NASA Procedures and Guidelines
This Document is Obsolete and Is No Longer Used. Check the NODIS Library to access the current version: http://nodis3.gsfc.nasa.gov
NPR 9090.1A Eff. Date: February 25, 2013 Cancellation Date:	Reimbursable Agreements
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Appendix E. Market Based Pricing Procedures

E.1 Market-Based Pricing is discussed in Chapter 4. This Appendix provides additional detail and direction regarding this pricing procedure.

E.2 Market-Based Pricing. In accordance with OMB Circular A-25, "market price" means the price for a good, resource, or service that is based on competition in open markets and creates neither a shortage nor a surplus of the good, resource, or service.

E.2.1 When a substantial competitive demand exists for a good, resource, or service, its market price will be determined based on market rates from commercial providers.

E.2.2 In the absence of substantial competitive demand, market price will be determined by taking into account the prevailing prices for goods, resources, or services that are comparable to those provided by the Government and then adjusting the supply made available and/or price of the good, resource, or service, so that there will be neither a shortage nor a surplus. In those cases, some independent judgment may be applied in order to consider whether the specific good or service involved is actually comparable to the NASA good or service. That can include, but not be limited to judgment from an appraiser or consultant with knowledge of potential customers and what they generally would pay for such goods or services (where comparable commercial providers cannot be identified) and experience at the Center when negotiating agreements with potential customers. This situation could be considered comparable to a house appraisal where a professional appraiser takes into consideration both comparable prices and also the unique features and condition of the house involved. One such adjustment to compute market price could involve the unique security, emergency, and institutional services associated with a property on a NASA installation. The costs of providing these services should be part of the calculation of market price, if a comparison is made with facilities outside the Center's secured area. Any such adjustment from a market survey must be supportable, documented; as much as is practicable; and involve participation from persons independent of the negotiation with the customer but who are knowledgeable in the pricing of the good or service. There should be reasonable support for a price to ensure that NASA would obtain fair reimbursement.

E.3 Limited Circumstances. This pricing methodology, while required in the out-granting of Federal real property and EUL arrangements in order to determine fair market value, should be limited in its application to Space Act Agreements. The market price will generally result in situations where the contemplated price charged to the customer is either higher or lower than the full cost of the good or service.

E.3.1 The application of market-based pricing procedures in cases where the contemplated price is higher than the full cost of the work must not conflict with other legal or policy restrictions (e.g., Economy Act agreements). Further, all revenues in excess of full cost must be returned to the U.S. Treasury as miscellaneous receipts (except where otherwise allowed). The pricing methodology is limited in this circumstance to prevent putting commercial providers of similar goods/services at a competitive disadvantage, should NASA's full cost be lower. These situations (beyond those applicable to an EUL) are rare. Centers should consult with their OCFO and OGC to ensure adherence to other NASA policy provisions.

E.3.2 The application of market-based pricing procedures for Space Act Agreements in cases where the contemplated price is lower than full cost of the work should be limited to instances meeting the following conditions:

a. NASA real property or other assets or services are underutilized.

b. Full-cost pricing is not consistent with local market conditions, which can include a reasonable determination that pricing the property at full cost is unlikely to yield any customers.

c. The revenue derived would offset some or all of a budget requirement for the maintenance or disposition of the real property or asset, where some or all of those costs would be incurred by NASA even in the absence of the reimbursable agreement.

d. The price should still be at or above the marginal cost of providing the good or service.

E.4 Market Survey. Center CFO offices will ensure that a comparable pricing survey is conducted of commercial providers of comparable services that the Center wishes to offer through reimbursable Space Act Agreements (the Center CFO is not necessarily responsible for preparing a market survey, only to ensure that one has been done). In the absence of commercial providers of similar services, there should be an objective and reasonably independent analysis (which may include a survey of potential customers), so that pricing would result in attracting customers. If there has been a survey for comparable goods or services within the last year, the Center may use the results of that survey. These surveys are to be performed as required when agreements are proposed that involve market-based pricing. If the agreement is expected to extend beyond a year, the survey to establish appropriate pricing must take that into account. However, revised determinations of market prices will not change the terms of an agreement unless there is a provision for that in the agreement. Such a survey will include a representative sample of commercial providers and be conducted in a thorough manner, so that an analysis of the results will provide reasonable assurance that a comparable pricing structure can be determined for that agreement.

E.4.1 A representative sample of commercial service providers will be surveyed through interviews, reviewing their published rates, or by appropriate alternative methods (e.g., knowledgeable industry representatives or associations). The information obtained during the surveys will be documented, labeled proprietary information, and access will be restricted. The documentation will include:

a. Name of the commercial service provider.

b. Date the information was received.

c. Pricing information obtained.

E.4.2 The Center CFO will ensure that the results of the survey are consolidated, evaluated, and analyzed, with the objective of reaching a pricing structure for the Center that is:

a. Supported by the survey results.

b. Comparable to prices that customers could expect to find at other commercial providers, given any discount or premium that is applied to compensate for bona-fide differences.

c. Rational, fair, and consistently applied.

E.4.3 The Center CFO will ensure that the survey results, evaluation, analysis, and judgments are appropriately documented and retained for review in accordance with NASA document retention policies. In cases where commercial service providers are unwilling to share pricing information or the Center is unable to compile enough information to develop a market survey, the Center CFO will document for the record and use alternative pricing methodologies.

E.4.4 Interim Pricing Adjustments Between Market Surveys. During the period between the market surveys, new pricing-related information may be discovered that the Center CFO should review, analyze, and evaluate for justifying possible interim adjustments to the Center's pricing structure. These adjustments should be kept to an absolute minimum in order to maintain pricing consistency and fairness to customers. In addition, pricing changes should not be influenced by "negotiations" with individual customers. The pricing strategy is market based, not negotiated customer by customer. Nevertheless, in those rare cases when an interim adjustment to the Center pricing structure is necessary, it should be well documented and the supporting evidence maintained for three years. However, interim adjustments to the Center pricing structure do not affect signed and executed reimbursable agreements and are not applied retroactively.

E.5 Market Adjustments on EPR. The adjustments needed to reconcile the market price to the full cost will be identified in the Price Adjustment column of the EPR. The total adjustment for the agreement should be distributed to the individual lines on the EPR based on the information available at the Center. In order to ensure commercial providers are not at a competitive disadvantage, NASA may have to increase its full cost to market rates. Collections above NASA's full cost are deposited to the Treasury unless statutory authority exists to retain such amounts.

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