[Federal Register Volume 60, Number 4 (Friday, January 6, 1995)]
[Proposed Rules]
[Pages 2282-2299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12]
[[Page 2281]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Ch. 1
Federal Acquisition Regulation; Truth in Negotiations Act and Related
Changes; Proposed Rule
Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 /
Proposed Rules
[[Page 2282]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION-
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION-
48 CFR Chapter 1 -
[FAR Case 94-721]-
RIN 9000-AG30-
Federal Acquisition Regulation; Truth in -Negotiations Act and
Related Changes
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule is issued pursuant to the Federal
Acquisition Streamlining Act of 1994 to implement those portions of
Pub. L. 103-355 that make specific changes to the Truth in Negotiations
Act (TINA) or that impact other areas of the FAR that affect contract
pricing. This regulatory action was not subject to Office of Management
and Budget review under Executive Order 12866, dated September 30,
1993.
DATES: Comment Due Date: Comments should be submitted on or before
March 7, 1995 to be considered in the formulation of a final rule.
Public Meeting: A public meeting will be held on February 9, 1995,
at 9:30 a.m.-
Oral/Written Statements: Views to be presented at the public
meeting should be sent, in writing, to the FAR Secretariat, at the
address given below, not later than February 6, 1995.
ADDRESSES: Interested parties should submit written comments to: -
General Services Administration, FAR Secretariat (VRS),- 18th & F
Streets, NW, Room 4037, Washington, DC 20405, Telephone: (202) 501-
4755.
The public meeting will be held at:- General Services
Administration Auditorium, 18th & F Streets, NW, First Floor, -
Washington, DC 20405.
Please cite FAR case 94-721 in all correspondence related to this
case. -
FOR FURTHER INFORMATION CONTACT: Mr. Al Winston, Truth in Negotiations
Act (TINA) Team Leader, at (703) 602-2119 in reference to this FAR
case. For general information, contact the FAR Secretariat, Room 4037,
GSA Building, Washington, DC 20405 (202) 501-4755. Please cite FAR case
94-721.
SUPPLEMENTARY INFORMATION:
A. Background -
The Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355)
(the Act) provides authorities that streamline the acquisition process
and minimize burdensome government-unique requirements. Major changes
that can be expected in the acquisition process as a result of the
Act's implementation include changes in the areas of Commercial Item
Acquisition, Simplified Acquisition Procedures, the Truth in
Negotiations Act, and introduction of the Federal Acquisition Computer
Network (FACNET).
Public Meeting-
The FAR Council is interested in an exchange of ideas and opinions
with respect to the regulatory implementation of the Act. For that
reason, the FAR Council is conducting a series of public meetings. The
public is encouraged to furnish its views; the FAR Council anticipates
that public comments will be very helpful in formulating final rules. -
A public meeting will be held on February 9, 1995, to enable the
public to present its views on this rule. This rule will only be
discussed at the public meeting session. Any subsequent public meetings
will be devoted to other revisions to the FAR.-
Persons or organizations wishing to make presentations will be
allowed 10 minutes each to present their views, provided they notify
the FAR Secretariat at (202) 501-4755. Written statements for
presentation should be submitted to the FAR Secretariat by February 6,
1995. Persons or organizations with similar positions are encouraged to
select a common spokesperson for presentation of their views. This
meeting, in conjunction with the Federal Register notice soliciting
public comments on the rule, will be the only opportunity for the
public to present its views.
FAR case 94-721
FAR case 94-721 implements Sections 1201 through 1210 and Sections
1251 and 1252 of the Act. Highlights include making TINA requirements
for civilian agencies substantially the same as those for the
Department of Defense (increasing the threshold for submission of
``cost or pricing data'' to $500,000 and adding penalties for defective
pricing). Provisions are also included that increase the threshold for
cost or pricing data submission every 5 years beginning October 1,
1995. New exceptions are added to the requirement for the submission of
``cost or pricing data'' for commercial items; approval levels for
waivers are changed, and prohibitions are placed on acquiring ``cost or
pricing data'' when an exception applies. The coverage includes a clear
explanation of adequate price competition as required by the Act.
Also, FAR coverage has been included that addresses: (1)
``Information other than cost or pricing data'', (2) exemptions based
on established catalog or market price, (3) inter-divisional transfers
of commercial items at price, and (4) price competition when only one
offer has been received.
The FAR language primarily modifies FAR Part 15, together with
associated Part 52 clauses and Part 53 forms. However, some coverage is
proposed to address contract clauses where threshold changes are made
in Part 14 pertaining to sealed bid contracting, and in Part 31 where
the cost principle on material costs has been amended to address inter-
divisional transfers of commercial items at price. Additional
miscellaneous changes in Parts 4, 12, 15, 16, 31, 33, 36, 45, 46, 49,
and 53 have also been included.
Upon final implementation, the proposed FAR coverage will supersede
the earlier FAR case 94-720 that was previously published as an interim
rule in Federal Acquisition Circular (FAC) 90-22. FAR case 94-720
provided for an immediate increase to the threshold for ``cost or
pricing data'' submission by contractors to civilian agencies to
$500,000. The Act provided that this requirement was effective on
October 13, 1994, the date of enactment. FAC 90-22 (FAR case 94-720)
also removed the certification requirement of commercial pricing for
parts or components for contractors doing business with civilian
agencies.
Policy for Determining Reasonableness of Price-
Two major changes are found in the proposed coverage. The first
change shifts the policy of FAR Part 15 with respect to determining
price reasonableness. A hierarchical policy preference for the types of
information to be used in assessing reasonableness of price is
established. The policy states that no additional information should be
obtained from the contractor if there is adequate price competition.
This is followed by allowing progressively more intrusive types of data
requirements. Obtaining ``cost or pricing data'' is designated as the
last choice. Use of ``cost or pricing data'' is coupled with a reminder
that unnecessarily requiring that type of data is not desirable and can
lead to additional [[Page 2283]] costs to both the government and the
contractor.-
New FAR coverage, based on the Act, is presented that expands the
exceptions based on adequate price competition and provides for special
exceptions for commercial items. A new section addressing ``information
other than cost or pricing data'' is created and a Standard Form 141X
is provided for use by contractors. -
The proposed policy at FAR 15.804-1(b)(1)(ii), which recognizes
circumstances when it can be determined that adequate price competition
exists even though only one offeror has responded to the Government's
requirement, is under review within the executive branch of the
Government to insure the policy is a permissible implementation of the
Act.
Defining ``Cost or Pricing Data''
The second major change accomplished by the proposed coverage is
the clarification of the meaning of the term ``cost or pricing data.''
Currently, the FAR uses the term inconsistently. In some places,
``certified cost or pricing data'' is used and in other locations, it
states ``cost or pricing data.'' In the proposed coverage, the term has
been clarified in the definition to mean that, among other things,
``cost or pricing data'' is required to be certified in accordance with
TINA and FAR 15.804-4, and means all facts that as of the date of
agreement on price (or other mutually agreeable date) prudent buyers
and sellers would reasonably expect to affect the price significantly.
To avoid possible confusion, the term ``certified cost or pricing
data'' has also been defined as a subset of the more encompassing term
``cost or pricing data.'' The latter addition is designed to show that
``certified cost or pricing data'' is a subset of ``cost or pricing
data'' and serves to distinguish between data for which a certificate
has not yet been submitted and data for which a certificate has or
should have been submitted. If circumstances change such that
certification is not required, ``cost or pricing data'' reverts to
``information other than cost or pricing data'' and has the same
postaward audit value that any other ``information other than cost or
pricing data'' would have. However, ``cost or pricing data'' is always
distinguishable from ``information other than cost or pricing data''
before award by its intended use. That is, ``cost or pricing data''
should not be requested unless the contracting officer believes it will
be necessary to rely upon it to price the contract and that
certification will be required or should have been required in
accordance with FAR 15.804-4. Only in the very limited circumstance
where ``cost or pricing data'' is submitted but an exception is later
found to apply would it revert to and become ''information other than
cost or pricing data'' after award of the contract. Thus, the word
``certified'' need no longer be placed in front of ``cost or pricing
data'' in every location it is used in the FAR in order for the term to
have the full meaning provided for in TINA. Furthermore, now that the
intent of the use of the data is clear, a bright-line distinction
between ``cost or pricing data'' and all other types of information has
been created.
``Information Other Than Cost or Pricing Data''-
Since a bright-line test for ``cost or pricing data'' has now been
established, it is also possible to craft a second category of data--
``information other than cost or pricing data''--that may be required
by the contracting officer in order to establish cost realism or price
reasonableness. This information can include limited cost information,
sales data or pricing information. The intent is also clear with
respect to this category of information. Because it is not ``cost or
pricing data,'' certification shall not be required and approval to
obtain this information is vested in the contracting officer. The
proposed FAR coverage gives a detailed discussion of ``information
other than cost or pricing data'' at 15.804-5.
B. Regulatory Flexibility Act-
This proposed rule is not expected to 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
proposed FAR revisions reduce the instances where it is necessary to
request ``cost or pricing data'' from contractors. However, most
contracts awarded to small entities are awarded on a competitive,
fixed-price basis and do not require the submission of ``cost or
pricing data''. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. Comments from small entities concerning
the affected FAR subpart will be considered in accordance with 5 U.S.C.
610. Such comments must be submitted separately and should cite 5
U.S.C. 601, et seq. (FAR case 94-721), in correspondence.
C. Paperwork Reduction Act-
The Paperwork Reduction Act, Pub. L. 96-511, is deemed to apply
because the proposed rule contains information collection requirements.
Accordingly, a request for approval of a new information collection
requirement concerning TINA changes is being submitted to the Office of
Management and Budget under 44 U.S.C. 3501, et seq. Public comments
concerning this request will be invited through a Federal Register
notice appearing in a future issue.
List of Subjects in 48 CFR Parts 4, 12, 14, 15, 16, 31, 33, 36, 45, 46,
49, 52, and 53
Government procurement.
Dated: December 27, 1994.
Edward Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, it is proposed that 48 CFR Chapter 1 be amended as set
forth below:
1. The authority citation for 48 CFR Chapter 1 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM-
2. Section 1.105 is amended under the ``FAR Segment'' and ``OMB
Control Number'' headings by removing ``52.215-32'' and ``9000-0105'',
and adding entries, in numerical order, to read as follows:
1.105 OMB Approval under the Paperwork Reduction Act.
* * * * *
------------------------------------------------------------------------
OMB control
FAR segment No.
------------------------------------------------------------------------
* * * * *
52.215-41-............................................... 9000-XXX
52.215-42-............................................... 9000-XXX
* * * * *
------------------------------------------------------------------------
PART 4--ADMINISTRATIVE MATTERS
3. Section 4.803 is amended in paragraph (a)(17) by adding before
the period at the end of the sentence ``, or information other than
cost or pricing data'', and paragraph (b)(4) is revised to read as
follows:
4.803 Contents of contract files.
* * * * *-
(b) * * *
(4) Cost or pricing data, Certificates of Current Cost or Pricing
Data, or information other than cost or pricing data; cost or price
analysis; and other documentation supporting contractual
[[Page 2284]] actions executed by the contract administration office.
* * * * *
PART 12--CONTRACT DELIVERY OR PERFORMANCE
12.504 [Amended]
4. Section 12.504(d) is amended by adding ``or other information''
before the period at the end of the sentence.
PART 14--SEALED BIDDING-
5. Section 14.201-7 is amended in paragraphs (b)(1) and (c)(1) by
removing ``$100,000, or for the Department of Defense, the National
Aeronautics and Space Administration, and the Coast Guard, is expected
to exceed $500,000.'' and inserting ``the threshold for submission of
cost or pricing data at 15.804-2(a)(1).'' in its place; by
redesignating (d) as (e), and adding a new (d) to read as follows:
14.201-7 Contract clauses.
* * * * *-
(d) Contracting officers shall, if requested by the prime
contractor, modify contracts to change the threshold in the contract to
the threshold for submission of cost or pricing data at 15.804-2(a)(1),
without requiring consideration. The contract modification shall be
accomplished by inserting into the contract the current version of
clauses 52.214-27, Price Reduction for Defective Cost or Pricing Data--
Modifications--Sealed Bidding, and 52.214-28, Subcontractor Cost or
Pricing Data--Modifications--Sealed Bidding. These new contract clauses
shall apply only to contract modifications and subcontracts for which
agreement on price occurs after the contracting officer has inserted
the new clauses.
* * * * *
14.214 [Removed]-
6. Section 14.214 is removed.
PART 15--CONTRACTING BY NEGOTIATION
7. Section 15.106-2 is revised to read as follows:
15.106-2 Audit--commercial items.
(a) This subsection implements 10 U.S.C. 2306a(d)(2) and (3) and 41
U.S.C. 254b(d)(2) and (3).
(b) The contracting officer shall, when contracting by negotiation,
insert clause 52.215-XX, Audit-Commercial Items, in solicitations and
contracts when submission of cost or pricing data may be required under
15.804-2 or exempted under 15.804-1(a)(2).
15.406-5 [Amended]-
8. Section 15.406-5(b) is amended by inserting the parenthetical
``(See 15.804-6 and 15.804-8.)'' at the end.-
9. Section 15.703(a)(2) is revised to read as follows:
15.703 Acquisitions requiring make-or-buy programs.-
(a) * * * -
(2) Qualifies for an exception from the requirement to submit cost
or pricing data under 15.804-1; or
* * * * *-
10. Section 15.801 is amended by revising the definition of ``Cost
or pricing data'', and adding definitions in alphabetical order to read
as follows:
15.801 Definitions.
Certified cost or pricing data is a subset of the term ``cost or
pricing data''. The term ``cost or pricing data'' includes the
requirement for certification. The term ``certified cost or pricing
data'' may be used to specifically indicate ``cost or pricing data''
for which a certificate has been, or should have been, provided in
accordance with 15.804-4.
* * * * *-
Cost or pricing data means all facts that, as of the date of price
agreement or, if applicable, another date agreed upon between the
parties that is as close as possible to the date of agreement on price,
prudent buyers and sellers would reasonably expect to affect the price
significantly. Cost or pricing data shall be certified in accordance
with 15.804-4. Cost and pricing data are factual, not judgmental, and
are therefore 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
such factors as (a) vendor quotations; (b) nonrecurring costs; (c)
information on changes in production methods and in production or
purchasing volume; (d) data supporting projections of business
prospects and objectives and related operations costs; (e) unit-cost
trends such as those associated with labor efficiency; (f) make-or-buy
decisions; (g) estimated resources to attain business goals; and (h)
information on management decisions that could have a significant
bearing on costs.
* * * * *-
Information other than cost or pricing data means any type of
information that is not required to be certified in accordance with
15.804-4, that is necessary to determine price reasonableness or cost
realism. For example, such information may include pricing information,
sales information, or partial cost information, and includes cost or
pricing data for which certification is determined inapplicable after
submission.
* * * * *
Subcontract, for purposes of this subpart, includes a transfer of
commercial items between divisions, subsidiaries, or affiliates of a
contractor or a subcontractor.
* * * * *-
11. Section 15.802 is revised to read as follows:
15.802 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 shall not obtain more
information than is necessary and shall generally use the following
order of preference in determining the type of information required:-
(1) No further information from the offeror if the price is based
on adequate price competition.
(2) Information other than cost or pricing data:
(i) Information related to prices (e.g., established catalog or
market prices), relying first on information available within the
Government, second on information obtained from sources other than the
offeror and lastly on information obtained from the offeror.
(ii) Limited cost information, which does not meet the definition
of cost or pricing data at 15.801.
(3) Cost or pricing data. The contracting officer should use every
means available to ascertain a fair and reasonable price prior to
requesting cost or pricing data. Contracting officers shall not
unnecessarily require the submission of cost or pricing data because it
leads to increased proposal preparation costs, generally extends
acquisition lead-time, and wastes both contractor and Government
resources.
(b) Price each contract separately and independently and not--
(1) Use proposed price reductions under other contracts as an
evaluation factor, or
(2) Consider losses or profits realized or anticipated under other
contracts.
(c) Not include in a contract price any amount for a specified
contingency to the extent that the contract provides for a price
adjustment based upon the occurrence of that
contingency. [[Page 2285]]
15.803 [Amended]
12. Section 15.803(a) is amended in the last sentence by inserting
``or other information'' after ``pricing data''.
15.804 Cost or pricing data and other information.
13. Section 15.804, heading, is revised to read as set forth
above.-
14. Section 15.804-1 is revised to read as follows:
15.804-1 Prohibition on obtaining cost or pricing data.
(a) Exceptions to cost or pricing data requirements. The
contracting officer shall not, pursuant to 10 U.S.C. 2306a and 41
U.S.C. 254b, require submission of cost or pricing data (but may
require other information to support a determination of price
reasonableness or cost realism)--
(1) If the contracting officer determines that prices agreed upon
are based on--
(i) Adequate price competition (see paragraph (b)(1) of this
section);---
(ii) Established catalog or market prices of commercial items (see
section 2.101) sold in substantial quantities to the general public
(see paragraph (b)(2) of this section); or-
(iii) Prices set by law or regulation (see paragraph (b)(3) of this
section).
(2) For acquisition of a commercial item if an exception under
paragraph (a)(1) of this section does not apply, but the contracting
officer can determine the price is fair and reasonable (see paragraph
(b)(4)(i) of this section and 15.804-5(b));
(3) For modifications to contracts/subcontracts for commercial
items, if the basic contract/subcontract was awarded without the
submission of cost or pricing data because the action was exempt from
cost or pricing data requirements of 15.804-2 and the modification does
not change the contract/subcontract to a contract/subcontract for the
acquisition of other than a commercial item (see paragraph (b)(4)(ii)
of this section); or
(4) For exceptional cases (see paragraph (b)(5) of this section).
(b) Standards for exceptions from cost or pricing data
requirements.
(1) Adequate price competition. A price is based on adequate price
competition if--
(i) Two or more responsible offerors, competing independently,
submit priced offers responsive to the Government's expressed
requirement and if--
(A) Award will be made to a responsible offeror whose proposal
offers either--
(1) The greatest value (see 15.605(c)) to the Government and price
is a substantial factor in source selection; or
(2) The lowest evaluated price; and
(B) There is no finding, supported by a statement of the facts and
approved at a level above the contracting officer, that the price of
the otherwise successful offeror is unreasonable.
(ii) There was a reasonable expectation, based on market analysis
or other assessment, that two or more responsible offerors, competing
independently, would submit priced offers responsive to the
solicitation's expressed requirement, even though only one offer is
received from a responsible, responsive offeror and if--
(A) Based on the offer received, the contracting officer can
reasonably conclude that the offer was submitted with the expectation
of competition, e.g.,--
(1) The offeror believed that at least one other offeror was
capable of submitting a meaningful, responsive offer.
(2) The offeror had no reason to believe that other potential
offerors did not intend to submit an offer; and
(B) The determination is approved at a level above the contracting
officer that the proposed price is based on adequate price competition
and is reasonable; or
(iii) Price analysis clearly demonstrates that the proposed price
is reasonable in comparison with current or recent prices for the same
or similar items purchased in comparable quantities, under comparable
terms and conditions under contracts that resulted from adequate price
competition.
(2) Established catalog or market prices--(i) Established catalog
price. Established catalog prices are prices (including discount
prices) recorded in a catalog, price list, schedule or other verifiable
and established record that (A) are regularly maintained by the
manufacturer or vendor; (B) are published or otherwise available for
customer inspection, and (C) state current or last sales price. An item
will automatically qualify for this exception if sold in substantial
quantities, and sales at established catalog prices made to the general
public are at least one-fourth of total sales of the item. If an item
does not meet these criteria, an exception may also apply under
paragraph (b)(2)(vi) of this section.
(ii) Established market price. An established market price is a
price that is established in the course of ordinary and usual trade
between buyers and sellers free to bargain and that can be
substantiated by data from sources independent of the offeror.
(iii) Based on. A price may also be based on an established catalog
or market price if the item being purchased is not itself a catalog or
market priced commercial item but is sufficiently similar to the
catalog or market priced commercial item to ensure that any difference
in prices can be identified and justified without resorting to cost
analysis. If a price is based on estimated future sales and prices,
then provision should be made for future price adjustment, if actual
sales and prices differ significantly from the estimated sales and
prices upon which the contract price was based.
(iv) Sold in substantial quantities. An item is sold in substantial
quantities if there are sales of more than a nominal quantity based on
the norm of the industry segment. For services to be sold in
substantial quantities, they must also be customarily provided by the
offeror, using personnel regularly employed and equipment (if any is
necessary) regularly maintained principally to provide the services.
(A) The method used to establish sales for catalog priced items may
be sales order, contract, shipment, invoice, actual recorded sales or
other records, so long as the method used is consistent and provides an
accurate indication of sales activity. If the item would not otherwise
qualify for an exception, sales of the item by affiliates (see 19.101
for definition) of the offeror may be considered in addition to sales
of the item by the offeror if--
(1) The offeror provides and separately identifies all data
required to be submitted that are related to the sales by the affiliate
(e.g., information required by the Standard Form (SF) 1412);
(2) The affiliate agrees in writing to provide the same preaward
and post-award access to records as is provided by the offeror; and
(3) All sales of the item by the affiliate are considered, not just
catalog sales.
(B) An exception may apply for an item based on the market price of
the item regardless of the quantity of sales of the item previously
made by the offeror or the types of customers for these sales.
(v) The general public consists of buyers other than the U.S.
Government or its instrumentalities, e.g., U.S. Government
corporations. The general public does not include (A) affiliates of the
offerors, (B) buyers of items for U.S. Government end use, or (C)
purchases by the U.S. Government on behalf of foreign governments, such
as for Foreign Military Sales.
(vi) Discretionary criteria. Even though the criteria of paragraphs
[[Page 2286]] (b)(2)(i) and (ii) of this section are not met, the
contracting officer may use other criteria to determine that the price
of the item is based on an established catalog or market price of a
commercial item sold in substantial quantities to the general public.
For example--
(A) The item recently qualified for an exemption but no longer
qualifies due to an unusual level of sales to the Government; or
(B) The item is a commercial item no longer sold to the public, but
is still required by the Government and the proposed price can be
determined reasonable based upon consideration of differences in
quantities, terms, conditions, or other appropriate factors in
comparison to the last price for which an exemption was granted.
(3) Prices set by law or regulation. Pronouncements in the form of
periodic rulings, reviews, or similar actions of a governmental body,
or embodied in the laws are sufficient to set a price.
(4) Commercial items. (i) For acquisitions of commercial items, if
the exceptions at 15.804-1(a)(1) do not apply, the contracting officer
shall obtain information from the prospective contractor or other
sources regarding prices at which the same or similar items have been
sold in the commercial marketplace in order to determine whether the
price is fair and reasonable. Cost or pricing data may be obtained for
such a commercial item only if the contracting officer makes a written
determination that such information is inadequate for performing a
price analysis and determining price reasonableness.
(ii) For modifications of commercial items, the exception at
15.804-1(a)(3) applies if the modification of a commercial item does
not change the item from a commercial item to a noncommercial item.
However, if the modification changes the nature of the work under the
contract/subcontract either by a change to the commercial item or by
the addition of other noncommercial work, the contracting officer is
not prohibited from obtaining cost or pricing data for the added work.
(5) Exceptional cases. The head of the contracting activity may, in
exceptional cases and without power of delegation, waive the
requirement for submission of cost or pricing data. For example, a
waiver should be considered if another exemption does not apply but the
price can be determined to be fair and reasonable. The authorization
for the waiver and the reasons for granting it shall be in writing. If
the head of the contracting activity has waived the requirement for
submission of cost or pricing data, the contractor or higher-tier
subcontractor to whom the waiver relates shall be considered as having
been required to make available cost or pricing data for purposes of
15.804-2(a)(1). Consequently, award of any lower-tier subcontract
expected to exceed the pertinent threshold set forth at 15.804-2(a)(1)
requires the submission of cost or pricing data unless 15.804-1
otherwise applies to the subcontract.
(c) Qualifying for an exception. (1) In order to qualify for an
exception based on established catalog or market price or prices set by
law or regulation, the offeror must request an exemption. The
contracting officer may specify one of the following methods:
(i) Customary method--SF 1412, Request for Exemption from Cost or
Pricing Data.
(A) It is not necessary to establish an exemption for each line
item. Consequently, a SF 1412 may be appropriate only for major items,
i.e., if the proposed price for the total quantity of an item exceeds
$100,000 or another threshold specified by the contracting officer.
(B) If none of the items has a proposed price for its total
quantity in excess of $100,000 or another threshold specified by the
contracting officer, a SF 1412 should be obtained for the item with the
highest total proposed price.
(C) The contracting officer shall ensure that information used to
support price negotiations is sufficiently current to permit
negotiation of a fair and reasonable price. Requests for updated
offeror information should be limited to information that affects the
adequacy of the proposal for negotiations, such as changes in price
lists.
(ii) Prior exemption. (A) If the U.S. Government has acted
favorably on an exemption request for the same or similar items, the
contracting officer may consider the prior submissions as support for
the current exemption request. Relief from the submission of new
information does not relieve the contracting officer from the
requirement to determine reasonableness of price on the current
acquisition.
(B) When acquiring by separate contract an item included on an
active Federal Supply Service or Information Resource Management
Service Multiple Award Schedule contract, the contracting officer
should grant an exemption and not require a SF 1412 or similar
exemption documentation if the offeror has provided as proof of the
prior exemption a copy of the Certificate of Established Catalog or
Market Price that was provided to GSA. Price analysis shall be
performed in accordance with 15.805-2 to determine reasonableness of
price.
(iii) Repetitive acquisitions. The contracting officer and offeror
may make special arrangements for the submission of exemption requests
for repetitive acquisitions of catalog items or market items. These
arrangements can take any form as long as they set forth an effective
period and the exemption criteria at 15.804-1(b) (2) or (3) are
satisfied. Such arrangements may be extended to other Government
offices with their concurrence.
(iv) Other. The contracting officer may request or agree to accept
information other than that specified in paragraphs (c)(1)(i) through
(iii) of this section.
(2) If the offeror/contractor does not qualify for an exception
under paragraph (c)(1) of this section, an exemption may nevertheless
be requested as a commercial item (see paragraph (b)(4) of this
section) or as an exceptional case (see paragraph (b)(5) of this
section). The contracting officer shall request sufficient
documentation to support the request.
15. Section 15.804-2 is revised to read as follows:
15.804-2 Requiring Cost or Pricing Data
(a)(1) Cost or pricing data shall be obtained only if the
contracting officer concludes that none of the exceptions in 15.804-1
applies. However, if the contracting officer has sufficient information
available to determine price reasonableness, then a waiver in
accordance with 15.804-1(b)(5) should be considered. The threshold for
obtaining cost or pricing data is $500,000. This amount will be subject
to adjustment, effective October 1, 1995, and every five years
thereafter. Except as provided in 15.804-1, cost or pricing data are
required before accomplishing any of the following actions expected to
exceed the threshold in effect at time of agreement on price 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 higher-tier subcontractor have been required to furnish cost or
pricing data. (See 15.804-1(b)(5).)
(iii) The modification of any sealed bid or negotiated contract
(whether or not cost or pricing data were initially required) or
subcontract covered by paragraph (a)(1)(ii) of this section. Price
adjustment amounts shall consider both increases and decreases. (For
example, a $150,000 modification resulting from a
[[Page 2287]] reduction of $350,000 and an increase of $200,000 is a
pricing adjustment exceeding $500,000.) This requirement does not apply
when unrelated and separately priced changes for which cost or pricing
data would not otherwise be required are included for administrative
convenience in the same modification.
(2) Contracting officers shall, if requested by the prime
contractor, modify contracts to change the threshold in the contract to
the cost or pricing data threshold in paragraph (a)(1) of this section,
without requiring consideration. The contract modification shall be
accomplished by inserting into the contract the current version of the
clauses 52.215-23, Price Reduction for Defective Cost or Pricing Data--
Modifications, and 52.215-25, Subcontractor Cost or Pricing Data--
Modifications, or 52.215-24, Subcontractor Cost or Pricing Data, as
applicable. These new contract clauses shall apply only to contract
modifications and subcontracts for which agreement on price occurs
after the contracting officer has inserted the new clauses.
(3) Unless prohibited by 15.804-1(a)(1), the head of the
contracting activity, without power of delegation, may authorize the
contracting officer to obtain cost or pricing data for pricing actions
below the pertinent threshold in paragraph (a)(1) of this section
provided the action exceeds the simplified acquisition threshold. The
head of the contracting activity shall justify the requirement for cost
or pricing data. The documentation shall include a written finding that
cost or pricing data are necessary to determine whether the price is
fair and reasonable and the facts supporting that finding.
(b) When 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 cost or pricing data.
(2) A certificate of current cost or pricing data, in the format
specified in 15.804-4, 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 final agreement on price or, if applicable, another
date agreed upon between the parties.
(c) If cost or pricing data are requested and submitted by an
offeror, but an exception is later found to apply under 15.804-1, the
data shall not be considered cost or pricing data as defined in 15.801
and shall not be certified in accordance with 15.804-4.
(d) The requirements of this section also apply to contracts
entered into by the head of an agency on behalf of a foreign
government.
15.804-3 [Reserved]
16. Section 15.804-3 is removed and reserved.
17. Section 15.804-4 is amended by revising paragraph (a), the
double asterisk footnote to the certification statement following
paragraph (a), and paragraph (e) to read as follows:
15.804-4 Certificate of Current Cost or Pricing Data
(a) When cost or pricing data are required under 15.804-2, the
contracting officer shall require the contractor to execute a
Certificate of Current Cost or Pricing Data, shown following this
paragraph (a), and shall include the executed certificate in the
contract file. The certificate states that the cost or pricing data are
accurate, complete, and current as of the date the contractor and the
Government agreed on a price or, if applicable, another date agreed
upon between the parties.
Certificate of Current Cost or Pricing Data
* * * * *
* * * Insert the day, month, and year when price negotiations were
concluded and price agreement was reached or, if applicable, another
date agreed upon between the parties.
* * * * *
(e) If cost or pricing data are requested and submitted by an
offeror, but an exception is later found to apply under 15.804-1, the
data shall not be considered cost or pricing data and shall not be
certified in accordance with this section.
* * * * *
18. Section 15.804-5 is added to read as follows:
15.804-5 Requiring Information Other Than Cost or Pricing Data
(a)(1) If cost or pricing data are not required because an
exception under 15.804-1 other than paragraph (a)(2) of this section
applies, or an action is at or below the threshold set forth at 15.804-
2(a)(1), the contracting officer shall make a price analysis to
determine the reasonableness of the price and any need for further
negotiation.
(2) The contracting officer may require submission of information
other than cost or pricing data only to the extent necessary to
determine reasonableness of the price or cost realism. Such data shall
not be certified in accordance with 15.804-4.
(3) If cost or pricing data are not requested in the solicitation
because the contracting officer has a reasonable expectation that
adequate price competition as discussed at 15.804-1(b)(1) will result,
the contracting officer may request information to determine the cost
realism of competing offers or to evaluate competing approaches. The
contractor's format for submitting such information shall be used
unless the contracting officer determines that use of a specific format
is essential.
(4) When acquiring commercial items, if the action is based on
adequate price competition, generally no additional information is
necessary to determine the reasonableness of price. However, if it is
determined that additional information is necessary to determine the
reasonableness of the price, the contracting officer shall, to the
maximum extent practicable, obtain the additional information from
sources other than the offeror.
(5) When cost or pricing data are not required because an action is
at or below the threshold set forth at 15.804-2(a)(1), information
requested under paragraph (a)(2) of this section shall include, as a
minimum, appropriate information on the prices and quantities at which
the same or similar items have previously been sold, that is adequate
for evaluating the reasonableness of the proposed price. Partial or
limited cost information may also be required. For example, cost
information might be necessary to support an analysis of material
costs, but not for labor and overhead costs.
(6) When acquiring commercial items, unless adequate information is
available from government sources, it may be necessary to obtain from
the prospective contractor information such as that regarding--
(i) The supplier's marketing system (e.g., use of jobbers, brokers,
sales agencies, or distributors);
(ii) The services normally provided commercial purchasers (e.g.,
engineering, financing, advertising or promotion);
(iii) Normal quantity per order;
(iv) Annual volume of sales to largest customers;
(v) Adjustments such as rebates, credits, or trade-ins available
commercially but not available or used by the Government;
(vi) Additional sales inducements such as training or extended
warranty periods provided to some customers if not provided to the
Government; or
(vii) Prices charged by the primary source of an item offered by a
reseller. [[Page 2288]]
(b)(1) When acquiring commercial items for which an exception under
15.804-1(a)(2) may apply, the contracting officer shall seek to obtain
from the offeror or contractor information on prices at which the same
or similar items have been sold in the commercial market, that is
adequate for evaluating, through price analysis, the reasonableness of
the price of the action.
(2) If such information is not available from the offeror or
contractor, the contracting officer shall seek to obtain such
information from another source or sources.
(3) Requests for sales data relating to commercial items shall be
limited to data for the same or similar items during a relevant time
period.
(4) In requesting information from an offeror under this paragraph
(b), the contracting officer shall, to the maximum extent practicable,
limit the scope of the request to include only information that is in
the form regularly maintained by the offeror in commercial operations.
The SF 1412 shall not be used for this purpose.
(5) Any information obtained pursuant to this paragraph (b) that is
exempt from disclosure under the Freedom of Information Act (5 U.S.C.
552(b)) shall not be disclosed by the Government.
(c) If, after receipt of offers, the contracting officer concludes
there is insufficient information available to determine price
reasonableness and none of the exceptions under 15.804-1 applies, then
cost or pricing data shall be obtained, unless a waiver is granted (see
15.804-1(b)(5)).
19. Section 15.804-6 is amended by revising the heading and
paragraphs (a) and (b) and amending Table 15-2 by:
(a) Revising the heading;
(b) Adding introductory text;
(c) Revising the first paragraph of item 1 and revising the
``Established Catalog'' subparagraph;--
(d) Revising item 4;
(e) Amending in Table B of item 8 by revising the ``under column
(2)'' instructions under the table and;
Adding Table 15-3 above paragraph (c) and revising the first
sentence of paragraph (d).
The revised and added text reads as follows:
15.804-6 Submission of Cost or Pricing Data or Other Information-
(a) Taking into consideration the policy at 15.802, the contracting
officer shall specify in the solicitation (see 52.215-40 and 52.215-
41)----
(1) Whether cost or pricing data are required;--
(2) That, in lieu of submitting cost or pricing data, the offeror
may submit a request for exemption from the requirement to submit cost
or pricing data, as specified by the contracting officer in accordance
with 15.804-1(c);--
(3) Other information required, if cost or pricing data are not
necessary;--
(4) The format (see paragraph (b) of this section) in which the
cost or pricing data or other information shall be submitted; and--
(5) Necessary preaward or postaward access to offeror's records if
not provided by use of Standard Form (SF) 1411, Contract Pricing
Proposal Cover Sheet (Cost or Pricing Data Required), Standard Form
(SF) 1412, Request for Exemption from Submission of Cost or Pricing
Data, or Standard Form (SF) 141X, Proposal Cover Sheet (Cost or Pricing
Data Not Required); or a standard clause such as 52.214-26, Audit and
Records Sealed--Bidding, 52.215-1, Audit and Records--Negotiation, or
52.215-XX, Audit--Commercial Items.-
(b)(1) Cost or pricing data shall be submitted on a SF 1411 unless
required to be submitted on one of the termination forms specified in
48 CFR part 49, subpart 49.6. The SF 1411 shall not be used to submit
any information other than cost or pricing data. Contract pricing
proposals submitted on SF 1411 with supporting attachments shall be
prepared in accordance with Table 15-2. Data supporting forward pricing
rate agreements or final indirect cost proposals shall be submitted in
a format acceptable to the contracting officer.--
(2) If information other than cost or pricing data is required to
support price reasonableness or cost realism, the contracting officer
may require such information to be submitted using a SF 141X. The
information is not considered cost or pricing data in accordance with
15.804-2, and shall not be certified in accordance with 15.804-4.
Information submitted on a SF 141X shall be prepared following the
instructions provided in Table 15-3.
Table 15-2 Instructions for Submission of a Contract Pricing Proposal
When Cost or Pricing Data are Required
The SF 1411 provides a cover sheet for use by offerors to submit
to the Government a pricing proposal of estimated and/or actual
costs only when cost or pricing data are required.
1. The pricing proposal shall be segregated by contract line
item with sufficient detail to permit cost analysis. Attach cost-
element breakdowns, using the applicable formats prescribed in item
8A, B, or C of this section for each proposed line item. These
breakdowns must conform to the instructions in the solicitation and
any specific requirements established by the contracting officer.
Furnish supporting breakdowns for each cost element, consistent with
offeror's cost accounting system.
* * * * *
Established Catalog or Market Prices/Prices Set by Law or
Regulation/Commercial Item Not Covered By Another Exception--When an
exemption from the requirement to submit cost or pricing data is
requested, whether the item was produced by others or by the
offeror, provide justification for the exemption as required by
15.804-1(c).
* * * * *
4. There is a clear distinction between submitting cost or
pricing data and merely making available books, records, and other
documents without identification. The requirement for submission of
cost or pricing data is met when all accurate 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 information comes into the
offeror's possession, it should be promptly submitted to the
contracting officer in a manner that clearly shows how the
information impacts the offeror's price proposal. The requirement
for submission of cost or pricing data continues up to the time of
final agreement on price, or another date agreed upon between the
parties if applicable.
* * * * *
8. Headings for Submission of Line-Item Summaries
* * * * *
B. Change Orders, Modifications, and Claims.
* * * * *
Under Column (2)--Include (i) the current estimates of the cost
to complete the deleted work not yet performed (not the original
proposal estimates), and (ii) the cost of deleted work already
performed.
* * * * *
Table 15-3 Instruction for Submission of Information Other Than Cost
or Pricing Data
SF 141X is a cover sheet for use by offerors to submit
information to the Government when cost or pricing data are not
required but the contracting officer has requested information to
help establish price reasonableness or cost realism. Such
information is not considered cost or pricing data, and shall not be
certified in accordance with 15.804-4. Requests for information
should be tailored so that only necessary data are requested.
1. The information submitted shall be at the level of detail
described in the solicitation or specified by the contracting
officer. The offeror's own format is acceptable unless the
contracting officer determines that use of a specific format is
essential.
A. If adequate price competition is expected, the information
may include cost or technical information necessary to determine the
cost realism and adequacy of the offeror's proposal, e.g.,
information adequate to validate that the proposed costs are
consistent with the technical proposal, or cost breakdowns to help
identify unrealistically low cost proposals. [[Page 2289]]
B. If the offer is expected to be at or below the threshold set
forth at 15.804-2(a)(1), and adequate price competition is not
expected, the information may consist of data to permit the
contracting officer and authorized representatives to determine
price reasonableness, e.g., information to support an analysis of
material costs (when sufficient information on labor and overhead
rates is already available), or information on prices and quantities
at which the offeror has previously sold the same or similar items.-
2. Any information submitted must support the price proposed.
Include sufficient detail or cross references to clearly establish
the relationship of the information provided to the price proposed.
Support any information provided by explanations or supporting
rationale as needed to permit the contracting officer and authorized
representatives to evaluate the documentation.
* * * * *
(d) The requirement for submission of cost or pricing data is met
if all cost or pricing data reasonably available to the offeror are
either submitted or specifically identified in writing by the time of
agreement on price or another time agreed upon by the parties. * * *
* * * * *
20. Section 15.804-7 is amended by revising paragraphs (b)(7)(i),
(ii)(B), and (iii) to read as follows:
15.804-7 Defective Cost or Pricing Data
* * * * *
(b) * * *
(7)(i) In addition to the price adjustment amount, the Government
is also entitled to interest on any overpayments. The Government is
also entitled to penalty amounts on certain of these overpayments.
Overpayment occurs only when payment is made for supplies or services
accepted by the Government. Overpayments would not result from amounts
paid for contract financing as defined in 32.902.
(ii) * * *
(B) Consider the date of each overpayment (The date of overpayment
for this interest calculation shall be (1) the date payment was made
for the related completed and accepted contract items, or (2) for
subcontract defective pricing, the date payment was made to the prime
contractor, based on prime contract progress billings or deliveries,
which included payments for a completed and accepted subcontract item);
and
* * * * *
(iii) In arriving at the amount due for penalties on contracts
where the submission of defective cost or pricing data was a knowing
submission, the contracting officer shall obtain an amount equal to the
amount of overpayment made. Before taking any contractual actions
concerning penalties, the contracting officer shall obtain the advice
of counsel.
* * * * *
21. Section 15.804-8 is amended by revising the heading and adding
paragraphs (h) and (i) to read as follows:
15.804-8 Contract Clauses and Solicitation Provisions
* * * * *
(h) Requirements for Cost or Pricing Data or Other Information. The
contracting officer shall insert the provision at 52.215-41,
Requirements for Cost or Pricing Data or Other Information, in
solicitations only when it is contemplated that cost or pricing data or
other information will be required. Use the provision with Alternate I
to specify a format for cost or pricing data other than the format
required by Table 15-2 of 15.804-6(b). Use the provision with Alternate
II when copies of the proposal are to be sent to the administrative
contracting officer and contract auditor. Use the provision with
Alternate III when submission via electronic media is required. Replace
the basic provision with Alternate IV when a SF 1411 will not be
required because an exception applies, but other information is
required pursuant to 15.804-5.
(i) Requirements for Cost or Pricing Data or Other Information--
Modifications. The contracting officer shall insert the clause at
52.215-42, Requirements for Cost or Pricing Data or Other Information
Modifications, in solicitations and contracts only if it is
contemplated that cost or pricing data or other information will be
required for modifications. Use the clause with Alternate I to specify
a format for cost or pricing data other than the format required by
Table 15-2 of 15.804-6(b). Use the clause with Alternate II if copies
of the proposal are to be sent to the administrative contracting
officer and contract auditor. Use the clause with Alternate III if
submission via electronic media is required. Replace the basic clause
with Alternate IV if a SF 1411 is not required because an exception
applies, but other information is required pursuant to 15.804-5.
22. Section 15.805-1 is amended by adding paragraph (d) to read as
follows:
15.805-1 General
* * * * *
(d) The Armed Services Pricing Manual (ASPM Volume I, ''Contract
Pricing'', and Volume 2, ``Price Analysis'') was issued by the
Department of Defense to guide pricing and negotiating personnel. The
ASPM provides detailed discussion and examples applying pricing
policies to pricing problems. ASPM is available for use for instruction
and professional guidance. However, it is not directive and its
references to Department of Defense forms and regulations should be
considered informational only. Copies of ASPM Vol. 1 (Stock No. 008-
000-00457-9) and Vol. 2 (Stock No. 008-000-00467-6) may be purchased
from the Superintendent of Documents, U.S. Government Printing Office
by telephone (202) 512-1800 or fax (202) 512-2250, or by mail order
from the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA
15250-7954.
23. Section 15.805-2 is amended by adding paragraph (f) to read as
follows:
15.805-2 Price Analysis
* * * * *-
(f) Comparison of proposed prices with prices for the same or
similar items obtained through market research.-
24. Section 15.806-1 is amended in the first sentence of paragraph
(a)(2) by removing the word ``claims'' and inserting ''requests'' in
its place, and revising paragraph (b) to read as follows:
15.806-1 General
* * * * *-
(b) Unless the subcontract qualifies for an exception under 15.804-
1, any contractor required to submit cost or pricing data also shall
obtain cost or pricing data before awarding any subcontract or purchase
order expected to exceed the pertinent threshold set forth at 15.804-
2(a)(1), or issuing any modification involving a price adjustment
expected to exceed the pertinent threshold set forth at 15.804-2(a)(1)
(see example of pricing adjustment at 15.804-2(a)(1)(iii)). To waive
subcontractor cost or pricing data, follow the procedures at 15.804-
1(b)(5).
* * * * *-
25. Section 15.806-2 is amended by revising paragraph (a), the
first sentence of paragraph (c), and paragraph (d) to read as follows:
15.806-2 Prospective Subcontractor Cost or Pricing Data
(a) The contracting officer shall require a contractor that is
required to submit to the Government (or cause submission of) accurate,
complete, and current cost or pricing data from prospective
subcontractors in support of each subcontract cost estimate that is (1)
$1,000,000 or more, (2) both more than the pertinent threshold set
forth at 15.804-2(a)(1) and more than 10% of the prime contractor's
proposed price, or (3) considered to be necessary for adequately
pricing the prime contract. [[Page 2290]] These subcontract cost or
pricing data may be submitted using a Standard Form (SF) 1411, Contract
Pricing Proposal Cover Sheet (Cost or Pricing Data Required).
* * * * *-
(c) If the prospective contractor satisfies the contracting officer
that a subcontract will be priced on the basis of one of the exceptions
in 15.804-1, the contracting officer shall not require submission of
cost or pricing data to the Government in that case. * * *-
(d) Subcontractor data shall be accurate, complete, and current as
of the date of final price agreement or, if applicable, another date
agreed upon between the parties, given on the contractor's Certificate
of Current Cost or Pricing Data. The prospective contractor shall be
responsible for updating a prospective subcontractor's data.
* * * * *-
26. Section 15.808 is amended by revising paragraphs (a) (6) and
(7) to read as follows:
15.808 Price Negotiation Memorandum
(a) * * *
(6) If cost or pricing data were not required in the case of any
price negotiation exceeding the thresholds set forth at 15.804-2(a)(1),
the exception used and the basis for it.--
(7) If cost or pricing data were required by the head of the
contracting activity under 15.804-2(a)(3), the rationale for such
requirement.
* * * * * -
27. Section 15.812-1 is amended by revising paragraph (b) and the
second sentence of paragraph (c) to read as follows:
15.812-1 General
* * * * *-
(b) However, the policy in paragraph (a) of this section does not
apply to any contract or subcontract item of supply for which the price
is, or is based on, an established catalog or market price of a
commercial item sold in substantial quantities to the general public
(see 15.804-1(b)(2)). -
(c) * * * The contracting officer shall require similar information
when contracting by negotiation with full and open competition if
adequate price competition is not expected (see 15.804-1(b)(1)). * * *
15.813 [Reserved] and 15.813-1 Through 15.813-7 [Removed]-
28. Section 15.813 is removed and reserved and subsections 15.813-1
through 15.813-7 are removed.
PART 16--TYPES OF CONTRACTS
16.203-4 [Amended]-
29. Section 16.203-4 is amended in paragraphs (a)(1)(ii) and
(b)(1)(ii) by removing ``15.804-3'' and inserting ``15.804-1'' in its
place. -
30. Section 16.501(c) is amended by revising the first sentence to
read as follows:
16.501 General
* * * * *-
(c) Indefinite-delivery contracts may provide for firm fixed prices
(see 16.202), fixed prices with economic price adjustment (see 16.203),
fixed prices with prospective redetermination (see 16.205), or prices
based on catalog or market prices (see 15.804-1(b)(2)). * * *
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES-
31. Section 31.205-26(e) is revised to read as follows:
31.205-26 Material Costs
* * * * *-
(e) Allowance for all materials, supplies, and services that are
sold or transferred between any divisions, subdivisions, subsidiaries,
or affiliates of the contractor under a common control shall be on the
basis of cost incurred in accordance with this subpart. However,
allowance may be at a price when it is the established practice of the
transferring organization to price interorganizational transfers at
other than cost for commercial work of the contractor or any division,
subsidiary, or affiliate of the contractor under a common control, and
when the item being transferred qualifies for an exception under
15.804-1 and the contracting officer has not determined the price to be
unreasonable.
* * * * *
PART 33--PROTESTS, DISPUTES, AND APPEALS-
32. Section 33.207(d) is revised to read as follows:
33.207 Contractor Certification
* * * * *-
(d) The aggregate amount of both increased and decreased costs
shall be used in determining when the dollar thresholds requiring
certification are met (see example in 15.804-2(a)(1)(iii) regarding
cost or pricing data).
* * * * *
PART 36--CONSTRUCTION AND ARCHITECT ENGINEERING CONTRACTS-
33. Section 36.402 is amended by revising the introductory text of
paragraph (b) and paragraph (b)(1) to read as follows:
36.402 Price Negotiation
* * * * *-
(b) The contracting officer shall evaluate proposals and associated
cost or pricing data or other information and shall compare them to the
Government estimate.--
(1) When submission of cost or pricing data is not required (see
15.804-1 and 15.804-2, and any element of proposed cost differs
significantly from the Government estimate, the contracting officer
should request the offeror to submit cost data concerning that element
(e.g., wage rates or fringe benefits, significant materials, equipment
allowances, and subcontractor costs).
* * * * *
PART 45--GOVERNMENT PROPERTY-
34. Section 45.103(b)(1) is revised to read as follows:
45.103 Responsibility and Liability for Government Property
* * * * *-
(b) * * *--
(1) Negotiated fixed price contracts for which the contract price
is not based upon an exception at 15.804-1;
* * * * *-
35. Section 45.106(b)(2) is revised to read as follows:
45.106 Government Property Clauses
* * * * *-
(b) * * *--
(2) If the contract is (i) a negotiated fixed-price contract for
which prices are not based on an exception at 15.804-1, or (ii) a
fixed-price service contract which is performed primarily on a
government installation, provided the contracting officer determines it
to be in the best interest of the government (see subpart
45.103(b)(4)), the contracting officer shall use the clause with its
Alternate I.
* * * * *
PART 46--QUALITY ASSURANCE
46.804 [Amended]-
36. Section 46.804 is amended by removing ``(see 15.804-3(c))'' and
inserting ``(see 15.804-1(b)(2))'' in its place.
[[Page 2291]]
PART 49--TERMINATION OF CONTRACTS
49.208 [Amended]-
37. Section 49.208 is amended in the introductory text by adding
``(Cost or Pricing Data Required)'' before the period at the end.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES-
38. Section 52.214-27 is amended by revising the clause date and
paragraphs (a) and (e)(2) to read as follows:
52.214-27 Price Reduction for Defective Cost or Pricing Data--
Modifications--Sealed Bidding
* * * * *
Price Reduction for Defective Cost or Pricing Data--Modifications--
Sealed Bidding (XXX 1995)-
(a) This clause shall become operative only for any modification
to this contract involving aggregate increases and/or decreases in
costs, plus applicable profits, of more than the threshold for the
submission of cost or pricing data at FAR 15.804-2(a)(1), except
that this clause does not apply to a modification if an exception
under FAR 15.804-1 applies.
* * * * *-
(e) * * *--
(2) A penalty equal to the amount of the overpayment, if the
Contractor or subcontractor knowingly submitted cost or pricing data
which were incomplete, inaccurate, or noncurrent.
(End of clause)
-39. Section 52.214-28 is amended by revising the clause date and
paragraphs (a), (b), and (d) to read as follows:
52.214-28 Subcontractor Cost or Pricing Data--Modifications--Sealed
Bidding
* * * * *
Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding (XXX
1995)-
(a) The requirements of paragraphs (b) and (c) of this clause
shall (1) become operative only for any modification to this
contract involving aggregate increases and/or decreases in costs,
plus applicable profits, expected to exceed the threshold for
submission of cost or pricing data at FAR 15.804-2(a)(1), and (2) be
limited to such modifications.-
(b) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1) when entered into, or pricing any subcontract modifications
involving aggregate increases and/or decreases in costs, plus
applicable profits, expected to exceed the threshold for submission
of cost or pricing data at FAR 15.804-2(a)(1), the Contractor shall
require the subcontractor to submit cost or pricing data (actually
or by specific identification in writing), unless an exception under
FAR 15.804-1 applies.
* * * * *-
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in each subcontract that, when entered
into, exceeds the threshold for submission of cost or pricing data
at FAR 15.804-2(a)(1).
(End of clause)
52.215-22 [Amended]-
40. Section 52.215-22 is amended by revising the clause date to
``(XXX 1995)'', and in paragraph (d)(2) by removing ``For Department of
Defense contracts only, a'' and inserting ``A'' in its place.-
41. Section 52.215-23 is amended by revising the clause date and
paragraphs (a) and (e)(2) to read as follows:
52.215-23 Price Reduction for Defective Cost or Pricing Data--
Modifications
* * * * *
Price Reduction for Defective cost or Pricing Data--Modifications (XXX
1995)-
(a) This clause shall become operative only for any modification
to this contract involving a pricing adjustment expected to exceed
the threshold for submission of cost or pricing data, at FAR 15.804-
2(a)(1), except that this clause does not apply to a modification if
an exception under FAR 15.804-1 applies.
* * * * *--
(e) * * *----
(2) A penalty equal to the amount of the overpayment, if the
Contractor or subcontractor knowingly submitted cost or pricing data
which were incomplete, inaccurate, or noncurrent.
(End of clause)
-42. Section 52.215-24 is amended by revising the clause date,
paragraph (a), and the introductory text of (c) to read as follows:
52.215-24 Subcontractor Cost or Pricing Data
* * * * *
Subcontractor Cost or Pricing Data (XXX 1995)--
(a) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), when entered into, or before pricing any subcontract
modification involving a pricing adjustment expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), the Contractor shall require the subcontractor to submit
cost or pricing data (actually or by specific identification in
writing), unless an exception under FAR 15.804-1 applies.
* * * * *-
(c) In each subcontract that exceeds the threshold for
submission of cost or pricing data at FAR 15.804-2(a)(1), when
entered into, the Contractor shall insert either--
* * * * *-
43. Section 52.215-25 is amended by revising the clause date and
paragraphs (a), (b) and (d) to read as follows:
52.215-25 Subcontractor Cost or Pricing Data--Modifications
* * * * *
Subcontractor Cost or Pricing Data--Modifications (XXX 1995)-
(a) The requirements of paragraphs (b) and (c) of this clause
shall (1) become operative only for any modification to this
contract involving a pricing adjustment expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1); and (2) be limited to such modifications.-
(b) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), when entered into, or pricing any subcontract modification
involving a pricing adjustment expected to exceed the threshold for
submission of cost or pricing data at FAR 15.804-2(a)(1), the
Contractor shall require the subcontractor to submit cost or pricing
data (actually or by specific identification in writing), unless an
exception under FAR 15.804-1 applies.
* * * * *--
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in each subcontract that exceeds the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), when entered into.
(End of clause)
-44. Section 52.215-26 is amended by revising the clause date and
the last sentence in paragraph (b) to read as follows:
52.215-26 Integrity of Unit Prices
* * * * *
Integrity of Unit Prices (XXX 1995)
* * * * *
(b) * * * A price is based on an established catalog or market
price only if the item being purchased is sufficiently similar to
the catalog or market priced commercial item to ensure that any
difference in prices can be identified without resort to cost
analysis.
* * * * *
52.215-32 and 52.215-37 [Removed and Reserved)
45. Sections 52.215-32 and 52.215-37 are removed and reserved.
46. Sections 52.215-41 and 52.215-42 are added to read as follows:
52.215-41 Requirements for Cost or Pricing Data or Other Information
As prescribed in 15.804-8(h), insert the following
provision: [[Page 2292]]
Requirements for Cost or Pricing Data or Other Information (XXX 1995)
(a) In lieu of submitting cost or pricing data, offerors may
submit a written request for exemption from the requirement for
submission of cost or pricing data by submitting--
(1) SF 1412, Request for Exemption From Submission of Cost or
Pricing Data;
(2) Information relative to an exemption granted for prior or
repetitive acquisitions; or
(3) For commercial items not covered by another exception,
information on prices at which the same item or similar items have
been sold in the commercial market.
(b)(1) Unless the offeror is granted an exemption from the
requirement to submit cost or pricing data, the offeror shall submit
cost or pricing data on Standard Form (SF) 1411, Contract Pricing
Proposal Cover Sheet (Cost or Pricing Data Required), with
supporting attachments prepared in accordance with Table 15-2 of FAR
15.804-6(b)(2).
(2) As soon as practicable after final agreement on price, but
before contract award (except for unpriced actions such as letter
contracts), the offeror shall submit a Certificate of Current Cost
or Pricing Data, as prescribed by FAR 15.804-4.
(End of provision)
Alternate I (XXX 1995). As prescribed in 15.804-8(h), substitute
the following paragraph (b)(1) for paragraph (b)(1) of the basic
provision: -
(b)(1) Unless the offeror is granted an exemption from the
requirement to submit cost or pricing data, the offeror shall submit
cost or pricing data on Standard Form (SF) 1411, Contract Pricing
Proposal Cover Sheet (Cost or Pricing Data Required), with
supporting attachments prepared in the following format:
Alternate II (XXX 1995). As prescribed in 15.804-8(h), add the
following paragraph (c) to the basic provision:
(c) When the proposal is submitted, also submit one copy each,
including the SF 1411 and supporting attachments, to: (1) the
Administrative Contracting Officer, and (2) the Contract Auditor.
Alternate III (XXX 1995). As prescribed in 15.804-8(h), add the
following paragraph (c) to the basic provision (if Alternate II is
also used, redesignate as paragraph (d)):
(c) Submit the cost portion of the proposal via the following
electronic media: (Insert media format, e.g., electronic spreadsheet
format, electronic mail, etc.).
Alternate IV (XXX 1995). As prescribed in 15.804-8(h), replace
the text of the basic provision with the following:
(a) Submission of cost or pricing data is not required.
(b) Provide information described below: (Insert description of
the information and the format that are required, including access
to records necessary to permit an adequate evaluation of the
proposed price in accordance with 15.804-6(a)(5). Standard Form
141X. Proposal Cover Sheet (Cost or Pricing Data Not Required), may
be used for information other than cost or pricing data.)
52.215-42 Requirements for Cost or Pricing Data or Other Information--
Modifications
As prescribed in 15.804-8(i), insert the following clause:
Requirements for Cost or Pricing Data or Other Information--
Modifications (XXX 1995)
(a) In lieu of submitting cost or pricing data for modifications
under this contract, for price adjustments expected to exceed
threshold set forth at FAR 15.804-2(a)(1), the Contractor may submit
a written request for exemption from the requirement for submission
of cost or pricing data by submitting--
(1) Standard Form 1412, Request for Exemption From Submission of
Cost or Pricing Data;
(2) Information relative to an exemption granted for prior or
repetitive acquisitions; or
(3) For commercial items not covered by another exception,
information on prices at which the same item or similar items have
been sold in the commercial market.
(b)(1) Unless the Contractor is granted an exemption from the
requirement to submit cost or pricing data, the Contractor shall
submit cost or pricing data on Standard Form (SF) 1411, Contract
Pricing Proposal Cover Sheet (Cost or Pricing Data Required), with
supporting attachments prepared in accordance with Table 15-2 of FAR
15.804-6(b)(2).
(2) As soon as practicable after final agreement on price, but
before contract award (except for unpriced actions such as letter
contracts), the offeror shall submit a certificate of Current Cost
or Pricing Data, as prescribed by FAR 15.804-4.
(End of clause)
Alternate I (XXX) 1995). As prescribed in 15.804-8(i),
substitute the following paragraph (b)(1) for paragraph (b)(1) of
the basic clause.
(b)(1) Unless the Contractor is granted an exemption from the
requirement to submit cost or pricing data, the Contractor shall
submit cost or pricing data on Standard Form (SF) 1411, Contract
Pricing Proposal Cover Sheet (Cost or Pricing Data Required), with
supporting attachments prepared in the following format:
Alternate II (XXX 1995). As prescribed in 15.804-8(i), add the
following paragraph (c) to the basic clause:
(c) When the proposal is submitted, also submit one copy each,
including the SF 1411 and supporting attachments, to: (1) the
Administrative Contracting Officer, and (2) the Contract Auditor.
Alternate III (XXX 1995). As prescribed in 15.804-8(i), add the
following paragraph (c) to the basic clause (if Alternate II is also
used, redesignate as paragraph (d)):
(c) Submit the cost portion of the proposal via the following
electronic media: (Insert media format).
Alternate IV (XXX 1995). As prescribed in 15.804-8(i), replace
the text of the basic provision with the following:
(a) Submission of cost or pricing data is not required.
(b) Provide information described below: (Insert description of
the information and the format that are required, including access
to records necessary to permit an adequate evaluation of the
proposed price in accordance with 15.804-6(a)(5). Standard Form
141X, Proposal Cover Sheet (Cost or Pricing Data Not Required), may
be used for information other than cost or pricing data.)
47. Section 52.215-XX is added to read as follows:
52.215-XX Audit--Commercial Items
As prescribed at 15.106-2, insert the following clause:
Audit--Commercial Items (XXX 1995)
(a) As used in this clause, records include books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of whether such items are in written form, in
the form of computer data, or any other form.
(b) This paragraph applies to solicitations and contracts/
subcontracts for commercial items that may be or have been granted
an exemption from submittal of cost or pricing data under FAR
15.804-1(a)(2). In order to determine the accuracy of the
information on prices at which the same or similar items have been
sold in the commercial market, the Contracting Officer and
authorized representatives have a right to examine such information
provided by the offeror, Contractor, or subcontractor, and all
records that directly relate to such information. This right shall
expire two years after the date of award of the contract, or two
years after the date of any modification to the contract, with
respect to which this information is provided.
(c) If the prime Contractor and each higher-tier subcontractor
were required to submit cost or pricing data, the Contractor shall
insert the substance of this clause, including this paragraph (c),
in each subcontract for which submission of cost or pricing data was
required or was exempted under FAR 15.804-1(a)(2).
(End of clause)
52.216-2 Economic Price Adjustment--Standard Supplies
48. Section 52.216-2(a)(2) is amended by removing ``15.804-3'' and
inserting ``15.804-1'' in its place.
49. Section 52.216-3 is amended by revising the clause date and
paragraph (a)(2) to read as follows:
52.216-3 Economic Price Adjustment--Semistandard Supplies
* * * * *
Economic Price Adjustment--Semistandard Supplies (XXX 1995)
(a) * * * (2) meets the criteria of subsection 15.804-1 of the
Federal Acquisition Regulation (FAR), and * * *
* * * * *
50. Section 52.216-5 is amended by revising the clause date and
paragraph (d)(1)(i)(A) to read as follows:
52.216-5 Price Redetermination--Prospective
* * * * * [[Page 2293]]
Price Redetermination--Prospective (XXX 1995)
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An estimate and breakdown of the costs of these supplies or
services on Standard Form 1411, Contract Pricing Proposal Cover
Sheet (Cost or Pricing Data Required) (or in any other form on which
the parties may agree);
* * * * *
51. Section 52.216-6 is amended by revising the clause date and
paragraph (c)(1)(ii) to read as follows:
52.216-6 Price Redetermination--Retroactive
* * * * *
Price Redetermination--Retroactive (XXX 1995)
* * * * *
(c) * * *
(1) * * *
(ii) A statement on Standard Form 1411, Contract Pricing
Proposal Cover Sheet (Cost or Pricing Data Required), or in any
other form on which the parties may agree, of all costs incurred in
performing the contract; and
* * * * *
52. Section 52.216-25, introductory text, is revised to read as
follows:
52.216-25 Contract Definitization
As prescribed in 16.603-4(b)(3), insert the following clause in
solicitations and contracts when a letter contract is contemplated. 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 15.804-1 for
not requiring submission of cost or pricing data, the words ``and cost
or pricing data supporting its proposal'' may be deleted from paragraph
(a) of the clause.
* * * * *
53. Section 52.222-48 is amended by revising the clause date and
paragraph (a)(ii) to read as follows:
52.222-48 Exemption From Application of Service Contract Act
Provisions for Contracts for Maintenance, Calibration, and/or Repair of
Certain ADP, Scientific and Medical and/or Office and Business
Equipment--Contractor Certification
* * * * *
Exemption From Application of Service Contract Act Provisions (XXX
1995)
(a) * * * (ii) The contract services are furnished at prices
which are, or are based on, established catalog or market prices for
the maintenance, calibration, and/or repair of certain ADP,
scientific and medical and/or office and business equipment. An
``established catalog price'' is a price (including discount price)
recorded in a catalog, price list schedule, or other verifiable and
established record that is regularly maintained by the manufacturer
or the Contractor, is either published or otherwise available for
inspection by customers, and states prices at which sales are
currently, or were last, made to a significant number of buyers
constituting the general public. An ``established market price'' is
a current price, established in the course of ordinary and usual
trade between buyers and sellers free to bargain, which can be
substantiated by data from sources independent of the manufacturer
or Contractor; and * * *
* * * * *
PART 53--FORMS
54. Section 53.215-2 is revised to read as follows:
53.215-2 Price Negotiation (SF's 1411, 1412, and 141X)
The following standard forms are prescribed for use in connection
with requirements for obtaining cost or pricing data or other
information from offerors or contractors, as specified in 15.804:
(a) SF 1411 (REV. XXX/95), Contract Pricing Proposal Cover Sheet
(Cost or Pricing Data Required). (See 15.804-6(b)(1).)
(b) SF 1412 (REV. XXX/95), Request for Exemption from Submission of
Cost or Pricing Data. (See 15.804-1(e).)
(c) SF 1412A (XXX/95), Continuation Sheet (for SF 1412). SF 1412
and SF 1412A are authorized for local reproduction.
(d) SF 141X (XXX/95), Proposal Cover Sheet (Cost or Pricing Data
Not Required). (See 15.804-6(b)(2).)
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[FR Doc. 95-12 Filed 1-5-95; 8:45 am]
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