Procedural
Requirements
Effective Date: February 23, 2023
Expiration Date: February 23, 2028
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NASA Procedural Requirements |
NPR 9090.1C Effective Date: February 23, 2023 Expiration Date: February 23, 2028 |
| | TOC | Change History | 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 accordance with the 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 as estimating reimbursable cost is estimating NASA's full cost for nonreimbursable activity to determine whether the balance of the agreement's contributions is 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. Estimating full cost of 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.18
3.1.2 Recognizing that the computation of estimated full cost is not an exact science, NASA strives to ensure the costing methodologies are supportable, repeatable, and defensible and follow the general accepted accounting principles established in the FASAB Handbook and Accounting Standards and Other Pronouncements, as amended.19 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 activity should only include cost for goods or services NASA provides specific to the partner as 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. The Center should consult Center OGC and OIIR when less than full cost pricing is proposed for a Federal partner. (See section 4.4.1).
3.2.1.1 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.
3.2.1.2 Indirect Costs. Indirect costs represent resources that NASA jointly or commonly uses to produce two or more types of outputs, but the indirect costs 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.
a. When indirect 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.
b. When indirect costs are 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, and amount should be included as a separate line on the EPR/ECR.
c. Indirect costs should be calculated per sections 3.2.2 and 3.2.3 and reflected in the NASA full cost column of an EPR/ECR. An exception is when an alternative indirect rate is not approved by the Center CFO. (See section 3.2.3.1a. (2).)
3.2.2 Authorized indirect rates include Agency Agreement Indirect (AAI), Contract Administration and Audit Services (CAAS), Pass-Through, and Other Approved Indirect rates in accordance with section 3.2.3. Indirect rates and supporting documentation will be made available to the Agency OCFO and Center OCFOs.
a. The Center OCFO may use the 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 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.
3.2.2.1 Agency Agreement Indirect (AAI) Rate. The standard AAI rate is representative of the Agency and Center's indirect cost associated with an agreement based on the SSMS20 budget. Annually, the Agency OCFO Budget Division will calculate and distribute the AAI rate to the Center OCFOs. The AAI rate should be used by Center OCFOs. A Center CFO may also approve an alternative indirect rate in accordance with section 3.2.3.
3.2.2.2 Pass-Through Rate. The pass-through rate represents an administrative charge to cover the cost associated with agreements that typically 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 rate is generally charged in place of the AAI rate, except as noted in section 3.2.2.2c. A pass-through rate may be used with an agreement that allows the partner to obtain services from a NASA contract or to obtain services offsite as a convenience to the partner. Cost components for calculating the pass-through rate may include the Office of Procurement, OCFO, Center OGC, Partnership Office, Center Director Office, and other participating organizations.
a. The Center CFO is responsible for approving the pass-through rate calculated annually. The pass-through rate should be consistent throughout the year unless there is a substantial change to the cost components requiring the rate to be recalculated. The pass-through rate is not considered a pricing adjustment nor a waived cost.
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 AAI 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.
3.2.2.3 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 these 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. The CAAS rate is not considered a pricing adjustment nor a waived cost.
3.2.3 Other Approved Indirect Rates. A Center OCFO may propose an alternative indirect rate, or a program may request a program indirect rate. The Center CFO, or their designee, is responsible for approving these rates.
a. An indirect rate approved by the Center CFO is considered an approved indirect rate and should not be reflected as a waived cost or pricing adjustment to the AAI.
b. Center OCFO will retain supporting documentation for an indirect rate and provide to the Agency OCFO upon request.
3.2.3.1 Alternative Indirect Rate. An alternative indirect rate represents a Center indirect rate for a specified activity that varies from the annual AAI rate (section 3.2.2.1). Using an alternative indirect rate is not based on a benefit received by NASA; it may be used when the AAI rate estimated cost is not appropriate for the goods or services provided and level of effort required to ensure augmentation does not occur. The alternative indirect rate may be higher or lower. In these situations, a Center may determine that an alternative indirect rate is more appropriate.
a. At a minimum, the Center OCFO will document the purpose of the alternative indirect rate, the basis of the calculation/methodology, and the application of the rate.
(1) An alternative indirect rate approved by the Center CFO may be reflected in the AAI line of the EPR/ECR or on a separate designated line and is not considered a pricing adjustment or a waived cost.
(2) An alternative indirect rate that is not approved by the Center CFO is considered a pricing adjustment or a waived cost to the AAI for the variance amount on the EPR.
b. An alternative indirect rate will be agreed to by the performing Center CFO(s) in accordance with section 2.3.3.2 (multi-Center EPR/ECR approval process) prior to being approved by the proposing Center CFO.
c. An alternative indirect rate approved by the Center CFO may not be applied to other agreements unless specified as part of the request, regardless of the partner.
3.2.3.2 Program Indirect Rate. A program indirect rate represents the indirect costs specific to a program that are not captured in the AAI or alternative indirect 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 AAI or alternative indirect rate.
b. The rate is typically in addition to the AAI or alternative indirect rate and will be identified as a separate line item on the EPR/ECR. The program indirect rate is not considered a pricing adjustment.
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.
3.3.1.1 Standard Rate Agreement Cost. A standard rate ($/unit) or charge based on consumption or other quantifiable measure 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 3.2.1.2.
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 conform 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.
3.3.1.2 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.
| TOC | Change History | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | AppendixF | AppendixG | ALL | |
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