National Aeronautics and Space Administration (NASA) Pre-Award Costs

  • January 26, 2021

If you are thinking of applying for NASA SBIR, you would be wise to familiarize yourself with the allowable costs and the limitations on pre-award costs set forth by the agency as well as in your individual solicitation. There are limitations to what costs are allowable, and pre-award costs have limits as well. Generally speaking, pre-award costs are not honored. NASA makes it quite clear they are under no obligation to repay a business for costs incurred before the grant award. On the rare opportunities they choose to, these costs must be from a very specific list and incurred no more than 90 days before the grant was awarded.

Pre-Award Costs For grants or cooperative agreements, expenses incurred within the 90-day period preceding the award’s effective date may be authorized. Still, such expenses are made at the recipient’s risk. NASA will not pay any pre-award costs incurred for unfunded proposals.

https://prod.nais.nasa.gov/pub/pub_library/srba/documents/2020_edition_Proposers_Guidebook.pdf

This means that all purchases prior to grant award have a low likelihood of being reimbursed. This is why it is critically important to understand the regulations and limitations inherent in each solicitation. This knowledge will enable small businesses to make informed, calculated decisions about how they spend their money prior to a grant award.

Pre-Award Unallowable Costs

One unallowable cost that some small businesses attempt to pay for federal grant dollars is proposal preparation services. The services rendered to pay for the preparation of a proposal are never an allowable cost. If these unallowable costs are uncovered during an audit, the small business will be asked to pay back the entire award amount. To attempt to pay for proposal preparation services after federal grant dollars would be a risky endeavor with any agency, especially with NASA. This agency carries a stricter than average reporting policy regarding expenditures.

Recipients of all NASA grants and cooperative agreements are required to submit a quarterly Federal Cash Transaction Report (SF272) and a properly certified final Federal Cash Transaction Report (SF272). The quarterly reports are due electronically within 15 working days following the end of each quarter of the Federal fiscal year (i.e., December 31, March 31, June 30, and September 30). The final report is due in paper format within 90 calendar days after the grant/cooperative agreement’s expiration date.

https://prod.nais.nasa.gov/pub/pub_library/srba/faq.html


Q: What is a Federal Cash Transaction Report?
A: This PMS report shows the award authorization and prior cumulative disbursements reported against the individual awards. The recipient reports current net disbursements cumulative through the current reporting period and indicates any missing documents from this report (through the SF272-A form). In addition, the PMS will inform the recipient of the resolution of any previously reported award problems. The data elements of the 272 are as follows: Cash on Hand Beginning of Reporting Period; Total Receipts; Total Cash Available; Net Disbursements; Adjustments of Prior Periods; Cash on Hand End of Period; and Cash Requirements for the Ensuring Number of Days.

https://prod.nais.nasa.gov/pub/pub_library/srba/faq.html

As you can see from the above policy, small businesses are unlikely to make any purchases or expenditures without the knowledge of NASA. These strict reporting guidelines help NASA ensure that all awards are used for research and development as intended, not for fraudulent or unallowable expenditures.

How to Ensure Compliance with NASA Pre-Award Guidelines

Before applying to any solicitation, research the agency and solicitation thoroughly. Read all program materials and FAQs, and if necessary, reach out to the program director via phone or email to ask a specific question. Trust us, the effort you put into researching will be well worth your while.

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