Full Answer
What is the threshold for certified cost or pricing data for modifications to a subcontract?
What is the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018?
When should a subcontractor submit certified cost or pricing data?
When will the new threshold for subcontracts be issued?
When is NDAA required to modify contracts?
Does section 811 affect CAS?
Who to contact regarding section 811?
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Class Deviations - Under Secretary of Defense for Acquisition and ...
Class Deviations. The Principal Director of Defense Pricing and Contracting issues class deviations when necessary to allow organizations to deviate from the FAR and DFARS.
15.406-2 Certificate of Current Cost or Pricing Data. - Acquisition
(a) When certified cost or pricing data are required, the contracting officer shall require the contractor to execute a Certificate of Current Cost or Pricing Data, using the format in this paragraph, and must include the executed certificate in the contract file. Certificate of Current Cost or Pricing Data This is to certify that, to the best of my knowledge and belief, the cost or pricing ...
15.403-1 - Acquisition.GOV
(a) Certified cost or pricing data shall not be obtained for acquisitions at or below the simplified acquisition threshold. (b) Exceptions to certified cost or pricing data requirements.The contracting officer shall not require certified cost or pricing data to support any action (contracts, subcontracts, or modifications) (but may require data other than certified cost or pricing data as ...
48 CFR § 9903.201-1 - LII / Legal Information Institute
(a) This subsection describes the rules for determining whether a proposed contract or subcontract is exempt from CAS. (See 9904 or 9905, as applicable.) Negotiated contracts not exempt in accordance with 9903.201-1(b) shall be subject to CAS. A CAS-covered contract may be subject to full, modified or other types of CAS coverage. The rules for determining the applicable type of CAS coverage ...
PGI 215.4 — Contract Pricing - Under Secretary of Defense for ...
(c) Use of DD Form 1861 - Field pricing support. (i) The contracting officer may ask the ACO to complete the forms as part of field pricing support. (ii) When the Weighted Guidelines Method is used, completion of the DD Form 1861 requires data not included on the Form CASB-CMF, i.e., distribution percentages of land, building, and equipment for the business unit performing the contract.
Cost Estimating and the Truth in Negotiations Act (TINA)
TINA Exception –Commercial Items •Commercial items defined at FAR 2.101 •No cost or pricing data, but may rely on “other than cost or pricing data” •Proposed DFARS commercial items rule would make it more difficult to
What is the threshold for certified cost or pricing data for modifications to a subcontract?
Section 811 provides that if a contract awarded before July 1, 2018, is amended as described above, the threshold for submission of certified cost or pricing data for modifications to that contract will be $750,000 instead of the new $2,000,000 threshold. This appears to be an oversight on the part of Congress. Section 811 provides that if a contract awarded before July 1, 2018, is modified as above, the threshold for submission of certified cost or pricing data relating to a subcontract to be awarded after June 30, 2018, will be $2,000,000. Similarly, the threshold for submission of certified cost or pricing data for modifications to subcontracts entered into under contracts awarded after June 30, 2018, is $2,000,000. Finally, the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018, but that have been modified as provided by the NDAA is $2,000,000. Again, the deviation does not address these situations. Therefore, unless a separate deviation is issued, we will have to wait for the FAR Councils to amend the FAR in this regard. A review of the Conference Report on the NDAA does not explain why modifications that are made after June 30, 2018, to contracts awarded before July 1, 2018, remains at $750,000.
When should a subcontractor submit certified cost or pricing data?
However, if the prime contract exceeds $2,000,000 and the prime contractor is required to submit certified cost or pricing data, subcontractors would normally be expected to submit certified cost or pricing data if the subcontract is expected to exceed $750,000. The NDAA addressed this issue by raising the threshold for submission of certified cost or pricing data to $2,000,000 for subcontracts under contracts awarded after June 30, 2018. This threshold applies to the initial award of a subcontract and to modifications of subcontracts under prime contracts awarded after June 30, 2018.
What is the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018?
Finally, the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018, but that have been modified as provided by the NDAA is $2,000,000. Again, the deviation does not address these situations.
When will the new threshold for subcontracts be issued?
The deviation states that DoD contracting officers will start using the new threshold for contracts awarded on or after July 1, 2018. This raises two issues. First, is the applicability of the new threshold relevant to subcontracts? In this regard, we should note that the Federal Acquisition Regulation (“FAR”) uses two clauses to address the topic of subcontractors being required to submit certified cost or pricing data. These are FAR 52.215-12, Subcontractor Certified Cost or Pricing Data and FAR 52.215-13, Subcontractor Certified Cost or Pricing Data – Modifications. Both of these clauses are to be included in prime contracts when it is anticipated that the prime contractor will be required to submit certified cost or pricing data.
When is NDAA required to modify contracts?
The NDAA permits contractors holding contracts awarded before July 1, 2018 , to request that the threshold for submission of certified cost or pricing data for modifications to such contracts be adjusted to reflect the language of section 811. If such a request is made, the agency is required to modify the contract accordingly without requiring the contractor to provide the government with consideration. Unfortunately, there appears to be a drafting error in section 811.
Does section 811 affect CAS?
Although section 811 did not address the impact it has on the applicability of the CAS, the deviation does so. Specifically, the deviation changes the threshold for application of the FAR clauses and provisions dealing with the CAS (FAR 52.230-1 through 52.230-5) to $2,000,000 effective July 1, 2018. The deviation does not impact FAR 52.230-6, which is to be included in a contract when one of the other CAS clauses is included in the contract.
What is the threshold for a simplified acquisition?
A Certificate is required before any of the following actions that exceed the simplified acquisition threshold of $750,000: Award of any negotiated contract , Award of any subcontract at any tier, if the contractor and subcontractor were required to submit certified cost & pricing data, or. Modification of any sealed bid or negotiated contract ...
What is a certificate of current cost?
A Certificate of Current Cost or Pricing Data (“Certificate”) is required in certain circumstances under FAR 15.403-4. When required (see below), the contractor must execute a Certificate and include it in the contract file. In submitting a Certificate 2, a contractor certifies that the cost or pricing data in support of a bid or contract are ...
What is a certificate 2?
In submitting a Certificate 2, a contractor certifies that the cost or pricing data in support of a bid or contract are accurate, complete, and current as of the date of submission. It also includes the cost or pricing data that supports any advance agreements and forward pricing rate agreements that are part of the proposal.
What is the purpose of subsection (b) in a contractor certification?
When submitting a certificate of current cost or data pricing under FAR 15.406-2 (a), it is imperative to include subsection (b) of that section in order to avoid potential False Claims Act (pdf) violations. Subsection (b) distinguishes between fact and the judgment of the contractor. This section clarifies that the certification is not a representation of the accuracy of the contractor’s judgment on the estimate of future costs or projections. Rather, the contractor certifies that the data upon which the judgment or estimate was based, is correct and distinguishable.
What happens when a contractor fails to certify?
When a Certificate of Current Cost or Pricing Data is required, contractors must be aware of what information they are certifying, and the implications of certifying too much. If contractors fail to distinguish between what is fact and what is judgmental, they run the risk of false claims violations. Accordingly, a seemingly small error ...
What is the purpose of a contracting certificate?
The purpose of the Certificate is to assist the contracting officer in evaluating the reasonableness of the proposed pricing. It also serves as a mechanism to detect and discourage fraud and false claims.
What are factual items that are to be certified as correct and accurate?
Some examples of factual items that are to be certified as correct and accurate include: overhead, bond, gross receipts tax rates and payments, labor, burden rates, timesheet data, equipment rates, material costs, and subcontract and supplier written or verbal quotations.
Cost and Pricing Data: What the Government Needs
The need for providing cost and pricing data is primarily found in FAR Part 15 – Contracting by Negotiation, where the government seeks “the best value” for a particular acquisition based on competition. This pricing and proposal environment is much different than that found within the other methods of government acquisition:
Two Paths for Providing Cost and Pricing Data
The requirement for cost and pricing data can take two paths, but they both end with the government’s need to determine a “fair and reasonable” price. Both paths require a detailed description of all cost elements, including project costs, indirect costs, and fee.
Certified Cost and Pricing
The Truth in Negotiations Act (TINA) requires cost and pricing data be certified as “accurate, complete, and current” by contractors upon conclusion of negotiations. Cost or pricing data are defined broadly as facts that prudent negotiators would expect to significantly affect price negotiations.
Exceptions
Thankfully, there are notable exceptions to providing certified cost and pricing data. Prices determined through comparing competitive prices and commercial item purchases are two such exceptions. The exception making recent news is the one based on the value of the acquisition.
Techniques to Reduce Risk
Here are just some of the ways a contractor can reduce its risk of a “defective” proposal:
ReliAscent Assistance
As always, you can rely on ReliAscent if you have further questions related to cost and pricing data or allegations of defective pricing. Contact us today to learn more about our government accounting and contract management services, and how we can help.
What is the threshold for certified cost or pricing data for modifications to a subcontract?
Section 811 provides that if a contract awarded before July 1, 2018, is amended as described above, the threshold for submission of certified cost or pricing data for modifications to that contract will be $750,000 instead of the new $2,000,000 threshold. This appears to be an oversight on the part of Congress. Section 811 provides that if a contract awarded before July 1, 2018, is modified as above, the threshold for submission of certified cost or pricing data relating to a subcontract to be awarded after June 30, 2018, will be $2,000,000. Similarly, the threshold for submission of certified cost or pricing data for modifications to subcontracts entered into under contracts awarded after June 30, 2018, is $2,000,000. Finally, the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018, but that have been modified as provided by the NDAA is $2,000,000. Again, the deviation does not address these situations. Therefore, unless a separate deviation is issued, we will have to wait for the FAR Councils to amend the FAR in this regard. A review of the Conference Report on the NDAA does not explain why modifications that are made after June 30, 2018, to contracts awarded before July 1, 2018, remains at $750,000.
What is the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018?
Finally, the threshold for modifications to subcontracts under prime contracts awarded before July 1, 2018, but that have been modified as provided by the NDAA is $2,000,000. Again, the deviation does not address these situations.
When should a subcontractor submit certified cost or pricing data?
However, if the prime contract exceeds $2,000,000 and the prime contractor is required to submit certified cost or pricing data, subcontractors would normally be expected to submit certified cost or pricing data if the subcontract is expected to exceed $750,000. The NDAA addressed this issue by raising the threshold for submission of certified cost or pricing data to $2,000,000 for subcontracts under contracts awarded after June 30, 2018. This threshold applies to the initial award of a subcontract and to modifications of subcontracts under prime contracts awarded after June 30, 2018.
When will the new threshold for subcontracts be issued?
The deviation states that DoD contracting officers will start using the new threshold for contracts awarded on or after July 1, 2018. This raises two issues. First, is the applicability of the new threshold relevant to subcontracts? In this regard, we should note that the Federal Acquisition Regulation (“FAR”) uses two clauses to address the topic of subcontractors being required to submit certified cost or pricing data. These are FAR 52.215-12, Subcontractor Certified Cost or Pricing Data and FAR 52.215-13, Subcontractor Certified Cost or Pricing Data – Modifications. Both of these clauses are to be included in prime contracts when it is anticipated that the prime contractor will be required to submit certified cost or pricing data.
When is NDAA required to modify contracts?
The NDAA permits contractors holding contracts awarded before July 1, 2018 , to request that the threshold for submission of certified cost or pricing data for modifications to such contracts be adjusted to reflect the language of section 811. If such a request is made, the agency is required to modify the contract accordingly without requiring the contractor to provide the government with consideration. Unfortunately, there appears to be a drafting error in section 811.
Does section 811 affect CAS?
Although section 811 did not address the impact it has on the applicability of the CAS, the deviation does so. Specifically, the deviation changes the threshold for application of the FAR clauses and provisions dealing with the CAS (FAR 52.230-1 through 52.230-5) to $2,000,000 effective July 1, 2018. The deviation does not impact FAR 52.230-6, which is to be included in a contract when one of the other CAS clauses is included in the contract.
Who to contact regarding section 811?
In the meantime, if you have any questions concerning section 811 or the deviation, do not hesitate to contact a member of Cherry Bekaert’s GovCon industry group.
