particular company:

a. Is given an unfair competitive advantage over other companies in respect to future NASA business;

b. Is placed in a position to affect Government actions under circumstances in which there is danger that the company's judgment may be biased; or

c. Otherwise finds that a conflict exists between the performance of work or services for the Government in an impartial manner and the company's own self-interest.

5. Guidelines. a. The general rules set forth in Attachment A of this Instruction are for the guidance of all NASA Installations in the placing of contracts. However, in some cases involving unusual contract situations, specific rules will be required.

b. NASA Management Instructions 5101.2 and 5101.3 imposing certain restrictions on the placing of contracts with companies of the Bell System and with the General Electric Company, in light of the unique relationship these companies will have to NASA, illustrate the need for special rules in some cases. Any such specific rules will:

(1) Require the approval of the Director of Procurement,

(2) Be formalized in individual NASA issuances, and

(3) Govern for the specific case in the event of inconsistency between such rules and the guidelines set forth in Attachment A hereto.

6. Waiver. Application of the guidelines set forth in Attachment A may be varied or waived in a particular case by the Director of Procurement when such action would, in his judgment, be in the best interests of the Government.

JAMES E. WEBB, Administrator.

[NASA Instruction 3-3-16; Attachment A] RULES FOR THE AVOIDANCE OF ORGANIZATIONAL CONFLICTS OF INTEREST*

The following rules state general prohibitions which are then explained and illustrated by specific examples. There will undoubtedly occur cases which are not resolved by these rules. As the Bell Report said, "[Conflict of Interest]

arises in several forms-not all of which are by any means yet fully understood." In order to assist in deciding what, if any, prohibitions should be applied in such instances, the two basic principles of this code-(1) preventing conflicting roles which might bias a contractor's judgment, and (2) preventing unfair competitive advantage-should be paramount. The following rules and examples are not all inclusive but merely attempt to achieve these two goals in a variety of situations. The ultimate test should always be: Is the contractor placed in a position where his judgment may be biased, or where he has an unfair competitive advantage? If so, corrective action must be taken in accordance with the rules below.

*These Rules are identical to those issued by the Department of Defense in DOD Directive 5500.10 on June 1, 1963, except for the words "Department of Defense" in order to make the guidelines applicable to NASA.

of

As used in these rules, "contractor" means the person under contract to NASA to perform the work described in each rule, and its affiliates; "system" means system, subsystem, project or item. The term "systems engineering" includes a combination substantially all the following activities: determination of specifications, identification and solution of interfaces between parts of the system, development of test requirements or plans and evaluation of test data, and supervision of design work. The term "technical direction" includes a combination of substantially all the following activities: preparation of work statements for contractors, determination of parameters, direction of contractors' operations, and resolution of technical controversies.

1. If a contractor agrees to provide systems engineering and technical direction (SE/ TD) for a system, without at the same time assuming overall contractual responsibility for: (a) Development, or (b) integration, assembly and checkout (IAC), or (c) production of the system, then that contractor shall not later be allowed to supply the system or any major components thereof, or to be a subcontractor or consultant to a supplier of the system or any major components thereof.

Explanation: The SE/TD contractor occupies a highly influential and responsible position both in determining basic concepts of a system and in supervising their execution by other contractors. To assure the objectivity of its services and hence a more soundly planned system, the SE/TD contractor must not be in a position to make decisions which could favor its own products. Furthermore, it would be inconsistent with the managerial responsibility of an SE/TD contractor for it to be concurrently one of the component suppliers.

Example A: Company A agrees to provide SE/TD for NASA on a manned re-entry vehicle for a group of launch vehicles. Company A shall not be allowed to supply any Comcomponents of the re-entry vehicle. pany A can, however, supply components of the launch vehicle unrelated to the re-entry vehicle. In this example, the system is the manned re-entry vehicle, not the launch vehicle, and the ban on the supply of components is coterminous with the system only.

Example B: Company A is the SE/TD contractor for system X. After some progress, but prior to completion, the system is cancelled. Later, system Y is developed to achieve the same purposes as system X, but in a fundamentally different fashion. Company B is the SE/TD contractor for system Y. Company A may bid to produce system Y or its components.

2. If a contractor agrees to prepare and furnish complete specifications covering nondevelopmental items to be used in competitive procurement, that contractor shall not

be allowed to furnish such items, either as a prime or subcontractor, for a reasonable period of time including, at least, the initial procurement. This rule shall not apply to: a. Contractors who furnish at Government request specifications or data with respect to the product they furnished, even though the specifications or data may have been paid for separately or in the price of the product.

b. Situations where one or more contractors acting as industry representatives assist NASA in preparing, refining or coordinating specifications, regardless of source, which assistance is supervised and controlled by Government representatives.

c. Contracts for developmental or prototype items.

Explanation: If a single contractor is engaged by the Government to draft complete specifications for nondevelopmental equipment, he should be eliminated for a reasonable time from competition for production based on the specifications. This should be done in order to avoid a situation where he could draft specifications which would favor his own products or capabilities. In this way the Government can be assured of getting unbiased advice as to the content of its specifications and can avoid allegations of favoritism in the award of production contracts.

In development work it is normal to select firms which have done the most advanced work in the field. It is to be expected that these firms will design and develop around their own prior knowledge. Development contractors can frequently start production earlier and more knowledgeably than firms which did not participate in the development, and this affects the time and quality of production, both of which are important to the Government. In many instances the Government may have financed such development. Thus, the development contractor may have an unavoidable competitive advantage which is not considered unfair and no prohibition should be imposed.

In instances of cooperation between industry and NASA to prepare, refine, or coordinate specifications, there is continuous participation and supervision by Government representatives and, usually, more than one contractor concerned. In these circumstances Government supervision prevents the establishment of specifications oriented to favor a given contractor's products capabilities.

or

Example A: Company A prepares updated Government specifications for a standard compressor to be procured competitively. Company A shall not be allowed for a reasonable period of time to compete for supply of the compressor.

Example B: Company A designs or develops a new electronic equipment and, as a result of the design or development, prepares

specifications. Company A may supply the electronics equipment.

Example C: XYZ Tool Company and/or KLM Machinery Co. representing the American Tool Institute work under the supervision and control of Government representatives to refine specifications or to clarify the requirements of a specific procurement. These companies may supply the item.

3. If a single contractor, other than a company which has participated in the development or design of a system, agrees to assist NASA or a contractor of NASA in the preparation of a statement of work, or agrees to provide material leading directly, predictably, and without delay to a statement of work, to be used in the competitive procurement of a system or services, that contractor shall not be allowed to supply the services, or the system or major components thereof, unless he is the sole source. The content of a statement of work shall not be considered predictable if more than one contractor is involved in the preparation of material leading to it.

Explanation: The various services related to a statement of work to be used in a competitive procurement should normally be performed by the Government. However, when it is necessary to seek the assistance of contractors, they may often be in a position to favor their own products or capabilities. To overcome this possibility of bias, such contractors are to be prohibited from supplying a system or services procured on the basis of work statements growing out of their services.

No prohibitions are imposed on development contractors for the reasons given in the explanation to rule 2.

Example A: Company A receives a contract to define the detailed performance characteristics for the purchase of rocket fuels. A has not developed the particular fuels. At the time the contract is awarded, it is clear to both parties that the performance characteristics arrived at will be used to choose competitively a contractor to develop or produce the fuels. Company A shall not be permitted to bid on this procurement.

Example B: Company A receives a contract to prepare a detailed plan for the procurement of services aimed at the advanced scientific and engineering training of NASA personnel. It suggests a curriculum which NASA endorses and incorporates in requests for proposals to various institutions to establish and conduct such training. Company A shall not be permitted to bid on this procure

ment.

Example C: Company A prepares a feasibility study of a new spacecraft without proposing in detail the characteristics of a possible final device. It may offer to produce the spacecraft or components thereof.

4. If a contractor agrees to conduct studies or provide advice concerning a system, which work requires access to proprietary data of