PROCUREMENT BY NEGOTIATION processing and transmittal to the fiscal or financial management officer. (ii) On contracts placed directly with Canadian firms, audits are requested by the contracting officer from the Audit Services Branch, Comptroller of the Treasury, Department of Finance, Ottawa, Ontario, Canada. Invoices are approved by the auditor on a provisional basis pending completion of the contract and final audit. These invoices, accompanied by Standard Form 1034 (Public Voucher), are forwarded to the contracting officer for further processing and transmittal to the fiscal or financial management officer. Periodic advisory audit reports are furnished directly to the contracting officer. In the event that costs claimed are suspended or disapproved, the contracting officer shall issue the NASA Form 456, "Notice of Contract Costs Suspended and/or Disapproved" to the contractor. NASA Form 456 will be processed in the same manner as indicated in (1)(i) above with regard to contractor appeals, and shall contain the statement prescribed therein with respect to costs disapproved. (iii) Audits performed by the Audit Services Branch are normally conducted in accordance with Department of Defence Production regulations. 3.810 Exchange of Information. In appropriate cases it is desirable to exchange and coordinate specialized information regarding a contractor between NASA procurement offices and between NASA and other Government agencies, since it will provide uniformity of treatment of major issues and it may aid in the resolution of particularly difficult or controversial issues. 3.811 Record of Negotiation. (a) At the conclusion of each negotiation of an initial or a revised price, the contracting officer shall promptly prepare or cause to be prepared, a memorandum, setting forth the principal elements of the price negotiation, for inclusion in the contract file and for the use of reviewing authorities. The memorandum shall be in sufficient detail to reflect the most significant considerations controlling the establishment of such initial or revised price, and other terms of the contract. The memorandum should include an explanation of why cost or pricing data was, or was not, required (see 3.807) and, if it was not required in the case of any price negotiation in excess of $100,000, a statement of the basis for determining that the price resulted from or was based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. If cost or pricing data were submitted and a certificate of cost or pricing data was required (3.807-4), the memorandum shall reflect the extent to which reliance was not placed upon the factual cost or pricing data submitted and the extent to which this data was not used by the contracting officer in determining his total price objective and in negotiating the final price. The memorandum shall also reflect the extent to which the contracting officer recognized in the negotiation that any cost or pricing data submitted by the contractor was inaccurate, incomplete, or noncurrent; the action taken by the [Next page is 377] PRICE NEGOTIATION POLICIES AND TECHNIQUES contracting officer and the contractor as a result; and the effect, if any, of such defective data on the total price negotiated. Where the total price negotiated differs significantly from the total price objective, the memorandum shall explain this difference. Whenever cost or pricing data are used in connection with a price negotiation in excess of $100,000, the contracting officer shall forward one copy of the memorandum to the cognizant auditor for use by the auditor to improve the usefulness of his audit work and related reports to negotiation officials. Where appropriate, the memorandum should include or be supplemented by information on how the auditor's advisory services can be made more effective in future negotiations with the contractor. In those cases where a copy is forwarded to the auditor, a copy will also be furnished to the cognizant contract administration office. (b) As part of the requirement in (a) above, determination of the profit or fee objective, in accordance with 3.808, shall be fully documented. 3.812 Disposition of Post Award Audits. An auditor's advisory report or post award reviews of cost and pricing data may result either from a specific request of a contracting officer (see 3.807-5(c)) or from audit action initiated independent of a contracting officer's request. The contracting officer shall prepare a memorandum on each audit report indicating (i) whether defective data were submitted and relied upon and (ii) the results of any contract action taken. A copy of the memorandum shall be forwarded to the auditor issuing the audit report and to the office administering the contract. 3.813 Pre-Contract Planning and Startup and Other Nonrecurring Costs. (a) Estimates of pre-contract planning and startup costs include such costs as preproduction engineering, special tooling, special plant rearrangement, training programs, and such nonrecurring costs as initial rework, initial spoilage, and pilot runs. (b) Since an offeror may propose a price which does not include all nonrecurring costs for the purpose of obtaining the initial contract and of gaining an advantage over competitors in negotiations for future procurements, it is important to know whether the offeror intends to absorb any portion of these costs or whether he plans to recover them in connection with subsequent pricing actions under the proposed or future contracts. This information is needed in evaluating competing proposals to determine which proposal is most likely to result in the lowest overall cost to the Government, particularly where the successful offeror is likely to become in effect, a sole source for followon procurements (including spare parts or other support items). (c) When it is anticipated that such costs will be a significant factor in the evaluation of proposals for the procurement of an item, the request for proposals shall require the offeror to provide the following information: (i) an estimate of the total of such costs; (ii) the extent to which these costs are included in the proposed price; and (iii) the intent to absorb, or plan for recovery of, any remaining costs. When entering into a contract with an offeror who has indicated that he intends to absorb any portion of these costs, the contract shall expressly provide that such portion will not be charged to the Government in any future noncompetitive procurement or other pricing action. PROCUREMENT BY NEGOTIATION 3.850 Initiation of the Procurement Request. A procurement request (NASA Form 404, or similar form) will be prepared and processed in accordance with the provisions of 1.356. 3.851 [Reserved] 3.852 Procurement Plans. A procurement plan is a detailed outline of the method by which the contracting officer expects to accomplish the procurement task. The plan is an administrative tool designed to enable the contracting officer to plan effectively for the placement and accomplishment of assigned procurements by analyzing the requirement for, and determining the method to be used in, placing the procurement. It also furnishes justification for the contemplated method of procurement for use in connection with the review and approval of higher authority when applicable. Although adequate planning prior to procurement action is always a prerequisite, the preparation of a more formal procurement plan is required in certain cases. A description of what such a procurement plan should contain and the situation in which preparation and approval of such a plan are required are set forth in 3.852-1 through 3.852-5. 3.852-1 Requirement for Preparation of Procurement Plans. (a) Except as otherwise authorized by paragraph (b) below, contracting officer shall prepare a procurement plan, with the advice and assistance of the cognizant technical division, on each negotiated procurement which is estimated to exceed $100,000. Such plans shall be prepared prior to solicitation of proposals. Field installations may require the preparation of a procurement plan for negotiated procurements that are not anticipated to exceed $100,000. (b) Procurement plans are not required to be prepared for: (i) procurements of architect-engineer services; (iii) procurements contemplated with non-profit institutions or organi- (iv) procurements of utility services where the services are available from only one source; (v) procurements made from or through other government agencies; and (vi) procurements of industrial facilities required in support of related procurement contracts. 3.852-2 Approval of Procurement Plans. (a) Procurement plans, whether for competitive or noncompetitive procurement action, shall, as a minimum requirement, be reviewed and approved in accordance with the procedures set forth below, whenever the estimated cost of the procurement, including the aggregate amount of follow-on contracts under the same program (see (b) below), is within the applicable dollar amounts set forth in (i), (ii) or (iii) below. (i) For procurements in excess of $100,000, but less than the dollar amount set forth below for the installation concerned, the procurement plan shall be submitted for the approval of the Procurement Officer or his designee after prior review and written concurrence by the head of the cognizant technical division or laboratory, as applicable. (For the purpose of this requirement, the term "or his designee" shall mean the individual authorized by the Procurement PRICE NEGOTIATION POLICIES AND TECHNIQUES Officer to sign the procurement plan. Such authorization shall be in writing and shall not be delegated to more than one individual.) Marshall Space Flight Center Space Nuclear Propulsion Office (Germantown) (ii) For procurements within the range of the dollar amounts set forth below for the installation concerned, the procurement plan shall be submitted for the approval of the Head of the Installation, his Deputy or Associate Director (the title "Associate Director" means a full Associate Director and not an Associate Director for --) after prior review and written concurrences by the Director or Assistant Director of the cognizant technical directorate, cognizant Program Manager, or cognizant staff official, as applicable, who reports directly to the Head of the Installation, and by the Procurement Officer. (A) $250,000 but less than $500,000 Flight Research Center Wallops Station (B) $500,000 but less than $1,000,000 Headquarters Contracts Division NASA Pasadena Office (C) $1,000,000 but less than $2,500,000 Goddard Space Flight Center Lewis Research Center Manned Spacecraft Center Marshall Space Flight Center Space Nuclear Propulsion Office (Germantown) (iii) For procurements that equal or exceed the dollar amounts set forth below for the installation concerned, the procurement plan shall be submitted for the signature of the Head of the Installation after prior review and written concurrences by the Director or Assistant Director of the cognizant technical directorate, cognizant PROCUREMENT BY NEGOTIATION Program Manager, or cognizant staff official, as applicable, who reports directly to the Head of the Installation, and by the Procurement Officer. The procurement plan shall contain additional signature blocks for approval by the Associate Administrator for Organization and Management and for concurrences by the Director of Procurement, the cognizant Program Associate Administrator, the Assistant Administrator for Industry Affairs, and the Assistant Administrator for Administration. (A) $500,000 and over Flight Research Center Wallops Station (B) $1,000,000 and over Electronics Research Center Headquarters Contracts Division NASA Pasadena Office (C) $2,500,000 and over Ames Research Center Goddard Space Flight Center Manned Spacecraft Center Marshall Space Flight Center Space Nuclear Propulsion Office (Germantown) The original and twenty copies of the procurement plan shall be submitted in the case of those procurements under the cognizance of the Office of Manned Space Flight. In all other instances, the original and ten copies shall be submitted. The position title will be shown for each individual signing the procurement plan as required by (i) through (iii) above. (b) Examples of what is meant by the phrase "including the aggregate amount of follow-on contracts under the same program" appearing in (a) above are: (i) options as defined in Part 1, Subpart 15; (ii) agreements-toagree, wherein the parties agree to negotiate for the extension of the supplies or services being procured; and (iii) later phases of the same project subject to the Phased Project Planning concept prescribed by NHB 7121.2. 3.852-3 Contents of the Procurement Plan. (a) Procurement Plans Requiring Approval By NASA Headquarters or the Head of a Field Installation. Each procurement plan prepared for approval by NASA Headquarters or the head of a field installation shall contain the information outlined below, developed in depth, using the same subject (or paragraph) headings and numbers as those indicated. Where a subject is not treated in the plan, the words "not applicable," or a suitable explanation, will follow the subject heading in the plan. Each heading or subheading may include as many paragraphs or further breakdowns as necessary for a particular plan. Centered at the top of the first page of the plan will be the words "Procurement Plan for" followed by sufficient wording to identify the procurement. The Procurement Plan Contents Checklist (NASA Form [Next page is 379] |