(a) Deliveries of supplies purchased "off the shelf" are made from a point other than that of manufacture;

(b) Necessary testing equipment is located only at destination;

(c) Biologicals being purchased are processed under direct control of the National Institutes of Health or the Federal Food and Drug Administration;

(d) The volume of procurement at a given plant is not sufficient to warrant the increased cost of inspection at origin;

or

(e) Otherwise determined to be in the best interest of the Government.

§ 18-14.106 Inspection of small purchases ($2,500 or less).

(a) This § 18-14.106 applies to all small purchases, including items described in Federal and Military specifications, and qualified products. In determining the type and extent of Government inspection to be required on small purchases, the smallness of possible losses and the likelihood of uncontested replacement of defective articles shall be considered.

(b) Generally, inspection of small purchases shall be at destination. Purchasers, users, and installers may be considered inspectors for small purchase inspection purposes.

(c) Unless detailed technical inspection is necessary, inspection shall consist of examination of (1) type and kind; (2) quantity; (3) damage; (4) operability, if readily determinable; and (5) packaging and marking, if applicable.

(d) Detailed technical inspection shall be performed if special specifications are involved or if defective supplies can harm personnel or equipment.

(e) Detailed technical inspection may be limited to a check of characteristics that require separate specifications and of those likely to cause harm. Such inspection may be limited to inspection of Occasional purchases of the same item from the same manufacturing source when there is good reason to rely upon the integrity of the manufacturer because of known safeguards and a significant history of defect-free purchases.

(f) Adjustments for short shipments or defective supplies shall be requested from suppliers when recovery will benefit the Government.

§ 18-14.107 Rejection of nonconforming supplies or services.

Contractors ordinarily shall be given an opportunity to correct or replace non

conforming supplies or services if this can be done within the required delivery schedule. Unless the contract provides otherwise, such correction or replacement shall be without additional cost to the Government. Notices of rejection of nonconforming supplies or services need not be in writing unless (a) the supplies have been delivered to a point other than the contractor's plant, (b) the contractor persists in offering nonconforming supplies or services for acceptance, or (c) delivery or performance is overdue without excusable cause. The reasons for rejection normally shall be stated, and the contractor may be given any suggestions that might help in eliminating the cause of rejection. If timely notice of rejection is not furnished to the contractor, acceptance may, in certain cases, be implied as a matter of law from such omission. Therefore, notices of rejection should be furnished promptly to contractors whenever rejection is intended.

§ 18-14.108 Government inspection under subcontracts.

Government inspection of subcontracted supplies or services shall be made only when required in the interest of the Government. The primary purpose of subcontract inspection is to assist the Government agency at the prime contractor's plant in determining the conformance of supplies or services with contract requirements. It does not relieve the prime contractor of any of his responsibilities under the contract. Supplies and services that do not qualify under the criteria in § 18-14.105-2 for Government inspection at source shall not be inspected by the Government at the subcontractor's plant. Supplies and workmanship for which records, reports, and similar evidence of quality are available at the prime contractor's plant shall not be Government-inspected at the subcontractor's plant except occasionally to verify such evidence. However, Government inspection shall be performed at a subcontractor's plant whenever the Government contract requires. All oral and written statements and contract provisions relating to the inspection of subcontracted supplies shall be so worded as not to (a) affect the contractual relationship between the prime contractor and the Government or between the prime contractor and the subcontractor, (b) establish a contractual relationship between the Govern

As used in NASA contracts, "acceptance" generally means the act of an authorized representative of the Government by which the Government assents to ownership by it of existing and identified supplies, or approves specific services rendered as partial or complete performance of the contract. Except as provided in § 18-14.205, and subject to other terms and conditions of the contract, the Government thereby acknowledges that the supplies or services are in conformity with contract requirements, including those of quality, quantity, packaging, and marking. Depending upon the provisions of the contract, acceptance may be effected prior to, at the time of, or after delivery. However, supplies and services shall not be accepted prior to inspection, except as stated in § 18-14.204. Acceptance shall ordinarily be accomplished by execution of the acceptance certificate contained in the Materiel Inspection and Receiving Report (DD Form 250) or by signing the receiving report section of the purchase order form used in small purchases. When acceptance is accomplished at a point other than destination, supplies shall not be reinspected at destination for acceptance purposes. § 18-14.202

contracts.

Delivery under f.o.b. origin

(a) Satisfactory evidence of delivery is required before payment other than progress or advance payments may be made under fixed-price supply contracts. Under contracts calling for deliveries f.o.b. origin, the contracting officer or his authorized representative, in certifying that delivery has been made, may, at his discretion, rely on the contractor's signed statement on the invoice that delivery has been made on a specified date to a named carrier or to a representative of the Government. When necessary to protect the Government's interest, the contracting officer may require either that the contractor furnish a receipted copy of the bill of lading or postal receipt, or that a representative of the Government certify as to actual delivery on the applicable inspection and receiving report from. Invoicing instructions to f.o.b. origin contractors shall require that

the contractor state on all invoices (1) the date of shipment, name of carrier, and bill of lading, number, (2) the name and title of the Government representative to whom delivery was made and the date of such delivery.

(b) When payment has been made on the basis of a certificate and the supplies have not been received at destination, prompt follow-up and remedial action shall be initiated.

§ 18-14.203 Point of acceptance.

Each contract shall specify the point of acceptance. Contracts which provide for delivery f.o.b. destination shall provide for acceptance at destination whether inspection is to occur at destination or at origin. Contracts which provide for delivery f.o.b. origin ordinarily shall provide for acceptance (and inspection) at origin.

§ 18-14.204 Responsibility for accept

ance.

(a) Acceptance is the responsibility of the contracting officer or his authorized representative. When a NASA installation utilizes the services of another executive agency for the purpose of acceptance, acceptance by the other agency is binding on the NASA installation for which the services are performed. (See § 18-14.103 regarding performance for NASA of field service functions, including acceptance, by the Departments of the Army, Navy, and Air Force.) For Category 1 and 2 procurements (as defined in § 18-1.5002), final acceptance may be deferred, under appropriate contract provisions, until satisfactory system integration is accomplished, or until other special conditions are fulfilled.

(b) A supplier's certificate of conformance with requirements shall not be considered a proper element incident to acceptance of supplies or services, except a supplier's certificate may be used for Government acceptance prior to inspection on selected Category 3 procurements (as defined in § 18-1.5002). At the discretion of the contracting officer, a clause may be inserted in contracts requiring the contractor to certify that supplies comply with contract requirements. However, when acceptance precedes inspection, a clause will be used to reserve the Government's right after acceptance to inspect the supplies within a reasonable time after delivery and to reject defective items. Certificates of conformance shall be required by the contract when the

value of supplies or the condition of purchase, delivery, receipt, or use thereof makes it desirable to have additional assurance that supplies conform to contract requirements.

§ 18-14.205

Acceptance of supplies or services not conforming with contract requirements.

When supplies or services tendered for acceptance do not conform with contract requirements, the applicable contract provisions shall govern the action to be taken (see § 18-14.107). For reasons of economy or the urgency of the requirement, acceptance of supplies or services which do not meet all contract requirements may occasionally be desirable. Prior to such acceptance, the contracting officer shall obtain the approval of the requiring activity where the nonconformity with contract requirements (a) affects matters such as safety, durability, performance, or interchangeability of parts or assemblies, (b) results in material increases in weight where weight is a significant consideration, or (c) affects the basic objectives of the specifications. Acceptance of these types of nonconforming supplies or services shall be covered by an appropriate modification of the contract. Acceptance of other types of nonconforming supplies and services shall be covered by contract modification if determined necessary by the contracting officer. See also NPC 200-1A. Subpart 18-14.50-Procedures

for

Utilization of Government Inspection Agencies for Quality Assurance Functions at NASA Suppliers' Plants

This Subpart 18-14.50 establishes procedures and guidelines for utilizing Government agencies to assist NASA installations in judging contractor performance of the quality assurance aspects of contracts for space systems and parts thereof.

§ 18-14.5001 Definitions.

(a) Quality assurance. A planned and systematic pattern of all actions necessary to provide adequate confidence that the end items will perform satisfactorily in actual operations.

(b) Space system. A system which includes launch vehicle(s), spacecraft, ground support equipment, and test hardware which are used in ground test

ing, launching, operating, and maintaining vehicles or craft in space.

§ 18-14.5002 Procedures.

(a) In arranging for quality assurance including inspection, NASA installations shall designate the Government agency, as appropriate, and:

(1) Provide a definitive statement of quality and related engineering effort required of the delegated agency (see Subpart 18-1.50, of this chapter);

(2) Review NASA requirements with the Government agency early in the procurement procedure and periodically as the contract work progresses;

(3) Determine the work requirements to be delegated to the agency and at the same time provide for

(i) NASA engineering representation and technical liaison at the plant and test sites;

(ii) NASA performance of quality assurance functions which are not delegated; and

(iii) Designation of individuals at the NASA installation responsible for quality assurance, engineering, and documentation matters for the contract;

(4) Request the Government agency to prepare and document a quality assurance plan on the basis of NASA requirements and NPC 200-1A;

(5) Review such plans as early as possible and whenever revisions or additions are made during the progress of the work;

(6) Provide for continuous assessment of actual product quality by the installation through (i) plant visits, (ii) quality surveys, and (iii) review of quality data, regular reports, and trouble reports, including pertinent investigations and analyses by contractors and suppliers, and by the Government agency;

(7) Provide the Government agency with program information to enable planning for technically competent field personnel to be trained and available when required for assigned work; and

(8) Provide, as required, for training of Government agency and contractor quality assurance personnel as an integral part of the quality assurance program.

(b) Each installation shall reimburse Government agencies performing work for NASA in accordance with current procedures

§ 18-14.5003

Guidelines for use in arranging for quality assurance functions at NASA suppliers' plants.

(a) General. (1) Circumstances will vary the timing, order, and selection of pertinent items. For major space systems, it is desirable to initiate as many arrangements as possible during the precontract negotiation period.

(2) Since the contracting officer is the only official of the Government authorized to bind the Government contractually in dealings with contractors, it is essential that all actions which affect the contract be taken through the contracting officer.

(3) NASA representatives visiting plants where inspection services are being performed for NASA by a Government agency shall notify the agency in advance of the purpose of the visit. Any instructions, decisions, or advice to the contractor shall be provided either simultaneously to the contractor and to the agency, or via the agency. All oral commitments shall be confirmed in writing.

(b) Initial arrangements. (1) Furnish a letter (which may confirm telephone conversation) to the Government agency indicating intent to discuss inspection assignment or, after formal assignment, to provide details.

(2) Provide the Government agency with NASA documents pertinent to the purchase of contract involved, and the following additional documents:

(i) "Quality Assurance Provisions for Government Agencies" (NPC 200-1A);

and

(ii) Pertinent NASA technical direction for use by the Government inspection agency in product and process verification, quality system evaluations, and technical data documentation (or indicate when and where these will be available).

(3) Arrange for a quality assurance planning conference between the agency and the NASA installation to finalize NASA requirements.

(4) Arrange for a postaward conference between the supplier, the Government agency, and the NASA installation.

(c) Quality assurance planning conference with Government agency. (1) Review NASA requirements for quality assurance and technical representation at plant and test sites, including:

(i) Review of contract requirements; (ii) Review of separate technical direction to Government agency;

(iii) Clarification of quality requirements in subparagraphs (i) and (ii) above, and determination of any omissions or conflicts for NASA resolution;

(iv) Specification of NASA criteria applicable to the contract for selection of subcontract items requiring Government inspection at source; and

(v) Arranging for providing NASA documents not already on hand.

(2) Review Government agency's quality assurance plan, including:

(i) Determination of the adequacy of proposed Government action:

(ii) Review of the numbers and qualifications of proposed Government agency manpower for various stages of contract;

(iii) Determination of work to be delegated to the Government agency;

(iv) Where a Material Review Board at a supplier's plant is authorized to act on nonconforming material, making certain that the Government agency representative is technically qualified to make decisions within the scope delegated to the Government agency (otherwise, the NASA installation shall provide the Government representative on this board); and

(v) Arranging for the NASA installation to provide

(a) NASA performance of quality assurance functions not delegated;

(b) NASA engineering representation and technical liaison at the plant and test sites; and

(c) Designation (by the contracting officer, in writing) of individuals at the responsible NASA installation to be contacted directly for quality assurance, engineering, and documentation matters for the contract.

(3) Review and discuss past quality history of supplier including:

(i) Government agency quality system evaluation results, known supplier quality system deficiencies, and supplier's progress in correcting these deficiencies; and

(ii) Government agency quality performance records for similar items, particularly troubles, product or process deficiencies, and supplier's corrective action.

(4) Arrange for a NASA-directed quality system evaluation, if desired by NASA installation.

(5) If more than one Government agency is involved in research and development work at a plant, determine as early as possible which agency shall perform desired inspection.

(d) Postaward conference with supplier and Government agency. (1) Review and discuss applicable items from paragraph (c) of this section.

(2) Review supplier's quality program planning including:

(i) A flow chart or tabulation showing supplier's quality assurance operations in general terms (i.e., what, where and how);

(ii) Revisions or additions to present quality operations to satisfy quality assurance provisions of the contract;

(iii) The time schedule for supplierprepared technical documents satisfying quality assurance needs of Government agency and NASA installation;

(iv) The contract time schedule or planned events affecting quality assurance operations;

(v) The inspection and testing equipment and facilities available and planned;

(vi) The preliminary system and subsystem interface relationships affecting quality assurance operations;

(vii) Other arrangements necessary to assure system compatibility; and (viii) The supplier's structure.

organizational

(3) In connection with the review of the supplier's quality program or inspection plan, determine the location of proposed Government inspection and control stations.

PART 18-15-CONTRACT COST PRINCIPLES AND PROCEDURES

Sec. 18-15.000

18-15.205-18 18-15.205-19 18-15.205-20 18-15.205-21

18-15.205-22 18-15.205-23

18-15.205-24

Scope of part.

18-15.205-25

Subpart 18-15.1-Applicability

18-15.205-26

18-15.205-27

18-15.205-28

18-15.205-29

18-15.205-30

and research contracts, and

18-15.205-31

18-15.205-33 18-15.205-34

institutions.

with

particular cost items.

State and local governments.

18-15.205-32

costs.

Labor relations costs.

Losses on other contracts.
Maintenance and repair costs.
Manufacturing and produc-
tion engineering costs.
Material costs.

Organization costs.

Other business expenses.
Relocation costs.

Patent costs.

Pension plans.

Plant protection costs.
Plant reconversion costs.
Precontract costs.

Professional and consultant

service costs-Legal, accounting, engineering and other.

Gains and losses on disposition of depreciable property or other capital assets. Recruitment costs.

Rental costs (including sale and leaseback of facilities). 18-15.205-35 Research and development

costs.