The government's extensive audit rights, particularly under negotiated contracts, provides it numerous remedies that can result in retroactive price adjustments to the contract price under the Truth and Negotiations Act (TINA). Although TINA was amended in 1994 and 1996 to limit its application to only certain type of contracts with exclusion of its requirements on "commercial item" contracts, a careful due diligence needs to identify the seller's universe of TINA covered contracts, its history with TINA and any expected price adjustments. In our initial requests for data, we ask the seller to identify the universe of TINA covered contracts to both guage potential liability and evaluate their understanding of their own contracts when pursuing other information. In addition, fraud liability under the False Claims Act must also be examined.

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