Announcement (New Thresholds For Certified Cost and Pricing Data)

New Thresholds For Certified Cost and Pricing Data

The 2018 National Defense Authorization Act (NDAA) raised the Truth in Negotiation (TINA) thresholds for requiring certified cost or pricing data to $2 million. These new thresholds are being implemented by Class Deviations without the need for FAR and DFAR changes. On April 13, 2018, a DoD class deviation was issued providing that effective July 1, 2018, the threshold of $2 million is to be used for obtaining certified cost or pricing data in lieu of the $750,000 threshold.  On May 3, 2018, the Chair of the Civilian Agency Acquisition Council implemented a similar increase in the TINA threshold to $2 million for civilian agency contract actions as of July 1, 2018.

Here is what implementation looks like:

• Prime Contracts entered into after June 30, 2018: The threshold for the submission of certified cost or pricing data will be $2 million. In the case of a prime contract entered into on or before June 30, 2018, the threshold remains at $750,000.

• Subcontracts entered into after June 30, 2018 under a prime contract entered into after June 30, 2018: The threshold for the submission of certified cost or pricing data will be $2 million. In the case of a subcontract entered into on or before June 30, 2018, the threshold remains at $750,000. As to a subcontract actions taken after June 30, 2018 for a prime contract entered into on or before June 30, 2018, the presumptive situation is that the threshold would remain at $750,000.  

• Important Note for a subcontract entered into after July 1, 2018, under a prime contract entered into on or before June 30, 2018:   In subsection 10 USC § 2306(a)(1)(c)(ii) of the TINA statute, there is a provision to have the prime contract modified to provide for the revised $2 million threshold “upon the request of a contractor” without consideration.  

Even if the threshold for certified cost or pricing data is raised to $2 million, a contractor or subcontractor may be required to submit data other than certified cost or pricing data (see FAR 15.403-3).  However, the change in the TINA statute (subsection (d)(1)) and in the FAR now provide that such data be required only “…to the extent necessary to determine a fair and reasonable price.” It is no longer an affirmative requirement to obtain such data as in the past.  

If you have questions regarding your government contract, call Point Compliance Group today at 336.379.0442.