Requiring certified cost or pricing data (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35)
Certified cost or pricing data is required for most negotiated contract actions exceeding $2 million (or $750,000 for older contracts), unless a FAR 15.403-1(b) exception applies, and must be accompanied by a formal certificate.
Overview
FAR 15.403-4 establishes when contracting officers must obtain certified cost or pricing data from contractors and subcontractors. The regulation sets a threshold—$750,000 for contracts awarded before July 1, 2018, and $2 million for those awarded on or after that date—above which certified cost or pricing data are generally required unless an exception applies. The rule covers prime contracts, subcontracts, and contract modifications, and details how pricing adjustments are calculated. It also allows for the head of the contracting activity to require certified data below the threshold in certain cases, provided the action exceeds the simplified acquisition threshold and is justified in writing. 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 apply to contracts entered into on behalf of foreign governments.
Key Rules
- Thresholds for Certified Cost or Pricing Data
- Certified data is required for actions exceeding $750,000 (pre-July 1, 2018) or $2 million (post-July 1, 2018), unless an exception applies.
- Applicability to Contract Actions
- Applies to negotiated contracts, certain subcontracts, and contract modifications, including price adjustments (both increases and decreases).
- Waivers and Exceptions
- Contracting officers may seek waivers or apply exceptions per FAR 15.403-1(b); heads of contracting activity can require data below the threshold with justification.
- Submission Requirements
- Contractors must submit certified cost or pricing data and a Certificate of Current Cost or Pricing Data (FAR 15.406-2).
- Foreign Government Contracts
- Requirements extend to contracts entered into on behalf of foreign governments.
Responsibilities
- Contracting Officers: Determine if certified data is required, apply exceptions, request waivers, ensure proper documentation, and require certificates.
- Contractors: Submit accurate, complete, and current certified cost or pricing data and the required certificate; comply with threshold and timing requirements.
- Agencies: Heads of contracting activity may authorize exceptions and must justify requirements for data below the threshold.
Practical Implications
- Ensures the government obtains fair and reasonable pricing for significant contract actions.
- Contractors must be vigilant about thresholds and exceptions to avoid unnecessary submissions or compliance failures.
- Misunderstanding the thresholds or exceptions can lead to improper certifications or contract disputes.