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When are Prime contractors required to obtain Certified Cost or

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I forgot to clarify. The prime contract in my example was negotiated and the prime ws required to certify its cost or pricing data back at the award.

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Retread, you are arguing the wrong point. I don't disagree with you that the prime needas to obtain C or P data from actual or prospective subs during the prime contract award process and that that information is useful and relevant.

This thread concerns a replacement subcontractor who was supposedly neither an actual or prospective sub at the time of negotiations or award of the FFP contract action. In fact, this sub has no relation to the contract action for which the C or P was required. In fact, this decision to replace a non-performing subcontractor isn't a contract action at all..

Now, I answered your question, so please answer mine. Let me make it clearer. If a prime doesn't solicit a subcontract for say - painting, for two years after the FFP construction contract was awarded and he wants to then use a SB painter that he just found out about, does he have to submit cost or pricing data from his negotiations with that sub? The sub was never a prospective sub until now. The prime contract price was based upon an estimate by the prime at the time of award.

Joel, you are missing the point. I have never said the prime needs to submit the sub's cost or pricing data to the government in Midas' situation. The issue has always been whether a prime has to obtain cost or pricing data from a subcontractor when the criteria Vern identified are present and the subcontract will be awarded after agreement on price between the prime and government. In the situation described by Midas, and even your painting subcontractor, if the subcontract will exceed $650K, does not fall within one of the three exemptions for disclosure of cost or pricing data, and the prime contract contains 52.215-12, then as a matter of contract and consistent with TINA, the prime must obtain cost or pricing data from the sub. The prime does not have to disclose that cost or pricing data to the government or certify it as its own. If you read 52.215-12 and 13, you can come to no other conclusion. If the prime does not obtain cost or pricing data post award in circumstances similar to Midas', the prime will be in breach of its contractual obligations.

I have already said I don't think it makes much sense to obtain cost or pricing data from a sub after agreement on the price of the prime contract in the case of a FFP prime contract. However, there is some logic to doing so for cost reimbursement and FPI contracts as evidenced by FAR 15.407-1(f)(2). Under this latter section, the government is permitted a cost disallowance if the data submitted by the sub after prime contract award is defective.

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This isn't a cost contract, so my commemts are and have been directed to fixed price contracts.

The point made in the articles and by me is that the the replacement subcontract would not be related to the contract action for which the C and P data was required. Therefore the proposal for such replacement subcontract isn't "cost or pricing data" as defined by TINA. Since it isn't C and P data, there is no need to submit it. I understand your argument. If it were C and P data, the prime would have to obtain it per the clause.

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Joel:

Here is the text of the contract clause at FAR 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997):

Subcontractor Cost or Pricing Data (Oct 1997)

(a) Before awarding any subcontract expected to exceed the threshold for submission of cost or pricing data at FAR 15.403-4, on the date of agreement on price or the date of award, whichever is later; or before pricing any subcontract modification involving a pricing adjustment expected to exceed the threshold for submission of cost or pricing data at FAR 15.403-4, the Contractor shall require the subcontractor to submit cost or pricing data (actually or by specific identification in writing), unless an exception under FAR 15.403-1 applies.

(B) The Contractor shall require the subcontractor to certify in substantially the form prescribed in FAR 15.406-2 that, to the best of its knowledge and belief, the data submitted under paragraph (a) of this clause were accurate, complete, and current as of the date of agreement on the negotiated price of the subcontract or subcontract modification.

© In each subcontract that exceeds the threshold for submission of cost or pricing data at FAR 15.403-4, when entered into, the Contractor shall insert either?

(1) The substance of this clause, including this paragraph ©, if paragraph (a) of this clause requires submission of cost or pricing data for the subcontract; or

(2) The substance of the clause at FAR 52.215-13, Subcontractor Cost or Pricing Data?Modifications.

(End of clause)

That clause goes into a government prime contract. As a contract clause, it is effective after award of the prime contract, by which time the government and the contractor will have reached agreement on the prime contract price (unless the contract is a letter contract). The clause thus expressly requires that the prime obtain something called "cost or pricing data" from subs after the pricing and award of the prime contract, and that the prime require such subs to obtain something called "cost or pricing data" from their own subs after the pricing and award of the prime contract.

Now, it should be clear to all that defective data submitted by a subcontractor after the pricing and award of the price contract cannot have affected the pricing of the prime contract and is not cost or pricing data for that purpose. But why would it not be cost or pricing data for the purpose of pricing actions that might take place in the future?

If such data are not cost or pricing data under any circumstances, then why the clause?

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This isn't a cost contract, so my commemts are and have been directed to fixed price contracts.

The point made in the articles and by me is that the the replacement subcontract would not be related to the contract action for which the C and P data was required. Therefore the proposal for such replacement subcontract isn't "cost or pricing data" as defined by TINA. Since it isn't C and P data, there is no need to submit it. I understand your argument. If it were C and P data, the prime would have to obtain it per the clause.

Joel, the proposal for the replacement subcontract is not cost or pricing data. What is cost or pricing data are the facts that would relate to negotiating a fair and reasonable price for that subcontract. Your position invalidates FAR 52.215-12 except for cost reimbursement and possible FPI contracts. However, that clause is also required to be inserted in FFP contracts if the contractor was required to submit cost or pricing data. Per that clause and TINA, subcontractors are required to disclose cost or pricing data before award of the subcontract. The clause and TINA do not restrict this obligation only to subcontract actions that could impact the pricing of the prime contract.

I don't understand your logic on this. FAR 52.215-12 requires the prime contractor to obtain cost or pricing data from subcontractors. That clause can only become effective after the prime contractor and government have agreed on price and the prime contract has been awarded. As I understand what you are saying, because pricing data that does not affect the negotiation of the price of the prime contract, that data cannot be considered cost or pricing data. If that is the case, what is a prime contractor required to obtain from subcontractors to be in compliance with 52.215-12 and to give meaning to the clause?

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"FAR 52.215-12 requires the prime contractor to obtain cost or pricing data from subcontractors. That clause can only become effective after the prime contractor and government have agreed on price and the prime contract has been awarded. As I understand what you are saying, because pricing data that does not affect the negotiation of the price of the prime contract, that data cannot be considered cost or pricing data. If that is the case, what is a prime contractor required to obtain from subcontractors to be in compliance with 52.215-12 and to give meaning to the clause"

Retreadfed, I cant make a general statement that covers all circumstances. However, the Contractor has to obtain cost or pricing data from its actual or prospective subs for a contract action, where exemptions don't apply. It must be current as of the date in the certification and in some cases, must be updated as of the date of certification of current cost or pricing for the contract or mod. I dont have the FAR with me tonight, but I seem to remember there being a provision covering the contract negotiation, in addition to the clause.

What I'm trying to tell you is that cost data created after award of the prime contract or modification are not always (maybe never) "cost or pricing data" for purposes of that contract action. Cost data created long after the action in this situation is not cost or pricing data for the contract action. If it were, then the prime would have to obtain it and submit it under the appropriate circumstances.

By the way, modifications certainly occur after contract award, so the clause would apply to negotiate mods meeting the applicable TINA thresholds and conditions.

According to at least one case, GSBCA 15871 Viacom, Inc., September 21, 2005:

"The relevant cost or pricing data is that data in existence at the time of price negotiations. McDonnell Aircraft Co., ASBCA 44504, 97-1 BCA 28,977, at 144,315 (contractor has no duty to supply accurate and complete subcontractor cost data created after prime and subcontractor have reached agreement on price); Aydin Monitor Systems, NASA BCA 381-1, 83-1 BCA 16,500 at 81,997 (1983), reconsideration granted on other grounds, 84-2 BCA 17,297; see United States v. Davis, 803 F. Supp. 830, 863 (N.D.N.Y. 1992); aff'd in part, rev'd in part sub nom. United States v. General Dynamics Corp., 19 F.3d 770 (2nd Cir. 1994); Plessey Industries, Inc., ASBCA 16720, 74-1 BCA 10,603, at 50,277 (citing Paceco, Inc., ASBCA 16458, 73-2 BCA 10,119 (data created between cost and pricing data certification and award date not cost or pricing data that was required to be submitted) (in TINA context, duty to disclose complete, accurate and current data extends only to the date of price negotiations). We have found as fact that price negotiations were concluded on December 19, 1984. Finding 27. Thus the relevant ending date for transactions which were to be submitted as cost or pricing data was December 19, 1984, not July 1, 1985. Therefore, any Westinghouse discount data that existed only after December 19, 1984, was not cost or pricing data that Westinghouse was required to submit to the Government."

In our situation, the contractor replaced a subcontractor with a substitute, after performance was underway, supposedly for failure to perform. I am assuming that it was necessary for the contractor to succeed in or least to try to recover satisfactory contract performance. I am assuming here, as the basis of my argument, that neither the "cost data" that the replacement sub submitted to the prime in order for the prime to negotiate the new subcontract or the prime's intent to replace the original sub with a new sub existed at the time of agreement or the prime's certification of current cost or pricing data. So, such data is not "cost or pricing data". This action was unrelated to the price the government paid for the work.

There is no use arguing any further. You keep asking me to generally define what is "cost or pricing data" and to generally define when a contractor has to obtain it.

I'm only trying to tell you that, in this instance, the "cost data" was created (long) after the date of the certification of complete and accurate cost or pricing data, long after the agreement on the contract action, and (supposedly, long) after contract performance. There is no indication that the Contractor intended to replace an actual sub with a new sub at the time of its certification or at the time of agreement on negotiations or even as of contract award.

This specific information, which either supports a subcontractor's proposal or even the negotiated replacement subcontract is not "cost or pricing data" and it certainly isn't related to the price that the government paid for the contract. The Government certainly can't use such late information for a price reduction. There are cases all over the place that the government has lost, because of acts subsequent to the certified cost or pricing data for the contract and subsequent to contract or modification award, not constituting defective cost or pricing data.

If a contractor has quotes for steel for a construction contract that it wont need for a year, it might propose a cost based upon the steel quote with some risk factor applied for future cost escalation, because steel fabricators and suppliers will typically refuse to forward price structural steel that far in advance. When the time comes to purchase the steel, the contractor may go back to its regular supplier or fabricator and the price may be more or less than the originally proposed price, based upon current market conditions. However, the actual steel pricing data is not "cost or pricing data". For that matter, the original proposed pricing information maight not be "cost or pricing data", either - at least the judgmental risk factor placed upon a short term steel quote. There certainly isn't "defective cost or pricing" in either the original daqta or the actual data, if the price comes in less than estimated at the time of contract negotiations.

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Joel,

You have muddied up the waters pretty badly, and the more you have explained, the muddier the waters have become. I understand what you're saying, but I think your reasoning has cast you into a deadly definitional spin from which you cannot recover. You are right that there is no use in arguing further. By the way, the problem is not with the Briefing Papers, but with your understanding of them and of the subcontractor cost or pricing data clauses.

If (a) the prime contract contains one of the subcontractor cost or pricing data clauses, (B) if the TINA threshold is met, and © if no exception applies, then the prime must obtain "cost or pricing data" from the replacement sub. The data will have no relevance for the original pricing of the prime contract, but they are "cost or pricing data" nonetheless, and may be relevant to future pricing actions.

Poor midas.

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The provision is FAR 15.215-20, Requirements for Cost or Pricing Data or Information Other than Cost or Pricing Data.

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Joel,

You have muddied up the waters pretty badly, and the more you have explained, the muddier the waters have become. I understand what you're saying, but I think your reasoning has cast you into a deadly definitional spin from which you cannot recover. You are right that there is no use in arguing further. By the way, the problem is not with the Briefing Papers, but with your understanding of them and of the subcontractor cost or pricing data clauses.

If (a) the prime contract contains one of the subcontractor cost or pricing data clauses, (B) if the TINA threshold is met, and ? if no exception applies, then the prime must obtain "cost or pricing data" from the replacement sub. The data will have no relevance for the original pricing of the prime contract, but they are "cost or pricing data" nonetheless, and may be relevant to future pricing actions.

Poor midas.

Vern, do you know where I can find guidance on the requirement for the FFP Contractor to furnish subcontractor cost or pricing data to the government for subcontracts or what the government is supposed to do with it, when not part of the contractor's certified cost or pricing submission for a contract action? I could only find instructions in FAR Table 15-2, II A(2) to include data from prospective subcontractors as part of the Contractor's cost or pricing data and submission for a proposal. I looked in FAR and DFARS Parts 15, 42, and 44. Of course, there is guidance on cost reimbursement prime contracts.

I also checked the DCAA Contract Audit Manual. In 9-106.1, it generally states that DCAA wont expend audit resources on such subcontractor pricing proposals, unless the government may benefit from a price reduction.

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Joel:

The rules about prime contractor submission to the government of cost or pricing data obtained from subcontractors are at FAR 15.404-3©. The rules are the same for all contract types.

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Joel:

The rules about prime contractor submission to the government of cost or pricing data obtained from subcontractors are at FAR 15.404-3?. The rules are the same for all contract types.

Yes, but my question is where is the guidance to the government on what to do with it? 15.404-3 (cee) deals with information used to price the prime contract.

The only guidance I can find for covers what to do with subcontractor pricing as part of the proposal, not for replacement subcontracts or subcontracts that are newly solicited after the contract or mod date.

Plus, the guidance to the contractor on the "how to submit it" is to include it as part of its cost or pricing submission.

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I don't know of any guidance about what the government is supposed to do with it. I suppose it depends on the situation. Maybe someone wants the prime to get it in case it becomes significant in light of future events. In any case, if the prime contract includes the -12 or -13 clause, then the contractor has to get it. What the contractor does with it or what the government does with it, if anything, is another matter entirely.

Why are you beating this to death? Do you deny the existence of the -12 and -13 clauses? If not, why can't you accept that they are there and that they call upon the prime to get cost or pricing data from subs after award of the prime contract? What's up? What do you want?

The clauses in question are old. They predate the FAR. They have never posed a problem. Everybody seems to have understood them perfectly. Except you.

Give it a rest.

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I don't know of any guidance about what the government is supposed to do with it. I suppose it depends on the situation. Maybe someone wants the prime to get it in case it becomes significant in light of future events. In any case, if the prime contract includes the -12 or -13 clause, then the contractor has to get it. What the contractor does with it or what the government does with it, if anything, is another matter entirely.

Why are you beating this to death? Do you deny the existence of the -12 and -13 clauses? If not, why can't you accept that they are there and that they call upon the prime to get cost or pricing data from subs after award of the prime contract? What's up? What do you want?

The clauses in question are old. They predate the FAR. They have never posed a problem. Everybody seems to have understood them perfectly. Except you.

Give it a rest.

Because, if such subcontract proposals on FFP contracts are really "cost or pricing data", as they are on cost reimbursable or cost rederminable type contracts, there should be guidance on what to do with it or what it can be used for. All I found is where DCAA says - as it said way back at the date of my Briefing Papers article - that it isn't going to audit it because there is no benefit to the government.

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Because, if such subcontract proposals on FFP contracts are really "cost or pricing data", as they are on cost reimbursable or cost rederminable type contracts, there should be guidance on what to do with it or what it can be used for. All I found is where DCAA says - as it said way back at the date of my Briefing Papers article - that it isn't going to audit it because there is no benefit to the government.

It's not just cost reimbursable and cost redeterminable type contracts. It's also FFP/EPA, FPI(F), FPI(S), and FP Redeterminable (prospective and retroactive). It's FFP with claims. It's T&M and L-H. It's FFP letter contracts.

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Because, if such subcontract proposals on FFP contracts are really "cost or pricing data", as they are on cost reimbursable or cost rederminable type contracts, there should be guidance on what to do with it or what it can be used for. All I found is where DCAA says - as it said way back at the date of my Briefing Papers article - that it isn't going to audit it because there is no benefit to the government.

Joel, you are trying to apply logic to a government contracting question. You have been around long enough to know that logic and government contracting do not always go together. Remember, TINA is a statute. As such, it had to satisfy several constituancies before it was enacted. In this regard, here is what TINA says about this topic under discussion

"The head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows:

An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if the prime contractor and each higher-tier subcontractor have been required to make available cost or pricing data under this section."

This statutory requirement has been implemented in 52.215-12 and 13.

Also, what is in the FAR is the product of committee work. Thus, essentially you have a regulation prepared by a committee that implements a law prepared by committee. The product of all this is not always precise or logical. I am sure you are familiar with the expression that a camel is a horse designed by committee.

I have stated all along, it does not make much sense to obtain cost or pricing data for a subcontract that will be awarded after agreement on price of a FFP prime contract. although I can see some justification for it if there will be a follow on contract and the actual cost of the present contract will be used in determining the reasonableness of the price of the follow on contract. However, that is what congress and the clauses clearly require.

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This has been a very helpful discussion. I have a question though.

Let's say that the contractor in this example -- the one with the FFP contract who's changing subcontractors after award -- does NOT obtain cost or pricing data from its second subcontractor, as Vern and others have asserted must be done. Thus, the contractor has violated contract clause requirements as well as the TINA statute requirements.

My understanding is that the Government's remedy is a unilateral price reduction for the amount of the costs that were defectively priced, plus interested on any overpayments.

In this hypothetical example, how would the Government calculate its damages? What would its remedy be?

If there are no damages, because the Government did not rely on the second subcontractor's cost or pricing data when negotiating the value of the prime contract, and there are no overpayments because the prime contract is FFP, then where do the parties go from here?

Answering those questions would help me understand better what the dynamics are.

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The remedy might be termination for default. See, e.g., FAR 52.249-8(a)(1)(iii) or 52.249-9(a)(1)(iii). In lieu of termination for default the government might accept some other consideration.

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This has been a very helpful discussion. I have a question though.

Let's say that the contractor in this example -- the one with the FFP contract who's changing subcontractors after award -- does NOT obtain cost or pricing data from its second subcontractor, as Vern and others have asserted must be done. Thus, the contractor has violated contract clause requirements as well as the TINA statute requirements.

My understanding is that the Government's remedy is a unilateral price reduction for the amount of the costs that were defectively priced, plus interested on any overpayments.

In this hypothetical example, how would the Government calculate its damages? What would its remedy be?

If there are no damages, because the Government did not rely on the second subcontractor's cost or pricing data when negotiating the value of the prime contract, and there are no overpayments because the prime contract is FFP, then where do the parties go from here?

Answering those questions would help me understand better what the dynamics are.

The government would not be entitled to a price reduction under the TINA clauses because the prime contract has not been defectively priced. However, you would have to look at the total facts in regard to what is the defective pricing. I have seen circumstances where defective pricing is also a CAS non-compliance. Thus, if the defective pricing in regard to the replacement subcontractor is also a CAS non-compliance, likely by the sub, the government may be entitled to a price reduction for a CAS non-compliance.

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Retreadfed, you know that we won't agree on this. I had decided to quit arguing aout it. I agree that it says what it says. Ok - in fact I never disagreed or denied that if data is cost or pricing data, then the contractor must obtain it from a sub. You keep repeating the same thing over and over again. I said that if it is "cost or pricing data", as intended by the statute to be used to support a specified negotiated contract action, then the contractor must obtain it.

This effort costs the prime and the sub real money and resourcess. Seemingly stupid as much government requirements are, there is usually some specific purpose for them. "Cost or pricing data" were intended to have a purpose - in order to aid the government in its negotiations on larger contract negotiations or specific modifications for which TINA is applicable. It has to be certified to put some mark of "honesty" on it and to help hold the firms accountable for its content.

The basic question then is this. Is a proposal from a replacement subcontractor, which is the contractor's responsibility in order meet its obligation to the government on the FFP contract "cost or pricing data"? If the proposal isn't related to the cost that the taxpayers are paying or "should have" paid for the contract or a specific applicable mod, then I think that wouldn't be defined as "cost or pricing data". Yes, it is still "data", but in this case, I would argue that it only bears a relation to the FFP contractor's actual cost to get out of the mess that its non-performing sub got it into. It bears no relation to the deal that the government and the contractor struck or to the accuracy or truthfulness of that negotiation.

Your argument appears to be that this is automatically "cost or pricing data" because it is pricing information related to the agreement between the follow-on sub and the prime, regardless of whether or not it has any effect on what the government "should have paid" for the contract price.

My argument is that this reasoning is a stretch.

In trying to apply your reasoning to some possible negotiated FFP construction scenarios, I can't accept the automatic application of your definition of "cost or pricing" data. Say that something unforseen happens on the jobsite that is the risk responsibility of the FFP prime. This would be the same concept as the contractor being responsible to successfully complete the work that it hired the non-performing sub to perform for it .

I can provide a real example from my experience in Saudi Arabia. We had a FFP contract for a large university campus building on one of our project sites. We contracted, via an out of scope supplemental agreement to add an additional similar building. There was cost or pricing data in involved in pricing the mod. One night a fire broke out in the new building and damaged a significant share of the in-progress work on the building. In replacing the damaged work, the prime hired some of the work done by another contractor due to time and resource limitations. The TINA threshold was then $100k, which this subcontract and the increases to its other subcontracts all exceeded. Using your argument, it would seem that the pricing of the new negotiated subcontract and perhaps the mods to the other subcontracts would constitute "cost or pricing data" that the prime must obtain from the subs and perhaps provide to the government, even though this work was strictlty the responsibility of the prime contractor and for the purpose of completing the contract work.

I would say, that like the replacement subcontract in the example in this thread, the government wasn't concerned about didn't decide or really care how the contractor contracted to fix the damage, as long as it met the contract technical requirements. It was not concerned about prices the prime paid to the new sub or the other subs. Those were matters which did not affect the price we paid for the building and quite frankly, on a FFP contract, were internal contractor affairs and were none of the government's business.

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My last post was in response to one earlier today from Retreadfed addressed to me which continued the debate that I had decided to quit arguing about.

By the time that I finished my response and posted it using this accursed Blackberry, there were several posts in between.

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Joel:

You wrote:

The basic question then is this. Is a proposal from a replacement subcontractor, which is the contractor's responsibility in order meet its obligation to the government on the FFP contract "cost or pricing data"? If the proposal isn't related to the cost that the taxpayers are paying or "should have" paid for the contract or a specific applicable mod, then I think that wouldn't be defined as "cost or pricing data".

Before I post again, I want to make sure that I understand your position.

Suppose that the government has awarded a firm fixed price contract and that the contractor was required to submit and certify cost or pricing data. Suppose further that the contract includes the clause at FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data (OCT 1997), and 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997).

Now suppose that after agreement on price between the government and the prime contractor, and after award of the prime contract, the prime decides to subcontract one part of the work instead of doing it in house. Suppose further that the prospective subcontract is expected to exceed the TINA threshold and that no exception applies.

Two questions:

(1) Are you saying that because the negotiation of the prospective subcontract cannot have affected the price of the prime contract, it follows that no factual data of the prospective subcontractor that could affect the subcontract price can be cost or pricing data, since it "bears no relation to the deal that the government and the contractor struck or to the accuracy or truthfulness of that negotiation"?

(2) Do you thus conclude that, FAR 52.215-12 notwithstanding, the prime need not require the submission or certification of cost or pricing data from the prospective subcontractor, since by definition no data of the prospective subcontractor can be cost or pricing data?

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Joel:

You wrote:

Before I post again, I want to make sure that I understand your position.

Suppose that the government has awarded a firm fixed price contract and that the contractor was required to submit and certify cost or pricing data. Suppose further that the contract includes the clause at FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data (OCT 1997), and 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997).

Now suppose that after agreement on price between the government and the prime contractor, and after award of the prime contract, the prime decides to subcontract one part of the work instead of doing it in house. Suppose further that the prospective subcontract is expected to exceed the TINA threshold and that no exception applies.

Two questions:

(1) Are you saying that because the negotiation of the prospective subcontract cannot have affected the price of the prime contract, it follows that no factual data of the prospective subcontractor that could affect the subcontract price can be cost or pricing data, since it "bears no relation to the deal that the government and the contractor struck or to the accuracy or truthfulness of that negotiation"?

(2) Do you thus conclude that, FAR 52.215-12 notwithstanding, the prime need not require the submission or certification of cost or pricing data from the prospective subcontractor, since by definition no data of the prospective subcontractor can be cost or pricing data?

Vern, my position had nothing to do with the type scenario that you described.

Suppose that the government has awarded a firm fixed price contract and that the contractor was required to submit and certify cost or pricing data. Suppose further that the contract includes the clause at FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data (OCT 1997), and 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997).

Now suppose that the Contractor subcontracted a portion of the work to a firm, which submitted cost or pricing data per the clause. The subcontractor has been working, however has failed to meet its obligations; performance was unsatisfactory. In order to meet its contract obligation, the contractor terminates the non-performing subcontractor and replaces it with another subcontractor. I'm saying that the the new sub's proposal information is not cost or pricing data. Since it is not cost or pricing data, it need not be certified as such nor provided as such to the government.

Now, regarding your scenario, it might be cost or pricing data. The Contractor has changed the circumstances of performance by subcontracting, in lieu of self-performing the work. I'd have to research my sources to determine whether or not the government could collect for defective pricing, but that is a separate issue. The government's track record hasn't been too good at recovery for contractor actions initiated after award of the contract. The government might have to show that the prime intended to subcontract the work at the time of negotiations or certification, but I'd have to research further.

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How is your scenario substantively different from mine? In both cases a subcontract is awarded after the negotiation and award of the prime contract. In my scenario, the subcontract is awarded because the prime changed its mind about doing the work in house. In yours, the subcontract is awarded because the prime was dissatisfied with the first subcontractor. What does the reason for the subcontract award have to do with anything? What's the connection? Why is the new sub's data not cost or pricing data in your scenario, but might be cost or pricing data in mine?

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