(Editor’s Note.  The use of “information other than cost or pricing data” to justify proposed prices without subjecting offerors to liabilities stemming from submitting certified cost and pricing data is widely supported.  Up to now, use of this type of data to help procurement officials negotiate contract prices has been limited because contracting officers seeking an opinion from DCAA have been frustrated because the agency has taken the position it cannot issue an opinion (either favorable or unfavorable) on the data.  The following indicates this restriction may be reduced.)

The Defense Contract Audit Agency has issued guidance to its auditors indicating they may conduct an audit on certain “Information Other Than Cost or Pricing Data” and render an opinion.  FAR 2.101 defines Information Other Than Cost or Pricing Data as any data not required to be certified under FAR 15.406-2 that is needed for determining price reasonableness or cost realism.  Previously, auditors who must follow Generally Accepted Government Auditing Standards (GAGAS) were prohibited from either conducting an audit (or “examination”) of this information or issuing an opinion on the data in response to CO’s requests.  GAGAS prohibited audits because proposals based on “Information Other Than Cost or Pricing Data” lacked a certification of cost or pricing data which failed to meet the Statement on Auditing Standards (SAS) requirement to have a written management representation.  Certification of cost or pricing data has been held to be the equivalent of the representation and its absence meant an audit or examination could not be conducted.  Rather, less rigorous standards called “agreed-to procedures” could be used to analyze the data but GAGAS prevents issuing an opinion on analysis of data using these procedures.

Recently, GAGAS recently accepted new American Institute of CPAs (AICPA) attestation standards which differ from SAS in ways that allow auditors to audit pricing proposals supported by information other than cost or pricing data (i.e. written management representations are no longer required meaning certified cost or pricing data is no longer required to conduct an audit).  The guidance states that now some, but by no means all, information other than cost or pricing data may be audited.  The guidance does not indicate what kinds of data can now be examined but does indicate that proposals based solely on pricing or sales information or cost realism analyses can not be audited.  In such cases, agreed-to procedures will be followed where still, no audit opinion can be rendered.  When the acceptable data is audited, auditors are told to report their findings and opinions on currently used proforma reports and to substitute “cost or pricing data” with the phrase “information other than cost or pricing data” (MRD 01-PPD-055(R).

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