Effective Date: March 04, 2020
Expiration Date: March 04, 2025
|| TOC | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | AppendixF | AppendixG | ALL ||
3.1.1 Estimating NASA’s full cost is required for both reimbursable and nonreimbursable agreements and is the initial step or baseline, unless an exception exists per section 1.1.4. The determination of NASA’s estimated full cost to execute an activity in a reimbursable agreement is instrumental in ensuring we receive adequate compensation for performing a service or providing a good to a partner that is not a direct benefit to NASA. Just as important is estimating NASA’s full cost for nonreimbursable activity to determine whether the balance of the agreement’s contributions are fair and reasonable compared to the NASA resources to be committed, the NASA program risks, and corresponding benefits to NASA. The EPR/ECR template in Appendix C should be used to calculate NASA’s full-cost estimate.
a. Assignment of full cost to a reimbursable agreement activity is not necessarily equivalent to the estimated price. The estimated full cost describes NASA’s estimated cost, as outlined below, while price represents the estimated amount NASA charges the partner. The difference between full cost and price may be determined by the benefit received through issuance of waived cost, statutory-directed excluded cost, or other authorized pricing adjustments. This chapter provides policies for the determination and assignment of full cost to an agreement. Chapter 4 discusses the policies for pricing an agreement.
b. In developing a method for estimating costs for nonreimbursable agreements, NASA’s estimated full cost contribution should be calculated in the same manner as a reimbursable agreement, i.e., in enough detail for the Signing Official to determine whether the balance of the partner contribution is fair and reasonable compared to the NASA resources to be committed, NASA program risks, and corresponding benefits to NASA. 15
3.1.2 Recognizing that the computation of estimated full cost is not an exact science, NASA strives to ensure the costing methodology used is supportable, repeatable, and defensible and follows the general accepted accounting principles established in the FASAB Standards and Other Pronouncements, as amended. In accordance with SFFAS 4, Managerial Cost Accounting Standards and Concepts, the estimated full cost of an activity is calculated by adding the estimated costs of the resources to be used by the performing organization, (direct and indirect contribution) and the identifiable supporting services provided by other organizations. These costs should be assigned through a supportable costing methodology or cost finding technique most appropriate to the activity (output) and should be followed consistently.
3.1.3 In developing a method for estimating the cost of work on an agreement, both direct and indirect costs contributing to the output will be considered regardless of the funding sources. The full cost of the agreement should only include work that is specific to the partner for the scope of work identified in the agreement. The order of preference for assigning these costs is:
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.
3.2.1 Full Cost. As established in section 3.1, the full-cost estimate is the baseline for an agreement and includes the proposed direct and indirect resources to provide goods or services (output) based on the agreement requirements.
220.127.116.11 Direct Costs. Direct costs represent those costs that can be directly traced to an output (of the reimbursable activity) and should be individually identified and applied to the reimbursable project. Typical direct costs in the production of an output include:
a. Salaries and other benefits for employees who work directly on the output.
b. Travel costs to support specific work identified in the agreement.
c. Materials and supplies used in the work.
d. Service pool labor and materials that will be directly charged to an agreement.
e. Contract cost, e.g., labor, materials, supplies, that are directly associated with the responsibilities in the agreement.
f. Various costs associated with office space, equipment, facilities, and utilities that are used exclusively to produce the output.
g. Costs of goods or services received from other segments or entities that are used to produce the output.
h. Other direct costs (ODCs) related to the production of the output.
18.104.22.168 Indirect Costs. Indirect costs represent resources that are jointly or commonly used to produce two or more types of outputs, but are not specifically traceable to one output. Typical examples include costs of administrative services, general research and technical support, security, rent, employee health, and operating and maintenance costs for buildings and equipment, etc. If these costs cannot be assigned to outputs on a cause-and-effect basis in an economically feasible manner, the costs may be applied through reasonable allocations.
3.2.2 Indirect costs may be calculated as a percentage of the direct cost using a predetermined authorized rate for the supporting management and other administrative expenses. The type of rate, the percentage used for the rate, and amount associated with the rate should be included as a separate line on the EPR/ECR.
3.2.3 Authorized indirect rates include: Center Management Operations (CMO), HQs Administrative Fee, Contract Administration and Audit Services (CAAS), Center Pass-Through, and authorized alternative CMO rates in accordance with section 3.2.4. Indirect rates and supporting documentation will be made available to the Agency OCFO and Center OCFOs.
a. The Center OCFO may use the authorized indirect rate in effect at the time the agreement is signed for the life of the agreement or five years, whichever is shorter. This may be applied to a multi-year agreement or an annex for an umbrella agreement. An indirect rate for longer than five years may be applied when the agreement is submitted for official Agency review and approved in the EPR/ECR.
b. Alternatively, the Center OCFO may use the annual authorized indirect rate for the out-year calculations of indirect cost for an agreement or an annex of an umbrella agreement. Fluctuations in price due to rate changes may be identified through the estimated price in the agreement.
22.214.171.124 Agency Center Management Operations (CMO) Rate. The standard authorized CMO rate is representative of a Center’s indirect cost associated with an agreement based on the overall CMO budget. 16 Annually, the Agency OCFO Budget Division will calculate and distribute the CMO rate to the Center CFOs. The annual CMO rate should be used by Center OCFOs, except for agreements managed by MSD RPMO (activity performed by HQs organizations) or the NMO (activity performed by JPL) as outlined in section 126.96.36.199. A Center CFO may approve an alternative CMO rate in accordance with section 3.2.4.
188.8.131.52 HQs Administrative Fee Rates (for MSD RPMO and NMO). Similar to the CMO rate, the administrative fee rate is calculated annually to recover the indirect cost associated with the management of the agreement by MSD RPMO and NMO for work by HQs and JPL. For HQs initiated agreements where work is performed and managed by a Center, the annual CMO rate should be used for calculating the indirect costs rather than the HQs Administrative Fee.
184.108.40.206 Pass-Through Fee Rate. The pass-through fee rate represents an administrative charge to cover the cost associated with agreements that identify existing contract(s) through which work will be completed and for which NASA does not directly provide the product, service, or use of facilities. The pass-through fee is charged in place of the CMO rate, except as noted in section 220.127.116.11c. A pass-through agreement allows the partner to obtain services from a NASA contract as a convenience to the partner, e.g., utility services. Cost components for calculating the pass-through reimbursement fee may include the Office of Procurement, OCFO, Center OCC, Partnership Office, Center Director Office, and other participating organizations.
a. The Center CFO is responsible for approving the pass-through fee rate calculated annually. The pass-through fee rate should be consistent throughout the year unless there is a substantial change to the cost components that requires the fee to be recalculated.
b. General criteria for determining whether an agreement may be considered for use of the pass-through rate includes:
(1) Work may be performed using an existing contract or a contract action (e.g., task order) that does not require special terms or a modification to the scope. An example is a contract action where the reimbursable partner has developed the technical content and NASA is executing the contract action.
(2) Work may be performed with minimal 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 partner. Limited and insignificant participation by NASA is allowable to provide for normal contract management, monitoring of contract performance, and financial management responsibilities.
(3) Work may be performed without the use of NASA facilities or other resources. Limited and insignificant participation by NASA is allowable to provide for normal contract management, monitoring of contract performance, and financial management responsibilities.
c. An exception to the pass-through rate charged in place of the CMO rate is where it may be more appropriate to apply both rates. This exception is identified when a significant portion of the agreement (i.e., 50 percent of the total direct costs) is considered a pass-through activity with a portion of the work performed by NASA; the pass-through is distinguished by a separate task or similar breakout; and each portion of the agreement could be subject to an applicable rate. For identified exceptions, the pass-through rate and other identified rate will be displayed as separate line items on the EPR/ECR and associated cost identified to the rate.
18.104.22.168 Contract Administration and Audit Services (CAAS) Rate. The CAAS rate is assessed for the cost associated with administering procurement services, used in completing the reimbursable activity, that are subject to audit requirements and exceed $1 million. CAAS charges are applicable to the pass-through procurement actions meeting this criteria. The Agency Office of Procurement sets and manages the standard CAAS rate for these services. The CAAS rate in effect at the time the agreement is signed will be used to determine the applicable CAAS cost and will be identified as a separate indirect cost line item on the EPR/ECR.
3.2.4 A Center OCFO may propose an alternative CMO rate or a program may request a program indirect rate. The Center CFO is responsible for approving these rates. Once a rate is approved by the Center CFO, it is considered an authorized indirect rate.
22.214.171.124 Authorized Alternative CMO Rate. An authorized alternative CMO rate represents a Center indirect rate for a specified agreement activity that varies from the annual CMO rate. For example, although the agreement is a large dollar amount, the related indirect cost is not proportionate; it maybe lower than the annual CMO rate.
a. At a minimum, the Center OCFO will document the purpose of the alternative CMO rate, the basis of the calculation/methodology, and the application of the rate.
(1) Authorized alternative CMO rates should be reflected in the CMO rate line of the EPR/ECR or a separate designated line. The rate should not be reflected as a pricing adjustment.
(2) An alternative CMO rate that is not approved by the Center CFO may be submitted as a price adjustment for the variance amount and is subject to Center CFO approval on the EPR.
b. An alternative CMO rate will be agreed to by the performing Center CFOs in accordance with section 126.96.36.199 (multi-Center EPR/ECR approval process) prior to being approved by the proposing Center CFO.
c. An authorized alternative CMO rate may not be applied to other agreements unless approved as part of the request, regardless of the partner or activity.
d. An authorized alternative CMO rate and supporting documentation will be provided to the Agency OCFO.
188.8.131.52 Program Indirect Rate. A program indirect rate represents the indirect costs specific to a program that are not part of the CMO rate.
a. At a minimum, the program will document the purpose of the rate, the basis of the calculation/methodology, and the application of the rate. The cost elements for the program indirect rate will not overlap the cost elements identified as part of the CMO rate.
b. The rate is in addition to a CMO or alternative CMO rate and would be identified as a separate line item on the EPR/ECR.
3.3.1 For purposes of agreement work, the estimated full cost of an agreement refers to the calculated direct and indirect costs, as described in the above sections, for NASA to perform the specified work. NASA’s policy is to apply standard rates based on experience or similar work, whenever possible, to calculate the estimated full cost of the agreement activity.
184.108.40.206 Standard Rate Agreement Cost. A standard rate ($/unit) or charge based on consumption or other quantifiable measure and should be applied 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. The overall project management should develop a standard rate by using a costing methodology that is both consistent and supportable. Examples of when standard rates may be appropriate are wind tunnels, vacuum chambers, flight simulators, and other similar facilities where a daily/hourly rate may be calculated.
a. Standard rates should include indirect administrative and operations costs as outlined in section 220.127.116.11.
b. Standard rates will be periodically reviewed and evaluated to ensure the standard rates are reflective of NASA’s full costs. Such reviews will be performed on a biennial basis, at a minimum.
c. Standard rates developed for overall use by a program affecting more than one Center should be developed by the responsible program, board, or oversight office, in coordination with the Agency OCFO and Center OCFO. The rates will be reviewed for whether the methodology is supportable, may be applied on a consistent basis, and conforms to appropriation law. Although the calculated standard rate may not be the same for similar facilities at different Centers, the methodology used in calculating the rate should be performed in a similar manner.
d. Standard rates developed for Center-only use should be developed by the responsible program or oversight office in coordination with the Center OCFO. The rates will be reviewed for whether the methodology is supportable, may be applied on a consistent basis, and conforms to appropriation law.
18.104.22.168 Agreement Cost. When the full cost of an agreement project cannot be estimated using standard rates or charges, Centers shall estimate the full cost by projecting resources to be consumed by the agreement project and costs of those resources. NASA Centers will conduct an analysis to identify each cost element involved and how to assign the cost to the project.
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