There is no such thing as a risk-free interaction with the Government when it comes to submitting data.
FAR/DFARS Driving Contracting Officers to Ask for Uncertified Data
Congress has been behind the following changes:
- DFARS Case 2020-D008 October 28, 2022 Final Rule – Requiring Data Other Than Certified Cost or Pricing Data: Implementing “section 803 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020 ( L. 116-92). Section 803 amends 10 U.S.C. 2306a(d) (redesignated as 10 U.S.C. 3705) to prohibit contracting officers from determining that the price of a contract or subcontract is fair and reasonable based solely on historical prices paid by the Government and to state that an offeror is ineligible for award if the contracting officer is unable to determine proposed prices are fair and reasonable.”
- DFARS Case 2023-D010 December 22, 2023 Proposed Rule – Data Requirements for Commercial Products of Major Weapon Systems: Implementing “section 803 of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 ( L. 117-263). Section 803 modifies 10 U.S.C. 3455 to provide additional guidance regarding data requirements to support a determination of commerciality and price reasonableness for certain procurements associated with major weapon systems.”
The Definition
FAR 2.101 defines “data other than certified cost or pricing data” as: “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.”
The key wording in this definition is other than “data may include the identical types of data as certified cost or pricing data.”
FAR 15.403-3 Requiring Data Other Than Certified Cost or Pricing Data
FAR 15.403-3 requires the following:
- Submission of data other than certified cost or pricing data, as defined in 2.101, from the contractor necessary to determine a fair and reasonable price.
- Submission of data on the prices at which the same item or similar items have previously been sold, adequate for determining the reasonableness of the price.
- The contracting officer must ensure that data used to support price negotiations are sufficiently current to permit negotiation of a fair and reasonable price.
- A contractor that does not comply with a requirement to submit data for a contract or subcontract is ineligible for award unless approved by the Head of the Contracting Agency.
DFARS 215.403-3 Requiring Data Other Than Certified Cost or Pricing Data
DFARS 215.403-3 goes even further requiring the following:
- The contracting officer shall not determine the price of a contract or subcontract to be fair and reasonable based solely on historical prices paid by the Government.
- The Head of the Contracting Agency must address:
- The effort to obtain the data.
- Availability of other sources of supply of the product or service.
- The urgency or criticality of the Government's need for the product or service.
- Reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract based on information available to the contracting officer.
- Rationale or justification made by the offeror for not providing the requested data.
- Risk to the Government if award is not made.
The Underlying Story
As I see it, most contracting officers are going to react to the push from Congress and the existing FAR/DFARS requirements by requesting “other than certified cost or pricing data” even if they have sufficient data available from other sources. This is a natural reaction to the risk of being second guessed by the ever-present government oversight (i.e., Agency Inspector General Auditors) power of 20-20 hindsight. It is hard to blame them.
Now for the Risky Part of the story
Without the back stop of the defective pricing clauses (FAR 52.215-10, 52.215-11, 52.215-12, and 52.215-13), any uncertified data that is substantially not current, accurate, or complete may be seen as a non-compliant with FAR 52.203-13, Contractor Code of Business Ethics and Conduct; FAR 52.214-4, False Statements in Bids; and, dare I saw, the civil False Claims Act.
The Takeaway
Never take the submission of any data or information to the Government lightly. The risks are real and significant.
Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s data requirements and maintaining an adequate estimating system. We would be happy to be part of your team.
John is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to the DFARS business systems, CAS Disclosure Statements, and DCAA/DCMA compliance preparation, advisory, and defense. Prior to joining Redstone Government Consulting, John served in a number of capacities with DCAA/DCMA for more than 30 years. Upon his retirement, he was based in Texas as an SES-level Corporate Audit Director for DCAA, managing a staff of 300 auditors at one of the largest DOD programs. Professional Experience John began his career in the late 80s working in the Clearwater, FL audit office and over the next three decades he progressed through a number of positions within both DCAA and DCMA with career highlights as DCAA Program Manager at Ft. Belvoir, Chief of Technical Programs Division, Deputy Assistant Director-Policy, Director of the DCMA Cost and Pricing Center, the SES-level Lockheed Martin Corporate Audit Director, and Director of Integrity and Quality Assurance. John’s three decades of experience in performing and leading DCAA auditors and DCMA reviewers provides a wealth of expertise to our clients. John’s role, not only in the performance of audits, but also in the development of audit policy affords him unique insights into the defense of audit findings and the linkage of audit program steps to the underlying regulatory framework. He is an expert in FAR, DFARS, and other agency acquisition regulation, as well as a subject matter expert in the Cost Accounting Standards having reviewed and provided audit feedback on many of the largest and most complex cost accounting practices during his tenure with the DCAA. John’s tenure with DCAA and DCMA came at a critical time during each agency’s history where a number of changes were occurring such as the response to the ICS backlog, development of audit approaches to the DFARS Business Systems and implementation of new audit initiatives as a result of Congressional oversight through the NDAA process. John’s leadership at the DCMA Cost & Pricing center saw oversight of all major DOD pricing actions, leadership of should cost review teams, the Commercial Pricing group and many other areas of strategic value to our clients. His involvement in these and other Agency initiatives is of great value to our clients due to his in depth understanding of DCAA and DCMA’s internal policy directives. Education John holds a Master of Business Administration and a B.A. in Accounting from the University of South Florida. Certifications Certified Information Systems Auditor State of Alabama Certified Public Accountant