On September 26, 2024, the Department of Defense (DOD) issued a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Acts (NDAA) for Fiscal Years 2018, 2021, and 2022 that update requirements for contractors to submit cost or pricing data. This proposed rule looks to create uniformity for the Truth In Negotiations Act (TINA) threshold for submission of certified cost or pricing data, while continuing to pave the way for the Government to request offerors submit data other than certified cost or pricing data to the extent necessary to determine the reasonableness of the price of the contract or subcontract.
The Truthful Cost of Pricing Data State (formerly known as TINA) generally requires the submission of certified cost or pricing data before the award of any prime contract, subcontract, or modification to any contract that is expected to exceed $2,000,000. The purpose of TINA is to level the playing field by allowing the Government to negotiate on the basis of equal information regarding the reasonableness of the costs the contractor is proposing. The general requirement to provide the Government with certified cost or pricing data on contract actions over $2,000,000 does not apply in all situations. In addition to contracts, subcontracts, and contract modifications of less than $2,000,000 TINA, as implemented in the FAR, provides other exceptions from the Act’s requirements.
The prior NDAAs that the DOD rulemaking is design to implement are as follows:
- Section 814 of NDAA FY 2021: Established a uniform $2 million threshold for all DOD contract actions, including prime contract modifications, applied retroactively to contracts after June 30, 2018. This would raise the current threshold for prime contract modifications, which is currently at $750,000. In implementing the change to the thresholds for prime contract modifications, this proposed rule – DFARS 215.403-4 – includes a new contract clause (DFARS 252.215–70SS) and Alternate I. The clause is prescribed for use in lieu of FAR 52.215–21, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data—Modifications, in solicitations and contracts, including FAR part 12 acquisitions, if the contracting officer anticipates, at the time of solicitation, that postaward submission of certified cost or pricing data or data other than certified cost or pricing data may possibly be required for modifications. Further, this proposed rule requires use of the $2 million threshold for submission of certified cost or pricing data in conjunction with relevant FAR contract clauses and solicitation provisions regardless of the date on which the contract was awarded.
- Section 804 of NDAA FY 2022: Required contract modifications, for contracts entered on or before June 30, 2018, to reflect the new $2 million threshold “as soon as practicable.” The proposed rule aims to amend DFARS 215.403-4 by introducing six new clauses (prescribed at DFARS 214.201–7 and 215.408) specifically for use in contract modifications under 10 U.S.C. § 3702(f). These new DFARS clauses are designed for use with the FAR clauses that are already in existing contracts. These clauses incorporate the applicable TINA threshold for DoD contracts and are intended to be used alongside the FAR clauses already present in existing contracts. The new DFARS clauses will replace references to the TINA threshold in the FAR clauses with the current threshold relevant to DoD contracts.
- Section 811(b) of NDAA FY 2018: Requires offerors to submit data “other than certified cost or pricing data” upon contracting officer request. Accordingly, DoD proposes to change the solicitation provision at DFARS 252.215–7010, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data, and its Alternate I to require that, upon contracting officer request, the offeror shall submit data other than certified cost or pricing data to the extent necessary to determine the reasonableness of the price of the contract or subcontract. Similarly, the new clause at 252.215–70SS, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data— Modifications, and its Alternate I reflect the same clarifying language.
Comments on the proposed rule are due November 25, 2024.
