JSC Action # 2621 Hurricane Allowability/Charging Policy Jose Garcia /5/06

Hurricane Allowability/Charging Policy The action states: Review the flexibilities for dealing with the impacts of “Hurricane Leave” on our contractors. Note: programs have requested a status of this study as well as an understanding of any plan forward prior to implementation

Allowability Restricted to terms and conditions of contract Expense considered allowable unless otherwise excluded by the contract based on: –NFS Observance of Legal Holidays Alt II –FAR Compensation for personal services –Memorandum from the Office of the Under Secretary of Defense

Allowability (cont) Fixed priced contracts: –Contract governs Contract terms and conditions –Contractor may refer to the Contract Pricing Reference Guides for guidance Chapter 6: pricing equitable adjustments and settlements

Charging Regulations: –FAR part 30: CAS –FAR part 31: Cost Principles –GAAP: consistency in accounting/estimating Contract clause: –NFS , Alt 2 Observance of Legal Holidays Charge in accordance with contractor’s established accounting policy

Charging (cont) One NASA: –Stennis: Contracting Officer deals with it on a case-by-case basis Contracting Officer sends letter to respective contractors prior to event occurring pointing to: –NFS , Alt 2 Observance of Legal Holidays clause –Charge in accordance with contractor’s established accounting policy –KSC: Contracting Officer deals with it on a case-by-case basis Point the NFS , Alt 2 Observance of Legal Holidays clause –Charge in accordance with contractor’s established accounting policy

Small Contractors Regulations or accounting practices do not distinguish between small or large business except in the area of Cost Accounting Standards and disclosure of accounting practices Office of the Under Secretary of Defense did not specially distinguish between small or large businesses in a memo issued or during verbal conversations with the individual who wrote the memo Other NASA Centers have not specifically demonstrated a different type behavior between small or large business related to allowability or charging of these type expenses

Small Contractors However: –Small contractor with fixed priced contractual arrangements should carefully read their contracts to specifically: Understand terms and conditions related to emergencies or delay in work Understand any specific FAR or NFS exclusions that may affect not being able to submit an equitable adjustment

Summary Hurricane RITA: –Allowability restricted to the terms and conditions (T&C) of the contract –Expenses considered allowable if contract T&C do not specifically restrict these type of expenses but must be reasonable & allocable Otherwise considered allowable for accounting purposes only –If allowable by the contract terms & conditions: Cost shall be charged in accordance with established accounting polices

Forward Plan Hurricanes in general: –Procurement Policy Office to develop generic policy covering Center closures –Post policy to procurement external web-page for accessibility by contractors Pricing policy/assistance: –Develop a site on the procurement external web page to post any general pricing issues, guidance or recommendations to all contractors