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PART 1850

EXTRAORDINARY CONTRACTUAL ACTIONS

TABLE OF CONTENTS

SUBPART 1850.2 DELEGATION OF AND LIMITATIONS ON EXERCISE OF

AUTHORITY

1850.202 Contract adjustment boards.

SUBPART 1850.3 CONTRACT ADJUSTMENTS

1850.305 Processing cases.

1850.305-70 Submission of request to the Contract Adjustment Board.

1850.306 Disposition.

1850.306-70 Implementation of the Contract Adjustment Board's decision.

SUBPART 1850.4 RESIDUAL POWERS

1850.403 Special procedures for unusually hazardous or nuclear risks.

1850.403-170 Indemnification requests.

1850.403-2 Action on indemnification requests.

1850.470 Lead NASA installation.

PART 1850

EXTRAORDINARY CONTRACTUAL ACTIONS

Subpart 1850.2--Delegation of and Limitations on Exercise of Authority

1850.202 Contract adjustment boards.

NMI 1152.5, 14 CFR part 1209, subpart 3, Contract Adjustment Board, establishes the Contract Adjustment Board (CAB) as the approving authority to consider and dispose of requests from NASA contractors for extraordinary contractual actions.

Subpart 1850.3--Contract

Adjustments

1850.305 Processing cases.

1850.305-70 Submission of request to the Contract Adjustment Board.

(a) After investigating the facts and issues relevant to the contractor's request, the contracting officer shall forward the request to the Associate General Counsel for General Law (Code GG), Chairman, Contract Adjustment Board (CAB), NASA Headquarters (Code GG), including in the forwarding letter--

(1) The nature of the case;

(2) The recommended disposition recommended for the request; and,

(3) If contractual action is recommended, the contracting officer's opinion that the action will facilitate the national defense.

(b) The forwarding letter shall enclose the contractor's request, all supporting material submitted by the contractor, and any material the contracting officer has obtained while investigating the facts and issues relevant to the request. The forwarding letter and all enclosures shall be submitted in duplicate. Any classified information in the material forwarded shall be so identified. The CAB, acting through its Counsel, may further investigate the facts and issues involved to obtain from the contractor, the contracting officer, or others any additional facts and evidence, necessary to make a determination on the contractor's entitlement to the relief requested or to other equitable relief.

(c) Electronic submittal is preferred for unclassified material.

1850.306 Disposition.

1850.306-70 Implementation of the Con- tract Adjustment Board's decision.

(a) The contracting officer shall take action authorized in the CAB’s decision.Copies of the CAB's decision shall be transmitted to the contracting officer, who shall take such action as is authorized by the decision. If the CAB's decision is to reject the contractor's request for relief, the contracting officer shall advise the contractor of that decision.

(b) Except as provided in paragraph (c) of this section, Iimmediately upon execution, including any required Headquarters approval, of a contract or contract modification or amendment implementing the CAB decision, the contracting officer shall forward a copy two copies of the contractual document to the Associate General Counsel for General Law (Code GG).CAB Chairman, marked for the attention of the Counsel, for retention with the CAB's permanent files.

(c) Contracts or contract modifications or amendments for which NASA Headquarters approval is otherwise required under the FAR or this Regulation shall be forwarded for that approval. After approval has been received, the contracting officer shall comply with paragraph (b) of this section.

Subpart 1850.4--Residual Powers

1850.403 Special procedures for unusually hazardous or nuclear risks.

1850.403-1 Indemnification requests.

(a) In addition to the information required by FAR 50.403-1(a), tThe contractor shall also provide evidence, such as a certificate of insurance or other customary proof of insurance, that such insurance is either in force or is available and will be in force during the indemnified period.

1850.403-170 Subcontractor indemnification requests.

Subcontractors shall submit requests for indemnification to the prime contractor and through higher tier subcontractor(s), as applicable. If the prime contractor agrees an indemnity clause should be flowed down to the subcontractor, the prime contractor shall forward its written request for subcontractor indemnification to the cognizant contracting officer for approval in accordance with FAR 50.403-1. The prime contractor's request shall provide information responsive to 1850.403-1, FAR 50.403-1, and FAR 50.403-2(a)(1), (2), (4), (5) and (7). The agreed upon definition of the unusually hazardous risk to be incorporated into the subcontract shall be the same as that incorporated in the prime contract.

1850.403-2 Action on indemnification requests.

(a) If recommending approval, the contracting officer shall forward the required information to the Associate Administrator for Procurement (Code HS), along with the following:

(i) For contracts of five years duration or longer, a determination, with supporting rationale, whether the indemnification approval and insurance coverage and premiums should be reviewed for adequacy and continued validity at points in time within the extended contract period.

(ii) A recommended Memorandum of Decision. In addition to the applicable requirements of FAR 50.306, the Memorandum of Decision shall contain the following:

(A) The specific definition of the unusually hazardous risk to which the contractor is exposed in the performance of the contract(s);

(B) A complete discussion of the contractor's financial protection program; and

(C) The extent to, and conditions under, which indemnification is being approved for subcontracts.

(a) The Administrator will execute a Memorandum of Decision to approve a request to use the indemnification clause in a contract or group of contracts.

(b) For contracts of five years duration or longer, in addition to information required to be submitted by the contracting officer under FAR part 50, the submission should include discussion and determination on whether the indemnification approval and insurance coverage and premiums should be reviewed for adequacy and continued validity at points in time within the extended contract period.

(c) If a contracting officer recommends that a request for indemnification be approved, the required information specified in FAR 50.403-2(a) shall be forwarded to the Associate Administrator for Procurement (Code HS) for review and processing to the Administrator. The contracting officer shall also provide a recommended Memorandum of Decision. This document provides the specific approval to include an indemnification clause in a NASA contract, or group of contracts. In addition to the applicable requirements of FAR 50.306, the Memorandum of Decision shall contain the following:

(1) The specific definition of the unusually hazardous risk to which the contractor is exposed in the performance of the contract(s).

(2) A complete discussion of the contractor's financial protection program that the Administrator will review in order to approve the request for indemnification.

(3) As appropriate, the extent to, and conditions under, which indemnification is being approved for subcontracts.

(d) Before presentation to the Administrator, Code HS will obtain concurrences from the General Counsel, Comptroller, Associate Administrator for Procurement, Associate Deputy Administrator and Deputy Administrator, as appropriate.

(e) Since indemnification coverage must flow through the prime contractor, subcontractors shall submit requests for indemnification to the prime contractor and through higher tier subcontractor(s), as applicable. If the prime contractor agrees indemnity should be flowed down to the subcontractor, the prime contractor shall forward its written request for subcontractor indemnification to the cognizant contracting officer for approval. The prime contractor's request shall provide information responsive to 1850.403-1, FAR 50.403-1, and 50.403-2(a)(1), (2), (4), (5) and (7). The agreed upon definition of the unusually hazardous risk to be incorporated into the subcontract shall be the same as that incorporated in the prime contract.

(d)(f) If approving subcontractor indemnification,the contracting officer approves indemnification of a subcontractor by the prime, the contracting officer shall document the file with a memorandum for record addressing the items set forth in FAR 50.403-2(a) and include . This memorandum shall address the items set forth in FAR 50.403-2(a) and contain an analysis of the subcontractor's financial protection program. In performing this analysis, the contracting officer shall take into consideration the availability, cost, terms and conditions of insurance in relation to the unusually hazardous risk. The contracting officer may rely on the analysis of the prime contractor's financial protection program in relation to the approval of indemnification of the prime contractor, to the extent this analysis is applicable.

(g) Code HS will maintain records of each Memorandum of Decision executed by the Administrator.

1850.470 Lead NASA installation.

(a) Contractors applying for indemni- fication shall determine be responsible for initially determining which NASA installation has the highest dollarmost significant amount of the contractor's procurement contracts for which indemnification is requested, measured by either dollars or numbers, related to NASA space activities rather than to total NASA business. The indemnification request should be submitted to the procurement officer for that installation, who will then designate a cognizant contracting officer. Contractors shall submit a single request and ensure This determination should be done at the contractor's highest level necessary to prevent duplicate requests from are not submitted by associate divisions, subsidiaries, or central offices of the contractor. NASA reserves the right to reassign a lead installation for purposes of processing indemnification requests made under this Regulation.

(b) Relying on the contractor's submission, the receiving contracting officer shall process the request using the procedures in FAR subpart 50.4 and this subpart 1850.4. The receiving installation will become the lead installation and will remain so indefi- nitely. Lead installation designation may change to another installation if the affected losing and gaining procurement officers agree to the change. For example, a new award may so substantially alter the focus of a contractor's procurement contracts related to space activities toward a different installation that a change may be appropriate. Should a change occur in the lead installation, all records related to indemnification of that contractor shall be transferred to the gaining installation.

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