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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 | | |||||
5.1.1 This NPR also establishes financial management requirements for EUL agreements, related procedures and funding arrangements, and use of proceeds derived from EUL agreements. In the context of this NPR, EUL agreements represent contractual agreements entered into by NASA to lease property under EUL authority and to provide related support services associated with those leases.
5.1.2 Lease of Non-Excess Property gives the Administrator authority to lease non-excess NASA real property at fair market value, to use the amounts collected to cover the full costs to NASA in connection with the lease, and to use the net proceeds of the lease (i.e., cash collections received in excess of the full cost of leases) for maintenance, capital revitalization, and improvements of the real property assets and related personal property under the jurisdiction of the Administrator.
5.1.3 Under authority initially enacted, the statute applied to real property under the jurisdiction of the Administrator at no more than two NASA Centers. The Ames Research Center and Kennedy Space Center have been NASA's EUL demonstration sites. Cash amounts received under that authority in excess of costs associated with the leases shall be available for maintenance, capital revitalization, and improvements of the real property assets of the Centers selected for this demonstration program.
5.1.3.1 Amounts derived from cash collections prior to FY 2010 shall remain available until expended. That includes amounts collected to cover the full cost of leases as well as the FY 2009 year-end balance of the capital asset accounts (as described in Section 5.7).
5.1.3.2 Amounts derived from cash collections to cover the full costs of EUL agreements in FY 2010 and thereafter shall remain available until expended.
5.1.3.3 Amounts derived from cash collections in FY 2010 and thereafter, after deducting for the full cost of EUL agreements (i.e., amounts to be credited to the capital asset accounts), shall remain available for a period of five years.
5.1.3.4 EUL authority was modified by the Consolidated Appropriations Act of 2008, under which applicable provisions became effective on December 31, 2008. The revised statute applies to any non-excess real property and related personal property (i.e., collateral equipment) under the jurisdiction of the Administrator and extends the EUL authority to all NASA Centers. That authority removed in-kind consideration as a means of payment to NASA by a lessee. However, in-kind consideration can be accepted, where authorized, in connection with EUL agreements entered into prior to December 31, 2008, at Ames Research Center and Kennedy Space Center and subject to the terms of those lease agreements. EUL authority was subsequently modified by the Consolidated and Further Continuing Appropriations Act, 2012 to allow in-kind consideration for leases entered into for the purpose of developing renewable energy production facilities.
5.1.4 In accordance with the Consolidated Appropriations Act of 2010, net proceeds derived from cash consideration collected in FY 2010 and thereafter shall be available for a period of five years.
5.1.5 Sunset. Authority to enter into EUL agreements will expire on December 26, 2017. The expiration of EUL authority to enter into leases will not affect the validity or terms of leases, availability of amounts derived from cash collections to cover the full cost of leases, or NASA's retention of net proceeds (as described in Section 5.6) from leases entered into under EUL authority before the date of the expiration of such authority.
5.1.6 References to lease agreements in this NPR apply to the contractual agreements entered into by NASA with lessees under the EUL authority.
5.1.7 Proposed lease arrangements, lease terms, analysis of business cases, and reporting of lease activity will be subject to oversight and direction of the Office of Strategic Infrastructure, as discussed in NPR 8800.15, Real Estate Management Program, and the EUL Desk Guide as issued by that office.
5.1.8 In accordance with NPR 8800.15, Real Estate Management Program, EUL agreements shall not be entered into with other Federal agencies.
5.2.1 Lease agreements will not be for less than the fair market value of the property plus expected incremental billable costs as described in Section 5.5. Lease agreements entered into prior to December 31, 2008, with customers from other Federal agencies shall be based on the full costs of leases as described in Section 5.5. Pricing of lease agreements at fair market value (i.e., market pricing) is statutorily required for EUL agreements.
5.2.2 Fair market values of lease agreements shall be supportable and should be established using market surveys as discussed in Appendix E of this NPR or utilizing appraisal services. A recent market survey or appraisal for a different property could be referenced if the properties are comparable.
5.2.3 Lease agreements are priced to reflect fair market values over the life of the lease so that the amounts due from the lessee should be based as much as is practicable on the fair market value in the periods in which lease payments become due. With respect to lease terms as they apply in future years, fair market values over the life of a lease will be based either on reasonable projections of future values at the time the lease is executed or periodically adjusted based on reappraisals or similar estimates of valuation. Determinations of when to perform such reappraisals, if relevant, shall be provided for in the terms of the lease and is based on an analysis of cost effectiveness, changes in market conditions, or other factors so that lease terms will reasonably reflect fair market value in periods in which lease payments become due. That should not be interpreted as requiring annual reappraisals.
5.2.4 Since the lessee could make property improvements and since those could affect the fair market value of the property, there should be periodic adjustments in fair market value pricing to exclude the value of improvements that were funded by the lessee. Generally, the fair market value of the property as used to determine the contractual lease payments is determined without including the value of improvements made by the lessee.
5.2.5 Fair market value pricing of an EUL agreement could be either above or below the full cost of the lease. As discussed in Section 5.6, net proceeds would be derived if cash amounts collected exceed the full cost of the lease. If pricing is below the full cost of the lease, concurrence will be obtained from the office(s) providing the funding to cover the difference from the full cost.
5.3.1 Since lease agreements should be priced at not less than fair market value (excluding the value of upgrades funded by the lessee as described above) and can be in excess of full costs of leases as described in the Section 5.5 in this Chapter, collections associated with EUL agreements can result in net proceeds. Net proceeds derived from EUL agreements are discussed in Section 5.6.
5.3.2 Lease agreements under EUL authority shall be established in the Agency accounting system under a no year account as directed by the OCFO.
5.3.3 Each year, Centers shall prepare estimates of collections for amounts owed to NASA under this authority and submit estimates to OCFO for the purpose of preparing an apportionment request to the OMB. The estimated collections for a lease should represent cash collections expected in the coming year for amounts that will have become due under the EUL agreement. The estimate will include contractual lease payments, as well as an estimate of other incremental billable charges (i.e., demand services) in the coming year that are expected to be collected. Estimates for collections may include amounts billed to the lessee in a prior year or where the lessee occupied and benefitted from property in the prior year but where cash collections for the amounts are expected to occur in the upcoming year. Estimates for collections under this authority will be distinguished from anticipated reimbursements. Budgetary resources derived from EUL authority will include the unobligated balance brought forward into the new fiscal year (i.e., carryover).
5.3.4 Lease agreements under EUL authority will be executed in accordance with a program/management structure developed by the Office of Strategic Infrastructure at HQ in coordination with OCFO and affected Centers. In addition, the capital assets account under EUL authority will be managed in accordance with a program/management structure developed by the Office of Strategic Infrastructure in coordination with OCFO and affected Centers.
5.3.5 An EPR for the agreement shall be prepared generally in accordance with the format provided in the Appendix D. The full cost of the agreement on the EPR will include cost components as described in the Section 5.5 of this NPR and will not include costs of civil service labor. The full cost should include a regular recurring facilities charge based on property size and type and comply with Section 5.5.1 of this NPR. A facilities charge as described in Section 5.5.2 should be represented on the CMO line on the EPR. If the Center calculates a lease management and administration charge as part of the full cost of the lease as described in Section 5.5.3, that charge will be included in the amount entered on the CMO line on the EPR. The EPR will also include an estimate for incremental billable charges (e.g., demand services) associated with the lease that would be in addition to the regular recurring facilities charge. An estimate for the incremental billable charges should be represented on the line for Other Direct Costs on the EPR. The EPR prepared for an EUL agreement will include the Price Charged Customer based on the fair market value of the lease as addressed in Section 5.2. The "price adjustment" column on the EPR does not need to be completed.
Note: An EPR may be included as a component of the Business Case normally prepared to support a proposed EUL agreement.
5.3.6 To the extent practicable, revenue derived from a lease, including in-kind consideration where authorized, shall be recognized and recorded in the Agency accounting system in a period that reasonably corresponds to the period of occupancy of the property by the lessee resulting in an amount owed to NASA. Revenue will be recognized on an accrual basis not less frequently than annually so that fiscal year end data will reflect revenue recognized based on the fair market value of the lease of the property for the period just ended and so that the revenue can be reflected in Agency financial statements.
5.4.1 A person or entity entering into an EUL agreement shall provide consideration for the lease at not less than fair market value. Consideration for the lease is based on the fair market value of the property appraised to exclude the value of improvements funded by the lessee.
5.4.2 All consideration received by NASA in connection with the lease, including in-kind consideration, shall be applied to lease amounts due. Generally, lease revenue will be recognized when lease payments become due in accordance with provisions of the lease agreement and associated with the respective leases in the accounting system. Since revenue should generally be recognized based on when the lessee derived fair market value from the property, those amounts may not coincide with collections received as consideration under the lease agreements. However, revenue will be reconcilable with collections, whether those collections consist of cash or in-kind consideration.
5.4.3 Consideration may take one or a combination of the following forms:
a. Payment of Cash.
b. In-kind Consideration. The two EUL demonstration Centers, Ames Research Center and Kennedy Space Center, are authorized to accept in-kind consideration in lieu of cash for rent with leases entered into prior to December 31, 2008. NASA Centers are authorized to accept in-kind consideration (received November 18, 2011, and thereafter) for leases entered into for the purpose of developing renewable energy production facilities.
(1) In-kind consideration will reflect expenses for property repairs, upgrades, and/or capital improvements that extend the useful life of NASA properties and where the lessee assumed responsibility for the charges. In-kind consideration shall be included in the draft lease submitted to the Office of Strategic Infrastructure for review and approval.
(2) All in-kind consideration is to be spelled out in the draft and final versions of the lease. Any changes to an existing lease that include new projects as in-kind consideration will be submitted to the Office of Strategic Infrastructure for approval.
(3) Contributed materials, supplies, facilities, property, and/or utility services, if significant in amount, should be recorded at their fair value, provided the entity has a clearly measurable and objective basis for determining the value. If the values of contributed materials, supplies, facilities, and property cannot reasonably be determined, they should not be recorded as in-kind consideration.
(4) Unless the amount is approved in advance by both the Center and the Office of Strategic Infrastructure, the amount should not be recognized as in-kind consideration in lieu of cash.
(5) In-kind consideration received by NASA may include, but not be limited to one or a combination of the following forms:
(a) Maintenance, construction, modification, or improvement of facilities on real property under the jurisdiction of the Administrator.
(b) Provision of services to NASA, including launch or reentry services and payload processing services.
(c) Use by NASA of facilities not under the jurisdiction of the Administrator.
5.4.4 Generally, consideration from the lessee, whether cash consideration or in-kind consideration (where authorized), should be received to reflect fair market value of the leases not later than the accounting period following a period of occupancy covered by the lease payment. If the lease agreement provides for collections at points which are past the periods of occupancy (by more than one accounting period), that shall be expressly authorized by the Center CFO.
5.4.5 Upon termination of the lease and after all relevant charges have been settled with the lessee, any outstanding cash advance balances shall be returned to the lessee.
5.5.1 The Administrator may utilize amounts of cash consideration received under this section from a lease entered into under this section to cover the full costs to NASA in connection with the lease. These funds will remain available until expended. Because the funds collected under this authority to cover the full costs of leases will remain available until expended, the amounts collected to cover lease costs will be tracked separately in a no year account. The full cost of leases under this authority will consist of the following in accordance with provisions of EUL agreements in accordance with Section 5.1.3.2.
5.5.2 Facilities charge. A Center entering into an EUL agreement shall prepare an estimate of the cost to the Center per unit of space (i.e., 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 and procurement activities), and building maintenance (including both routine and major building repairs) of comparable properties at the Center, but will not reflect costs associated with civil service labor. A charge will be calculated based on the utilization of space by the lease times the cost per unit of space as described above and will be included as part of the regular recurring lease payment by the lessee. Amounts collected to cover this charge will be available to fund expenses at the Center which constitute the basis for that charge. That could be considered an equivalent of a standard CMO charge normally assessed on reimbursable agreements.
5.5.3 Lease Management and Administration.
5.5.3.1 The Center may determine whether to separately calculate a rate for lease management and administration. The lease management and administration charge may include expenses incurred by the Center for administrative, legal, and other services for EUL support activities (e.g., contract support, contract management, and financial management), but shall not include costs of civil service labor.
5.5.3.2 The lease management and administration charge should be represented as part of the full cost of the lease. The charge shall be included as part of the regular recurring lease payment by the lessee and will not result in additional charges to the lessee over the regular lease payment covered in the lease agreement.
5.5.3.3 If the Center determines not to separately calculate a lease management and administration charge, such support costs should be included as part of the recurring facilities charge described in Section 5.5.2.
5.5.4 Costs for Site Preparation Specific to the Leased Property.
5.5.4.1 These costs may include, but are not limited to, basic upgrades and building modifications or customizations so that a property can be considered viable for leasing. Site preparation costs shall not include routine building maintenance or building repairs.
5.5.4.2 Generally, costs associated with site preparation, facilities upgrade, etc. in order to make a property usable by the lessee shall be borne by the lessee and shall be reflected in an appropriate adjustment to the fair market value of the lease.
5.5.4.3 If NASA is arranging for site preparation activities, the charge will be billed in addition to regular recurring lease payments and be based on reimbursement to NASA of direct costs incurred by NASA for providing the service. Such costs will not include costs for civil service labor.
5.5.4.4 If the lessee is a non-Federal entity, NASA should receive an advance to cover that work or the work should be sufficiently general in nature that it could be covered appropriately by the Center's CMO functions.
5.5.5 Costs for Demand Services
5.5.5.1 Costs for demand services represent services provided by the Center based on usage or requests by the lessee for incremental services not normally covered by the charge for general use of facilities and building maintenance, as described in Section 5.5.2, not already covered by the fair market value of the property being leased, and in accordance with the contractual terms of the lease. A demand service should relate to a particular service or goods that a tenant will request to purchase at a given price and time. Demand services will not be used to cover lease management and administration, management and support, financial operations, business development, or facilities planning.
5.5.5.2 Demand service charges will be billed in addition to regular recurring lease payments based on the fair market value of the property. Demand services that could result in net proceeds should be within the scope of the EUL agreement and under the EUL authority, if those net proceeds are to be retained by NASA, as discussed in Section 5.6.
5.5.5.3 Services for work outside the scope of the EUL agreement would require separate agreements established with the lessee to ensure there is agreement on the scope of work and expected costs.
5.5.6 Appraisal costs.
5.5.6.1 Costs for appraisals or market surveys to determine the fair market value of a property for pricing purposes in cases where a lease agreement has not yet been entered into will generally be considered as part of lease administration costs associated with the EUL program at the Center, as described in Section 5.5.3.
5.5.6.2 If lease administration costs are not separately identified as a component of the full cost of the lease, those costs will be included as part of the facilities charge, as described in Section 5.5.2.
5.5.6.3 If the appraisal or market survey is specific to a lease agreement that is already in place, costs will be included as part of the full cost of that lease. Such an appraisal or market survey for a lease that has already been entered into may be used to determine an appropriate adjustment in lease payments under the lease agreement to reflect the fair market value of the property at the time.
5.5.6.4 Unless there is a provision in the lease agreement that expressly indicates that appraisal costs would be billed separately, costs covered in the lease agreement will not result in incremental billings to the lessee over and above the regular lease payments covered in the lease agreement.
5.5.6.5 Costs for appraisals or market surveys will not include costs for civil service labor.
5.5.7 Other Incremental Costs Traceable to the Lease.
5.5.7.1 Other incremental costs can include extraordinary administrative, legal costs, or other costs not normally included as part of routine facilities maintenance or otherwise described above but in accordance with the contractual terms of the lease. The Office of Strategic Infrastructure shall make a determination of whether the costs should be covered by the regular lease payment and, therefore, to be considered part of lease administration.
5.5.7.2 If certain other incremental costs would not be properly considered part of lease administration, a determination will be made on whether there would be a contractual basis for billing the lessee in addition to regular recurring lease payments based on reimbursement of direct costs incurred by NASA for providing those services.
5.5.7.3 Costs not otherwise described above will be approved by the Office of Strategic Infrastructure in coordination with OCFO before being recognized as part of the full cost of a lease.
5.5.8 Services, acquisitions, installations, upgrades, or other costs arranged for support of EUL agreements, including demand services, will be considered as part of the lease for the purpose of reporting of EUL activity and not be considered as under separate reimbursable authority. Agreements for all support activities will be considered as under EUL authority.
5.5.9 Except in the case of costs billable in excess of the fair market value of the property being leased (e.g., demand services), lease costs will not affect amounts owed by the lessee under the lease agreement (based on the fair market value of the property). Notwithstanding the fact that amounts owed by the lessee to NASA will not be affected by the lease costs, full costs of the leases will be recorded so they can be included for financial reporting purposes.
5.5.10 Where it is indicated that components of lease costs cannot include civil service labor, those costs will not include salaries, benefits, and other components of personnel compensation, as defined in OMB Circular A-11. Accordingly, NASA employees shall not charge time to accounts established for EUL agreements where costs are not to include civil service labor. Indirect costs (e.g., shared facilities service charge, as described in Section 5.5.2 and lease management and administration, as described in Section 5.5.3), will not include civil service labor. Rates calculated for the recovery of indirect costs will be derived so as not to recover personnel compensation costs of civil service labor.
5.6.1 Amounts of cash consideration collected in excess of full cost of leases in accordance with Section 5.5 shall be deposited into capital asset accounts to be established by the Administrator and be recognized as net proceeds from the EUL agreements.
5.6.2 Net lease proceeds derived from leases entered into on December 31, 2008, and later or which are collected after December 2008 shall contribute to capital asset accounts as described below. Amounts may not be utilized for daily operating costs.
5.6.2.1 Thirty-five percent will be deposited in capital asset accounts to be established by the Administrator and will be available for maintenance, capital revitalization, and improvements of the real property assets and related personal property under the jurisdiction of the Administrator. Amounts derived from collections prior to FY 2010 will remain available until expended. Amounts derived from collections in FY 2010 and thereafter will remain available for a period of five years. Distinctions will be maintained for accounts with different periods of availability. Capital accounts will be managed by the Office of Strategic Infrastructure on behalf of the Agency.
5.6.2.2 The remaining 65 percent will be available to the respective Center or facility of the Administration engaged in the lease of non-excess real property. Amounts derived from collections prior to FY 2010 will remain available until expended. Amounts derived from collections in FY 2010 and thereafter will remain available for a period of five years. Distinctions will be maintained for accounts with different periods of availability. Those amounts will be made available for maintenance, capital revitalization, and improvements of the real property assets and related personal property at the respective Center or facility subject to the concurrence of the Administrator. Projects funded by the account will be coordinated with the Office of Strategic Infrastructure on behalf of the Agency.
5.6.3 Net lease proceeds derived from leases entered into prior to December 31, 2008, and which were earned not later than December 2008 are available to contribute to capital asset accounts available for maintenance, capital revitalization, and improvements of the real property assets of the NASA Centers participating in the EUL demonstration program (i.e., Ames Research Center and Kennedy Space Center) and remain available until expended.
5.6.4 None of the amounts of the capital asset accounts derived from cash collections realized in FY 2010 and thereafter can be used for civil service labor costs. Such costs include salaries, benefits, and other components of personnel compensation, as defined in OMB Circular A-11.
5.6.5 Because costs for demand services should be billed to the lessee on a cost reimbursement basis, there should be no net proceeds derived from the demand services and the net results of demand services should, therefore, not contribute to the capital asset accounts.
5.7.1 Amounts deposited into the capital asset account will be based on cash collections reflecting net proceeds of EUL agreements. That may include cash amounts collected, but owed to NASA in prior periods. Amounts deposited into the capital asset account will not reflect in-kind consideration received by NASA under the terms of EUL agreements. Amounts derived from net proceeds of leases, as described in Section 5.6, shall be credited to capital asset accounts at least annually.
5.7.2 Consideration received from lessees in excess of lease amounts due (i.e., for regular lease payments in accordance with the lease agreement plus incremental billable costs, as described in Section 5.5) shall be applied against future lease billings to the lessee, but not recognized as revenue associated with the lease or be available to contribute to the capital asset account(s).
5.7.3 The capital asset accounts derived from collections prior to FY 2010 will remain available until expended in a no year fund. Amounts derived from collections in FY 2010 and thereafter will remain available for a period of five years. Distinctions will be maintained for accounts with different periods of availability.
5.7.4 Because the capital asset accounts may be used for different types of costs where the purpose is to support maintenance, capital revitalization, and improvements of the real property assets (other than civil service costs), as described above, an EUL capital asset account is not necessarily limited to acquisitions of capitalized assets or improvements/betterments that are to be capitalized in accordance with NASA capitalization policies. Funds from an EUL capital asset account may be used for acquisition of capitalized assets, but the EUL capital asset accounts are not limited to that.
5.8.1 The Administrator may require such terms and conditions in connection with a lease under this section as the Administrator considers appropriate to protect the interests of the United States.
5.8.2 Relationship to Other Lease Authority. The authority under this section to lease property of NASA is in addition to other authorities to lease NASA property.
5.8.3 Lease Restrictions. NASA is not authorized to lease back property under this section during the term of the lease or enter into other contracts with the lessee respecting the property.
5.8.4 If the lessee makes property upgrades at its expense, information regarding the upgrades will be coordinated with the Office of Strategic Infrastructure. That may include, but is not limited to site preparation costs. Where applicable, it will be determined whether such upgrades to NASA property, particularly if the upgrades extend the useful life of the property, should be capitalized in NASA accounting records in accordance with Agency capitalization policies and whether additional information might need to be furnished by the lessee (e.g., cost of the upgrades). Generally, that would not apply to property upgrades that are removed by the lessee at the termination of the lease.
5.9.1 The Administrator shall submit an annual report to Congress by January 31 of each year on the status of the EUL program. Assembling the report will be the responsibility of the Office of Strategic Infrastructure in coordination with OCFO. EUL reports will provide accounting as of the fiscal year just ended for lease revenue and balances and activity affecting capital asset accounts derived from the EUL activity, as described in Sections 5.6 and Section 5.7. Reporting will provide the capability to distinguish the following:
a. Fiscal year beginning and ending balances of the capital asset account.
b. Revenue derived from each lease and related collections. Distinctions will be provided for cash collections versus collections consisting of in-kind consideration. Data will be traceable to source documents recorded in the Agency accounting system.
c. Costs directly associated with each lease in order to derive the full cost of each lease agreement.
d. Use of proceeds in accordance with provisions in EUL authority and as described above. Data will be traceable to source documents recorded in the Agency accounting system.
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