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Intrepid411

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  1. Very long time reader, 1st time poster. I respectfully disagree with the statement, “If the prime and sub have not reached agreement on price before the prime and government have reached agreement on price, the prime is to obtain a certificate from the sub and submit it along with the certificate from the prime. In the latter case, the prime is required to get another certificate from the sub when the prime and sub reach agreement on price.” There should only be one certificate per pricing action, it comes whenever two parties complete a negotiation over the threshold (and no exception exists). If the prime and sub have not agreed on the price at the time the prime and government agree on price, the prime should ensure they have provided all information they have as of the date of price agreement (regarding the sub in this example) to the Government. They should not ask the sub to provide a certificate until they are negotiated with the prime. This understanding is evidenced in a few places: FAR clause 52.215-12, Subcontractor Certified Cost or Pricing Data directs the prime contractor, prior to the award of a subcontract expected to exceed the threshold for submission of certified cost or pricing data, to require the subcontractor to submit cost or pricing data. The clause further directs the prime contractor to require the subcontractor to certify that, to the best of the subcontractor's knowledge and belief, the data submitted were accurate, complete and current as of the date of agreement on the negotiated price of the subcontract. Nothing in this clause requires or even suggests that the subcontract has to be negotiated or the subcontractor's certificate of current cost or pricing data has to be executed prior to or concurrent with the prime contractor's certification of cost or pricing data. FAR clause 52.215-10, Price Reduction for Defective Certified Cost or Pricing Data, provides for a reduction in contract price if (1) a contractor or subcontractor furnished cost or pricing data that were not complete, accurate, and current as certified in its Certificate of Current Cost or pricing Data or (2) a subcontractor or prospective contractor furnished the contractor cost or pricing data that were not complete, accurate, and current as certified in the contractor’s Certificate of Current Cost or Pricing Data. The latter provision contemplates the circumstance where the prime contractor has executed a Certificate of Current Cost or Pricing Data and the subcontractor or prospective subcontractor has not. The Armed Services Board of Contract Appeals has recognized that the Truth In Negotiations Act requires the submission of subcontractor cost or pricing data and the certification of such data as accurate, complete, and current upon two occasions: (1) as of the date of final price agreement between the prime contractor and the government; and (2) when the subcontractor and prime contractor agree on a negotiated subcontract price, which can occur months after agreement on the government's and prime contractor's price. McDonnell Aircraft Co., ASBCA No. 44504, 03-01 BCA 32154. In McDonnell, the prime contractor signed a Certificate of Current Cost or Pricing Data on August 16, 1988, certifying that its cost or pricing data was complete, accurate, and current as of June 24, 1988. Almost a year later, on August 2, 1989, the subcontractor executed a Certificate of Current Cost or pricing Data, certifying that the subcontractor's cost or pricing data was complete, accurate, and current as of January 16, 1989. Far Clause 15.404-3, Subcontract pricing considerations (b) The prime contractor or subcontractor shall- (3) When required by paragraph (c) of this subsection, submit subcontractor certified cost or pricing data to the Government as part of its own certified cost or pricing data. (c) Any contractor or subcontractor that is required to submit certified cost or pricing data also shall obtain and analyze certified cost or pricing data before awarding any subcontract… (3) Subcontractor certified cost or pricing data shall be submitted in the format provided in Table 15-2 of 15.408… (4) Subcontractor certified cost or pricing data shall be current, accurate, and complete as of the date of price agreement.… The contractor shall update subcontractor’s data, as appropriate, during source selection and negotiations. (5) If there is more than one prospective subcontractor for any given work, the contractor need only submit to the Government certified cost or pricing data for the prospective subcontractor most likely to receive the award. The quoted portions or 15.404-3 are consistent with 15.403-4. The subcontractor certificate must precede award of the subcontract. Where there is not yet an agreement on price, there is no requirement for subcontract certification.
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