Requiring certified cost or pricing data (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35)
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.