Federal Acquisition Regulation; Definition of Cost or Pricing Data, 53135-53153 [2010-21026]
Download as PDF
<![CDATA[
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
and (j)(2) ‘‘$10,000’’ and adding
‘‘$15,000’’ in its place.
52.228–15
[Amended]
74. Amend section 52.228–15 by
removing from the clause heading ‘‘(Nov
2006)’’ and adding ‘‘(Oct 2010)’’ in its
place; and removing from the
introductory text of paragraph (b)
‘‘$100,000’’ and adding ‘‘$150,000’’ in its
place.
■
52.244–6
[Amended]
75. Amend section 52.244–6 by—
a. Removing from the clause heading
‘‘(Jun 2010)’’ and adding ‘‘(Oct 2010)’’ in
its place;
■ b. Removing from paragraph (c)(1)(iii)
‘‘$550,000’’ and adding ‘‘$650,000’’ in its
place, and removing ‘‘$1,000,000’’ and
adding ‘‘$1.5 million’’ in its place; and
■ c. Removing from paragraph (c)(1)(vi)
‘‘(Jun 1998)’’ and adding ‘‘(Oct 2010)’’ in
its place.
■
■
52.248–1
[Amended]
76. Amend section 52.248–1 by
removing from the clause heading ‘‘(Feb
2000)’’ and adding ‘‘(Oct 2010)’’ in its
place; and removing from paragraph (l)
‘‘$100,000’’ and adding ‘‘$150,000’’ in its
place.
■
52.248–3
[Amended]
77. Amend section 52.248–3 by
removing from the clause heading ‘‘(Sep
2006)’’ and adding ‘‘(Oct 2010)’’ in its
place; and removing from paragraph (h)
‘‘$55,000’’ and adding ‘‘$65,000’’ in its
place.
■
[FR Doc. 2010–21025 Filed 8–27–10; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 2, 4, 12, 14, 15, 16, 19,
27, 30, 31, 32, 42, 44, 49, and 52
[FAC 2005–45; FAR Case 2005–036; Item
II; Docket 2007–0001, Sequence 15]
RIN 9000–AK74
Federal Acquisition Regulation;
Definition of Cost or Pricing Data
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
jlentini on DSKJ8SOYB1PROD with RULES3
AGENCIES:
The Civilian Agency
Acquisition Council and the Defense
SUMMARY:
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
Acquisition Regulations Council
(Councils) have agreed on a final rule
amending the Federal Acquisition
Regulation (FAR) to clarify the
distinction between ‘‘certified cost or
pricing data’’ and ‘‘data other than
certified cost or pricing data’’, and to
clarify requirements for submission of
cost or pricing data.
DATES: Effective Date: October 1, 2010.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact Mr.
Edward N. Chambers, Procurement
Analyst, at (202) 501–3221. For
information pertaining to status or
publication schedules, contact the
Regulatory Secretariat at (202) 501–
4755. Please cite FAC 2005–45, FAR
case 2005–036.
SUPPLEMENTARY INFORMATION:
A. Background
Subpart 15.4 of the FAR describes the
contracting officer’s responsibility to
purchase supplies and services at fair
and reasonable prices and the use of
data and information in meeting this
requirement. This subpart incorporates
the requirements of the Truth In
Negotiations Act (TINA), 10 U.S.C.
2306a and 41 U.S.C. 254b, which
address the requirements for the
submission of cost or pricing data and
the circumstances under which a
contractor must certify to their accuracy,
completeness, and currency.
The Councils believe that the
implementation of TINA in FAR subpart
15.4 is not sufficiently clear. In
particular, there is confusion regarding
the right of the Government to request
‘‘data other than certified cost or pricing
data,’’ the obligation of the offeror to
provide this data, and the definition of
this term.
This lack of clarity is due, in large
part, to definitions that overlap and are
not identical to TINA. For example, the
term ‘‘cost or pricing data’’ is defined in
the FAR to mean certified cost or
pricing data, whereas TINA does not
make certification part of the definition
of this term. This regulatory refinement
has led to confusion regarding the level
of information that a contracting officer
may request to establish fair and
reasonable pricing including a
misunderstanding by some that the data
elements that comprise cost or pricing
data cannot be requested by the
Government unless the data are required
by law to be submitted to the
contracting officer in a certified form.
This confusion has been exacerbated by
the FAR’s use of the phrase ‘‘information
other than cost or pricing data,’’ which
has made it difficult for contracting
officers to understand the circumstances
PO 00000
Frm 00009
Fmt 4701
Sfmt 4700
53135
when data other than certified cost or
pricing data should be obtained to
protect the Government from paying
unreasonable prices.
Even the basic articulation of policy
regarding the use of data to establish the
fairness and reasonableness of offered
prices in the introductory paragraph of
FAR 15.402(a) has lacked a certain level
of clarity that creates uncertainty. For
many years, this paragraph has
appropriately cautioned contracting
officers not to obtain more information
than is necessary—and the FAR must
continue to do so. However this
paragraph should also, but currently
does not, expressly mention the
underlying statutory authority to collect
‘‘data other than certified cost or pricing
data.’’ Because of this omission, some
contracting officers may be under the
misperception that there is a greater
responsibility to avoid asking
unnecessarily for the submission of cost
or pricing data than there is, in the first
instance, to determine whether and how
much of this data may be required, in
a given case, to establish price fairness
and reasonableness. In fact, both
responsibilities—i.e., obtaining data that
are adequate for evaluating the
reasonableness of the price and taking
appropriate care not to ask for more data
than is necessary—are inextricably
interrelated and equally important. As
such, the FAR needs to communicate
this message more clearly.
DoD, GSA, and NASA published a
proposed rule in the Federal Register at
72 FR 20092, April 23, 2007, to revise
the FAR definition of ‘‘cost or pricing
data’’; change the term ‘‘information
other than cost or pricing data’’ to ‘‘data
other than certified cost or pricing data’’;
add a definition of ‘‘certified cost or
pricing data’’ to make the terms and
definitions consistent with TINA and
more understandable to the general
reader; change terminology throughout
the FAR; and clarify the need for
contracting officers to obtain ‘‘data other
than certified cost or pricing data’’ when
there is no other means to determine fair
and reasonable pricing during price
analysis.
Based on comments received on the
proposed rule, a public meeting held on
November 1, 2007, and additional
deliberations (which are all discussed in
greater detail below), the Councils have
adopted a final rule that—
• Clarifies terminology used in the
FAR to make it consistent with TINA,
resulting in (i) refinements to the
regulatory definition of cost or pricing
data, (ii) the addition of a definition for
‘‘certified cost or pricing data,’’ (iii) the
addition of a definition for ‘‘data other
than certified cost or pricing data,’’ and
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
53136
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
(iv) deletion of the phrase ‘‘information
other than cost or pricing data’’;
• Clarifies responsibilities regarding
the request for, and submission of, ‘‘data
other than certified cost or pricing data’’
to establish fair and reasonable pricing,
both in the case when ‘‘certified cost or
pricing data’’ is required and is not
required;
• Retains the current order of
preference for determining the type of
cost or pricing data required to establish
fair and reasonable prices when
certified cost or pricing data are not
required;
• Retains and reinforces important
statements to explain why contracting
officers must not require, unnecessarily,
the submission of ‘‘data other than
certified cost or pricing data’’;
• Clarifies the instructions for offerors
preparing a contract pricing proposal
when cost or pricing data are required
so that such instructions are consistent
with the clarified terminology and
policies for determining the type and
quantity of data necessary to establish a
fair and reasonable price; and
• Supplements existing coverage to
clarify current coverage and achieve
greater understanding by contracting
officers and contractors.
This rule neither expands nor
diminishes the existing rights of
contracting officers to request cost or
pricing data (whether certified or other
than certified) or other information, or
the existing responsibilities of the
offeror to submit such data or other
information. Similarly, the rule does not
require, encourage, or authorize
contracting officers to obtain cost or
pricing data or other information unless
it is needed to determine that prices
offered are fair and reasonable, which
may include the request for such data in
connection with a cost realism analysis.
As the rule explains, requiring
contractors to submit more data than
what is needed can ‘‘lead to increased
proposal preparation costs, generally
extend acquisition lead time, and
consume additional contractor and
Government resources.’’
Whether a contractor must submit
‘‘certified cost or pricing data’’ is based
on the requirements of TINA and its
stated exceptions. With respect to ‘‘data
other than certified cost or pricing data,’’
the introductory policy statement in
FAR 15.402(a) has been clarified to tie
together the contracting officer’s
longstanding statutory responsibility to
request the data and information
necessary to establish a fair and
reasonable price—as stated in TINA at
10 U.S.C. 2306a(d)(1) and 41 U.S.C.
254b(d)(1)—with the caution that, in
doing so, the contracting officer must
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
not request more data than is necessary.
By doing so, the FAR will provide a
more complete articulation of the policy
underlying the use of ‘‘data other than
certified cost or pricing data’’ in
establishing price fairness and
reasonableness, in furtherance of the
contracting officer’s duty to serve as a
responsible steward of the taxpayer’s
resources.
B. Public Comments
The first comment period closed on
June 22, 2007. Comments were received
from 11 respondents. As a result of the
comments received, a public meeting
was scheduled with notice provided at
72 FR 61854 on November 1, 2007. The
public meeting was held on November
15, 2007, and was followed by a one
week period for submission of
additional comments. Several
respondents submitted additional
comments. The public comments are
addressed in the following analysis:
General Comments
Some respondents noted that the
proposed changes should alleviate
confusion. Others raised the following
general concerns regarding various
aspects of the proposed rule.
1. Some respondents were concerned
that the proposed rule will result in
contracting officers by-passing normal
market research and pricing techniques
and require contractors to submit full
cost or pricing data as if the Truth in
Negotiations Act (TINA) applied.
Response: The current FAR, as well as
the proposed and final rule, protect
against this practice. Contracting
officers must generally follow the order
of preference at FAR 15.402, and are
required by that section to ‘‘obtain the
type and quantity of data necessary to
establish a fair and reasonable price, but
not more data than is necessary.’’ In
theory, this could include all of the
elements prescribed under FAR 15.408,
Table
15–2. However, in most cases the data
necessary for a contracting officer to
determine cost fairness and
reasonableness, or cost realism, will fall
short of this level of data. The rule
should not result in contracting officers
requiring contractors to submit full cost
or pricing data as if certification will be
required when it is not necessary.
2. Public comments did point out an
error where the proposed rule changed
the FAR to require certified cost or
pricing data ‘‘and’’ data other than
certified cost or pricing data.
Response: The final rule corrects
several instances where ‘‘and’’ was
incorrectly used, replacing it with ‘‘or’’.
However, there are circumstances where
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
‘‘and’’ is appropriate and those have
been retained. The final rule recognizes
that the contracting officer may need to
request data other than certified cost or
pricing data, in addition to certified cost
or pricing data, to establish fair and
reasonable pricing.
3. Some respondents were concerned
about the broadening of the definition of
‘‘information other than cost or pricing
data’’ by adding the words ‘‘and
judgmental information.’’
Response: Data used to support an
offer will necessarily contain some
information that is non-factual, i.e.,
judgmental information. Due to its
nature, judgmental information cannot
be certified. Even in situations where
‘‘certified cost or pricing data’’ are
required, judgmental information is not
certified, and it is part of ‘‘data other
than certified cost or pricing data’’ that
supplements certified cost or pricing
data. The final rule deletes the phrase
‘‘information other than cost or pricing
data,’’ but includes ‘‘judgmental
information’’ and ‘‘judgmental factors’’ in
the definition of ‘‘data other than
certified cost or pricing data.’’ The final
rule also includes additional language to
provide consistency with FAR 15.408,
Table 15–2 (i.e., any information
reasonably required to explain the
estimating process, including the
judgmental factors applied and the
mathematical or other methods used in
the estimate, including those used in
projecting from known data; and the
nature and amount of any contingencies
included in the proposed price).
Aligning the definition of ‘‘data other
than certified cost or pricing data’’ and
the text of the language in FAR 15.408,
Table 15–2, keeps the definition
consistent with the current FAR
requirements and TINA. The Councils
note that the existence of a judgment is
factual, but the nature and amount of
the judgment are not.
4. Many respondents were concerned
that the proposed rule inappropriately
adds the phrase ‘‘data other than
certified cost or pricing data’’
throughout the proposed rule when only
certified cost or pricing data apply.
Response: The final rule deletes that
addition in some instances. There are
other instances where both phrases:
‘‘Certified cost or pricing data’’ and ‘‘data
other than certified cost or pricing data’’
are applicable. See the response to
General Comments number 2.
5. Several respondents were
concerned that offerors of commercial
items would be required to submit cost
data in all instances.
Response: Such an outcome would be
contrary to the intent of the rule, which
does not alter the current intent of the
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
jlentini on DSKJ8SOYB1PROD with RULES3
FAR regarding the type and quantity of
data to determine if the price of a
commercial item is fair and reasonable.
FAR 15.403–1(c)(3) specifically exempts
commercial items from certified cost or
pricing data requirements, and this rule
does not change that exception. Also,
FAR 15.403–3(c)(2) sets limitations on
the type of cost data or pricing data that
can be requested regarding commercial
items. When contracting officers
determine that they can use price
analysis to determine the price to be fair
and reasonable, the order of preference
at FAR 15.402 means cost data will
generally not be obtained for pricing
commercial items. Contracting officers
are to obtain only that information
needed to determine a fair and
reasonable price, which, in some cases,
may include contractor cost data
(without certification) for commercial
items.
Specific Comments
1. Comment: Add a definition of ‘‘cost
data,’’ which is referenced at FAR
15.402(a)(2)(ii).
Response: We do not believe a
separate definition is required. The
revised definition of ‘‘data other than
certified cost or pricing data’’ and the
existing definition of ‘‘information other
than cost or pricing data’’ both
encompass cost data and pricing data
depending on what is needed by the
contracting officer, using the order of
preference at FAR 15.402(a). The
definition simply breaks out various
aspects of ‘‘data other than certified cost
or pricing data.’’ The cost data refers to
data related to a contractor’s costs.
2. Comment: Separate enumeration of
‘‘cost or pricing data’’ in FAR
4.803(a)(17)(i) ‘‘Content of Contract
Files’’ is unnecessary because it is
repetitive with existing definitions in
FAR 2.101.
Response: The final rule revises FAR
4.803(a)(17)(i) to read ‘‘certified cost or
pricing data’’ consistent with the revised
definition. The requirement at FAR
4.803(a)(17) is for documenting the
contract file for the contracting officer’s
determination of a fair and reasonable
price, and lists the types of data that
should be maintained. ‘‘Certified cost or
pricing data’’ includes all data that
conforms to FAR 15.408, Table 15–2,
while ‘‘data other than certified cost or
pricing data’’ includes only the level of
data the contracting officer needs to
determine the price fair and reasonable.
Whichever is required to be submitted,
this section makes it clear that it shall
be documented in the contract file.
3. Comment: FAR 13.106–3(a)(2)(iii)
contradicts FAR 15.404–1(b)(2)(iv) as
FAR 13.106–3(a)(2)(iii) appears to
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
indicate non-acceptability of price lists
and catalogs as a price analysis stand
alone technique.
Response: Neither of the referenced
texts is part of this rulemaking.
Nonetheless, we note that the references
do not conflict. Both references list
various techniques and types of
information the contracting officer may
use, either individually or collectively.
The type and extent of data needed is
based on the contracting officer’s
business judgment. FAR 13.106–
3(a)(2)(iii) simply adds a cautionary
note when using catalog prices.
4. Comment: Change language in the
proposed FAR 15.403–3(a)(1)(ii) from ‘‘If
the contracting officer cannot obtain
adequate data from sources other than
the offeror, the contracting officer shall
require’’ to ‘‘If the contracting officer
determines that adequate data from
sources other than the offeror is not
available, the contracting officer shall
require.’’
Response: We concur that the
contracting officer should determine
when adequate data is not available and
have clarified the final rule accordingly.
However, ‘‘data’’ is plural and requires
the verb ‘‘are available’’ rather than ‘‘is
available’’.
5. Comment: The new language at
FAR 15.404–1(b) confuses the difference
between cost analysis and price analysis
when it states that ‘‘Price analysis may
include evaluating data other than
certified cost or pricing data obtained
from the offeror or contractor when
there is no other means for determining
a fair and reasonable price.’’ Price
analysis should only be applied to sales
data obtained from the offeror.
Response: The referenced paragraph
is a discussion of ‘‘price’’ analysis. The
referenced text simply points out that in
performing price analysis, the
contracting officer may require data
other than certified cost or pricing data.
Price analysis is not limited to sales
data.
6. Comment: Language at FAR
15.404–1(b)(2)(ii) needs clarification.
Response: Changes have been made to
FAR 15.404–1(b)(2)(ii) to clarify the text.
7. Comment: In reference to FAR
15.408, Table 15–2, changing the word
‘‘information’’ to the phrase ‘‘data other
than certified cost or pricing data’’
means that the contractor does not have
to certify all the cost or pricing data.
Changing these terms is changing the
requirement under TINA.
Response: The final rule utilizes the
term ‘‘information’’ in a few instances,
not as a term of art as it had been used
in FAR part 15 prior to this revision, but
generically. The requirements under
TINA have not been changed.
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
53137
8. Comment: The proposed language
that adds ‘‘certified cost or pricing data
and data other than certified cost or
pricing data’’ at FAR 15.408, Table
15–2, means that the offeror could
withhold disclosure or certification of
cost or pricing data related to its
subcontractors, in cases when the
subcontractor is not required to certify.
Response: When ‘‘certified cost or
pricing data’’ is required, the prime
contractor is responsible for certifying
the completeness of all cost or pricing
data, which includes subcontractor
price quotes and cost data when the
subcontractor is not required to certify
to its data. The requirement for the
prime contractor to certify that it has
submitted all of the facts regarding
subcontractor cost data or pricing data,
even if the subcontractor is not required
to submit ‘‘certified cost or pricing data,’’
is implicitly in the certification
language at FAR 15.406–2(a).
9. Comment: Throughout the
proposed rule, including the clauses,
change ‘‘required certified cost or
pricing data and data other than
certified cost or pricing data’’ back to
‘‘required certified cost or pricing data,
or data other than certified cost or
pricing data.’’
Response: The phrases ‘‘certified cost
or pricing data’’ and ‘‘data other than
certified cost or pricing data’’ are joined
with ‘‘and’’ when they are used to refer
to both types of data collectively. The
phrases are joined with ‘‘or’’ when the
phrases are used to refer to either one
or the other type of data. See the
response to General Comments number
2.
10. Comment: FAR 52.214–26, Audit
and Records—Sealed Bidding, expand
the Government’s rights by allowing the
Government to audit and review the
contractor’s records when certified cost
or pricing data are not required. There
is no authority to do this.
Response: This change was in error
and the final rule deletes that addition.
11. Comment: The proposed rule
inappropriately adds the phrase ‘‘data
other than certified cost or pricing data’’
to clauses and FAR 15.408, Table 15–2,
when only certified cost or pricing data
apply.
Response: The final rule adds
clarifying language to indicate that,
when certified cost or pricing data is
required, data other than certified cost
or pricing data may also be required.
See the responses to General Comments
numbers 2 and 4, and Specific
Comments number 9.
12. Comment: Why is Alternate I of
FAR 52.215–21(b) marked reserved? It
shouldn’t be.
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
53138
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
Response: The final rule retains
Alternate I.
13. Comment: The Councils are
inappropriately prescribing the use of
FAR 15.408, Table 15–2, for both
‘‘certified cost or pricing data’’ and ‘‘data
other than certified cost or pricing data’’.
By doing so, the Councils are advocating
cost analysis on commercial items.
Response: This comment is similar to
the Specific Comments numbers 7 and
9. The language in the table and clauses
is revised in the final rule. FAR 15.408,
Table 15–2, applies only when certified
cost or pricing data are required.
However, when certified cost or pricing
data are required, data other than
certified cost or pricing data may also be
required. Additionally, cost analysis can
be used when an item that was thought
initially to be commercial is found not
to have sufficient sales data or other
information for determining the price to
be fair and reasonable. In each situation,
and in accordance with FAR 1.602–2,
the contracting officer must exercise
business judgment as to the level and
type of data needed to determine that
prices are fair and reasonable following
the order of preference at FAR 15.402(a).
See the responses to General Comments
numbers 2 and 4, and to Specific
Comments numbers 7 and 9.
14. Comment: The rule will not
address situations when a contracting
officer inappropriately determines an
item to be commercial.
Response: Commercial item
determinations are beyond the scope of
this rule. This rule is to clarify what
data are needed to determine whether
prices are fair and reasonable as
required by FAR part 15. The
procedures for making the
determination under FAR part 12 are
outside the scope of this rule about the
definitions of phrases associated with
cost or pricing data, and the
requirements for their submission.
15. Comment: Cost data should only
be used when there are no other means
to determine whether price is fair and
reasonable.
Response: The order of preference at
FAR 15.402(a) has been restructured,
but is essentially unchanged. Certified
cost or pricing data must be obtained
when required by TINA. When certified
cost or pricing data are not required, the
order of preference at FAR 15.402(a)
must generally be followed.
16. Comment: Contracting officers
should never have to rely on cost data
from the offeror to determine if the price
for a commercial item is fair and
reasonable.
Response: The contracting officer
retains the authority to request cost data
where other information, including
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
pricing data, is either unavailable or
inadequate to establish that prices
offered for a commercial item are fair
and reasonable. However, the FAR
policy is to only require submission of
‘‘data other than certified cost or pricing
data,’’ and only to the extent necessary
to support the contracting officer’s
determination of a fair and reasonable
price.
17. Comment: The proposed rule
demands that the contracting officer
obtains additional data (and ‘‘all facts’’)
regardless of needs and reverses the
presumption of the present FAR, which
asserts that the contracting officer
should not obtain more information
than needed. The proposed rule requires
greatly increased amounts of
information even where certified cost or
pricing data is not required. This is
contrary to the language of the statute
(TINA).
Response: The language in FAR
15.402(a); FAR 15.408, FAR Table 15–2;
and the clauses are revised in the final
rule. When certified cost or pricing data
are required, data other than certified
cost or pricing data may also be
required. The contracting officer is
cautioned to obtain data other than
certified cost or pricing as necessary to
establish a fair and reasonable price. See
section A, Background; see also the
responses to the Specific Comments
numbers 7, 9, and 16.
18. Comment: The proposed FAR
15.403–3(c)(1) implies that contractors
face vague and unbounded disclosure
obligations (i.e., ‘‘cost data, or any other
information the contracting officer
requires’’ and ‘‘at a minimum,
appropriate data on * * * prices’’) that
likely will be highly varied in
application to different procurements.
This costly burden is unnecessary—
certainly where it applies to exempt
procurements, e.g., commercial items.
Proposed changes conflict with TINA.
Response: TINA and the existing FAR
permit a contracting officer to obtain all
data that is needed, in the contracting
officer’s discretion (which may vary
among contracting officers), to
determine the price to be fair and
reasonable. See the order of preference
at FAR 15.402(a), Pricing Policy. The
present rule does not change that. The
intent is to leave latitude for contracting
officers to exercise business judgment
(FAR 1.602–2) in obtaining whatever
data are required in order to be able to
determine a price fair and reasonable,
following the order of preference at FAR
15.402(a). No negotiated procurements,
including procurements of commercial
items, are ‘‘exempt’’ from a contracting
officer requiring submission of data
other than certified cost or pricing data
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
when it is needed to determine a fair
and reasonable price. The proposed rule
is consistent with the existing FAR, the
requirements of TINA, the Federal
Acquisition Streamlining Act of 1994
(Pub. L. 103–355), and the Clinger
Cohen Act of 1996 (Pub. L. 104–106). It
does not add any requirements that do
not already exist in the statutes and
FAR. See the response to Specific
Comments number 16.
19. Comment: The proposed rule adds
the requirement that price be ‘‘fair’’ and
‘‘reasonable’’ in circumstances where the
previous FAR required only
demonstration of price
‘‘reasonableness.’’
Response: Under the existing FAR,
the contracting officer must determine
prices to be fair and reasonable (see FAR
15.402(a)). The final rule makes no
changes to this basic policy.
20. Comment: The proposed rule also
obligates the contracting officer to
require submission of ‘‘data other than
certified cost or pricing data.’’ This is a
profound change because the contractor
must submit both certified cost or
pricing data and something else.
Response: See section A, Background.
Also, see responses to Specific
Comments numbers 7, 9, and 11.
21. Comment: The proposed rule at
FAR 15.404–1(b)(1) adds a new term,
‘‘price or cost data.’’ What is ‘‘price or
cost data?’’
Response: The language has been
removed. The final rule clarifies the
language at FAR 15.404–1(b) to correct
‘‘price or cost data’’ to ‘‘data other than
certified cost or pricing data’’.
22. Comment: What is ‘‘commercial
item analysis’’ at FAR 15.404–1(b)?
Response: The phrase has been
deleted.
23. Comment: The proposed rule at
FAR 15.404–1(b)(2)(ii) creates extensive
additional disclosure requirements,
which affect the eligibility for the
‘‘commercial item’’ exemption. These
include very particular demands
concerning ‘‘prior price,’’ ‘‘terms and
conditions,’’ ‘‘market and economic
factors,’’ ‘‘differences between the
similar item and the item being
procured’’ and encouragement to use
expert technical advice to evaluate
‘‘minor modifications.’’ The effect of
these requirements is to reduce the
availability and utility of the
‘‘commercial item’’ exception and to
create, again, a whole class of
‘‘surrogate’’ data that is uncertified but
nevertheless burdensome and expensive
to produce.
Response: The contracting officer
must be able to determine that the price
is fair and reasonable. The fair and
reasonable price can be the commercial
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
price. To the extent there are sufficient
commercial sales of the item being
procured for the same or similar
quantities, both the validity of the
comparison and the reasonableness of
the previous prices can be established,
and the company shares that
commercial sales data with the
contracting officer when it cannot be
obtained by the Government through
normal market research, so that the
contracting officer can determine a fair
and reasonable price, obtaining further
‘‘data other than certified cost or pricing
data’’ will not be necessary. See section
A, Background, and the responses to
Specific Comments numbers 7, 9, and
11.
24. Comment: The rule will create
confusion when commercial items are
being procured by putting contracting
officers in a position where the only safe
alternative will be to demand the
maximum amount of data from an
offeror.
Response: There is no fundamental
change from the existing requirements
that contracting officers: ‘‘shall not
obtain more data or information than
necessary.’’ To the extent there are
sufficient commercial sales of the item
for the same or similar quantities, both
the validity of the comparison and the
reasonableness of the previous price can
be established, and the company shares
that information with the contracting
officer when it cannot be obtained by
the Government through normal market
research, so that the contracting officer
can determine a fair and reasonable
price, additional data requests will not
be required. This is not a departure from
the existing FAR requirement. See
section A, Background.
25. Comment: We believe the FAR
Council is expressing dissatisfaction
with the ability of the acquisition
workforce to do price analysis rather
than the more familiar cost analysis and
recommend providing adequate training
rather than making significant changes
to established regulations.
Response: See section A, Background,
and the Background section of the
proposed rule Federal Register notice
(72 FR 20092, April 23, 2007),
concerning the confusion over the
current FAR language, and further
expressed in these public comments
about existing FAR requirements.
Training of our acquisition workforce in
all types of proposal analysis is an
ongoing effort. The workforce needs the
cooperation of contractors to submit
required data so that contracting officers
can ensure a fair and reasonable price.
We believe this final rule helps clarify
requirements for submitting data
consistent with the existing FAR. The
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
Councils anticipate the development of
training to help the workforce
understand and apply the rule.
26. Comment: Recommend Councils
conduct a public meeting.
Response: A public meeting was held
on November 15, 2007, to ensure that all
interested parties had an opportunity to
provide additional input. The public
meeting was followed by the
opportunity for interested parties to
submit comments.
27. Comment: Existing regulations
delineate that data provided in support
of proposals fall into two distinct
categories: ‘‘cost or pricing data’’ and
‘‘information other than cost or pricing
data.’’ The primary differentiator
between cost or pricing data and
information other than cost or pricing
data is that the former requires
certification in accordance with FAR
15.406–2, while the latter is any type of
information that does not require
certification per FAR 15.406–2. The
existing regulations clearly state that
‘‘information other than cost or pricing
data’’ is ‘‘any type of information that is
not required to be certified’’ and that the
definition ‘‘includes cost or pricing data
for which certification is determined
inapplicable after submission.’’ As a
result, there is no ambiguity as to the
type of data that can be requested or
obtained through the submission of
‘‘information other than cost or pricing
data.’’ The Councils have changed the
type of non-certifiable data to include
‘‘cost data’’ rather than what was
previously referred to as ‘‘cost
information.’’ The FAR Council’s intent
to clarify that the two terms result in
underlying data that is the same,
appears to be in direct conflict with the
statutory definition. That statute does
not eliminate the possibility that the
data may be the same but it provides a
different standard for ‘‘other
information.’’ Accordingly, there are two
different types of data defined in TINA,
‘‘cost or pricing data’’ that is required to
be certified and ‘‘other information’’ that
is not required to be certified.
Response: We believe this comment
demonstrates the confusion reported to
the Councils. TINA and FAR 15.402(a)
require that the contracting officer shall
require submission of data other than
certified cost or pricing data to the
extent necessary to determine the
reasonableness of the price. We agree
with the respondent’s comment that the
definition of ‘‘information other than
cost or pricing data’’, in effect prior to
this final rule, included cost or pricing
data for which certification is
determined inapplicable after
submission. The contracting officer
must obtain whatever level of data is
PO 00000
Frm 00013
Fmt 4701
Sfmt 4700
53139
needed to determine price
reasonableness, but cannot require
certification of cost or pricing data
(should cost or pricing data be needed)
if the certification requirement of TINA
does not apply. However, some
contractors incorrectly believed that the
FAR definition of ‘‘information other
than cost or pricing data’’ in effect prior
to this final rule, precluded the
contracting officer from obtaining
uncertified cost or pricing data.
Section 2306a(h) of Title 10, as well
as section 254b(h) of Title 41 of the U.S.
Code, define both ‘‘cost or pricing data’’
and the circumstances under which that
data must be certified. When the data
must be certified, that data becomes
‘‘certified cost or pricing data.’’ If, after
submittal, no certification is required,
the data becomes ‘‘data other than
certified cost or pricing data.’’ Sections
2306a(d)(1) and 254b(d)(1) state: ‘‘When
certified cost or pricing data are not
required * * * the contracting officer
shall require submission of data other
than certified cost or pricing data to the
extent necessary to determine the
reasonableness of the price * * * the
contracting officer shall require that the
data submitted include, at a minimum,
appropriate information on prices at
which the same or similar items have
previously been sold. * * *’’ The
statutory requirement is to obtain data
necessary to determine the
reasonableness of the price. The
contracting officer cannot require
certification of the data submitted if
TINA does not require it to be certified.
If the contracting officer has no other
means to determine the reasonableness
of the price (the main requirement of
TINA), then the contracting officer shall
require the submission of the necessary
data needed to make that determination,
including, at a minimum, prices at
which the same or similar items have
been previously sold. TINA does not
prohibit obtaining cost or pricing data
when ‘‘certified cost or pricing data’’ is
not required to be obtained, but TINA
(10 U.S.C. 2306(d)), as well as the FAR,
provide requirements to ensure the
contracting officer does not require
more data than is necessary to
determine that the prices are fair and
reasonable.
28. Comment: The proposed rule
would lead contracting officers to
expect offerors to maintain traditional
Government cost accounting data for
commercial items.
Response: There is no requirement for
anything more than the type of
commercial data customarily
maintained. See FAR 15.403–3(a)(2),
FAR 15.403–3(c)(2), and FAR 15.403–
5(b)(2).
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
53140
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
29. Comment: Use of the word
‘‘claimed’’ at FAR 15.403–1(c)(3)(i)
reveals a great deal about the underlying
philosophy that is perpetuated
throughout the proposed rule.
Response: The word ‘‘claimed’’ in FAR
15.403–1(c)(3)(i) is not new; it is part of
the existing language. There is no
inference of intent on the use of the
word. The intent of the rule is to make
it clear that contracting officers must
obtain the level of data needed in order
to meet the requirements of TINA (10
U.S.C. 2306a(d)(1) and 41 U.S.C.
254b(d)(1)), which states that ‘‘* * * the
contracting officer shall require
submission of data * * * necessary to
determine the reasonableness of the
price * * *.’’
30. Comment: FAR subpart 15.4
should not be used to determine
whether or not an item being offered is
a commercial item.
Response: FAR subpart 15.4 is not
used to determine whether or not an
item is a commercial item. However, it
is appropriate in FAR subpart 15.4 to
require contracting officers to
affirmatively decide if an item being
offered meets the definition of
‘‘commercial item’’ before asking a
contractor to provide cost or pricing
data, if cost analysis is the contracting
officer’s only means to determine the
price to be fair and reasonable.
31. Comment: The proposed change to
FAR 15.403–3(c), Commercial Items,
states that even if an offeror provides
catalog or market pricing, the
contracting officer cannot assume that
such information would be sufficient to
establish a fair and reasonable price,
and therefore, the contracting officer
‘‘shall require’’ the offeror to submit data
other than certified cost or pricing data
to support further analysis.
Response: There was no substantive
change in the language in question; it is
essentially the existing language. The
language gives no mention to ‘‘market
pricing.’’ Considering FAR subpart 15.4
in its entirety, if there is adequate
market pricing, the contracting officer is
prohibited from requiring data from the
contractor (FAR 15.402(a) and FAR
15.403–3(a)). The current language and
revised language in this final rule only
requires submission of data other than
certified cost or pricing data in
accordance with the order of preference
at FAR 15.402(a), and then only to the
level of detail needed to support a
determination of a fair and reasonable
price.
32. Comment: The proposed change to
FAR 52.215–20, illustrates the
tremendous confusion the proposed rule
will cause and the onerous nature of the
pricing requirements for commercial
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
items. The proposed rule would
‘‘require’’ contracting officers to demand
that offerors proposing commercial
items submit ‘‘data other than certified
cost or pricing data’’ if the contracting
officer believes it is necessary to
determine prices fair and reasonable.
Proposed paragraph (b) of FAR 52.215–
20 then states that if the offeror is not
granted an exception from TINA, then
the offeror shall submit ‘‘data other than
certified cost or pricing data.’’
Response: FAR 52.215–20 clause
requires offerors to submit ‘‘data other
than certified cost or pricing data’’ if the
contracting officer believes it is
necessary to determine prices to be fair
and reasonable. The final rule clarifies
in paragraph (b) of the contract clause
FAR 52.215–20 that the data required
under Table 15–2 includes ‘‘data other
than certified cost or pricing data’’ as
well as ‘‘certified cost or pricing data’’.
33. Comment: Within the proposed
rule, the Councils have made significant
changes that result in the reprioritizing
of the Government’s pricing policy as
detailed at FAR 15.402.
Response: In response to comments,
the final rule reorganizes the FAR
15.402(a) to clarify the policy, but the
policy remains essentially unchanged.
See section A, Background.
34. Comment: The proposed rule
revisions at FAR 15.402(a) suggests that
the ‘‘data other than certified cost or
pricing data’’ is preferred over ‘‘certified
cost or pricing data’’, even when
certification is required by FAR 15.403–
4.
Response: In response to comments,
the final rule reorganizes FAR 15.402(a)
to emphasize that certified cost or
pricing data shall be obtained when
required by TINA. When certified cost
or pricing data are not required, the
order of preference at FAR 15.402(a)(2)
should generally be followed.
35. Comment: The DoD-specific issues
cited in the proposed rule and at the
public meeting have been adequately
addressed by the Director of Defense
Procurement and Acquisition Policy
through recent policy memos, policy
guidance, and contract pricing training.
These actions should be given a chance
to work before further regulatory
changes are made that would impede
the U.S. Government’s access to the
commercial marketplace.
Response: The purpose of the FAR
rulemaking is to eliminate confusion
throughout the Government and to
clarify for all agencies and their
contractors definitions and associated
responsibilities for the request and
submission of certified cost or pricing
data and data other than certified cost
or pricing data. While DoD guidance is
PO 00000
Frm 00014
Fmt 4701
Sfmt 4700
helpful to the DoD acquisition
workforce, years of experiences
throughout Government show that the
current FAR language is causing
confusion over what a contractor is
required to submit to support prices.
This confusion leads to inefficient
procurement processes and sometimes
leads to the Government paying
unreasonable prices. The revised
language clarifies the regulation, and is
consistent with TINA, by requiring the
contracting officer to obtain only the
data necessary to determine the fairness
and reasonableness of the price.
36. Comment: The current FAR rules,
when properly exercised, are already
capable of achieving fair and reasonable
prices and, in this respondent’s opinion,
the definitions are clear and
unambiguous, and contracting officers
have significant latitude under current
regulations to acquire data from
contractors to support price
reasonableness of commercial items.
Response: See section A, Background,
and also the responses to Specific
Comments numbers 7, 9, 11, and 23.
37. Comment: There are no proposed
changes to make contracting officers
aware that cost data from commercial
companies will most likely not be in a
form that complies with their
expectations, training, or experience.
Cost data from commercial companies
will not comply with Cost Accounting
Standards, FAR part 31, and are not
generally suitable for certification under
the Truth in Negotiations Act. The FAR
council should not use terminology that
is part of a cost-based contracting
process.
Response: Current regulations and
TINA already require contractors to
provide certified cost or pricing data,
and data other than certified cost or
pricing data as necessary, that will
enable the contracting officer to
determine fair and reasonable prices.
The rule clarifies the regulations by
using language consistent with TINA
more precisely. The rule does not
expand the contracting officer’s
authority to request data from
commercial companies when needed for
the determination that prices are fair
and reasonable. The challenge the
comment reflects may be real, but it is
not affected by the rule.
38. Comment: The proposed rule
would revise the order of preference of
data at FAR 15.402(a) and would
eliminate the distinction between ‘‘cost
or pricing data’’ and ‘‘information other
than cost or pricing data.’’
Response: The order of preference is
not changed. By eliminating the
ambiguous phrase ‘‘information other
than cost or pricing data,’’ the rule
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
clarifies and maintains the distinction
between ‘‘certified cost or pricing data’’
and ‘‘data other than certified cost or
pricing data,’’ tracking the statutory
distinctions. As stated in other
responses herein, the revised definitions
clearly describe what is required by
TINA and intended by this rule. TINA
defines ‘‘cost or pricing data,’’ and then
prescribes when such data shall be
certified. The nature and extent of ‘‘cost
or pricing data’’ is the same regardless
of whether it is certified or not. The
statute also prescribes when a contractor
must provide ‘‘data other than certified
cost or pricing data’’ (which includes
‘‘cost or pricing data’’ and judgmental
information) without being required to
certify it. Under the current law and
regulations, a contracting officer is
empowered to obtain all the data and
judgmental information needed to
determine a fair and reasonable price,
but is restricted as to which data, and
when that data, must be certified.
39. Comment: By eliminating the term
‘‘information’’ and substituting the term
‘‘data’’ the rule would add ambiguity as
to the legal status of the submission by
commercial companies that cannot
provide FAR compliant cost data.
Response: The use of the term ‘‘data’’
is consistent with the statute and with
the Government’s need to obtain factual
information to be used as a basis for
reasoning, discussion, or calculation.
The rule does not change the existing
strong limitations in the FAR on the
circumstances under which a
contracting officer can obtain certified
cost or pricing data from commercial
sources. It does not change the current
restrictions on the amount of data a
contracting officer can obtain (i.e., only
that data to the extent necessary to
determine fair and reasonable prices.)
The rule also retains the existing
flexibility to use contractor data formats.
40. Comment: The ‘‘of a type’’
language in the proposed rule at FAR
15.404–1(b)(2)(i) and FAR
15.401(b)(ii)(C) introduces ambiguity as
to the meaning of a commercial item. It
is recommended that the ‘‘of a type’’
language be deleted from the proposed
rule as it seems to add no clarity to the
definition of a commercial item or how
commercial items are to be priced.
Response: We believe the respondent
meant FAR 15.404–1(b)(2)(ii) and FAR
15.404–1(b)(2)(ii)(C). The references in
the comment either do not have the ‘‘of
a type’’ text, or the reference is
erroneous. These subparagraphs of the
FAR provide requirements for price
analysis and appropriately directs
contracting officers to consider price
comparisons even in situations when
the proposed item is ‘‘of a type’’ that is
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
customarily used by the general public
or non-governmental entities for
purposes other than governmental
purposes, a term used consistently in
the definition of commercial item at
FAR 2.101. This section also
appropriately directs contracting
officers to obtain technical assistance.
41. Comment: The proposed rule fails
to address the confusion in pricing
noncompetitive (sole-source)
commercial items and guides the
contracting officer to perform price
analysis of previous DoD (Government)
prices to determine price
reasonableness.
Response: The intent of the rule is for
contracting officers to follow the order
of preference, which includes price
analysis (including price analysis of
previous Government and nonGovernment sales). The Councils
recognize, however, that there has been
confusion over the type and amount of
data that can be required by a
contracting officer, particularly in noncompetitive (sole-source) acquisitions of
commercial items. Accordingly, for the
sake of clarification, changes were made
at FAR 15.402(a)(2)(ii)(A), FAR 15.403–
1(c)(3)(i), and FAR 15.403–3(c) to
emphasize the need for the contracting
officer to review the history of sales to
non-governmental and governmental
entities, determine whether an item is a
commercial item, and decide whether
certified cost or pricing data are
required. The changes to FAR 15.402(a)
provide sufficient flexibility to the
contracting officer to address the
specific contracting situation. As
revised, this rule clarifies that TINA
authorizes a contracting officer to obtain
data other than certified cost or pricing
data to the extent necessary to establish
a fair and reasonable price, even when
the acquisition is for a commercial item.
Therefore, the rule sets forth appropriate
guidance for determining fair and
reasonable prices.
This is a significant regulatory action
and, therefore, was subject to review
under Section 6(b) of Executive Order
12866, Regulatory Planning and Review,
dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
C. Regulatory Flexibility Act
The Department of Defense, the
General Services Administration, and
the National Aeronautics and Space
Administration certify that this final
rule will not have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601, et seq., because the
rule does not expand or diminish the
existing rights of the contracting officer
PO 00000
Frm 00015
Fmt 4701
Sfmt 4700
53141
to obtain cost data or pricing data.
Further, most acquisitions involving
small entities are under the threshold
for the submission of certified cost or
pricing data of $700,000, the new TINA
threshold (see FAR Case 2008–024, Item
I of this FAC). Finally, this rule will
benefit all entities, both large and small,
by clarifying the requirements for the
submission of ‘‘certified cost or pricing
data’’ and ‘‘data other than certified cost
or pricing data.’’
D. Paperwork Reduction Act
The Paperwork Reduction Act does
apply; however, these changes to the
FAR do not impose additional
information collection requirements to
the paperwork burden previously
approved under OMB Control Number
9000–0013.
List of Subjects in 48 CFR Parts 2, 4, 12,
14, 15, 16, 19, 27, 30, 31, 32, 42, 44, 49,
and 52
Government procurement.
Dated: August 18, 2010.
Edward Loeb,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 2, 4, 12, 14, 15, 16,
19, 27, 30, 31, 32, 42, 44, 49, and 52 as
set forth below:
■ 1. The authority citation for 48 CFR
parts 2, 4, 12, 14, 15, 16, 19, 27, 30, 31,
32, 42, 44, 49, and 52 continues to read
as follows:
■
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 2—DEFINITIONS OF WORDS
AND TERMS
2. Amend section 2.101 in paragraph
(b)(2) by—
■ a. Adding, in alphabetical order, the
definition ‘‘Certified cost or pricing
data’’;
■ b. Revising the introductory text of the
definition ‘‘Cost or pricing data’’;
■ c. Adding, in alphabetical order, the
definition ‘‘Data other than certified cost
or pricing data’’; and
■ d. Removing the definition
‘‘Information other than cost or pricing
data’’.
The added and revised text reads as
follows:
■
2.101
Definitions
*
*
*
*
*
(b) * * *
(2) * * *
Certified cost or pricing data means
‘‘cost or pricing data’’ that were required
to be submitted in accordance with FAR
15.403–4 and 15.403–5 and have been
certified, or are required to be certified,
E:\FR\FM\30AUR3.SGM
30AUR3
53142
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
in accordance with 15.406–2. This
certification states that, to the best of the
person’s knowledge and belief, the cost
or pricing data are accurate, complete,
and current as of a date certain before
contract award. Cost or pricing data are
required to be certified in certain
procurements (10 U.S.C. 2306a and 41
U.S.C. 254b).
*
*
*
*
*
Cost or pricing data (10 U.S.C.
2306a(h)(1) and 41 U.S.C. 254b) means
all facts that, as of the date of price
agreement, or, if applicable, an earlier
date agreed upon between the parties
that is as close as practicable to the date
of agreement on price, prudent buyers
and sellers would reasonably expect to
affect price negotiations significantly.
Cost or pricing data are factual, not
judgmental; and are verifiable. While
they do not indicate the accuracy of the
prospective contractor’s judgment about
estimated future costs or projections,
they do include the data forming the
basis for that judgment. Cost or pricing
data are more than historical accounting
data; they are all the facts that can be
reasonably expected to contribute to the
soundness of estimates of future costs
and to the validity of determinations of
costs already incurred. They also
include, but are not limited to, such
factors as—
*
*
*
*
*
Data other than certified cost or
pricing data means pricing data, cost
data, and judgmental information
necessary for the contracting officer to
determine a fair and reasonable price or
to determine cost realism. Such data
may include the identical types of data
as certified cost or pricing data,
consistent with Table 15–2 of 15.408,
but without the certification. The data
may also include, for example, sales
data and any information reasonably
required to explain the offeror’s
estimating process, including, but not
limited to—
(1) The judgmental factors applied
and the mathematical or other methods
used in the estimate, including those
used in projecting from known data; and
(2) The nature and amount of any
contingencies included in the proposed
price.
*
*
*
*
*
jlentini on DSKJ8SOYB1PROD with RULES3
PART 4—ADMINISTRATIVE MATTERS
4.704
[Amended]
3. Amend section 4.704 in paragraph
(b) by removing ‘‘for cost’’ and adding
‘‘for certified cost’’ in its place.
■ 4. Amend section 4.803 by revising
paragraphs (a)(17) and (b)(4) to read as
follows:
■
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
4.803
Contents of contract files.
*
*
*
*
*
(a) * * *
(17) Data and information related to
the contracting officer’s determination
of a fair and reasonable price. This may
include—
(i) Certified cost or pricing data;
(ii) Data other than certified cost or
pricing data;
(iii) Justification for waiver from the
requirement to submit certified cost or
pricing data; or
(iv) Certificates of Current Cost or
Pricing Data.
*
*
*
*
*
(b) * * *
(4) Certified cost or pricing data,
Certificates of Current Cost or Pricing
Data, or data other than certified cost or
pricing data; cost or price analysis; and
other documentation supporting
contractual actions executed by the
contract administration office.
*
*
*
*
*
PART 12—ACQUISITON OF
COMMERCIAL ITEMS
12.102
[Amended]
5. Amend section 12.102 in paragraph
(f)(2)(ii) by removing ‘‘Cost or pricing’’
and adding ‘‘Certified cost or pricing’’ in
its place.
■
12.504
[Amended]
6. Amend section 12.504 in paragraph
(a)(7) by removing ‘‘provide cost’’ and
adding ‘‘provide certified cost’’ in its
place.
■
PART 14—SEALED BIDDING
7. Amend section 14.201–7 by
removing from paragraph (a)(1)(ii) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place; and by revising paragraphs (b)(1)
and (c)(1) to read as follows:
■
14.201–7
Contract clauses.
*
*
*
*
*
(b)(1) When contracting by sealed
bidding, the contracting officer shall
insert the clause at 52.214–27, Price
Reduction for Defective Certified Cost or
Pricing Data—Modifications—Sealed
Bidding, in solicitations and contracts if
the contract amount is expected to
exceed the threshold for submission of
certified cost or pricing data at 15.403–
4(a)(1).
*
*
*
*
*
(c)(1) When contracting by sealed
bidding, the contracting officer shall
insert the clause at 52.214–28,
Subcontractor Certified Cost or Pricing
Data—Modifications—Sealed Bidding,
in solicitations and contracts if the
contract amount is expected to exceed
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
the threshold for submission of certified
cost or pricing data at 15.403–4(a)(1).
*
*
*
*
*
PART 15—CONTRACTING BY
NEGOTIATION
8. Amend section 15.204–5 by
revising paragraph (b)(5) to read as
follows:
■
15.204–5 Part IV—Representations and
Instructions.
*
*
*
*
*
(b) * * *
(5) Certified cost or pricing data (see
Table 15–2 of 15.408) or data other than
certified cost or pricing data.
*
*
*
*
*
■ 9. Amend section 15.402 by revising
the introductory text and paragraph (a)
to read as follows:
15.402
Pricing policy.
Contracting officers shall—
(a) Purchase supplies and services
from responsible sources at fair and
reasonable prices. In establishing the
reasonableness of the offered prices, the
contracting officer—
(1) Shall obtain certified cost or
pricing data when required by 15.403–
4, along with data other than certified
cost or pricing data as necessary to
establish a fair and reasonable price; or
(2) When certified cost or pricing data
are not required by 15.403–4, obtain
data other than certified cost or pricing
data as necessary to establish a fair and
reasonable price, generally using the
following order of preference in
determining the type of data required:
(i) No additional data from the offeror,
if the price is based on adequate price
competition, except as provided by
15.403–3(b).
(ii) Data other than certified cost or
pricing data such as—
(A) Data related to prices (e.g.,
established catalog or market prices,
sales to non-governmental and
governmental entities), relying first on
data available within the Government;
second, on data obtained from sources
other than the offeror; and, if necessary,
on data obtained from the offeror. When
obtaining data from the offeror is
necessary, unless an exception under
15.403–1(b)(1) or (2) applies, such data
submitted by the offeror shall include,
at a minimum, appropriate data on the
prices at which the same or similar
items have been sold previously,
adequate for evaluating the
reasonableness of the price.
(B) Cost data to the extent necessary
for the contracting officer to determine
a fair and reasonable price.
(3) Obtain the type and quantity of
data necessary to establish a fair and
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
reasonable price, but not more data than
is necessary. Requesting unnecessary
data can lead to increased proposal
preparation costs, generally extend
acquisition lead time, and consume
additional contractor and Government
resources. Use techniques such as, but
not limited to, price analysis, cost
analysis, and/or cost realism analysis to
establish a fair and reasonable price. If
a fair and reasonable price cannot be
established by the contracting officer
from the analyses of the data obtained
or submitted to date, the contracting
officer shall require the submission of
additional data sufficient for the
contracting officer to support the
determination of the fair and reasonable
price.
*
*
*
*
*
■ 10. Amend section 15.403 by revising
the section heading to read as follows:
15.403
data.
Obtaining certified cost or pricing
*
*
*
*
*
11. Amend section 15.403–1 by—
a. Revising the section heading,
paragraph (a), the introductory text of
paragraph (b), the heading to paragraph
(c) introductory text, and paragraph
(c)(3)(i);
■ b. Removing from paragraph
(c)(3)(iii)(A) ‘‘of cost’’ and adding ‘‘of
certified cost’’ in its place;
■ c. Revising paragraphs (c)(3)(iii)(B)
and (c)(3)(iii)(C);
■ d. Removing from paragraph (c)(3)(iv)
‘‘for cost’’ and adding ‘‘for certified cost’’
in its place; and
■ e. Revising the introductory text of
paragraph (c)(4).
The revised text reads as follows:
■
■
jlentini on DSKJ8SOYB1PROD with RULES3
15.403–1 Prohibition on obtaining certified
cost or pricing data (10 U.S.C. 2306a and 41
U.S.C. 254b).
(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 defined in FAR 2.101 to support a
determination of a fair and reasonable
price or cost realism)—
*
*
*
*
*
(c) Standards for exceptions from
certified cost or pricing data
requirements—* * *
(3) * * *
(i) Any acquisition of an item that the
contracting officer determines meets the
commercial item definition in 2.101, or
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
any modification, as defined in
paragraph (3)(i) of that definition, that
does not change the item from a
commercial item to a noncommercial
item, is exempt from the requirement for
certified cost or pricing data. If the
contracting officer determines that an
item claimed to be commercial is, in
fact, not commercial and that no other
exception or waiver applies, (e.g. the
acquisition is not based on adequate
price competition; the acquisition is not
based on prices set by law or regulation;
and the acquisition exceeds the
threshold for the submission of certified
cost or pricing data at 15.403–4(a)(1))
the contracting officer shall require
submission of certified cost or pricing
data.
*
*
*
*
*
(iii) * * *
(B) For acquisitions funded by DoD,
NASA, or Coast Guard, such
modifications of a commercial item are
exempt from the requirement for
submission of certified cost or pricing
data provided the total price of all such
modifications under a particular
contract action does not exceed the
greater of the threshold for obtaining
certified cost or pricing data in 15.403–
4 or 5 percent of the total price of the
contract at the time of contract award.
(C) For acquisitions funded by DoD,
NASA, or Coast Guard such
modifications of a commercial item are
not exempt from the requirement for
submission of certified cost or pricing
data on the basis of the exemption
provided for at 15.403–1(c)(3) if the total
price of all such modifications under a
particular contract action exceeds the
greater of the threshold for obtaining
certified cost or pricing data in 15.403–
4 or 5 percent of the total price of the
contract at the time of contract award.
*
*
*
*
*
(4) Waivers. The head of the
contracting activity (HCA) may, without
power of delegation, waive the
requirement for submission of certified
cost or pricing data in exceptional cases.
The authorization for the waiver and the
supporting rationale shall be in writing.
The HCA may consider waiving the
requirement if the price can be
determined to be fair and reasonable
without submission of certified cost or
pricing data. For example, if certified
cost or pricing data were furnished on
previous production buys and the
contracting officer determines such data
are sufficient, when combined with
updated data, a waiver may be granted.
If the HCA has waived the requirement
for submission of certified cost or
pricing data, the contractor or highertier subcontractor to whom the waiver
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
53143
relates shall be considered as having
been required to provide certified cost
or pricing data. Consequently, award of
any lower-tier subcontract expected to
exceed the certified cost or pricing data
threshold requires the submission of
certified cost or pricing data unless—
*
*
*
*
*
■ 12. Revise section 15.403–2 to read as
follows:
15.403–2 Other circumstances where
certified cost or pricing data are not
required.
(a) The exercise of an option at the
price established at contract award or
initial negotiation does not require
submission of certified cost or pricing
data.
(b) Certified cost or pricing data are
not required for proposals used solely
for overrun funding or interim billing
price adjustments.
■ 13. Revise section 15.403–3 to read as
follows:
15.403–3 Requiring data other than
certified cost or pricing data.
(a)(1) In those acquisitions that do not
require certified cost or pricing data, the
contracting officer shall—
(i) Obtain whatever data are available
from Government or other secondary
sources and use that data in determining
a fair and reasonable price;
(ii) Require submission of data other
than certified cost or pricing data, as
defined in 2.101, from the offeror to the
extent necessary to determine a fair and
reasonable price (10 U.S.C. 2306a(d)(1)
and 41 U.S.C. 254b(d)(1)) if the
contracting officer determines that
adequate data from sources other than
the offeror are not available. This
includes requiring data from an offeror
to support a cost realism analysis;
(iii) Consider whether cost data are
necessary to determine a fair and
reasonable price when there is not
adequate price competition;
(iv) Require that the data submitted by
the offeror include, at a minimum,
appropriate data on the prices at which
the same item or similar items have
previously been sold, adequate for
determining the reasonableness of the
price unless an exception under 15.403–
1(b)(1) or (2) applies; and
(v) Consider the guidance in section
3.3, chapter 3, volume I, of the Contract
Pricing Reference Guide cited at 15.404–
1(a)(7) to determine the data an offeror
shall be required to submit.
(2) The contractor’s format for
submitting the data should be used (see
15.403–5(b)(2)).
(3) The contracting officer shall
ensure that data used to support price
negotiations are sufficiently current to
E:\FR\FM\30AUR3.SGM
30AUR3
jlentini on DSKJ8SOYB1PROD with RULES3
53144
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
permit negotiation of a fair and
reasonable price. Requests for updated
offeror data should be limited to data
that affect the adequacy of the proposal
for negotiations, such as changes in
price lists.
(4) As specified in section 808 of the
Strom Thurmond National Defense
Authorization Act for Fiscal Year 1999
(Pub. L. 105–261), an offeror who does
not comply with a requirement to
submit data for a contract or subcontract
in accordance with paragraph (a)(1) of
this subsection is ineligible for award
unless the HCA determines that it is in
the best interest of the Government to
make the award to that offeror, based on
consideration of the following:
(i) The effort made to obtain the data.
(ii) The need for the item or service.
(iii) Increased cost or significant harm
to the Government if award is not made.
(b) Adequate price competition. When
adequate price competition exists (see
15.403–1(c)(1)), generally no additional
data are necessary to determine the
reasonableness of price. However, if
there are unusual circumstances where
it is concluded that additional data are
necessary to determine the
reasonableness of price, the contracting
officer shall, to the maximum extent
practicable, obtain the additional data
from sources other than the offeror. In
addition, the contracting officer should
request data to determine the cost
realism of competing offers or to
evaluate competing approaches.
(c) Commercial items. (1) At a
minimum, the contracting officer must
use price analysis to determine whether
the price is fair and reasonable
whenever the contracting officer
acquires a commercial item (see 15.404–
1(b)). The fact that a price is included
in a catalog does not, in and of itself,
make it fair and reasonable. If the
contracting officer cannot determine
whether an offered price is fair and
reasonable, even after obtaining
additional data from sources other than
the offeror, then the contracting officer
shall require the offeror to submit data
other than certified cost or pricing data
to support further analysis (see 15.404–
1). This data may include history of
sales to non-governmental and
governmental entities, cost data, or any
other information the contracting officer
requires to determine the price is fair
and reasonable. Unless an exception
under 15.403–1(b)(1) or (2) applies, the
contracting officer shall require that the
data submitted by the offeror include, at
a minimum, appropriate data on the
prices at which the same item or similar
items have previously been sold,
adequate for determining the
reasonableness of the price.
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
(2) Limitations relating to commercial
items (10 U.S.C. 2306a(d)(2) and 41
U.S.C. 254b(d)(2)). (i) The contracting
officer shall limit requests for sales data
relating to commercial items to data for
the same or similar items during a
relevant time period.
(ii) The contracting officer shall, to
the maximum extent practicable, limit
the scope of the request for data relating
to commercial items to include only
data that are in the form regularly
maintained by the offeror as part of its
commercial operations.
(iii) The Government shall not
disclose outside the Government data
obtained relating to commercial items
that is exempt from disclosure under
24.202(a) or the Freedom of Information
Act (5 U.S.C. 552(b)).
(3) For services that are not offered
and sold competitively in substantial
quantities in the commercial
marketplace, but are of a type offered
and sold competitively in substantial
quantities in the commercial
marketplace, see 15.403–1(c)(3)(ii).
14. Amend section 15.403–4 by
revising the section heading, and
paragraphs (a), (b), and (c) to read as
follows:
15.403–4 Requiring certified cost or
pricing data (10 U.S.C. 2306a and 41 U.S.C.
254b).
(a)(1) The contracting officer shall
obtain certified cost or pricing data only
if the contracting officer concludes that
none of the exceptions in 15.403–1(b)
applies. However, if the contracting
officer has reason to believe exceptional
circumstances exist and has sufficient
data available to determine a fair and
reasonable price, then the contracting
officer should consider requesting a
waiver under the exception at 15.403–
1(b)(4). The threshold for obtaining
certified cost or pricing data is
$700,000. Unless an exception applies,
certified cost or pricing data are
required before accomplishing any of
the following actions expected to exceed
the current threshold or, in the case of
existing contracts, the threshold
specified in the contract:
(i) The award of any negotiated
contract (except for undefinitized
actions such as letter contracts).
(ii) The award of a subcontract at any
tier, if the contractor and each highertier subcontractor were required to
furnish certified cost or pricing data (but
see waivers at 15.403–1(c)(4)).
(iii) The modification of any sealed
bid or negotiated contract (whether or
not certified cost or pricing data were
initially required) or any subcontract
covered by paragraph (a)(1)(ii) of this
subsection. Price adjustment amounts
PO 00000
Frm 00018
Fmt 4701
Sfmt 4700
must consider both increases and
decreases (e.g., a $200,000 modification
resulting from a reduction of $500,000
and an increase of $300,000 is a pricing
adjustment exceeding $700,000). This
requirement does not apply when
unrelated and separately priced changes
for which certified cost or pricing data
would not otherwise be required are
included for administrative convenience
in the same modification. Negotiated
final pricing actions (such as
termination settlements and total final
price agreements for fixed-price
incentive and redeterminable contracts)
are contract modifications requiring
certified cost or pricing data if—
(A) The total final price agreement for
such settlements or agreements exceeds
the pertinent threshold set forth at
paragraph (a)(1) of this subsection; or
(B) The partial termination settlement
plus the estimate to complete the
continued portion of the contract
exceeds the pertinent threshold set forth
at paragraph (a)(1) of this subsection
(see 49.105(c)(15)).
(2) Unless prohibited because an
exception at 15.403–1(b) applies, the
head of the contracting activity, without
power of delegation, may authorize the
contracting officer to obtain certified
cost or pricing data for pricing actions
below the pertinent threshold in
paragraph (a)(1) of this subsection,
provided the action exceeds the
simplified acquisition threshold. The
head of the contracting activity shall
justify the requirement for certified cost
or pricing data. The documentation
shall include a written finding that
certified cost or pricing data are
necessary to determine whether the
price is fair and reasonable and the facts
supporting that finding.
(b) When certified cost or pricing data
are required, the contracting officer
shall require the contractor or
prospective contractor to submit to the
contracting officer (and to have any
subcontractor or prospective
subcontractor submit to the prime
contractor or appropriate subcontractor
tier) the following in support of any
proposal:
(1) The certified cost or pricing data
and data other than certified cost or
pricing data required by the contracting
officer to determine that the price is fair
and reasonable.
(2) A Certificate of Current Cost or
Pricing Data, in the format specified in
15.406–2, certifying that to the best of
its knowledge and belief, the cost or
pricing data were accurate, complete,
and current as of the date of agreement
on price or, if applicable, an earlier date
agreed upon between the parties that is
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
as close as practicable to the date of
agreement on price.
(c) If certified cost or pricing data are
requested and submitted by an offeror,
but an exception is later found to apply,
the data must not be considered
certified cost or pricing data as defined
in 2.101 and must not be certified in
accordance with 15.406–2.
*
*
*
*
*
■ 15. Revise section 15.403–5 to read as
follows:
jlentini on DSKJ8SOYB1PROD with RULES3
15.403–5 Instructions for submission of
certified cost or pricing data and data other
than certified cost or pricing data.
(a) Taking into consideration the
policy at 15.402, the contracting officer
shall specify in the solicitation (see
15.408 (l) and (m))—
(1) Whether certified cost or pricing
data are required;
(2) That, in lieu of submitting certified
cost or pricing data, the offeror may
submit a request for exception from the
requirement to submit certified cost or
pricing data;
(3) Any requirement for data other
than certified cost or pricing data; and
(4) The requirement for necessary
preaward or postaward access to
offeror’s records.
(b)(1) Format for submission of
certified cost or pricing data. When
certification is required, the contracting
officer may require submission of
certified cost or pricing data in the
format indicated in Table 15–2 of
15.408, specify an alternative format, or
permit submission in the contractor’s
format (See 15.408(l)(1)), unless the data
are required to be submitted on one of
the termination forms specified in
subpart 49.6.
(2) Format for submission of data
other than certified cost or pricing data.
When required by the contracting
officer, data other than certified cost or
pricing data may be submitted in the
offeror’s own format unless the
contracting officer decides that use of a
specific format is essential for
evaluating and determining that the
price is fair and reasonable and the
format has been described in the
solicitation.
(3) Format for submission of data
supporting forward pricing rate
agreements. Data supporting forward
pricing rate agreements or final indirect
cost proposals shall be submitted in a
form acceptable to the contracting
officer.
■ 16. Amend section 15.404–1 by—
■ a. Removing from paragraphs (a)(2)
and (a)(3) ‘‘when cost’’ and adding
‘‘when certified cost’’ in its place;
■ b. Revising paragraph (a)(4) and the
second sentence of paragraph (a)(6);
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
c. Revising the heading of paragraph
(b);
■ d. Adding three sentences to the end
of paragraph (b)(1);
■ e. Revising the second sentence of
paragraph (b)(2)(i), and paragraphs
(b)(2)(ii) and (b)(2)(vii);
■ f. Revising paragraph (c)(1);
■ g. Removing from the introductory
text of paragraph (c)(2)(i) ‘‘cost or’’ and
adding ‘‘cost data or’’ in its place;
■ h. Revising paragraph (c)(2)(v);
■ i. Removing from paragraph (d)(3)
‘‘contractors’’ and adding ‘‘contractors’ ’’
in its place;
■ j. Removing from paragraph (e)(1)
‘‘may’’ and adding ‘‘should’’ in its place,
and removing ‘‘equipment, real’’ and
adding ‘‘equipment or real’’ in its place;
■ k. Adding paragraph (e)(3); and
■ l. Removing from the third sentence of
paragraph (f)(2) ‘‘may’’ and adding
‘‘should’’ in its place.
The revised and added text reads as
follows:
■
15.404–1
Proposal analysis techniques.
(a) * * *
(4) Cost analysis may also be used to
evaluate data other than certified cost or
pricing data to determine cost
reasonableness or cost realism when a
fair and reasonable price cannot be
determined through price analysis alone
for commercial or non-commercial
items.
*
*
*
*
*
(6) * * * Any discrepancy or mistake
of fact (such as duplications, omissions,
and errors in computation) contained in
the certified cost or pricing data or data
other than certified cost or pricing data
submitted in support of a proposal shall
be brought to the contracting officer’s
attention for appropriate action.
*
*
*
*
*
(b) Price analysis for commercial and
non-commercial items. (1) * * * Unless
an exception from the requirement to
obtain certified cost or pricing data
applies under 15.403–1(b)(1) or (b)(2), at
a minimum, the contracting officer shall
obtain appropriate data, without
certification, on the prices at which the
same or similar items have previously
been sold and determine if the data is
adequate for evaluating the
reasonableness of the price. Price
analysis may include evaluating data
other than certified cost or pricing data
obtained from the offeror or contractor
when there is no other means for
determining a fair and reasonable price.
Contracting officers shall obtain data
other than certified cost or pricing data
from the offeror or contractor for all
acquisitions (including commercial item
acquisitions), if that is the contracting
PO 00000
Frm 00019
Fmt 4701
Sfmt 4700
53145
officer’s only means to determine the
price to be fair and reasonable.
(2) * * *
(i) * * * Normally, adequate price
competition establishes a fair and
reasonable price (see 15.403–1(c)(1)).
(ii) Comparison of the proposed prices
to historical prices paid, whether by the
Government or other than the
Government, for the same or similar
items. This method may be used for
commercial items including those ‘‘of a
type’’ or requiring minor modifications.
(A) The prior price must be a valid
basis for comparison. If there has been
a significant time lapse between the last
acquisition and the present one, if the
terms and conditions of the acquisition
are significantly different, or if the
reasonableness of the prior price is
uncertain, then the prior price may not
be a valid basis for comparison.
(B) The prior price must be adjusted
to account for materially differing terms
and conditions, quantities and market
and economic factors. For similar items,
the contracting officer must also adjust
the prior price to account for material
differences between the similar item
and the item being procured.
(C) Expert technical advice should be
obtained when analyzing similar items,
or commercial items that are ‘‘of a type’’
or requiring minor modifications, to
ascertain the magnitude of changes
required and to assist in pricing the
required changes.
*
*
*
*
*
(vii) Analysis of data other than
certified cost or pricing data (as defined
at 2.101) provided by the offeror.
*
*
*
*
*
(c) * * * (1) Cost analysis is the
review and evaluation of any separate
cost elements and profit or fee in an
offeror’s or contractor’s proposal, as
needed to determine a fair and
reasonable price or to determine cost
realism, and the application of judgment
to determine how well the proposed
costs represent what the cost of the
contract should be, assuming reasonable
economy and efficiency.
*
*
*
*
*
(2) * * *
(v) Review to determine whether any
cost data or pricing data, necessary to
make the offeror’s proposal suitable for
negotiation, have not been either
submitted or identified in writing by the
offeror. If there are such data, the
contracting officer shall attempt to
obtain and use them in the negotiations
or make satisfactory allowance for the
incomplete data.
*
*
*
*
*
(e) * * *
E:\FR\FM\30AUR3.SGM
30AUR3
53146
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
(3) The contracting officer should
request technical assistance in
evaluating pricing related to items that
are ‘‘similar to’’ items being purchased,
or commercial items that are ‘‘of a type’’
or requiring minor modifications, to
ascertain the magnitude of changes
required and to assist in pricing the
required changes.
*
*
*
*
*
■ 17. Amend section 15.404–2 by—
■ a. Revising the section heading;
■ b. Removing from the second sentence
in paragraph (a)(1) and the introductory
text of paragraph (a)(2) ‘‘must’’ and
adding ‘‘shall’’ in its place;
■ c. Revising the introductory text of
paragraph (a)(2)(iii) and paragraph
(a)(2)(iii)(F); and
■ d. Removing from the introductory
text of paragraph (c)(1) ‘‘may’’ and
adding ‘‘should’’ in its place.
The revised text reads as follows:
15.404–2 Data to support proposal
analysis.
(a) * * *
(2) * * *
(iii) Information to help contracting
officers determine commerciality and a
fair and reasonable price, including—
*
*
*
*
*
(F) Identifying general market
conditions affecting determinations of
commerciality and a fair and reasonable
price.
*
*
*
*
*
■ 18. Amend section 15.404–3 by—
■ a. Revising paragraphs (a) and (b)(3);
■ b. Revising the introductory text of
paragraph (c);
■ c. Removing from the introductory
text of paragraph (c)(1)
‘‘subcontractor(s), cost’’ and adding
‘‘subcontractor(s), certified cost’’ in its
place;
■ d. Removing from paragraph (c)(1)(ii)
‘‘pertinent cost’’ and adding ‘‘pertinent
certified cost’’ in its place;
■ e. Revising paragraph (c)(2);
■ f. Removing from paragraphs (c)(3)
and (c)(4) ‘‘Subcontractor cost’’ and
adding ‘‘Subcontractor certified cost’’ in
its place; and
■ g. Removing from paragraph (c)(5)
‘‘Government cost’’ and adding
‘‘Government certified cost’’ in its place.
The revised text reads as follows:
jlentini on DSKJ8SOYB1PROD with RULES3
15.404–3 Subcontract pricing
considerations.
(a) The contracting officer is
responsible for the determination of a
fair and reasonable price for the prime
contract, including subcontracting costs.
The contracting officer should consider
whether a contractor or subcontractor
has an approved purchasing system, has
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
performed cost or price analysis of
proposed subcontractor prices, or has
negotiated the subcontract prices before
negotiation of the prime contract, in
determining the reasonableness of the
prime contract price. This does not
relieve the contracting officer from the
responsibility to analyze the contractor’s
submission, including subcontractor’s
certified cost or pricing data.
(b) * * *
(3) When required by paragraph (c) of
this subsection, submit subcontractor
certified cost or pricing data to the
Government as part of its own certified
cost or pricing data.
(c) Any contractor or subcontractor
that is required to submit certified cost
or pricing data also shall obtain and
analyze certified cost or pricing data
before awarding any subcontract,
purchase order, or modification
expected to exceed the certified cost or
pricing data threshold, unless an
exception in 15.403–1(b) applies to that
action.
*
*
*
*
*
(2) The contracting officer should
require the contractor or subcontractor
to submit to the Government (or cause
submission of) subcontractor certified
cost or pricing data below the
thresholds in paragraph (c)(1) of this
subsection and data other than certified
cost or pricing data that the contracting
officer considers necessary for
adequately pricing the prime contract.
*
*
*
*
*
■ 19. Amend section 15.406–2 by
revising the introductory text of
paragraph (a), and paragraph (e) to read
as follows:
15.406–2 Certificate of current cost or
pricing data.
(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.
*
*
*
*
*
(e) If certified cost or pricing data are
requested by the Government and
submitted by an offeror, but an
exception is later found to apply, the
data shall not be considered certified
cost or pricing data and shall not be
certified in accordance with this
subsection.
■ 20. Amend section 15.406–3 by
revising paragraphs (a)(5) and (a)(6), and
the second and third sentences of
paragraph (a)(7) to read as follows:
15.406–3
Documenting the negotiation.
(a) * * *
PO 00000
Frm 00020
Fmt 4701
Sfmt 4700
(5) If certified cost or pricing data
were not required in the case of any
price negotiation exceeding the certified
cost or pricing data threshold, the
exception used and the basis for it.
(6) If certified cost or pricing data
were required, the extent to which the
contracting officer—
(i) Relied on the certified cost or
pricing data submitted and used them in
negotiating the price;
(ii) Recognized as inaccurate,
incomplete, or noncurrent any certified
cost or pricing data submitted; the
action taken by the contracting officer
and the contractor as a result; and the
effect of the defective data on the price
negotiated; or
(iii) Determined that an exception
applied after the data were submitted
and, therefore, considered not to be
certified cost or pricing data.
(7) * * * Where the determination of
a fair and reasonable price is based on
cost analysis, the summary shall address
each major cost element. When
determination of a fair and reasonable
price is based on price analysis, the
summary shall include the source and
type of data used to support the
determination.
*
*
*
*
*
■ 21. Amend section 15.407–1 by—
■ a. Revising the section heading;
■ b. Removing from the first sentence in
paragraph (a) ‘‘any cost’’ and adding
‘‘any certified cost’’ in its place;
■ c. Revising paragraph (b)(1);
■ d. Removing from paragraphs (b)(2)
and (b)(3)(ii) ‘‘the cost’’ and adding ‘‘the
certified cost’’ in its place;
■ e. Revising paragraph (b)(3)(iv);
■ f. Removing from paragraph (b)(4)
‘‘understated cost’’ and adding
‘‘understated certified cost’’ in its place;
■ g. Removing from paragraph (b)(5)(ii)
‘‘the cost’’ and adding ‘‘the certified cost’’
in its place;
■ h. Removing from the first sentence in
paragraph (b)(7)(iii) ‘‘defective cost’’ and
adding ‘‘defective certified cost’’ in its
place;
■ i. Removing from the first sentence in
paragraph (e) ‘‘Defective Cost’’ each time
it appears (twice) and adding ‘‘Defective
Certified Cost’’ in its place; and
■ j. Removing from the first sentence in
the introductory text of paragraph (f)
and the first sentence of paragraph (f)(2)
‘‘subcontractor cost’’ and adding
‘‘subcontractor certified cost’’ in its
place.
The revised text reads as follows:
15.407–1
data.
Defective certified cost or pricing
*
*
*
*
*
(b)(1) If, after award, certified cost or
pricing data are found to be inaccurate,
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
jlentini on DSKJ8SOYB1PROD with RULES3
incomplete, or noncurrent as of the date
of final agreement on price or an earlier
date agreed upon by the parties given on
the contractor’s or subcontractor’s
Certificate of Current Cost or Pricing
Data, the Government is entitled to a
price adjustment, including profit or fee,
of any significant amount by which the
price was increased because of the
defective data. This entitlement is
ensured by including in the contract one
of the clauses prescribed in 15.408(b)
and (c) and is set forth in the clauses at
52.215–10, Price Reduction for
Defective Certified Cost or Pricing Data,
and 52.215–11, Price Reduction for
Defective Certified Cost or Pricing
Data—Modifications. The clauses give
the Government the right to a price
adjustment for defects in certified cost
or pricing data submitted by the
contractor, a prospective subcontractor,
or an actual subcontractor.
*
*
*
*
*
(3) * * *
(iv) Certified cost or pricing data were
required; however, the contractor or
subcontractor did not submit a
Certificate of Current Cost or Pricing
Data relating to the contract.
*
*
*
*
*
d. In Table 15–2, which follows
paragraph (n), by—
■ 1. Revising the table heading, the
introductory text, and Notes 1 and 2;
■ 2. Revising the first sentence of
paragraph B., and paragraph C. of the I.
General Instructions; and
■ 3. Revising the introductory text of
paragraph A. and paragraph A.(2) of the
II. Cost Elements.
The revised text reads as follows:
■
15.408 Solicitation provisions and
contract clauses.
*
*
*
*
(b) Price Reduction for Defective
Certified Cost or Pricing Data. The
contracting officer shall, when
contracting by negotiation, insert the
clause at 52.215–10, Price Reduction for
Defective Certified Cost or Pricing Data,
in solicitations and contracts when it is
contemplated that certified cost or
pricing data will be required from the
contractor or any subcontractor (see
15.403–4).
(c) Price Reduction for Defective
Certified Cost or Pricing Data—
Modifications. The contracting officer
shall, when contracting by negotiation,
insert the clause at 52.215–11, Price
Reduction for Defective Certified Cost or
Pricing Data—Modifications, in
15.407–2 [Amended]
solicitations and contracts when it is
■ 22. Amend section 15.407–2 in
contemplated that certified cost or
paragraph (c)(1) by removing ‘‘requiring pricing data will be required from the
cost’’ and adding ‘‘requiring certified
contractor or any subcontractor (see
cost’’ in its place.
15.403–4) for the pricing of contract
modifications, and the clause prescribed
■ 23. Amend section 15.407–3 by
revising paragraph (a) to read as follows: in paragraph (b) of this section has not
been included.
15.407–3 Forward pricing rate agreements.
(d) Subcontractor Certified Cost or
(a) When certified cost or pricing data Pricing Data. The contracting officer
are required, offerors are required to
shall insert the clause at 52.215–12,
describe any forward pricing rate
Subcontractor Certified Cost or Pricing
agreements (FPRAs) in each specific
Data, in solicitations and contracts
pricing proposal to which the rates
when the clause prescribed in paragraph
apply and to identify the latest cost or
(b) of this section is included.
pricing data already submitted in
(e) Subcontractor Certified Cost or
accordance with the FPRA. All data
Pricing Data—Modifications. The
submitted in connection with the FPRA, contracting officer shall insert the clause
updated as necessary, form a part of the at 52.215–13, Subcontractor Certified
total data that the offeror certifies to be
Cost or Pricing Data—Modifications, in
accurate, complete, and current at the
solicitations and contracts when the
time of agreement on price for an initial clause prescribed in paragraph (c) of
contract or for a contract modification.
this section is included.
(See the Certificate of Current Cost or
*
*
*
*
*
Pricing Data at 15.406–2.)
(g) Pension Adjustments and Asset
*
*
*
*
*
Reversions. The contracting officer shall
insert the clause at 52.215–15, Pension
■ 24. Amend section 15.408 by—
Adjustments and Asset Reversions, in
■ a. Revising paragraphs (b), (c), (d), (e),
solicitations and contracts for which it
and (g);
is anticipated that certified cost or
■ b. Removing from paragraph (j) ‘‘that
pricing data will be required or for
cost’’ and adding ‘‘that certified cost’’ in
which any preaward or postaward cost
its place;
determinations will be subject to part
■ c. Revising paragraph (k), the
31.
introductory text of paragraph (l), and
*
*
*
*
*
paragraphs (l)(1), (l)(4), and (m); and
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
*
PO 00000
Frm 00021
Fmt 4701
Sfmt 4700
53147
(k) Notification of Ownership
Changes. The contracting officer shall
insert the clause at 52.215–19,
Notification of Ownership Changes, in
solicitations and contracts for which it
is contemplated that certified cost or
pricing data will be required or for
which any preaward or postaward cost
determination will be subject to subpart
31.2.
(l) Requirements for Certified Cost or
Pricing Data and Data Other Than
Certified Cost or Pricing Data.
Considering the hierarchy at 15.402, the
contracting officer shall insert the
provision at 52.215–20, Requirements
for Certified Cost or Pricing Data and
Data Other Than Certified Cost or
Pricing Data, in solicitations if it is
reasonably certain that certified cost or
pricing data or data other than certified
cost or pricing data will be required.
This provision also provides
instructions to offerors on how to
request an exception from the
requirement to submit certified cost or
pricing data. The contracting officer
shall—
(1) Use the provision with its
Alternate I to specify a format for
certified cost or pricing data other than
the format required by Table 15–2 of
this section;
*
*
*
*
*
(4) Replace the basic provision with
its Alternate IV if certified cost or
pricing data are not expected to be
required because an exception may
apply, but data other than certified cost
or pricing data will be required as
described in 15.403–3.
(m) Requirements for Certified Cost or
Pricing Data and Data Other Than
Certified Cost or Pricing Data—
Modifications. Considering the
hierarchy at 15.402, the contracting
officer shall insert the clause at 52.215–
21, Requirements for Certified Cost or
Pricing Data and Data Other Than
Certified Cost or Pricing Data—
Modifications, in solicitations and
contracts if it is reasonably certain that
certified cost or pricing data or data
other than certified cost or pricing data
will be required for modifications. This
clause also provides instructions to
contractors on how to request an
exception from the requirement to
submit certified cost or pricing data.
The contracting officer shall—
(1) Use the clause with its Alternate
I to specify a format for certified cost or
pricing data other than the format
required by Table 15–2 of this section;
(2) Use the clause with its Alternate
II if copies of the proposal are to be sent
to the ACO and contract auditor;
E:\FR\FM\30AUR3.SGM
30AUR3
53148
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
(3) Use the clause with its Alternate
III if submission via electronic media is
required; and
(4) Replace the basic clause with its
Alternate IV if certified cost or pricing
data are not expected to be required
because an exception may apply, but
data other than certified cost or pricing
data will be required as described in
15.403–3.
*
*
*
*
*
Table 15–2—Instructions for Submitting
Cost/Price Proposals When Certified
Cost or Pricing Data Are Required
This document provides instructions
for preparing a contract pricing proposal
when certified cost or pricing data are
required.
Note 1: There is a clear distinction between
submitting certified cost or pricing data and
merely making available books, records, and
other documents without identification. The
requirement for submission of certified cost
or pricing data is met when all accurate
certified cost or pricing data reasonably
available to the offeror have been submitted,
either actually or by specific identification, to
the Contracting Officer or an authorized
representative. As later data come into your
possession, it should be submitted promptly
to the Contracting Officer in a manner that
clearly shows how the data relate to the
offeror’s price proposal. The requirement for
submission of certified cost or pricing data
continues up to the time of agreement on
price, or an earlier date agreed upon between
the parties if applicable.
Note 2: By submitting your proposal, you
grant the Contracting Officer or an authorized
representative the right to examine records
that formed the basis for the pricing proposal.
That examination can take place at any time
before award. It may include those books,
records, documents, and other types of
factual data (regardless of form or whether
the data are specifically referenced or
included in the proposal as the basis for
pricing) that will permit an adequate
evaluation of the proposed price.
I. General Instructions
jlentini on DSKJ8SOYB1PROD with RULES3
*
*
*
*
*
B. In submitting your proposal, you
must include an index, appropriately
referenced, of all the certified cost or
pricing data and information
accompanying or identified in the
proposal. * * *
C. As part of the specific information
required, you must submit, with your
proposal—
(1) Certified cost or pricing data (as
defined at FAR 2.101). You must clearly
identify on your cover sheet that
certified cost or pricing data are
included as part of the proposal.
(2) Information reasonably required to
explain your estimating process,
including—
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
(i) The judgmental factors applied and
the mathematical or other methods used
in the estimate, including those used in
projecting from known data; and
(ii) The nature and amount of any
contingencies included in the proposed
price.
*
*
*
*
*
II. Cost Elements
*
*
*
*
*
A. Materials and services. Provide a
consolidated priced summary of
individual material quantities included
in the various tasks, orders, or contract
line items being proposed and the basis
for pricing (vendor quotes, invoice
prices, etc.). Include raw materials,
parts, components, assemblies, and
services to be produced or performed by
others. For all items proposed, identify
the item and show the source, quantity,
and price. Conduct price analyses of all
subcontractor proposals. Conduct cost
analyses for all subcontracts when
certified cost or pricing data are
submitted by the subcontractor. Include
these analyses as part of your own
certified cost or pricing data
submissions for subcontracts expected
to exceed the appropriate threshold in
FAR 15.403–4. Submit the subcontractor
certified cost or pricing data and data
other than certified cost or pricing data
as part of your own certified cost or
pricing data as required in paragraph
IIA(2) of this table. These requirements
also apply to all subcontractors if
required to submit certified cost or
pricing data.
*
*
*
*
*
(2) All Other. Obtain certified cost or
pricing data from prospective sources
for those acquisitions (such as
subcontracts, purchase orders, material
order, etc.) exceeding the threshold set
forth in FAR 15.403–4 and not
otherwise exempt, in accordance with
FAR 15.403–1(b) (i.e., adequate price
competition, commercial items, prices
set by law or regulation or waiver). Also
provide data showing the basis for
establishing source and reasonableness
of price. In addition, provide a summary
of your cost analysis and a copy of
certified cost or pricing data submitted
by the prospective source in support of
each subcontract, or purchase order that
is the lower of either $12.5 million or
more, or both more than the pertinent
certified cost or pricing data threshold
and more than 10 percent of the prime
contractor’s proposed price. Also submit
any information reasonably required to
explain your estimating process
(including the judgmental factors
applied and the mathematical or other
methods used in the estimate, including
PO 00000
Frm 00022
Fmt 4701
Sfmt 4700
those used in projecting from known
data, and the nature and amount of any
contingencies included in the price).
The Contracting Officer may require you
to submit cost or pricing data in support
of proposals in lower amounts.
Subcontractor certified cost or pricing
data must be accurate, complete and
current as of the date of final price
agreement, or an earlier date agreed
upon by the parties, given on the prime
contractor’s Certificate of Current Cost
or Pricing Data. The prime contractor is
responsible for updating a prospective
subcontractor’s data. For standard
commercial items fabricated by the
offeror that are generally stocked in
inventory, provide a separate cost
breakdown, if priced based on cost. For
interorganizational transfers priced at
cost, provide a separate breakdown of
cost elements. Analyze the certified cost
or pricing data and submit the results of
your analysis of the prospective source’s
proposal. When submission of a
prospective source’s certified cost or
pricing data is required as described in
this paragraph, it must be included as
part of your own certified cost or pricing
data. You must also submit any data
other than certified cost or pricing data
obtained from a subcontractor, either
actually or by specific identification,
along with the results of any analysis
performed on that data.
*
*
*
*
*
PART 16—TYPES OF CONTRACTS
16.202–2
[Amended]
25. Amend section 16.202–2 by
removing from paragraph (b) ‘‘valid
cost’’ and adding ‘‘valid certified cost’’ in
its place.
■ 26. Amend section 16.203–2 by
revising paragraph (b) to read as follows:
■
16.203–2
Application.
*
*
*
*
*
(b) In contracts that do not require
submission of certified cost or pricing
data, the contracting officer shall obtain
adequate data to establish the base level
from which adjustment will be made
and may require verification of data
submitted.
■ 27. Amend section 16.603–2 by
revising the first sentence of paragraph
(c) to read as follows:
16.603–2
Application.
*
*
*
*
*
(c) Each letter contract shall, as
required by the clause at 52.216–25,
Contract Definitization, contain a
negotiated definitization schedule
including (1) dates for submission of the
contractor’s price proposal, required
certified cost or pricing data and data
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
other than certified cost or pricing data;
and, if required, make-or-buy and
subcontracting plans, (2) a date for the
start of negotiations, and (3) a target date
for definitization, which shall be the
earliest practicable date for
definitization. * * *
*
*
*
*
*
■ 28. Amend section 16.603–4 by
revising the second sentence of
paragraph (b)(3) to read as follows:
16.603–4
Contract clauses.
*
*
*
*
*
(b) * * *
(3) * * * If at the time of entering
into the letter contract, the contracting
officer knows that the definitive
contract will be based on adequate price
competition or will otherwise meet the
criteria of 15.403–1 for not requiring
submission of certified cost or pricing
data, the words ‘‘and certified cost or
pricing data in accordance with FAR
15.408, Table 15–2 supporting its
proposal’’ may be deleted from
paragraph (a) of the clause. * * *
*
*
*
*
*
PART 19—SMALL BUSINESS
PROGRAMS
*
*
*
*
(d) * * *
(3) Ensure that the subcontracting
goals are consistent with the offeror’s
certified cost or pricing data or data
other than certified cost or pricing data.
*
*
*
*
*
■ 30. Amend section 19.806 by revising
the second and third sentences of
paragraph (a) to read as follows:
jlentini on DSKJ8SOYB1PROD with RULES3
Pricing the 8(a) contract.
(a) * * * If required by subpart 15.4,
the SBA shall obtain certified cost or
pricing data from the 8(a) contractor. If
the SBA requests audit assistance to
determine the proposed price to be fair
and reasonable in a sole source
acquisition, the contracting activity
shall furnish it to the extent it is
available.
*
*
*
*
*
19.807
[Amended]
17:53 Aug 27, 2010
[Amended]
32. Amend section 27.202–5 by
removing from paragraph (a)(1)(i)
‘‘which cost’’ and adding ‘‘which
certified cost’’ in its place.
■
Jkt 220001
certified cost or pricing data and data
other than certified cost or pricing data
and shall compare them to the
Government estimate.
*
*
*
*
*
PART 42—CONTRACT
ADMINISTRATION AND AUDIT
SERVICES
42.705–1
[Amended]
■
39. Amend section 42.705–1 in
paragraph (b)(5)(iii) by giving separate
indention to paragraphs (b)(5)(iii)(A),
(B), (C), and (D) and by removing from
(b)(5)(iii)(D) ‘‘of cost’’ and adding ‘‘of
certified cost’’ in its place.
■ 40. Amend section 42.1304 by
revising paragraph (d) to read as
follows:
PART 31—CONTRACT COST
PRINCIPLES AND PROCEDURES
42.1304
PART 30—COST ACCOUNTING
STANDARDS ADMINISTRATION
30.201–5
[Amended]
33. Amend section 30.201–5 in
paragraph (c)(6) by removing ‘‘Whether
cost’’ and adding ‘‘Whether certified
cost’’ in its place.
31.205–6
[Amended]
34. Amend section 31.205–6 in
paragraph (j)(3)(i)(B), the second
sentence of paragraph (j)(3)(ii), and the
second sentence of paragraph (o)(5) by
removing ‘‘which cost’’ and adding
‘‘which certified cost’’ in its place.
■
32.601
[Amended]
35. Amend section 32.601 in
paragraph (b)(2) by removing ‘‘defective
cost’’ and adding ‘‘defective certified
cost’’ in its place.
■
■
Government delay of work.
*
*
*
*
*
(d) The contracting officer shall retain
in the file a record of all negotiations
leading to any adjustment made under
the clause, and related certified cost or
pricing data, or data other than certified
cost or pricing data.
■ 41. Amend section 42.1701 by—
■ a. In paragraph (b), revising the first
sentence, and removing the last
sentence; and
■ b. Revising the second sentence of
paragraph (c). The revised text reads as
follows:
42.1701
Procedures.
37. Amend section 33.207 in
paragraph (d) by removing ‘‘regarding
cost’’ and adding ‘‘regarding certified
cost’’ in its place.
*
*
*
*
(b) The ACO shall obtain the
contractor’s forward pricing rate
proposal and require that it include cost
or pricing data that are accurate,
complete, and current as of the date of
submission (but see 15.407–3(c)). * * *
(c) * * * The agreement shall provide
for cancellation at the option of either
party and shall require the contractor to
submit to the ACO and to the cognizant
contract auditor any significant change
in cost or pricing data used to support
the FPRA.
*
*
*
*
*
PART 36—CONSTRUCTION AND
ARCHITECT-ENGINEER CONTRACTS
PART 44—SUBCONTRACTING
POLICIES AND PROCEDURES
32.607–2
[Amended]
36. Amend section 32.607–2 in
paragraph (g)(3) by removing ‘‘Defective
Cost’’ and adding ‘‘Defective Certified
Cost’’ in its place.
PART 33—PROTESTS, DISPUTES,
AND APPEALS
33.207
[Amended]
■
38. Amend section 36.214 by—
a. Revising the introductory text of
paragraph (b); and
■ b. Removing from paragraph (b)(1) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place.
■ The revised text reads as follows:
■
■
36.214 Special procedures for price
negotiation in construction contracting.
*
31. Amend section 19.807 by
removing from paragraph (b) ‘‘including
■
VerDate Mar<15>2010
27.202–5
■
Reviewing the subcontracting
*
19.806
PART 27—PATENTS, DATA, AND
COPYRIGHTS
PART 32—CONTRACT FINANCING
29. Amend section 19.705–4 by—
a. Removing from the introductory
text and paragraph (a) introductory text
‘‘must’’ and adding ‘‘shall’’ in its place;
and
■ b. Revising paragraph (d)(3) to read as
follows:
■
■
19.705–4
plan.
cost’’ and adding ‘‘including certified
cost’’ in its place.
53149
*
*
*
*
(b) The contracting officer shall
evaluate proposals and associated
PO 00000
Frm 00023
Fmt 4701
Sfmt 4700
*
42. Amend section 44.202–2 by
revising paragraph (a)(8) to read as
follows:
■
44.202–2
Considerations.
(a) * * *
(8) Has the contractor performed
adequate cost or price analysis or price
comparisons and obtained certified cost
or pricing data and data other than
certified cost or pricing data?
*
*
*
*
*
E:\FR\FM\30AUR3.SGM
30AUR3
53150
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
43. Amend section 44.303 by revising
paragraph (c) to read as follows:
■
44.303
Extent of review.
*
*
*
*
*
(c) Pricing policies and techniques,
including methods of obtaining certified
cost or pricing data, and data other than
certified cost or pricing data;
*
*
*
*
*
44.305–3
[Amended]
*
44. Amend section 44.305–3 in
paragraph (a)(1) by removing ‘‘Cost’’ and
adding ‘‘Certified cost’’ in its place.
■
PART 45—GOVERNMENT PROPERTY
45.104
[Amended]
45. Amend section 45.104 by
removing from paragraph (a)(4) ‘‘of cost’’
and adding ‘‘of certified cost’’ in its
place.
■
PART 49—TERMINATION OF
CONTRACTS
49.603–1
[Amended]
46. Amend section 49.603–1 in
paragraph (b)(7)(x) of the agreement by
removing ‘‘defective cost’’ and adding
‘‘defective certified cost’’ in its place.
■
49.603–2
[Amended]
47. Amend section 49.603–2 in
paragraph (b)(8)(vii) of the agreement by
removing ‘‘defective cost’’ and adding
‘‘defective certified cost’’ in its place.
■
49.603–3
[Amended]
48. Amend section 49.603–3 in
paragraph (b)(7)(xv) of the agreement by
removing ‘‘defective cost’’ and adding
‘‘defective certified cost’’ in its place.
■
49.603–4
[Amended]
49. Amend section 49.603–4 in
paragraph (b)(4)(viii) of the agreement
by removing ‘‘defective cost’’ and adding
‘‘defective certified cost’’ in its place.
■
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
50. Amend section 52.214–26 by—
a. Revising the date of the clause;
b. Revising the introductory text of
paragraph (b); and
■ c. Removing from paragraph (e) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place.
The revised text reads as follows:
jlentini on DSKJ8SOYB1PROD with RULES3
■
■
■
52.214–26
Bidding.
Audit and Records—Sealed
*
*
*
*
*
Audit and Records—Sealed Bidding
(Oct 2010)
*
*
*
VerDate Mar<15>2010
*
(b) Certified cost or pricing data. If the
Contractor has been required to submit
certified cost or pricing data in connection
with the pricing of any modification to this
contract, the Contracting Officer, or an
authorized representative of the Contracting
Officer, in order to evaluate the accuracy,
completeness, and currency of the certified
cost or pricing data, shall have the right to
examine and audit all of the Contractor’s
records, including computations and
projections, related to—
*
17:53 Aug 27, 2010
Jkt 220001
*
*
*
*
51. Amend section 52.214–27 by—
■ a. Revising the section heading;
■ b. Revising the clause heading and
date of the clause;
■ c. Removing from paragraph (a) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place;
■ d. Removing from paragraph (b)
‘‘furnished cost’’ and adding ‘‘furnished
certified cost’’ in its place; removing
‘‘Contractor cost’’ and adding
‘‘Contractor certified cost’’ in its place;
and removing ‘‘(a) above’’ and adding
‘‘(a) of this clause’’ in its place;
■ e. Removing from paragraph (c) ‘‘(b)
above’’ and adding ‘‘(b) of this clause’’ in
its place, and removing ‘‘defective cost’’
and adding ‘‘defective certified cost’’ in
its place;
■ f. Removing from paragraph (d)(1)(i)
‘‘current cost’’ and adding ‘‘current
certified cost’’ in its place; and removing
from paragraph (d)(1)(ii) ‘‘the cost’’ and
adding ‘‘the certified cost’’ in its place;
■ g. Removing from paragraph
(d)(2)(i)(B) ‘‘the cost’’ and adding ‘‘the
certified cost’’ in its place; and
■ h. Removing from paragraph (e)(2)
‘‘submitted cost’’ and adding ‘‘submitted
certified cost’’ in its place;
The revised text reads as follows:
■
52.214–27 Price Reduction for Defective
Certified Cost or Pricing Data—
Modifications—Sealed Bidding.
*
*
*
*
*
Price Reduction for Defective Certified
Cost or Pricing Data—Modifications—
Sealed Bidding (Oct 2010)
*
*
*
*
*
52. Amend section 52.214–28 by—
■ a. Revising the section heading;
■ b. Revising the clause heading and
date of the clause;
■ c. Giving separate indention to
paragraphs (a)(1) and (2) and by
removing from paragraph (a)(1) ‘‘of cost’’
and adding ‘‘of certified cost’’ in its
place;
■ d. Revising paragraph (b); and
■ e. Removing from paragraph (d) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place.
The revised text reads as follows:
■
PO 00000
Frm 00024
Fmt 4701
Sfmt 4700
52.214–28 Subcontractor Certified Cost or
Pricing Data—Modifications—Sealed
Bidding.
*
*
*
*
*
Subcontractor Certified Cost or Pricing
Data—Modifications—Sealed Bidding
(Oct 2010)
*
*
*
*
*
(b) Before awarding any subcontract
expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4(a)(1), on the date of agreement
on price or the date of award, whichever is
later, or before pricing any subcontract
modifications involving aggregate increases
and/or decreases in costs, plus applicable
profits, expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4(a)(1), the Contractor shall
require the subcontractor to submit certified
cost or pricing data (actually or by specific
identification in writing), as part of the
subcontractor’s proposal in accordance with
FAR 15.408, Table 15–2 (to include any
information reasonably required to explain
the subcontractor’s estimating process such
as the judgmental factors applied and the
mathematical or other methods used in the
estimate, including those used in projecting
from known data, and the nature and amount
of any contingencies included in the price),
unless an exception under FAR 15.403–1(b)
applies.
*
*
*
*
*
53. Amend section 52.215–2 by—
a. Revising the date of the clause;
b. Revising the introductory text of
paragraph (c); and
■ c. Removing from introductory text of
paragraph (g) ‘‘paragraph (a)’’ and adding
‘‘paragraph (g)’’ in its place; and
removing from paragraph (g)(2) ‘‘which
cost’’ and adding ‘‘which certified cost’’
in its place.
The revised text reads as follows:
■
■
■
52.215–2
*
*
Audit and Records-Negotiation.
*
*
*
Audit and Records—Negotiation (Oct
2010)
*
*
*
*
*
(c) Certified cost or pricing data. If the
Contractor has been required to submit
certified cost or pricing data in connection
with any pricing action relating to this
contract, the Contracting Officer, or an
authorized representative of the Contracting
Officer, in order to evaluate the accuracy,
completeness, and currency of the certified
cost or pricing data, shall have the right to
examine and audit all of the Contractor’s
records, including computations and
projections, related to—
*
*
*
*
*
54. Amend section 52.215–9 by—
a. Revising the date of Alternate I and
paragraph (d)(1); and
■ b. Revising the date of Alternate II and
paragraph (d)(1).
The revised text reads as follows:
■
■
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
52.215–9 Changes or Additions to Makeor-Buy Program.
*
*
*
*
*
Alternate I (Oct 2010). * * *
(d) * * *
(1) Support its proposal with certified cost
or pricing data in accordance with FAR
15.408, Table 15–2 when required by FAR
15.403, and data other than certified cost or
pricing data, to permit evaluation; and
*
*
*
*
*
Alternate II (Oct 2010). * * *
(d) * * *
(1) Support its proposal with certified cost
or pricing data in accordance with FAR
15.408, Table 15–2, when required by FAR
15.403, and data other than certified cost or
pricing data, to permit evaluation; and
*
*
*
*
*
55. Amend section 52.215–10 by—
a. Revising the section heading;
b. Revising the clause heading and
date of the clause;
■ c. Removing from paragraph (a)(1)
‘‘furnished cost’’ and adding ‘‘furnished
certified cost’’ in its place, and removing
from paragraph (a)(2) ‘‘Contractor cost’’
and adding ‘‘Contractor certified cost’’ in
its place;
■ d. Revising paragraph (b);
■ e. Removing from paragraph (c)(1)(i)
‘‘current cost’’ and adding ‘‘current
certified cost’’ in its place, and removing
from paragraphs (c)(1)(ii) and (c)(2)(i)(B)
‘‘the cost’’ and adding ‘‘the certified cost’’
in its place; and
■ f. Removing from paragraph (d)(2)
‘‘submitted cost’’ and adding ‘‘submitted
certified cost’’ in its place.
The revised text reads as follows:
■
■
■
52.215–10 Price Reduction for Defective
Certified Cost or Pricing Data.
*
*
*
*
*
Price Reduction for Defective Certified
Cost or Pricing Data (Oct 2010)
*
*
*
*
*
(b) Any reduction in the contract price
under paragraph (a) of this clause due to
defective data from a prospective
subcontractor that was not subsequently
awarded the subcontract shall be limited to
the amount, plus applicable overhead and
profit markup, by which (1) the actual
subcontract or (2) the actual cost to the
Contractor, if there was no subcontract, was
less than the prospective subcontract cost
estimate submitted by the Contractor;
provided, that the actual subcontract price
was not itself affected by defective certified
cost or pricing data.
jlentini on DSKJ8SOYB1PROD with RULES3
*
*
*
*
*
■ 56. Amend section 52.215–11 by—
■ a. Revising the section heading;
■ b. Revising the clause heading and
date of the clause;
■ c. Removing from paragraph (a) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place;
■ d. Removing from paragraph (b)
‘‘furnished cost’’ and adding ‘‘furnished
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
certified cost’’ in its place; and removing
‘‘Contractor cost’’ and adding
‘‘Contractor certified cost’’ in its place;
■ e. Revising paragraph (c);
■ f. Removing from paragraph (d)(1)(i)
‘‘current cost’’ and adding ‘‘current
certified cost’’ in its place; and removing
from paragraphs (d)(1)(ii) and
(d)(2)(i)(B) ‘‘the cost’’ and adding ‘‘the
certified cost’’ in its place; and
■ g. Removing from paragraph (e)(2)
‘‘submitted cost’’ and adding ‘‘submitted
certified cost’’ in its place.
The revised text reads as follows:
52.215–11 Price Reduction for Defective
Certified Cost or Pricing Data—
Modifications.
*
*
*
*
*
Price Reduction for Defective Certified
Cost or Pricing Data—Modifications
(Oct 2010)
*
*
*
*
*
(c) Any reduction in the contract price
under paragraph (b) of this clause due to
defective data from a prospective
subcontractor that was not subsequently
awarded the subcontract shall be limited to
the amount, plus applicable overhead and
profit markup, by which (1) the actual
subcontract or (2) the actual cost to the
Contractor, if there was no subcontract, was
less than the prospective subcontract cost
estimate submitted by the Contractor;
provided, that the actual subcontract price
was not itself affected by defective certified
cost or pricing data.
*
*
*
*
*
57. Amend section 52.215–12 by—
a. Revising the section heading;
b. Revising the clause heading and
date of the clause;
■ c. Revising paragraph (a);
■ d. Removing from the introductory
text of paragraph (c) and paragraph
(c)(1) ‘‘of cost’’ and adding ‘‘of certified
cost’’ in its place; and
■ e. Removing from paragraph (c)(2)
‘‘Subcontractor Cost’’ and adding
‘‘Subcontractor Certified Cost’’ in its
place.
The revised text reads as follows:
■
■
■
52.215–12 Subcontractor Certified Cost or
Pricing Data.
*
*
*
*
*
*
*
*
*
*
(a) Before awarding any subcontract
expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4, on the date of agreement on
price or the date of award, whichever is later;
or before pricing any subcontract
modification involving a pricing adjustment
expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4, the Contractor shall require
the subcontractor to submit certified cost or
PO 00000
Frm 00025
Fmt 4701
Sfmt 4700
pricing data (actually or by specific
identification in writing), in accordance with
FAR 15.408, Table 15–2 (to include any
information reasonably required to explain
the subcontractor’s estimating process such
as the judgmental factors applied and the
mathematical or other methods used in the
estimate, including those used in projecting
from known data, and the nature and amount
of any contingencies included in the price),
unless an exception under FAR 15.403–1
applies.
*
*
*
*
*
58. Amend section 52.215–13 by—
a. Revising the section heading;
b. Revising the clause heading and
date of the clause;
■ c. Removing from paragraph (a)(1) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place;
■ d. Revising paragraph (b); and
■ e. Removing from paragraph (d) ‘‘of
cost’’ and adding ‘‘of certified cost’’ in its
place;
The revised text reads as follows:
■
■
■
52.215–13 Subcontractor Certified Cost or
Pricing Data—Modifications.
*
*
*
*
*
Subcontractor Certified Cost or Pricing
Data—Modifications (Oct 2010)
*
*
*
*
*
(b) Before awarding any subcontract
expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4, on the date of agreement on
price or the date of award, whichever is later;
or before pricing any subcontract
modification involving a pricing adjustment
expected to exceed the threshold for
submission of certified cost or pricing data at
FAR 15.403–4, the Contractor shall require
the subcontractor to submit certified cost or
pricing data (actually or by specific
identification in writing), in accordance with
FAR 15.408, Table 15–2 (to include any
information reasonably required to explain
the subcontractor’s estimating process such
as the judgmental factors applied and the
mathematical or other methods used in the
estimate, including those used in projecting
from known data, and the nature and amount
of any contingencies included in the price),
unless an exception under FAR 15.403–1
applies.
*
*
52.215–14
Subcontractor Certified Cost or Pricing
Data (Oct 2010)
53151
*
*
*
[Amended]
59. Amend section 52.215–14 by—
a. Revising the date of the clause to
read ‘‘(Oct 2010)’’; and
■ b. Removing from the last sentence of
paragraph (a) ‘‘of cost’’ and adding ‘‘of
certified cost’’ in its place.
■
■
52.215–15
[Amended]
60. Amend section 52.215–15 by
revising the date of the clause to read
‘‘(Oct 2010)’’; and removing from
paragraph (b)(2) and the second
sentence of paragraph (c) ‘‘which cost’’
■
E:\FR\FM\30AUR3.SGM
30AUR3
53152
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
and adding ‘‘which certified cost’’ in its
place.
■ 61. Amend section 52.215–20 by—
■ a. Revising the section heading;
■ b. Revising the provision heading and
date of the provision;
■ c. Revising the introductory text of
paragraph (a); and removing from the
first sentence of paragraph (a)(1)
‘‘submitting cost’’ and adding
‘‘submitting certified cost’’ in its place;
■ d. Revising the introductory text of
paragraph (b) and paragraph (b)(1);
■ e. Revising Alternate I; and
■ f. Revising the date of Alternate IV
and paragraphs (a) and (b).
The revised text reads as follows:
52.215–20 Requirements for Certified Cost
or Pricing Data and Data Other Than
Certified Cost or Pricing Data.
*
*
*
*
*
Requirements for Certified Cost or
Pricing Data and Data Other Than
Certified Cost or Pricing Data (Oct
2010)
(a) Exceptions from certified cost or pricing
data.
*
*
*
*
*
(b) Requirements for certified cost or
pricing data. If the offeror is not granted an
exception from the requirement to submit
certified cost or pricing data, the following
applies:
(1) The offeror shall prepare and submit
certified cost or pricing data, data other than
certified cost or pricing data, and supporting
attachments in accordance with the
instructions contained in Table 15–2 of FAR
15.408, which is incorporated by reference
with the same force and effect as though it
were inserted here in full text. The
instructions in Table 15–2 are incorporated
as a mandatory format to be used in this
contract, unless the Contracting Officer and
the Contractor agree to a different format and
change this clause to use Alternate I.
jlentini on DSKJ8SOYB1PROD with RULES3
*
*
*
*
*
Alternate I (Oct 2010). As prescribed in
15.408(1) (and see 15.403–5(b)(1)), substitute
the following paragraph (b)(1) for paragraph
(b)(1) of the basic provision:
(b)(1) The offeror shall submit certified cost
or pricing data, data other than certified cost
or pricing data, and supporting attachments
in the following format: [Insert description of
the data and format that are required, and
include access to records necessary to permit
an adequate evaluation of the proposed price
in accordance with 15.408, Table 15–2, Note
2. The description may be inserted at the
time of issuing the solicitation, or the
Contracting Officer may specify that the
offeror’s format will be acceptable, or the
description may be inserted as the result of
negotiations.]
*
*
*
*
*
Alternate IV (Oct 2010). * * *
(a) Submission of certified cost or pricing
data is not required.
(b) Provide data described below: [Insert
description of the data and the format that
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
are required, including the access to records
necessary to permit an adequate evaluation
of the proposed price in accordance with
15.403–3.]
62. Amend section 52.215–21 by—
a. Revising the section heading;
■ b. Revising the clause heading and
date of the clause;
■ c. Revising the introductory text of
paragraph (a); and removing from the
introductory text of paragraph (a)(1)
‘‘submitting cost’’ and adding
‘‘submitting certified cost’’ in its place;
■ d. Removing from paragraph
(a)(1)(ii)(A)(1) ‘‘from cost’’ and adding
‘‘from certified cost’’ in its place;
■ e. Revising the introductory text of
paragraph (b) and paragraph (b)(1);
■ f. Revising Alternate I; and
■ g. Revising the date of Alternate IV
and paragraphs (a) and (b).
The revised text reads as follows:
■
■
52.215–21 Requirements for Certified Cost
or Pricing Data and Data Other Than
Certified Cost or Pricing Data—
Modifications.
*
*
*
*
*
Requirements for Certified Cost or
Pricing Data and Data Other Than
Certified Cost or Pricing Data—
Modifications (Oct 2010)
(a) Exceptions from certified cost or pricing
data.
*
*
*
*
*
(b) Requirements for certified cost or
pricing data. If the Contractor is not granted
an exception from the requirement to submit
certified cost or pricing data, the following
applies:
(1) The Contractor shall submit certified
cost or pricing data, data other than certified
cost or pricing data, and supporting
attachments in accordance with the
instructions contained in Table 15–2 of FAR
15.408, which is incorporated by reference
with the same force and effect as though it
were inserted here in full text. The
instructions in Table 15–2 are incorporated
as a mandatory format to be used in this
contract, unless the Contracting Officer and
the Contractor agree to a different format and
change this clause to use Alternate I.
*
*
*
*
*
Alternate I (Oct 2010). As prescribed in
15.408(m) and 15.403–5(b)(1), substitute the
following paragraph (b)(1) for paragraph
(b)(1) of the basic clause.
(b)(1) The Contractor shall submit certified
cost or pricing data, data other than certified
cost or pricing data, and supporting
attachments prepared in the following
format: [Insert description of the data and
format that are required and include access
to records necessary to permit an adequate
evaluation of the proposed price in
accordance with 15.408, Table 15–2, Note 2.
The description may be inserted at the time
of issuing the solicitation, or the Contracting
Officer may specify that the offeror’s format
PO 00000
Frm 00026
Fmt 4701
Sfmt 4700
will be acceptable, or the description may be
inserted as the result of negotiations.]
*
*
*
*
*
Alternate IV (Oct 2010). * * *
(a) Submission of certified cost or pricing
data is not required.
(b) Provide data described below: [Insert
description of the data and the format that
are required, including the access to records
necessary to permit an adequate evaluation
of the proposed price in accordance with
15.403–3.]
63. Amend section 52.216–25 by—
a. Revising the date of the clause;
b. Revising paragraph (a); and
c. Removing from the paragraph (b)
‘‘and cost’’ and adding ‘‘and certified
cost’’ in its place.
The revised text reads as follows:
■
■
■
■
52.216–25
Contract Definitization.
*
*
*
*
*
Contract Definitization (Oct 2010)
(a) A ____ [insert specific type of contract]
definitive contract is contemplated. The
Contractor agrees to begin promptly
negotiating with the Contracting Officer the
terms of a definitive contract that will
include (1) all clauses required by the
Federal Acquisition Regulation (FAR) on the
date of execution of the letter contract, (2) all
clauses required by law on the date of
execution of the definitive contract, and (3)
any other mutually agreeable clauses, terms,
and conditions. The Contractor agrees to
submit a ____ [insert specific type of proposal
(e.g., fixed-price or cost-and-fee)] proposal,
including data other than certified cost or
pricing data, and certified cost or pricing
data, in accordance with FAR 15.408, Table
15–2, supporting its proposal.
*
*
52.230–2
*
*
*
[Amended]
64. Amend section 52.230–2 by
revising the date of the clause to read
‘‘(Oct 2010)’’; and removing from the
first sentences of paragraphs (a)(3) and
(d) ‘‘submitted cost’’ and adding
‘‘submitted certified cost’’ in its place.
■
52.230–5
[Amended]
65. Amend section 52.230–5 by
revising the date of the clause to read
‘‘(Oct 2010)’’; and removing from the
first sentence of paragraph (a)(3) and the
introductory text of paragraph (d)
‘‘submitted cost’’ and adding ‘‘submitted
certified cost’’ in its place.
■
52.232–17
[Amended]
66. Amend section 52.232–17 by
revising the date of the clause to read
‘‘(Oct 2010)’’; and removing from the
first sentence of paragraph (a) ‘‘Defective
Cost’’ and adding ‘‘Defective Certified
Cost’’ in its place.
■
52.244–2
■
[Amended]
67. Amend section 52.244–2 by—
E:\FR\FM\30AUR3.SGM
30AUR3
Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations
a. Revising the date of the clause to
read ‘‘(Oct 2010)’’;
■ b. Removing from paragraph (e)(1)(v)
‘‘accurate cost’’ and adding ‘‘accurate
certified cost’’ in its place;
■ c. Removing from paragraph
(e)(1)(vii)(C) ‘‘reason cost’’ and adding
‘‘reason certified cost’’ in its place; and
■ d. Removing from paragraphs
(e)(1)(vii)(D) and (e)(1)(vii)(E)
‘‘subcontractor’s cost’’ and adding
‘‘subcontractor’s certified cost’’ in its
place.
■
[FR Doc. 2010–21026 Filed 8–27–10; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 2, 5, 25, and 52
[FAC 2005–45; FAR Case 2009–008; Item
III; Docket 2009–0008, Sequence 1]
RIN 9000–AL22
Federal Acquisition Regulation;
American Recovery and Reinvestment
Act of 2009 (the Recovery Act)—Buy
American Requirements for
Construction Material
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council (the
Councils) have adopted as final, with
changes, an interim rule amending the
Federal Acquisition Regulation (FAR) to
implement the American Recovery and
Reinvestment Act of 2009 (Recovery
Act) with respect to the ‘‘Buy
American—Recovery Act’’ provision,
section 1605 in Division A.
DATES: Effective Date: October 1, 2010.
Applicability Date: The rule applies to
solicitations issued and contracts
awarded on or after the effective date of
this rule. Contracting officers shall
modify, on a bilateral basis, in
accordance with FAR 1.108(d)(3),
existing contracts to include the
appropriate FAR clause for future work,
if Recovery Act funds will be used. In
the event that a contractor refuses to
accept such a modification, the
contractor will not be eligible for award
of any work that uses Recovery Act
funds.
jlentini on DSKJ8SOYB1PROD with RULES3
SUMMARY:
VerDate Mar<15>2010
17:53 Aug 27, 2010
Jkt 220001
For
clarification of content, contact Ms.
Cecelia L. Davis, Procurement Analyst,
at (202) 219–0202. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at (202) 501–4755. Please
cite FAC 2005–45, FAR case 2009–008.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
A. Background
This final rule implements the unique
‘‘Buy American—Recovery Act’’
provision, section 1605 of the Recovery
Act, by revising FAR subpart 25.6, and
related provisions and clauses at FAR
part 52, with conforming changes to
FAR subparts 2.1, 5.2, 25.0, and 25.11.
An interim rule was published in the
Federal Register at 74 FR 14623, March
31, 2009. The public comment period
ended June 1, 2009.
As required by section 1605, the final
rule makes it clear that there will be full
compliance with U.S. obligations under
all international trade agreements when
undertaking construction covered by
such agreements with Recovery Act
funds. The new required provisions and
clauses implement U.S. obligations
under our trade agreements in the same
way as they are currently implemented
in non-Recovery Act construction
contracts. The Caribbean Basin
countries are excluded from the
definition of ‘‘Recovery Act designated
country,’’ because the treatment
provided to them is not as a result of a
U.S. international obligation.
B. Discussion and Analysis
The Regulatory Secretariat received
35 responses, but 2 responses lacked
attached comments and 1 response
appeared unrelated to the case. The
responses included multiple comments
on a wide range of issues addressed in
the interim rule. Each issue is discussed
by topic in the following sections.
Table of Contents
1. Comments on Section 1605 of the
Recovery Act
2. Applicability of Section 1605 of the
Recovery Act
a. Relation to the Buy American Act
b. Applicability to Construction Projects/
Contracts
c. Applicability to Construction Materials
or Supplies
d. Manufacture vs. Substantial
Transformation or Tariff Shift
e. Iron and Steel
f. Components
g. Summary Matrix of Requirements for
Domestic Construction Material
3. Applicability of International Agreements
a. Trade Agreements
b. G20 Summit Pledge
4. Other Definitions
a. Construction Material
PO 00000
Frm 00027
Fmt 4701
Sfmt 4700
53153
b. Public Building or Public Work
c. Manufactured Construction Material/
Unmanufactured Construction Material
5. Exceptions
a. Class Exceptions
b. Public Interest
c. Nonavailability
d. Unreasonable Cost
6. Determinations That an Exception Applies
a. Process and Publication
b. Requests for Specific Exceptions
7. Exemption for Acquisitions Below the
Simplified Acquisition Threshold
8. Remedies for Noncompliance
9. Funding Mechanisms
a. Modifications to Existing Contracts
b. Treatment of Mixed Funding
10. Interim Rule Improper
11. Inconsistencies Between This Rule and
Pre-Existing FAR Rule and the OMB
Grants Guidance
a. Inconsistency With Pre-Existing FAR
b. Inconsistency With the OMB Grants
Guidance
12. Need for Additional Guidance
1. Comments on Section 1605 of the
Recovery Act
Comments: Although the respondents
expressed general support for the goals
of the Recovery Act to stimulate the U.S.
economy, many were concerned about
the Recovery Act Buy American
restrictions of section 1605. For
example:
Several entities representing other
countries objected to the potential
restrictions on trade. They alleged that
the Recovery Act Buy American
requirement in section 1605 is not in
conformity with the U.S. pledge to
refrain from raising new barriers in the
framework of the Summit on Financial
Markets and the World Economy,
November 2008, and the G20 pledge,
April 2009. They alleged that it will
have a negative impact on the world
trade and economy. One respondent
stated that it is not rational for the U.S.
to take trade protection actions such as
the ‘‘Buy American—Recovery Act’’
provision, because it will not be useful
for the American and global economy in
promoting recovery from the current
downturn. Another respondent stated
that, to the extent 1605 imposes more
restrictive requirements than previously
existed, it represents a new barrier to
trade in goods between the United
States and Canada. One respondent
found several aspects of section 1605
problematic because of their ‘‘inherent
lack of clarity.’’
Some United States industry
associations also had concerns about
section 1605. One objected that the reallife burdens of complying with these
country-of-origin requirements cannot
be overstated. This respondent
concluded that, where the U.S.
Government places a premium on
E:\FR\FM\30AUR3.SGM
30AUR3
]]>Agencies
[Federal Register Volume 75, Number 167 (Monday, August 30, 2010)]
[Rules and Regulations]
[Pages 53135-53153]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-21026]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 4, 12, 14, 15, 16, 19, 27, 30, 31, 32, 42, 44, 49,
and 52
[FAC 2005-45; FAR Case 2005-036; Item II; Docket 2007-0001, Sequence
15]
RIN 9000-AK74
Federal Acquisition Regulation; Definition of Cost or Pricing
Data
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to clarify the
distinction between ``certified cost or pricing data'' and ``data other
than certified cost or pricing data'', and to clarify requirements for
submission of cost or pricing data.
DATES: Effective Date: October 1, 2010.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Edward N. Chambers, Procurement Analyst, at (202) 501-3221. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-45, FAR
case 2005-036.
SUPPLEMENTARY INFORMATION:
A. Background
Subpart 15.4 of the FAR describes the contracting officer's
responsibility to purchase supplies and services at fair and reasonable
prices and the use of data and information in meeting this requirement.
This subpart incorporates the requirements of the Truth In Negotiations
Act (TINA), 10 U.S.C. 2306a and 41 U.S.C. 254b, which address the
requirements for the submission of cost or pricing data and the
circumstances under which a contractor must certify to their accuracy,
completeness, and currency.
The Councils believe that the implementation of TINA in FAR subpart
15.4 is not sufficiently clear. In particular, there is confusion
regarding the right of the Government to request ``data other than
certified cost or pricing data,'' the obligation of the offeror to
provide this data, and the definition of this term.
This lack of clarity is due, in large part, to definitions that
overlap and are not identical to TINA. For example, the term ``cost or
pricing data'' is defined in the FAR to mean certified cost or pricing
data, whereas TINA does not make certification part of the definition
of this term. This regulatory refinement has led to confusion regarding
the level of information that a contracting officer may request to
establish fair and reasonable pricing including a misunderstanding by
some that the data elements that comprise cost or pricing data cannot
be requested by the Government unless the data are required by law to
be submitted to the contracting officer in a certified form. This
confusion has been exacerbated by the FAR's use of the phrase
``information other than cost or pricing data,'' which has made it
difficult for contracting officers to understand the circumstances when
data other than certified cost or pricing data should be obtained to
protect the Government from paying unreasonable prices.
Even the basic articulation of policy regarding the use of data to
establish the fairness and reasonableness of offered prices in the
introductory paragraph of FAR 15.402(a) has lacked a certain level of
clarity that creates uncertainty. For many years, this paragraph has
appropriately cautioned contracting officers not to obtain more
information than is necessary--and the FAR must continue to do so.
However this paragraph should also, but currently does not, expressly
mention the underlying statutory authority to collect ``data other than
certified cost or pricing data.'' Because of this omission, some
contracting officers may be under the misperception that there is a
greater responsibility to avoid asking unnecessarily for the submission
of cost or pricing data than there is, in the first instance, to
determine whether and how much of this data may be required, in a given
case, to establish price fairness and reasonableness. In fact, both
responsibilities--i.e., obtaining data that are adequate for evaluating
the reasonableness of the price and taking appropriate care not to ask
for more data than is necessary--are inextricably interrelated and
equally important. As such, the FAR needs to communicate this message
more clearly.
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 72 FR 20092, April 23, 2007, to revise the FAR definition
of ``cost or pricing data''; change the term ``information other than
cost or pricing data'' to ``data other than certified cost or pricing
data''; add a definition of ``certified cost or pricing data'' to make
the terms and definitions consistent with TINA and more understandable
to the general reader; change terminology throughout the FAR; and
clarify the need for contracting officers to obtain ``data other than
certified cost or pricing data'' when there is no other means to
determine fair and reasonable pricing during price analysis.
Based on comments received on the proposed rule, a public meeting
held on November 1, 2007, and additional deliberations (which are all
discussed in greater detail below), the Councils have adopted a final
rule that--
Clarifies terminology used in the FAR to make it
consistent with TINA, resulting in (i) refinements to the regulatory
definition of cost or pricing data, (ii) the addition of a definition
for ``certified cost or pricing data,'' (iii) the addition of a
definition for ``data other than certified cost or pricing data,'' and
[[Page 53136]]
(iv) deletion of the phrase ``information other than cost or pricing
data'';
Clarifies responsibilities regarding the request for, and
submission of, ``data other than certified cost or pricing data'' to
establish fair and reasonable pricing, both in the case when
``certified cost or pricing data'' is required and is not required;
Retains the current order of preference for determining
the type of cost or pricing data required to establish fair and
reasonable prices when certified cost or pricing data are not required;
Retains and reinforces important statements to explain why
contracting officers must not require, unnecessarily, the submission of
``data other than certified cost or pricing data'';
Clarifies the instructions for offerors preparing a
contract pricing proposal when cost or pricing data are required so
that such instructions are consistent with the clarified terminology
and policies for determining the type and quantity of data necessary to
establish a fair and reasonable price; and
Supplements existing coverage to clarify current coverage
and achieve greater understanding by contracting officers and
contractors.
This rule neither expands nor diminishes the existing rights of
contracting officers to request cost or pricing data (whether certified
or other than certified) or other information, or the existing
responsibilities of the offeror to submit such data or other
information. Similarly, the rule does not require, encourage, or
authorize contracting officers to obtain cost or pricing data or other
information unless it is needed to determine that prices offered are
fair and reasonable, which may include the request for such data in
connection with a cost realism analysis. As the rule explains,
requiring contractors to submit more data than what is needed can
``lead to increased proposal preparation costs, generally extend
acquisition lead time, and consume additional contractor and Government
resources.''
Whether a contractor must submit ``certified cost or pricing data''
is based on the requirements of TINA and its stated exceptions. With
respect to ``data other than certified cost or pricing data,'' the
introductory policy statement in FAR 15.402(a) has been clarified to
tie together the contracting officer's longstanding statutory
responsibility to request the data and information necessary to
establish a fair and reasonable price--as stated in TINA at 10 U.S.C.
2306a(d)(1) and 41 U.S.C. 254b(d)(1)--with the caution that, in doing
so, the contracting officer must not request more data than is
necessary. By doing so, the FAR will provide a more complete
articulation of the policy underlying the use of ``data other than
certified cost or pricing data'' in establishing price fairness and
reasonableness, in furtherance of the contracting officer's duty to
serve as a responsible steward of the taxpayer's resources.
B. Public Comments
The first comment period closed on June 22, 2007. Comments were
received from 11 respondents. As a result of the comments received, a
public meeting was scheduled with notice provided at 72 FR 61854 on
November 1, 2007. The public meeting was held on November 15, 2007, and
was followed by a one week period for submission of additional
comments. Several respondents submitted additional comments. The public
comments are addressed in the following analysis:
General Comments
Some respondents noted that the proposed changes should alleviate
confusion. Others raised the following general concerns regarding
various aspects of the proposed rule.
1. Some respondents were concerned that the proposed rule will
result in contracting officers by-passing normal market research and
pricing techniques and require contractors to submit full cost or
pricing data as if the Truth in Negotiations Act (TINA) applied.
Response: The current FAR, as well as the proposed and final rule,
protect against this practice. Contracting officers must generally
follow the order of preference at FAR 15.402, and are required by that
section to ``obtain the type and quantity of data necessary to
establish a fair and reasonable price, but not more data than is
necessary.'' In theory, this could include all of the elements
prescribed under FAR 15.408, Table 15-2. However, in most cases the
data necessary for a contracting officer to determine cost fairness and
reasonableness, or cost realism, will fall short of this level of data.
The rule should not result in contracting officers requiring
contractors to submit full cost or pricing data as if certification
will be required when it is not necessary.
2. Public comments did point out an error where the proposed rule
changed the FAR to require certified cost or pricing data ``and'' data
other than certified cost or pricing data.
Response: The final rule corrects several instances where ``and''
was incorrectly used, replacing it with ``or''. However, there are
circumstances where ``and'' is appropriate and those have been
retained. The final rule recognizes that the contracting officer may
need to request data other than certified cost or pricing data, in
addition to certified cost or pricing data, to establish fair and
reasonable pricing.
3. Some respondents were concerned about the broadening of the
definition of ``information other than cost or pricing data'' by adding
the words ``and judgmental information.''
Response: Data used to support an offer will necessarily contain
some information that is non-factual, i.e., judgmental information. Due
to its nature, judgmental information cannot be certified. Even in
situations where ``certified cost or pricing data'' are required,
judgmental information is not certified, and it is part of ``data other
than certified cost or pricing data'' that supplements certified cost
or pricing data. The final rule deletes the phrase ``information other
than cost or pricing data,'' but includes ``judgmental information''
and ``judgmental factors'' in the definition of ``data other than
certified cost or pricing data.'' The final rule also includes
additional language to provide consistency with FAR 15.408, Table 15-2
(i.e., any information reasonably required to explain the estimating
process, including the judgmental factors applied and the mathematical
or other methods used in the estimate, including those used in
projecting from known data; and the nature and amount of any
contingencies included in the proposed price). Aligning the definition
of ``data other than certified cost or pricing data'' and the text of
the language in FAR 15.408, Table 15-2, keeps the definition consistent
with the current FAR requirements and TINA. The Councils note that the
existence of a judgment is factual, but the nature and amount of the
judgment are not.
4. Many respondents were concerned that the proposed rule
inappropriately adds the phrase ``data other than certified cost or
pricing data'' throughout the proposed rule when only certified cost or
pricing data apply.
Response: The final rule deletes that addition in some instances.
There are other instances where both phrases: ``Certified cost or
pricing data'' and ``data other than certified cost or pricing data''
are applicable. See the response to General Comments number 2.
5. Several respondents were concerned that offerors of commercial
items would be required to submit cost data in all instances.
Response: Such an outcome would be contrary to the intent of the
rule, which does not alter the current intent of the
[[Page 53137]]
FAR regarding the type and quantity of data to determine if the price
of a commercial item is fair and reasonable. FAR 15.403-1(c)(3)
specifically exempts commercial items from certified cost or pricing
data requirements, and this rule does not change that exception. Also,
FAR 15.403-3(c)(2) sets limitations on the type of cost data or pricing
data that can be requested regarding commercial items. When contracting
officers determine that they can use price analysis to determine the
price to be fair and reasonable, the order of preference at FAR 15.402
means cost data will generally not be obtained for pricing commercial
items. Contracting officers are to obtain only that information needed
to determine a fair and reasonable price, which, in some cases, may
include contractor cost data (without certification) for commercial
items.
Specific Comments
1. Comment: Add a definition of ``cost data,'' which is referenced
at FAR 15.402(a)(2)(ii).
Response: We do not believe a separate definition is required. The
revised definition of ``data other than certified cost or pricing
data'' and the existing definition of ``information other than cost or
pricing data'' both encompass cost data and pricing data depending on
what is needed by the contracting officer, using the order of
preference at FAR 15.402(a). The definition simply breaks out various
aspects of ``data other than certified cost or pricing data.'' The cost
data refers to data related to a contractor's costs.
2. Comment: Separate enumeration of ``cost or pricing data'' in FAR
4.803(a)(17)(i) ``Content of Contract Files'' is unnecessary because it
is repetitive with existing definitions in FAR 2.101.
Response: The final rule revises FAR 4.803(a)(17)(i) to read
``certified cost or pricing data'' consistent with the revised
definition. The requirement at FAR 4.803(a)(17) is for documenting the
contract file for the contracting officer's determination of a fair and
reasonable price, and lists the types of data that should be
maintained. ``Certified cost or pricing data'' includes all data that
conforms to FAR 15.408, Table 15-2, while ``data other than certified
cost or pricing data'' includes only the level of data the contracting
officer needs to determine the price fair and reasonable. Whichever is
required to be submitted, this section makes it clear that it shall be
documented in the contract file.
3. Comment: FAR 13.106-3(a)(2)(iii) contradicts FAR 15.404-
1(b)(2)(iv) as FAR 13.106-3(a)(2)(iii) appears to indicate non-
acceptability of price lists and catalogs as a price analysis stand
alone technique.
Response: Neither of the referenced texts is part of this
rulemaking. Nonetheless, we note that the references do not conflict.
Both references list various techniques and types of information the
contracting officer may use, either individually or collectively. The
type and extent of data needed is based on the contracting officer's
business judgment. FAR 13.106-3(a)(2)(iii) simply adds a cautionary
note when using catalog prices.
4. Comment: Change language in the proposed FAR 15.403-3(a)(1)(ii)
from ``If the contracting officer cannot obtain adequate data from
sources other than the offeror, the contracting officer shall require''
to ``If the contracting officer determines that adequate data from
sources other than the offeror is not available, the contracting
officer shall require.''
Response: We concur that the contracting officer should determine
when adequate data is not available and have clarified the final rule
accordingly. However, ``data'' is plural and requires the verb ``are
available'' rather than ``is available''.
5. Comment: The new language at FAR 15.404-1(b) confuses the
difference between cost analysis and price analysis when it states that
``Price analysis may include evaluating data other than certified cost
or pricing data obtained from the offeror or contractor when there is
no other means for determining a fair and reasonable price.'' Price
analysis should only be applied to sales data obtained from the
offeror.
Response: The referenced paragraph is a discussion of ``price''
analysis. The referenced text simply points out that in performing
price analysis, the contracting officer may require data other than
certified cost or pricing data. Price analysis is not limited to sales
data.
6. Comment: Language at FAR 15.404-1(b)(2)(ii) needs clarification.
Response: Changes have been made to FAR 15.404-1(b)(2)(ii) to
clarify the text.
7. Comment: In reference to FAR 15.408, Table 15-2, changing the
word ``information'' to the phrase ``data other than certified cost or
pricing data'' means that the contractor does not have to certify all
the cost or pricing data. Changing these terms is changing the
requirement under TINA.
Response: The final rule utilizes the term ``information'' in a few
instances, not as a term of art as it had been used in FAR part 15
prior to this revision, but generically. The requirements under TINA
have not been changed.
8. Comment: The proposed language that adds ``certified cost or
pricing data and data other than certified cost or pricing data'' at
FAR 15.408, Table 15-2, means that the offeror could withhold
disclosure or certification of cost or pricing data related to its
subcontractors, in cases when the subcontractor is not required to
certify.
Response: When ``certified cost or pricing data'' is required, the
prime contractor is responsible for certifying the completeness of all
cost or pricing data, which includes subcontractor price quotes and
cost data when the subcontractor is not required to certify to its
data. The requirement for the prime contractor to certify that it has
submitted all of the facts regarding subcontractor cost data or pricing
data, even if the subcontractor is not required to submit ``certified
cost or pricing data,'' is implicitly in the certification language at
FAR 15.406-2(a).
9. Comment: Throughout the proposed rule, including the clauses,
change ``required certified cost or pricing data and data other than
certified cost or pricing data'' back to ``required certified cost or
pricing data, or data other than certified cost or pricing data.''
Response: The phrases ``certified cost or pricing data'' and ``data
other than certified cost or pricing data'' are joined with ``and''
when they are used to refer to both types of data collectively. The
phrases are joined with ``or'' when the phrases are used to refer to
either one or the other type of data. See the response to General
Comments number 2.
10. Comment: FAR 52.214-26, Audit and Records--Sealed Bidding,
expand the Government's rights by allowing the Government to audit and
review the contractor's records when certified cost or pricing data are
not required. There is no authority to do this.
Response: This change was in error and the final rule deletes that
addition.
11. Comment: The proposed rule inappropriately adds the phrase
``data other than certified cost or pricing data'' to clauses and FAR
15.408, Table 15-2, when only certified cost or pricing data apply.
Response: The final rule adds clarifying language to indicate that,
when certified cost or pricing data is required, data other than
certified cost or pricing data may also be required. See the responses
to General Comments numbers 2 and 4, and Specific Comments number 9.
12. Comment: Why is Alternate I of FAR 52.215-21(b) marked
reserved? It shouldn't be.
[[Page 53138]]
Response: The final rule retains Alternate I.
13. Comment: The Councils are inappropriately prescribing the use
of FAR 15.408, Table 15-2, for both ``certified cost or pricing data''
and ``data other than certified cost or pricing data''. By doing so,
the Councils are advocating cost analysis on commercial items.
Response: This comment is similar to the Specific Comments numbers
7 and 9. The language in the table and clauses is revised in the final
rule. FAR 15.408, Table 15-2, applies only when certified cost or
pricing data are required. However, when certified cost or pricing data
are required, data other than certified cost or pricing data may also
be required. Additionally, cost analysis can be used when an item that
was thought initially to be commercial is found not to have sufficient
sales data or other information for determining the price to be fair
and reasonable. In each situation, and in accordance with FAR 1.602-2,
the contracting officer must exercise business judgment as to the level
and type of data needed to determine that prices are fair and
reasonable following the order of preference at FAR 15.402(a). See the
responses to General Comments numbers 2 and 4, and to Specific Comments
numbers 7 and 9.
14. Comment: The rule will not address situations when a
contracting officer inappropriately determines an item to be
commercial.
Response: Commercial item determinations are beyond the scope of
this rule. This rule is to clarify what data are needed to determine
whether prices are fair and reasonable as required by FAR part 15. The
procedures for making the determination under FAR part 12 are outside
the scope of this rule about the definitions of phrases associated with
cost or pricing data, and the requirements for their submission.
15. Comment: Cost data should only be used when there are no other
means to determine whether price is fair and reasonable.
Response: The order of preference at FAR 15.402(a) has been
restructured, but is essentially unchanged. Certified cost or pricing
data must be obtained when required by TINA. When certified cost or
pricing data are not required, the order of preference at FAR 15.402(a)
must generally be followed.
16. Comment: Contracting officers should never have to rely on cost
data from the offeror to determine if the price for a commercial item
is fair and reasonable.
Response: The contracting officer retains the authority to request
cost data where other information, including pricing data, is either
unavailable or inadequate to establish that prices offered for a
commercial item are fair and reasonable. However, the FAR policy is to
only require submission of ``data other than certified cost or pricing
data,'' and only to the extent necessary to support the contracting
officer's determination of a fair and reasonable price.
17. Comment: The proposed rule demands that the contracting officer
obtains additional data (and ``all facts'') regardless of needs and
reverses the presumption of the present FAR, which asserts that the
contracting officer should not obtain more information than needed. The
proposed rule requires greatly increased amounts of information even
where certified cost or pricing data is not required. This is contrary
to the language of the statute (TINA).
Response: The language in FAR 15.402(a); FAR 15.408, FAR Table 15-
2; and the clauses are revised in the final rule. When certified cost
or pricing data are required, data other than certified cost or pricing
data may also be required. The contracting officer is cautioned to
obtain data other than certified cost or pricing as necessary to
establish a fair and reasonable price. See section A, Background; see
also the responses to the Specific Comments numbers 7, 9, and 16.
18. Comment: The proposed FAR 15.403-3(c)(1) implies that
contractors face vague and unbounded disclosure obligations (i.e.,
``cost data, or any other information the contracting officer
requires'' and ``at a minimum, appropriate data on * * * prices'') that
likely will be highly varied in application to different procurements.
This costly burden is unnecessary--certainly where it applies to exempt
procurements, e.g., commercial items. Proposed changes conflict with
TINA.
Response: TINA and the existing FAR permit a contracting officer to
obtain all data that is needed, in the contracting officer's discretion
(which may vary among contracting officers), to determine the price to
be fair and reasonable. See the order of preference at FAR 15.402(a),
Pricing Policy. The present rule does not change that. The intent is to
leave latitude for contracting officers to exercise business judgment
(FAR 1.602-2) in obtaining whatever data are required in order to be
able to determine a price fair and reasonable, following the order of
preference at FAR 15.402(a). No negotiated procurements, including
procurements of commercial items, are ``exempt'' from a contracting
officer requiring submission of data other than certified cost or
pricing data when it is needed to determine a fair and reasonable
price. The proposed rule is consistent with the existing FAR, the
requirements of TINA, the Federal Acquisition Streamlining Act of 1994
(Pub. L. 103-355), and the Clinger Cohen Act of 1996 (Pub. L. 104-106).
It does not add any requirements that do not already exist in the
statutes and FAR. See the response to Specific Comments number 16.
19. Comment: The proposed rule adds the requirement that price be
``fair'' and ``reasonable'' in circumstances where the previous FAR
required only demonstration of price ``reasonableness.''
Response: Under the existing FAR, the contracting officer must
determine prices to be fair and reasonable (see FAR 15.402(a)). The
final rule makes no changes to this basic policy.
20. Comment: The proposed rule also obligates the contracting
officer to require submission of ``data other than certified cost or
pricing data.'' This is a profound change because the contractor must
submit both certified cost or pricing data and something else.
Response: See section A, Background. Also, see responses to
Specific Comments numbers 7, 9, and 11.
21. Comment: The proposed rule at FAR 15.404-1(b)(1) adds a new
term, ``price or cost data.'' What is ``price or cost data?''
Response: The language has been removed. The final rule clarifies
the language at FAR 15.404-1(b) to correct ``price or cost data'' to
``data other than certified cost or pricing data''.
22. Comment: What is ``commercial item analysis'' at FAR 15.404-
1(b)?
Response: The phrase has been deleted.
23. Comment: The proposed rule at FAR 15.404-1(b)(2)(ii) creates
extensive additional disclosure requirements, which affect the
eligibility for the ``commercial item'' exemption. These include very
particular demands concerning ``prior price,'' ``terms and
conditions,'' ``market and economic factors,'' ``differences between
the similar item and the item being procured'' and encouragement to use
expert technical advice to evaluate ``minor modifications.'' The effect
of these requirements is to reduce the availability and utility of the
``commercial item'' exception and to create, again, a whole class of
``surrogate'' data that is uncertified but nevertheless burdensome and
expensive to produce.
Response: The contracting officer must be able to determine that
the price is fair and reasonable. The fair and reasonable price can be
the commercial
[[Page 53139]]
price. To the extent there are sufficient commercial sales of the item
being procured for the same or similar quantities, both the validity of
the comparison and the reasonableness of the previous prices can be
established, and the company shares that commercial sales data with the
contracting officer when it cannot be obtained by the Government
through normal market research, so that the contracting officer can
determine a fair and reasonable price, obtaining further ``data other
than certified cost or pricing data'' will not be necessary. See
section A, Background, and the responses to Specific Comments numbers
7, 9, and 11.
24. Comment: The rule will create confusion when commercial items
are being procured by putting contracting officers in a position where
the only safe alternative will be to demand the maximum amount of data
from an offeror.
Response: There is no fundamental change from the existing
requirements that contracting officers: ``shall not obtain more data or
information than necessary.'' To the extent there are sufficient
commercial sales of the item for the same or similar quantities, both
the validity of the comparison and the reasonableness of the previous
price can be established, and the company shares that information with
the contracting officer when it cannot be obtained by the Government
through normal market research, so that the contracting officer can
determine a fair and reasonable price, additional data requests will
not be required. This is not a departure from the existing FAR
requirement. See section A, Background.
25. Comment: We believe the FAR Council is expressing
dissatisfaction with the ability of the acquisition workforce to do
price analysis rather than the more familiar cost analysis and
recommend providing adequate training rather than making significant
changes to established regulations.
Response: See section A, Background, and the Background section of
the proposed rule Federal Register notice (72 FR 20092, April 23,
2007), concerning the confusion over the current FAR language, and
further expressed in these public comments about existing FAR
requirements. Training of our acquisition workforce in all types of
proposal analysis is an ongoing effort. The workforce needs the
cooperation of contractors to submit required data so that contracting
officers can ensure a fair and reasonable price. We believe this final
rule helps clarify requirements for submitting data consistent with the
existing FAR. The Councils anticipate the development of training to
help the workforce understand and apply the rule.
26. Comment: Recommend Councils conduct a public meeting.
Response: A public meeting was held on November 15, 2007, to ensure
that all interested parties had an opportunity to provide additional
input. The public meeting was followed by the opportunity for
interested parties to submit comments.
27. Comment: Existing regulations delineate that data provided in
support of proposals fall into two distinct categories: ``cost or
pricing data'' and ``information other than cost or pricing data.'' The
primary differentiator between cost or pricing data and information
other than cost or pricing data is that the former requires
certification in accordance with FAR 15.406-2, while the latter is any
type of information that does not require certification per FAR 15.406-
2. The existing regulations clearly state that ``information other than
cost or pricing data'' is ``any type of information that is not
required to be certified'' and that the definition ``includes cost or
pricing data for which certification is determined inapplicable after
submission.'' As a result, there is no ambiguity as to the type of data
that can be requested or obtained through the submission of
``information other than cost or pricing data.'' The Councils have
changed the type of non-certifiable data to include ``cost data''
rather than what was previously referred to as ``cost information.''
The FAR Council's intent to clarify that the two terms result in
underlying data that is the same, appears to be in direct conflict with
the statutory definition. That statute does not eliminate the
possibility that the data may be the same but it provides a different
standard for ``other information.'' Accordingly, there are two
different types of data defined in TINA, ``cost or pricing data'' that
is required to be certified and ``other information'' that is not
required to be certified.
Response: We believe this comment demonstrates the confusion
reported to the Councils. TINA and FAR 15.402(a) require that the
contracting officer shall require submission of data other than
certified cost or pricing data to the extent necessary to determine the
reasonableness of the price. We agree with the respondent's comment
that the definition of ``information other than cost or pricing data'',
in effect prior to this final rule, included cost or pricing data for
which certification is determined inapplicable after submission. The
contracting officer must obtain whatever level of data is needed to
determine price reasonableness, but cannot require certification of
cost or pricing data (should cost or pricing data be needed) if the
certification requirement of TINA does not apply. However, some
contractors incorrectly believed that the FAR definition of
``information other than cost or pricing data'' in effect prior to this
final rule, precluded the contracting officer from obtaining
uncertified cost or pricing data.
Section 2306a(h) of Title 10, as well as section 254b(h) of Title
41 of the U.S. Code, define both ``cost or pricing data'' and the
circumstances under which that data must be certified. When the data
must be certified, that data becomes ``certified cost or pricing
data.'' If, after submittal, no certification is required, the data
becomes ``data other than certified cost or pricing data.'' Sections
2306a(d)(1) and 254b(d)(1) state: ``When certified cost or pricing data
are not required * * * the contracting officer shall require submission
of data other than certified cost or pricing data to the extent
necessary to determine the reasonableness of the price * * * the
contracting officer shall require that the data submitted include, at a
minimum, appropriate information on prices at which the same or similar
items have previously been sold. * * *'' The statutory requirement is
to obtain data necessary to determine the reasonableness of the price.
The contracting officer cannot require certification of the data
submitted if TINA does not require it to be certified. If the
contracting officer has no other means to determine the reasonableness
of the price (the main requirement of TINA), then the contracting
officer shall require the submission of the necessary data needed to
make that determination, including, at a minimum, prices at which the
same or similar items have been previously sold. TINA does not prohibit
obtaining cost or pricing data when ``certified cost or pricing data''
is not required to be obtained, but TINA (10 U.S.C. 2306(d)), as well
as the FAR, provide requirements to ensure the contracting officer does
not require more data than is necessary to determine that the prices
are fair and reasonable.
28. Comment: The proposed rule would lead contracting officers to
expect offerors to maintain traditional Government cost accounting data
for commercial items.
Response: There is no requirement for anything more than the type
of commercial data customarily maintained. See FAR 15.403-3(a)(2), FAR
15.403-3(c)(2), and FAR 15.403-5(b)(2).
[[Page 53140]]
29. Comment: Use of the word ``claimed'' at FAR 15.403-1(c)(3)(i)
reveals a great deal about the underlying philosophy that is
perpetuated throughout the proposed rule.
Response: The word ``claimed'' in FAR 15.403-1(c)(3)(i) is not new;
it is part of the existing language. There is no inference of intent on
the use of the word. The intent of the rule is to make it clear that
contracting officers must obtain the level of data needed in order to
meet the requirements of TINA (10 U.S.C. 2306a(d)(1) and 41 U.S.C.
254b(d)(1)), which states that ``* * * the contracting officer shall
require submission of data * * * necessary to determine the
reasonableness of the price * * *.''
30. Comment: FAR subpart 15.4 should not be used to determine
whether or not an item being offered is a commercial item.
Response: FAR subpart 15.4 is not used to determine whether or not
an item is a commercial item. However, it is appropriate in FAR subpart
15.4 to require contracting officers to affirmatively decide if an item
being offered meets the definition of ``commercial item'' before asking
a contractor to provide cost or pricing data, if cost analysis is the
contracting officer's only means to determine the price to be fair and
reasonable.
31. Comment: The proposed change to FAR 15.403-3(c), Commercial
Items, states that even if an offeror provides catalog or market
pricing, the contracting officer cannot assume that such information
would be sufficient to establish a fair and reasonable price, and
therefore, the contracting officer ``shall require'' the offeror to
submit data other than certified cost or pricing data to support
further analysis.
Response: There was no substantive change in the language in
question; it is essentially the existing language. The language gives
no mention to ``market pricing.'' Considering FAR subpart 15.4 in its
entirety, if there is adequate market pricing, the contracting officer
is prohibited from requiring data from the contractor (FAR 15.402(a)
and FAR 15.403-3(a)). The current language and revised language in this
final rule only requires submission of data other than certified cost
or pricing data in accordance with the order of preference at FAR
15.402(a), and then only to the level of detail needed to support a
determination of a fair and reasonable price.
32. Comment: The proposed change to FAR 52.215-20, illustrates the
tremendous confusion the proposed rule will cause and the onerous
nature of the pricing requirements for commercial items. The proposed
rule would ``require'' contracting officers to demand that offerors
proposing commercial items submit ``data other than certified cost or
pricing data'' if the contracting officer believes it is necessary to
determine prices fair and reasonable. Proposed paragraph (b) of FAR
52.215-20 then states that if the offeror is not granted an exception
from TINA, then the offeror shall submit ``data other than certified
cost or pricing data.''
Response: FAR 52.215-20 clause requires offerors to submit ``data
other than certified cost or pricing data'' if the contracting officer
believes it is necessary to determine prices to be fair and reasonable.
The final rule clarifies in paragraph (b) of the contract clause FAR
52.215-20 that the data required under Table 15-2 includes ``data other
than certified cost or pricing data'' as well as ``certified cost or
pricing data''.
33. Comment: Within the proposed rule, the Councils have made
significant changes that result in the reprioritizing of the
Government's pricing policy as detailed at FAR 15.402.
Response: In response to comments, the final rule reorganizes the
FAR 15.402(a) to clarify the policy, but the policy remains essentially
unchanged. See section A, Background.
34. Comment: The proposed rule revisions at FAR 15.402(a) suggests
that the ``data other than certified cost or pricing data'' is
preferred over ``certified cost or pricing data'', even when
certification is required by FAR 15.403-4.
Response: In response to comments, the final rule reorganizes FAR
15.402(a) to emphasize that certified cost or pricing data shall be
obtained when required by TINA. When certified cost or pricing data are
not required, the order of preference at FAR 15.402(a)(2) should
generally be followed.
35. Comment: The DoD-specific issues cited in the proposed rule and
at the public meeting have been adequately addressed by the Director of
Defense Procurement and Acquisition Policy through recent policy memos,
policy guidance, and contract pricing training. These actions should be
given a chance to work before further regulatory changes are made that
would impede the U.S. Government's access to the commercial
marketplace.
Response: The purpose of the FAR rulemaking is to eliminate
confusion throughout the Government and to clarify for all agencies and
their contractors definitions and associated responsibilities for the
request and submission of certified cost or pricing data and data other
than certified cost or pricing data. While DoD guidance is helpful to
the DoD acquisition workforce, years of experiences throughout
Government show that the current FAR language is causing confusion over
what a contractor is required to submit to support prices. This
confusion leads to inefficient procurement processes and sometimes
leads to the Government paying unreasonable prices. The revised
language clarifies the regulation, and is consistent with TINA, by
requiring the contracting officer to obtain only the data necessary to
determine the fairness and reasonableness of the price.
36. Comment: The current FAR rules, when properly exercised, are
already capable of achieving fair and reasonable prices and, in this
respondent's opinion, the definitions are clear and unambiguous, and
contracting officers have significant latitude under current
regulations to acquire data from contractors to support price
reasonableness of commercial items.
Response: See section A, Background, and also the responses to
Specific Comments numbers 7, 9, 11, and 23.
37. Comment: There are no proposed changes to make contracting
officers aware that cost data from commercial companies will most
likely not be in a form that complies with their expectations,
training, or experience. Cost data from commercial companies will not
comply with Cost Accounting Standards, FAR part 31, and are not
generally suitable for certification under the Truth in Negotiations
Act. The FAR council should not use terminology that is part of a cost-
based contracting process.
Response: Current regulations and TINA already require contractors
to provide certified cost or pricing data, and data other than
certified cost or pricing data as necessary, that will enable the
contracting officer to determine fair and reasonable prices. The rule
clarifies the regulations by using language consistent with TINA more
precisely. The rule does not expand the contracting officer's authority
to request data from commercial companies when needed for the
determination that prices are fair and reasonable. The challenge the
comment reflects may be real, but it is not affected by the rule.
38. Comment: The proposed rule would revise the order of preference
of data at FAR 15.402(a) and would eliminate the distinction between
``cost or pricing data'' and ``information other than cost or pricing
data.''
Response: The order of preference is not changed. By eliminating
the ambiguous phrase ``information other than cost or pricing data,''
the rule
[[Page 53141]]
clarifies and maintains the distinction between ``certified cost or
pricing data'' and ``data other than certified cost or pricing data,''
tracking the statutory distinctions. As stated in other responses
herein, the revised definitions clearly describe what is required by
TINA and intended by this rule. TINA defines ``cost or pricing data,''
and then prescribes when such data shall be certified. The nature and
extent of ``cost or pricing data'' is the same regardless of whether it
is certified or not. The statute also prescribes when a contractor must
provide ``data other than certified cost or pricing data'' (which
includes ``cost or pricing data'' and judgmental information) without
being required to certify it. Under the current law and regulations, a
contracting officer is empowered to obtain all the data and judgmental
information needed to determine a fair and reasonable price, but is
restricted as to which data, and when that data, must be certified.
39. Comment: By eliminating the term ``information'' and
substituting the term ``data'' the rule would add ambiguity as to the
legal status of the submission by commercial companies that cannot
provide FAR compliant cost data.
Response: The use of the term ``data'' is consistent with the
statute and with the Government's need to obtain factual information to
be used as a basis for reasoning, discussion, or calculation. The rule
does not change the existing strong limitations in the FAR on the
circumstances under which a contracting officer can obtain certified
cost or pricing data from commercial sources. It does not change the
current restrictions on the amount of data a contracting officer can
obtain (i.e., only that data to the extent necessary to determine fair
and reasonable prices.) The rule also retains the existing flexibility
to use contractor data formats.
40. Comment: The ``of a type'' language in the proposed rule at FAR
15.404-1(b)(2)(i) and FAR 15.401(b)(ii)(C) introduces ambiguity as to
the meaning of a commercial item. It is recommended that the ``of a
type'' language be deleted from the proposed rule as it seems to add no
clarity to the definition of a commercial item or how commercial items
are to be priced.
Response: We believe the respondent meant FAR 15.404-1(b)(2)(ii)
and FAR 15.404-1(b)(2)(ii)(C). The references in the comment either do
not have the ``of a type'' text, or the reference is erroneous. These
subparagraphs of the FAR provide requirements for price analysis and
appropriately directs contracting officers to consider price
comparisons even in situations when the proposed item is ``of a type''
that is customarily used by the general public or non-governmental
entities for purposes other than governmental purposes, a term used
consistently in the definition of commercial item at FAR 2.101. This
section also appropriately directs contracting officers to obtain
technical assistance.
41. Comment: The proposed rule fails to address the confusion in
pricing noncompetitive (sole-source) commercial items and guides the
contracting officer to perform price analysis of previous DoD
(Government) prices to determine price reasonableness.
Response: The intent of the rule is for contracting officers to
follow the order of preference, which includes price analysis
(including price analysis of previous Government and non-Government
sales). The Councils recognize, however, that there has been confusion
over the type and amount of data that can be required by a contracting
officer, particularly in non-competitive (sole-source) acquisitions of
commercial items. Accordingly, for the sake of clarification, changes
were made at FAR 15.402(a)(2)(ii)(A), FAR 15.403-1(c)(3)(i), and FAR
15.403-3(c) to emphasize the need for the contracting officer to review
the history of sales to non-governmental and governmental entities,
determine whether an item is a commercial item, and decide whether
certified cost or pricing data are required. The changes to FAR
15.402(a) provide sufficient flexibility to the contracting officer to
address the specific contracting situation. As revised, this rule
clarifies that TINA authorizes a contracting officer to obtain data
other than certified cost or pricing data to the extent necessary to
establish a fair and reasonable price, even when the acquisition is for
a commercial item. Therefore, the rule sets forth appropriate guidance
for determining fair and reasonable prices.
This is a significant regulatory action and, therefore, was subject
to review under Section 6(b) of Executive Order 12866, Regulatory
Planning and Review, dated September 30, 1993. This rule is not a major
rule under 5 U.S.C. 804.
C. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because the rule does not
expand or diminish the existing rights of the contracting officer to
obtain cost data or pricing data. Further, most acquisitions involving
small entities are under the threshold for the submission of certified
cost or pricing data of $700,000, the new TINA threshold (see FAR Case
2008-024, Item I of this FAC). Finally, this rule will benefit all
entities, both large and small, by clarifying the requirements for the
submission of ``certified cost or pricing data'' and ``data other than
certified cost or pricing data.''
D. Paperwork Reduction Act
The Paperwork Reduction Act does apply; however, these changes to
the FAR do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Number 9000-
0013.
List of Subjects in 48 CFR Parts 2, 4, 12, 14, 15, 16, 19, 27, 30,
31, 32, 42, 44, 49, and 52
Government procurement.
Dated: August 18, 2010.
Edward Loeb,
Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 12, 14, 15, 16,
19, 27, 30, 31, 32, 42, 44, 49, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 4, 12, 14, 15, 16, 19,
27, 30, 31, 32, 42, 44, 49, and 52 continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. Adding, in alphabetical order, the definition ``Certified cost or
pricing data'';
0
b. Revising the introductory text of the definition ``Cost or pricing
data'';
0
c. Adding, in alphabetical order, the definition ``Data other than
certified cost or pricing data''; and
0
d. Removing the definition ``Information other than cost or pricing
data''.
The added and revised text reads as follows:
2.101 Definitions
* * * * *
(b) * * *
(2) * * *
Certified cost or pricing data means ``cost or pricing data'' that
were required to be submitted in accordance with FAR 15.403-4 and
15.403-5 and have been certified, or are required to be certified,
[[Page 53142]]
in accordance with 15.406-2. This certification states that, to the
best of the person's knowledge and belief, the cost or pricing data are
accurate, complete, and current as of a date certain before contract
award. Cost or pricing data are required to be certified in certain
procurements (10 U.S.C. 2306a and 41 U.S.C. 254b).
* * * * *
Cost or pricing data (10 U.S.C. 2306a(h)(1) and 41 U.S.C. 254b)
means all facts that, as of the date of price agreement, or, if
applicable, an earlier date agreed upon between the parties that is as
close as practicable to the date of agreement on price, prudent buyers
and sellers would reasonably expect to affect price negotiations
significantly. Cost or pricing data are factual, not judgmental; and
are verifiable. While they do not indicate the accuracy of the
prospective contractor's judgment about estimated future costs or
projections, they do include the data forming the basis for that
judgment. Cost or pricing data are more than historical accounting
data; they are all the facts that can be reasonably expected to
contribute to the soundness of estimates of future costs and to the
validity of determinations of costs already incurred. They also
include, but are not limited to, such factors as--
* * * * *
Data other than certified cost or pricing data means pricing data,
cost data, and judgmental information necessary for the contracting
officer to determine a fair and reasonable price or to determine cost
realism. Such data may include the identical types of data as certified
cost or pricing data, consistent with Table 15-2 of 15.408, but without
the certification. The data may also include, for example, sales data
and any information reasonably required to explain the offeror's
estimating process, including, but not limited to--
(1) The judgmental factors applied and the mathematical or other
methods used in the estimate, including those used in projecting from
known data; and
(2) The nature and amount of any contingencies included in the
proposed price.
* * * * *
PART 4--ADMINISTRATIVE MATTERS
4.704 [Amended]
0
3. Amend section 4.704 in paragraph (b) by removing ``for cost'' and
adding ``for certified cost'' in its place.
0
4. Amend section 4.803 by revising paragraphs (a)(17) and (b)(4) to
read as follows:
4.803 Contents of contract files.
* * * * *
(a) * * *
(17) Data and information related to the contracting officer's
determination of a fair and reasonable price. This may include--
(i) Certified cost or pricing data;
(ii) Data other than certified cost or pricing data;
(iii) Justification for waiver from the requirement to submit
certified cost or pricing data; or
(iv) Certificates of Current Cost or Pricing Data.
* * * * *
(b) * * *
(4) Certified cost or pricing data, Certificates of Current Cost or
Pricing Data, or data other than certified cost or pricing data; cost
or price analysis; and other documentation supporting contractual
actions executed by the contract administration office.
* * * * *
PART 12--ACQUISITON OF COMMERCIAL ITEMS
12.102 [Amended]
0
5. Amend section 12.102 in paragraph (f)(2)(ii) by removing ``Cost or
pricing'' and adding ``Certified cost or pricing'' in its place.
12.504 [Amended]
0
6. Amend section 12.504 in paragraph (a)(7) by removing ``provide
cost'' and adding ``provide certified cost'' in its place.
PART 14--SEALED BIDDING
0
7. Amend section 14.201-7 by removing from paragraph (a)(1)(ii) ``of
cost'' and adding ``of certified cost'' in its place; and by revising
paragraphs (b)(1) and (c)(1) to read as follows:
14.201-7 Contract clauses.
* * * * *
(b)(1) When contracting by sealed bidding, the contracting officer
shall insert the clause at 52.214-27, Price Reduction for Defective
Certified Cost or Pricing Data--Modifications--Sealed Bidding, in
solicitations and contracts if the contract amount is expected to
exceed the threshold for submission of certified cost or pricing data
at 15.403-4(a)(1).
* * * * *
(c)(1) When contracting by sealed bidding, the contracting officer
shall insert the clause at 52.214-28, Subcontractor Certified Cost or
Pricing Data--Modifications--Sealed Bidding, in solicitations and
contracts if the contract amount is expected to exceed the threshold
for submission of certified cost or pricing data at 15.403-4(a)(1).
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
8. Amend section 15.204-5 by revising paragraph (b)(5) to read as
follows:
15.204-5 Part IV--Representations and Instructions.
* * * * *
(b) * * *
(5) Certified cost or pricing data (see Table 15-2 of 15.408) or
data other than certified cost or pricing data.
* * * * *
0
9. Amend section 15.402 by revising the introductory text and paragraph
(a) to read as follows:
15.402 Pricing policy.
Contracting officers shall--
(a) Purchase supplies and services from responsible sources at fair
and reasonable prices. In establishing the reasonableness of the
offered prices, the contracting officer--
(1) Shall obtain certified cost or pricing data when required by
15.403-4, along with data other than certified cost or pricing data as
necessary to establish a fair and reasonable price; or
(2) When certified cost or pricing data are not required by 15.403-
4, obtain data other than certified cost or pricing data as necessary
to establish a fair and reasonable price, generally using the following
order of preference in determining the type of data required:
(i) No additional data from the offeror, if the price is based on
adequate price competition, except as provided by 15.403-3(b).
(ii) Data other than certified cost or pricing data such as--
(A) Data related to prices (e.g., established catalog or market
prices, sales to non-governmental and governmental entities), relying
first on data available within the Government; second, on data obtained
from sources other than the offeror; and, if necessary, on data
obtained from the offeror. When obtaining data from the offeror is
necessary, unless an exception under 15.403-1(b)(1) or (2) applies,
such data submitted by the offeror shall include, at a minimum,
appropriate data on the prices at which the same or similar items have
been sold previously, adequate for evaluating the reasonableness of the
price.
(B) Cost data to the extent necessary for the contracting officer
to determine a fair and reasonable price.
(3) Obtain the type and quantity of data necessary to establish a
fair and
[[Page 53143]]
reasonable price, but not more data than is necessary. Requesting
unnecessary data can lead to increased proposal preparation costs,
generally extend acquisition lead time, and consume additional
contractor and Government resources. Use techniques such as, but not
limited to, price analysis, cost analysis, and/or cost realism analysis
to establish a fair and reasonable price. If a fair and reasonable
price cannot be established by the contracting officer from the
analyses of the data obtained or submitted to date, the contracting
officer shall require the submission of additional data sufficient for
the contracting officer to support the determination of the fair and
reasonable price.
* * * * *
0
10. Amend section 15.403 by revising the section heading to read as
follows:
15.403 Obtaining certified cost or pricing data.
* * * * *
0
11. Amend section 15.403-1 by--
0
a. Revising the section heading, paragraph (a), the introductory text
of paragraph (b), the heading to paragraph (c) introductory text, and
paragraph (c)(3)(i);
0
b. Removing from paragraph (c)(3)(iii)(A) ``of cost'' and adding ``of
certified cost'' in its place;
0
c. Revising paragraphs (c)(3)(iii)(B) and (c)(3)(iii)(C);
0
d. Removing from paragraph (c)(3)(iv) ``for cost'' and adding ``for
certified cost'' in its place; and
0
e. Revising the introductory text of paragraph (c)(4).
The revised text reads as follows:
15.403-1 Prohibition on obtaining certified cost or pricing data (10
U.S.C. 2306a and 41 U.S.C. 254b).
(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 defined in
FAR 2.101 to support a determination of a fair and reasonable price or
cost realism)--
* * * * *
(c) Standards for exceptions from certified cost or pricing data
requirements--* * *
(3) * * *
(i) Any acquisition of an item that the contracting officer
determines meets the commercial item definition in 2.101, or any
modification, as defined in paragraph (3)(i) of that definition, that
does not change the item from a commercial item to a noncommercial
item, is exempt from the requirement for certified cost or pricing
data. If the contracting officer determines that an item claimed to be
commercial is, in fact, not commercial and that no other exception or
waiver applies, (e.g. the acquisition is not based on adequate price
competition; the acquisition is not based on prices set by law or
regulation; and the acquisition exceeds the threshold for the
submission of certified cost or pricing data at 15.403-4(a)(1)) the
contracting officer shall require submission of certified cost or
pricing data.
* * * * *
(iii) * * *
(B) For acquisitions funded by DoD, NASA, or Coast Guard, such
modifications of a commercial item are exempt from the requirement for
submission of certified cost or pricing data provided the total price
of all such modifications under a particular contract action does not
exceed the greater of the threshold for obtaining certified cost or
pricing data in 15.403-4 or 5 percent of the total price of the
contract at the time of contract award.
(C) For acquisitions funded by DoD, NASA, or Coast Guard such
modifications of a commercial item are not exempt from the requirement
for submission of certified cost or pricing data on the basis of the
exemption provided for at 15.403-1(c)(3) if the total price of all such
modifications under a particular contract action exceeds the greater of
the threshold for obtaining certified cost or pricing data in 15.403-4
or 5 percent of the total price of the contract at the time of contract
award.
* * * * *
(4) Waivers. The head of the contracting activity (HCA) may,
without power of delegation, waive the requirement for submission of
certified cost or pricing data in exceptional cases. The authorization
for the waiver and the supporting rationale shall be in writing. The
HCA may consider waiving the requirement if the price can be determined
to be fair and reasonable without submission of certified cost or
pricing data. For example, if certified cost or pricing data were
furnished on previous production buys and the contracting officer
determines such data are sufficient, when combined with updated data, a
waiver may be granted. If the HCA has waived the requirement for
submission of certified cost or pricing data, the contractor or higher-
tier subcontractor to whom the waiver relates shall be considered as
having been required to provide certified cost or pricing data.
Consequently, award of any lower-tier subcontract expected to exceed
the certified cost or pricing data threshold requires the submission of
certified cost or pricing data unless--
* * * * *
0
12. Revise section 15.403-2 to read as follows:
15.403-2 Other circumstances where certified cost or pricing data are
not required.
(a) The exercise of an option at the price established at contract
award or initial negotiation does not require submission of certified
cost or pricing data.
(b) Certified cost or pricing data are not required for proposals
used solely for overrun funding or interim billing price adjustments.
0
13. Revise section 15.403-3 to read as follows:
15.403-3 Requiring data other than certified cost or pricing data.
(a)(1) In those acquisitions that do not require certified cost or
pricing data, the contracting officer shall--
(i) Obtain whatever data are available from Government or other
secondary sources and use that data in determining a fair and
reasonable price;
(ii) Require submission of data other than certified cost or
pricing data, as defined in 2.101, from the offeror to the extent
necessary to determine a fair and reasonable price (10 U.S.C.
2306a(d)(1) and 41 U.S.C. 254b(d)(1)) if the contracting officer
determines that adequate data from sources other than the offeror are
not available. This includes requiring data from an offeror to support
a cost realism analysis;
(iii) Consider whether cost data are necessary to determine a fair
and reasonable price when there is not adequate price competition;
(iv) Require that the data submitted by the offeror include, at a
minimum, appropriate data on the prices at which the same item or
similar items have previously been sold, adequate for determining the
reasonableness of the price unless an exception under 15.403-1(b)(1) or
(2) applies; and
(v) Consider the guidance in section 3.3, chapter 3, volume I, of
the Contract Pricing Reference Guide cited at 15.404-1(a)(7) to
determine the data an offeror shall be required to submit.
(2) The contractor's format for submitting the
