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NASA Procedures and Guidelines |
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| | TOC | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | ALL | | |||||
3.1.1 This chapter covers the determination of reimbursable agreement full cost. All reimbursable agreements shall be initially developed on a full cost basis. Chapter 4 of this document contains instructions for establishing the required level of reimbursement. Before a reimbursable agreement for work is accepted, the full cost of reimbursable work will be calculated and documented on the EPR.
3.2.1 Full Cost. For purposes of reimbursable work, full cost includes all direct and indirect resources used to provide the specific work. See Attachment A for the definition of full cost. In general and in the context of this section, the term "output" could be considered analogous to the reimbursable project.
3.2.2 Direct Costs. Direct costs are costs specifically identified with an output. All direct costs should be included in the full cost of outputs. Typical direct costs in the production of an output include:
a. Salaries and other benefits for employees who work directly on the output.
b. Materials and supplies used in the work.
c. Various costs associated with office space, equipment, facilities, and utilities that are used exclusively to produce the output.
d. Costs of goods or services received from other segments or entities that are used to produce the output.
e. Other costs related to the production of the output.
3.2.2.1 These items should be individually identified and shall be applied directly to the reimbursable project. These are costs that can be directly traced to the reimbursable work. Direct costs include service pool labor and materials that are directly charged to a reimbursable agreement.
3.2.3 Indirect Costs. Indirect costs are costs of resources that are jointly or commonly used to produce two or more types of outputs, but are not specifically identifiable with any of the outputs. Typical examples of indirect costs include costs of general and administrative services, general research and technical support, security, rent, employee health, and recreation facilities. Indirect costs typically also include operating and maintenance costs for buildings and equipment. In general, if those costs cannot be assigned to outputs on a cause-and-effect basis in an economically feasible manner, assignment of those costs can be accomplished through reasonable allocations (e.g., CMO).
3.2.3.1 Following are examples of indirect costs used by NASA.
a. Agency-Wide CMO Rate. CMO funds all Center administration and support costs necessary to operate and maintain the Center. At least annually the Agency OCFO will establish an Agency CMO rate to be used by the Center to develop the full cost of reimbursable agreements and should be included on the appropriate line on the EPR. The single Agency-wide CMO rate is developed by OCFO and is to be used by all NASA Centers (except for reimbursable agreements involving HQ or the NMO for work to be performed by JPL (an FFRDC). Estimated CMO shall be calculated as part of the EPR before the agreement is signed. CMO is earned as the reimbursable services are performed.
(1) In general, the Center may consider the CMO rate in effect at the time the agreement is signed to be applicable for the life of the agreement, but not longer than five years. If an agreement is proposed in which the CMO rate would be fixed for longer than five years, that shall be approved by OCFO. Alternatively, a Center may, at its discretion, apply a revised CMO rate on an agreement (based on the prevailing Agency-wide CMO rate at the time), unless a specific rate is expressly indicated in the agreement with the reimbursable customer.
(2) If a Center has entered into an agreement and considers the CMO rate in effect at the time the agreement is signed to be applicable for the life of the agreement and if OCFO has determined that significant cost factors (as determined by OCFO) justify reconsideration of those rates, OCFO may direct Centers to use an updated rate unless a specific rate is expressly indicated in the agreement with the reimbursable customer.
(3) If a CMO rate is adjusted during the life of an agreement, CMO assessments shall not be retroactively recalculated. That would not, however, preclude valid corrections and adjustments. If there are valid prior period corrections that affect CMO calculations, corrections that affect CMO would be based on the CMO rate applicable to the agreement for the period being corrected.
(4) If a Center establishes a CMO rate on an agreement to be less than the Agency-wide CMO rate at the time the agreement is entered into, the difference shall be shown as waived cost in the EPR.
(5) A CMO rate is established for an agreement as described above and is not based on rates used with previous agreements. A Center shall not use rates on previous agreements, regardless of whether the same customer is involved, because it considers prior use of those rates to be customary and normal business practice.
b. Contract Administration and Audit Services (CAAS). When the contract costs associated with a reimbursable agreement exceed $1 million and require NASA procurement services, including contracts and grants, the full cost will include the cost of CAAS support. As needed, the Agency OCFO will update a standard CAAS rate that will be used to develop the full cost of reimbursable agreements. That rate will be available, if requested, by OCFO and may be issued at the same time as updated CMO rates. The CAAS rate in effect at the time the agreement is signed will be used to determine the applicable CAAS cost. The estimated CAAS cost is calculated by multiplying the planned contract cost (i.e., the contract that is equal to or greater than $1 million) by the established rate. The CAAS assessment cost is calculated by multiplying the cost incurred associated with a contract of $1 million or greater by the established rate. CAAS charges are applicable to pass-through contract actions if the contract requires CAAS services and the other party's share of the total contract exceeds $1 million. An estimate of CAAS charges should be included on the appropriate line on the EPR.
c. Agency Management and Operation (AM&O). Generally, there is no AM&O assessment on reimbursable agreements charged to reimbursable customers. The Agency CFO may make a determination of whether to prescribe such an AM&O assessment. Policy does provide, however, for an Administrative Fee for Headquarters and JPL (an FFRDC) Reimbursable Agreements, as discussed below
d. Administrative Fee for Reimbursable Agreements Involving Headquarters or the NMO for work to be performed by JPL (an FFRDC). An administrative fee shall be included in the cost of all reimbursable agreements that will be executed by Headquarters or NMO (for work to be performed by JPL (an FFRDC). This administrative fee is required so that NASA may recoup the cost associated with the management of the reimbursable agreements. The Agency CFO or delegate will determine whether to prescribe a rate specifically for that purpose, to use an Agency AM&O rate, or to defer to the Headquarters Office of Budget Management and System Support for determining the administrative fee. The rate to be used for determining administrative fees on Headquarters agreements or NMO agreements (for work to be performed by JPL (an FFRDC)) will be recalculated by the Headquarters Office of Budget Management and System Support or by the Agency OCFO, as needed.
e. Pass-Through Reimbursement Fee. NASA Centers may impose an administrative charge to cover the cost associated with processing a pass-through reimbursement agreement. Cost components for calculating the pass-through reimbursement fee generally include the Office of Procurement, CFO, Office of Chief Counsel, Partnership/Development Office, and Center Director Office. The administrative fee shall be approved by the Center CFO. If there is an administrative fee on pass-through agreements, the NASA Center shall calculate a rate that would generally be applied to pass-through agreements throughout the year, but it may be subject to adjustment if the Center CFO determines there is a need to do so in order to more correctly reflect administrative costs in calculation of the rate. That rate will be provided to OCFO as requested or may be requested by OCFO annually (and if adjusted, during the year by the Center). Such a rate will be recalculated at least biennially.
(1) Pass-Through Rate Reimbursements. Pass-through reimbursements represent agreements where NASA allows another party to obtain services from a NASA contract as a convenience to the other party. In such cases, NASA is not providing any type of product, service, or use of facilities other than the processing of the contract.
(a) Examples include NASA accepting funding from another party for the other party's share of a utility bill when service for both parties has been established under a single utility contract. Another example is where NASA pays for repairs on a fence and the entity on the other side of the fence shares that cost. The other party reimburses NASA to cover the cost of work on the portion of the fence that runs on their property.
(b) NASA Centers may charge an administrative fee to cover the cost associated with processing this type of reimbursement. That administrative fee can be alternatively referred to as a pass-through rate and would be charged in place of a CMO assessment.
(2) Partial Pass-Through Rate Reimbursements. If a significant portion of the total agreement could be considered pass-through because it meets the criteria indicated below while other work by NASA under the agreement does not meet the criteria for pass-through agreements, that portion of the agreement with characteristics of pass-through agreements shall be considered an equivalent of a pass-through agreement (i.e., subject to a pass-through administrative fee) while the remaining work is to be subject to standard indirect cost assessments (e.g., CMO). Such arrangements would be applicable if the portion of the agreement meeting criteria for a pass-through agreement is at least $500,000 (direct costs) or at least 50 percent of the total direct costs under the agreement (i.e., before indirect cost assessments). If possible, the portion of a contract considered as pass-through should be distinguished by a separate task or other similar breakout. The portion of the agreement considered as pass-through (and subject to the Center pass-through rate) and the remaining portion of the agreement (subject to other standard indirect cost rates) should be distinguished on separate EPRs.
(3) Generally, criteria for determining whether an agreement can be considered for utilization of a pass-through rate include all of the following:
(a) Work for the customer is incidental to and can utilize an existing contract vehicle or service that the Center already has entered into or it consists of a contract action (which may include contracts or small purchases) that would not require special terms or scope developed by NASA (e.g., utilities, commonly processed small purchases). Such a procurement may include a contract vehicle where the reimbursable customer has developed the technical content while NASA is basically executing the contract action.
(b) If work for the customer is covered by an existing contract, it would generally be within the scope of the existing contract and it would not require significant contract modification or revision to a Statement of Work.
(c) Work for the customer would not require significant technical oversight or direction by NASA. Accordingly, a contract would not include a Statement of Work tailored for this agreement to meet the requirements of the reimbursable customer. Some limited and insignificant participation by NASA would be allowable in order to provide for normal contract management, monitoring of contract performance, and financial management responsibilities by NASA.
(d) Work would not involve use of NASA facilities or other resources (e.g., civil service labor). As indicated above, some limited insignificant participation by NASA would be allowable in order to provide for basic administrative functions.
3.3.4 Generally, reimbursable funds cannot be used to fund acquisitions of capital assets or property upgrades that meet capitalization criteria as described in NPR 9250.1 Property, Plant, and Equipment and Operating Materials and Supplies.
Note: That does not apply to the Capital Asset Account associated with the Enhanced Use Lease (EUL) program as described in Chapter 5. The Capital Asset Account associated with the EUL program is available for maintenance, capital revitalization, and improvements of the real property assets and related personal property and may involve acquisitions or upgrades of property.
3.3.5 As described in NPR 9250.1, if property is required in order to perform work for the reimbursable customer and when NASA incurs the cost to acquire such Property, Plant, and Equipment (PP&E) or capital improvement, the cost is recorded as an expense and becomes part of the cost billed to the reimbursable customer. If, at the end of the reimbursable agreement, the Center CFO, in consultation with the Center Office of Chief Counsel, determines that NASA may appropriately retain such PP&E or capital improvement, the transaction to record the PP&E or capital improvement as a NASA asset is a separate transaction that has no effect on the amounts previously recorded for the reimbursable agreement or amounts charged to the reimbursable customer.
3.4.1 For purposes of reimbursable work, full cost means all direct and indirect costs (e.g. CMO, CAAS, and pass-through fee) used to provide the specific work (see Appendix A for definition of full cost). NASA policy is that standard rates based on experience of similar work will be used whenever possible and practical to calculate the full cost of the reimbursable project.
3.4.1.1 Standard Rates or Charges. A standard rate ($/unit) or charge based on consumption can be determined for some services or components of services that are required to complete a reimbursable project. For example, wind tunnel usage is charged based on a standard rate for each hour the wind tunnel is operated. Standard charging applies when there is recurrent demand for the same or similar goods or services and actual costs for those goods or services are not expected to fluctuate significantly. This type of charging is determined in advance and can readily be applied to cost the related components of a customer's reimbursable project.
a. Standard rates shall be periodically reviewed and adjusted to ensure that actual costs are recovered. Such reviews will be performed at least on a biennial basis.
b. If standard rates are used for estimating the full cost of an agreement and as a basis for pricing, the actual costs for performing the work shall still be tracked so that variances between standard costs used for the activity and the actual costs can be computed. Actual costs could be tracked by type of activity, facility, or cost pool, where appropriate, in order to support analysis of variances rather than tracking actual costs by individual agreement. If there are recurring variances between standard rates and actual costs, standard rates will be reviewed and adjusted, as described above.
3.4.1.2 Individual Agreement Costing. When the full cost of a reimbursable project cannot be estimated using standard rates or charges, Centers shall estimate the full cost by projecting resources to be consumed by the reimbursable project and costs of those resources. NASA Centers will conduct an analysis to identify each cost element involved and how to assign that cost to the project.
3.4.2 Cost Assignment.
3.4.2.1 In developing a method for costing and assigning cost to reimbursable work, NASA shall use Generally Accepted Accounting Principles (GAAP). In accordance with SFFAS No. 4, Managerial Cost Accounting Standards and Concepts, full cost of output is the total amount of resources used to produce the output. This includes direct and indirect costs that contribute to the output, regardless of funding sources.
3.4.2.2 GAAPs provide an order of preference framework for assigning costs:
a. Directly trace costs wherever feasible and economically practicable.
b. Assign costs on a cause-and-effect basis.
c. Allocate costs on a reasonable and consistent basis.
3.4.2.3 When reimbursable projects use the same types of goods or services as direct-funded projects, the reimbursable projects will be costed using the same rates and basis of consumption as the direct-funded projects.
3.4.2.4 Recognizing that the computation of full cost cannot always be exact, NASA will strive to achieve a high degree of precision in costing reimbursable work. The following restatement of a Comptroller General decision was taken from the Government Accountability Office's (GAO's) "Principles of Appropriations Law" Second Edition, Volume IV, pages 15-40 and 15-41 and can generally be applied to estimating the cost of NASA agreements under any authority: "While at times actual cost can be computed with precision, the Economy Act does not require that the determination be an exact science. Cases on reimbursable work even before the Economy Act recognized the acceptability of a reasonable and appropriate methodology over 'absolutely accurate ascertainment' which might entail considerable burden and expense, 3 Comp. Gen. 974 (1924). As stated in B-133913, January 21, 1958, '[a]s long as the amount agreed upon results from a bona fide attempt to determine the actual cost and, in fact, reasonably approximates the actual cost,' the Economy Act is satisfied."
3.4.3 The full cost of the reimbursable agreement should only include work that is specifically requested by the customer. Additional work or scope added by NASA, which is not for the benefit of the reimbursable customer and which is funded by NASA, should not be included in the full cost determination.
3.4.4 Calculating Full Cost of Collaborative Reimbursable Agreements.
3.4.4.1 In cases where NASA and the customer jointly collaborate on a project, the EPR full cost should be calculated only for the customer's portion of the work. Under these types of collaborative agreements, the customer's responsibility is usually identified under the "partner responsibility" section of the agreement. In general, the full cost as shown on the EPR should reflect the scope/content of the work being performed by NASA for the reimbursable customer. NASA should not include in the EPR full cost calculation work that is specifically part of a NASA project that is direct program funded (i.e., appropriated) and which would otherwise be performed regardless of the reimbursable work. A reasonable portion of shared costs (e.g., set up, engineering support) may, however, be associated with the reimbursable project. If there is a basis for waiving some of the costs for the scope of the work being performed for the reimbursable customer, those costs will be included in the EPR full cost even if the alternative source of funding for those costs is a direct-appropriated NASA program.
3.4.4.2 While the EPR full cost is only calculated for the customer's portion of the work, Centers should estimate the "Total Project Cost" for collaborative agreements. Total project cost is the sum of the agreement's full cost shown on the EPR, plus the full cost of NASA's portion of the work for the collaborative project (i.e., the portion of the project not reflected in the EPR as part of the full cost of the customer's portion of the work). This information will be included as supplemental information to the EPR and used for management analysis and additional visibility into the full scope of the collaborative effort.
3.4.5 Costs absorbed by a NASA program intended to sustain a facility or activity and which are normally not recovered from a customer (without waived costs specific to the agreement and as separately described) shall not be included in the full cost of the agreement on the EPR and, consequently, would not be treated as waived costs. For example, certain facility costs absorbed by the Strategic Capabilities Assets Program (SCAP) that are determined independent of the agreement being priced would not be included in the full cost of the agreement on the EPR.
3.4.6 Cost of Agreements for Facilities/Space. Generally, a Center entering into an agreement for occupancy by another party of a NASA facility shall prepare an estimate of the cost to the Center per unit of space (e.g., cost per square foot) of the property or other similar measure based on an objective and systematic analysis of the type of property being used (e.g., office space and undeveloped land). That cost should reflect indirect costs, general use of facilities services (i.e., shared charge for security services, procurement, and general administrative activities), and building maintenance (including both routine and major building repairs) of comparable properties at the Center. A charge should be calculated based on the utilization of space by the lease times the cost per unit of space as described above and shall be included as part of a regular recurring payment by the tenant/lessee.
3.4.6.1 If a Center calculates a cost for the facility based on a rate such as cost per unit of space (e.g., cost per square foot) or other similar general measures for common cost allocations as described above, the resulting cost, which would include an amount to recover administrative costs, shall be considered the full cost of facility under the agreement.
3.4.6.2 Such general calculations to establish rates for cost per unit of space (e.g., cost per square foot) or other similar general measures for common cost allocations may be done periodically and are not required to be recalculated for each agreement. Those rates should be recalculated at least biennially. The Center may derive costs per unit of space for different classes of facility/property (as determined by the Center to be appropriate for its circumstances) rather than try to derive costs per unit of space for each building. An example would be a calculation of cost per unit of space for general office space that could be used for lease agreements in different buildings.
3.4.6.3 If the Center enters into occasional agreements involving facility space, and if the Center CFO determines that it is not cost-effective to derive costs per unit of space or other similar general measures for common cost allocations, and if the Center has a reasonable basis for estimating costs based on experience or costs at similar facilities, the Center may use those rates when calculating the cost of the agreement. Such rates may be based on inputs that include but are not limited to appraisals, consultant studies, surveys, use of cost finding techniques, etc. (as long as the basis for cost estimates is intended to reflect cost data rather than a market value for the facility).
3.4.6.4 If the agreement with the customer includes performance by NASA of services other than those customarily associated with occupancy of space on a NASA facility, costs for those portions of the agreement shall be included on an EPR in a manner similar to other non-facility agreements, be generally priced at full cost, and would be subject to a standard CMO assessment or pass-through fee as appropriate. That may also include supplementary services priced separately (e.g., for utilities). That does not preclude, however, price adjustments by the Center to reflect waived costs as described elsewhere in this directive.
3.4.6.5 If certain services supporting the customer occupying a NASA facility are disproportionate with respect to those normally provided (e.g., non-routine IT support services and special security), those activities may be costed and priced separately from the cost for the facility as described above.
3.4.6.6 If the Center is entering into an agreement for occupancy of a NASA facility by another party and if the agreement will be subject to excluded costs (in accordance with policy or statute, such as CSLA), the Estimated Price Report will distinguish incremental costs associated with the agreement (i.e., costs that NASA would not incur in the absence of the agreement) from other costs that are allocated to the space in order to derive a full cost.
| TOC | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | ALL | |
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