February 27, 2020 Procurement Lawyer

Cost or Pricing Data Requirements: Emerging Developments & Risk Areas

by Alexander O. Canizares
Cost & Pricing Data

Cost & Pricing Data

Alexander O. Canizares, a senior counsel with Perkins Coie LLP, Washington, D.C., is an editorial board member of The Procurement Lawyer and a vice-chair of the Section’s Contract Claims and Disputes Resolution Committee. Views and opinions expressed in this article are the author’s only.

One of the recurring challenges facing companies that do business with the government is having to turn over cost or pricing data to the government during contract negotiations. Under the Truthful Cost or Pricing Data Act, commonly referred to by its former name, the Truth in Negotiations Act or TINA,  the government may, in certain circumstances, obtain certified (or uncertified) cost or pricing data from contractors as a means of verifying that prices are reasonable. Enacted in 1962 in response to reports of widespread overcharging by defense contractors, TINA was intended to protect the taxpayer by giving contracting officers more information when negotiating prices with offerors. But cost or pricing data submissions may result in administrative burdens and delays in the acquisition system that can frustrate other policy goals.

This article focuses on four recent developments that bear upon the scope of cost or pricing data requirements and their impact on contractors:

  • The increase in the TINA threshold from $750,000 to $2 million, which significantly narrows the scope of contracts subject to the statute;
  • The Section 809 Panel’s findings that the Department of Defense (DoD) overuses cost or pricing data and should change its practices to attract commercial companies to the federal market and help streamline the procurement process;
  • A February 2019 DoD Inspector General (IG) report and DoD policy changes addressing prices charged by sole-source contractors; and
  • Provisions in the FY 2020 National Defense Authorization Act (NDAA) that would amend TINA to incentivize companies to comply with requests for other than certified cost or pricing data, among other changes.
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