15.403-4 Requiring certified cost or pricing data (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35)
Source: FAR 15.403-4 on acquisition.gov
Certified cost or pricing data must be submitted for contract actions exceeding $2.5 million (unless an exception applies), ensuring the government can determine fair and reasonable pricing.
Overview
FAR 15.403-4 establishes when certified cost or pricing data must be obtained in federal contracting. It sets the threshold for requiring such data at $2.5 million for prime contracts awarded on or after July 1, 2018 (previously $950,000), subject to inflation adjustments. Certified cost or pricing data are required unless an exception in FAR 15.403-1(b) applies. The rule applies to negotiated contract awards, certain subcontracts, and contract modifications where the pricing adjustment exceeds the threshold. The regulation also allows the head of the contracting activity to require certified data below the threshold (but above the simplified acquisition threshold) with proper justification. Contractors must submit both the data and a Certificate of Current Cost or Pricing Data. If an exception is later found to apply, submitted data is not considered certified. The requirements also extend to contracts made on behalf of foreign governments.
Key Rules
- Thresholds for Certified Cost or Pricing Data
- Required for actions exceeding $2.5 million (for contracts awarded on/after July 1, 2018), unless an exception applies.
- Applicability to Contract Actions
- Applies to negotiated contract awards, qualifying subcontracts, and contract modifications (including price increases and decreases).
- Waivers and Exceptions
- Contracting officers must check for exceptions and may seek waivers in exceptional circumstances.
- Submission Requirements
- Contractors must submit certified cost or pricing data and a Certificate of Current Cost or Pricing Data.
- Special Provisions
- Data submitted when an exception is later found is not considered certified; requirements also apply to contracts for foreign governments.
Responsibilities
- Contracting Officers: Determine if exceptions apply, obtain certified data when required, ensure proper documentation, and enforce submission of certificates.
- Contractors: Submit accurate, complete, and current certified cost or pricing data and certificates when required; comply with threshold changes and requests for data.
- Agencies: May authorize data collection below the threshold with justification; ensure compliance for contracts on behalf of foreign governments.
Practical Implications
- Ensures the government pays fair and reasonable prices by requiring certified data for significant contract actions.
- Contractors must be vigilant about thresholds, exceptions, and documentation requirements.
- Failure to comply can result in contract delays, disputes, or penalties. Inflation adjustments and contract modifications can trigger new data requirements.
(a)
(1) The contracting officer shall obtain certified cost or pricing data only if the contracting officer concludes that none of the exceptions in 15.403-1(b) applies. However, if the contracting officer has reason to believe exceptional circumstances exist and has sufficient data available to determine a fair and reasonable price, then the contracting officer should consider requesting a waiver under the exception at 15.403-1(b)(4). The threshold for obtaining certified cost or pricing data is $950,000 for prime contracts awarded before July 1, 2018, and $2.5 million for prime contracts awarded on or after July 1, 2018.When a clause refers to this threshold, and if the threshold is adjusted for inflation pursuant to 1.109(a), then pursuant to 1.109(d) the changed threshold applies throughout the remaining term of the contract, unless there is a subsequent threshold adjustment. Unless an exception applies, certified cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold or, in the case of existing contracts, the threshold specified in the contract:
(i) The award of any negotiated contract (except for undefinitized actions such as letter contracts).
(ii) The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor were required to furnish certified cost or pricing data (but see waivers at 15.403-1(c)(4)).
(iii) The modification of any sealed bid or negotiated contract (whether or not certified cost or pricing data were initially required) or any subcontract covered by paragraph (a)(1)(ii) of this subsection. Price adjustment amounts must consider both increases and decreases (e.g., a $500,000 modification resulting from a reduction of $1,500,000 and an increase of $1,000,000 is a $2,500,000 pricing adjustment exceeding the $2,000,000 threshold). This requirement does not apply when unrelated and separately priced changes for which certified cost or pricing data would not otherwise be required are included for administrative convenience in the same modification. Negotiated final pricing actions (such as termination settlements and total final price agreements for fixed-price incentive and redeterminable contracts) are contract modifications requiring certified cost or pricing data if-
(A) The total final price agreement for such settlements or agreements exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection; or
(B) The partial termination settlement plus the estimate to complete the continued portion of the contract exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection (see 49.105(c)(15)).
(2) Unless prohibited because an exception at 15.403-1(b) applies, the head of the contracting activity, without power of delegation, may authorize the contracting officer to obtain certified cost or pricing data for pricing actions below the pertinent threshold in paragraph (a)(1) of this subsection, provided the action exceeds the simplified acquisition threshold. The head of the contracting activity shall justify the requirement for certified cost or pricing data. The documentation shall include a written finding that certified cost or pricing data are necessary to determine whether the price is fair and reasonable and the facts supporting that finding.
(3) Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract, without requiring consideration, to reflect a $2.5 million threshold for obtaining certified cost or pricing data on subcontracts entered on and after July 1, 2018. See 15.408.
(b) When certified cost or pricing data are required, the contracting officer shall require the contractor or prospective contractor to submit to the contracting officer (and to have any subcontractor or prospective subcontractor submit to the prime contractor or appropriate subcontractor tier) the following in support of any proposal:
(1) The certified cost or pricing data and data other than certified cost or pricing data required by the contracting officer to determine that the price is fair and reasonable.
(2) A Certificate of Current Cost or Pricing Data, in the format specified in 15.406-2, certifying that to the best of its knowledge and belief, the cost or pricing data were accurate, complete, and current as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price.
(c) If certified cost or pricing data are requested and submitted by an offeror, but an exception is later found to apply, the data must not be considered certified cost or pricing data as defined in 2.101 and must not be certified in accordance with 15.406-2
(d) The requirements of this subsection also apply to contracts entered into by an agency on behalf of a foreign government.