CODSIA recently expressed “grave concerns” about recent changes called for in an April 23 proposed rule and have urged the FAR Council to hold public meetings before proceeding further. The changes moving commercial items toward more cost based pricing, which we detailed in the last issue of the GCA DIGEST, would (1) amend the definitions at FAR 2.101 to add a new term “data other than certified cost or pricing data” which would mean any data including cost or pricing data as well as judgmental information the contracting officer would need to determine a fair and reasonable price (2) remove the current term “information other than cost or pricing data” which the rule writers say would be more consistent with the Truth in Negotiations Act (TINA) and instruct COs to obtain “data other than certified cost or pricing data” where certification of that cost or pricing data is not required by TINA (3) revise the definition of “cost or pricing data” to remove reference to certification while adding another definition of “certified cost or pricing data” (4) revise FAR 15.4 to “clarify the need and authority to obtain a detailed cost estimate, including cost or pricing data, when there is no other means to determine fair and reasonable pricing during price analysis even though the cost or pricing data will not be certified” and (5) incorporate the instructions in Table 15-2 of FAR 15.408 as mandatory for the submission of required data when TINA applies.

CODSIA put forth many “strong” objections stating the proposed changes will:

1. Conflict with TINA and provisions of the Federal Acquisition Streamlining Act exempting commercial items from TINA requirements of certified cost or pricing data and penalties when such data are not accurate, current or complete.
2. Significantly “reprioritize” the government hierarchical policies on what data is needed to support fair and reasonable pricing, putting COs in the position to demand the maximum amount of data from offerors and thereby creating more risk for contractors which in turn will make it more difficult for the government to obtain its needed products and services.
3. Provide expanded audit rights not contemplated by TINA (e.g. review of judgments and estimates in addition to factual information).
4. Eliminate the “bright line test” that distinguishes data subject to TINA and not subject to it that currently government and industry clearly recognize. In contrast to the well understood concept of “cost or pricing data”, whether it is certified or not, now “judgments” and “estimates”, which are not well defined, must be disclosed because they may have a bearing on the reasonableness of a proposed price. The fact there will be no defective pricing liability under TINA for such judgments – TINA defective pricing penalties apply only to factual not judgmental information – “is small comfort” if contractors must defend themselves against False Claims Act cases no matter how meritless the case.

{TAG_FORM_TITLE}