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Posted for viesqueboy:

I have a question regarding the certificate. I have reviewed the exceptions listed in 15.403-1 but I haven?t located any reference regarding a cert from a third tier subcontractor when the Govt and Prime have negotiated but not the 2nd/3rd subcontractors.

Situation: My Company ? is a third tier subcontractor to company B. The negotiations between the prime (Company A) and the Government have finalized. The negotiations between my Company (B ) and Company B have yet started. Late last year company B asks us for an updated proposal + ETC on this FFP effort. Today, we received an offer from Company B. Since the Government has negotiated with the Prime, using our old proposal and since Company B has not asked us for a Cert (yet), am I still required to provide a cert?

Further, in reviewing FAR 15.404-3, Subcontracting pricing consideration. Since the prime has already provided a cert for its subcontractors, is Company C still required to certified?

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A subcontractor at any tier must certify its cost or pricing data when all three of the following conditions are met:

(1) the dollar value of its proposal is greater than the dollar threshold in FAR 15.403-4(a);

(2) none of the exceptions in FAR 15.403-1 apply; and

(3) every tier above it, including the prime, must certify their data.

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Are there are other conditions that have to be met as well?

What if the CO's PNM, or lack thereof, shows that that CO did not rely on the cost and pricing data submitted and did not use them in negotiating the price - see 14.406-3(a)(6)(i).

Does not CPD have to be used in order for it to be required?

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Are there are other conditions that have to be met as well?

What if the CO's PNM, or lack thereof, shows that that CO did not rely on the cost and pricing data submitted and did not use them in negotiating the price - see 14.406-3(a)(6)(i).

Does not CPD have to be used in order for it to be required?

Whynot, thanks. I think you meant part 15 and not part 14. Since Government PNM is for Official Use Only we have no access to how they documented the negotiations.

A key factor here to consider too is that Subcontractor B has already certified to the Prime and any underrun from our Company can be consider 1) additional profit or 2) disclose it to Subcontractor B and now they get the profit. I understand the Cert process, the disclosure, the document document document, but this is very unique. It is almost an Ethical situation too. Let us disclose it and if Subcontractor B elects not to disclose it to the Prime and request a price adjustment, then it is up to them. Thoughts!!

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Thoughts? Why do you need more thoughts?

You asked two questions:

[1] Since the Government has negotiated with the Prime, using our old proposal and since Company B has not asked us for a Cert (yet), am I still required to provide a cert?

[2] Further, in reviewing FAR 15.404-3, Subcontracting pricing consideration. Since the prime has already provided a cert for its subcontractors, is Company C still required to certified?

Didn't I give you enough info for you to be able to answer your own questions? What do you not understand? The rules in FAR are simple and easy to understand.

In any case, if they don't ask you for a cert, then don't provide one. If they do, use the info I gave you to determine if you're obligated to provide one.

And Whynot -- a CO can demand certified cost or pricing data if entitled to it, but doesn't have to rely on it. If the CO gets it and doesn't rely on it, then the CO will not be entitled to a price reduction if the data turn out to have been defective.

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Thoughts? Why do you need more thoughts?

You asked two questions:

[1] Since the Government has negotiated with the Prime, using our old proposal and since Company B has not asked us for a Cert (yet), am I still required to provide a cert?

[2] Further, in reviewing FAR 15.404-3, Subcontracting pricing consideration. Since the prime has already provided a cert for its subcontractors, is Company C still required to certified?

Didn't I give you enough info for you to be able to answer your own questions? What do you not understand? The rules in FAR are simple and easy to understand.

In any case, if they don't ask you for a cert, then don't provide one. If they do, use the info I gave you to determine if you're obligated to provide one.

And Whynot -- a CO can demand certified cost or pricing data if entitled to it, but doesn't have to rely on it. If the CO gets it and doesn't rely on it, then the CO will not be entitled to a price reduction if the data turn out to have been defective.

Vern, thanks for the information. I was cleared with your answer. I was confused with the Whynot response. Thanks.

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It would appear that both the CO and Prime under FAR 15.404-3 has a responsibility to analyze CPD if they choose to obtain it. Based upon 15.404-3, if the CPD is not anlayzed it is therefore must have been found to be unnecessary and therefore not required.

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From the Contract Pricing Reference Guide:

"Responsibility for Updating Subcontract Cost or Pricing Data (FAR 15.404-3©(4)). The offeror is responsible for assuring that subcontractor cost or pricing data are accurate, complete, and current as of the date of price agreement or, if applicable, another date agreed upon between the parties, given on the contractor's Certificate of Current Cost or Pricing Data. Accordingly, the offeror is also responsible for updating a prospective subcontractor's cost or pricing data.

Remember that subcontract proposals are an integral part of prime contract proposals. As a result, when a prospective subcontractor's cost or pricing data are not accurate, complete, and current, the prospective prime contractor's proposal cannot be accurate, complete, and current."

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From the Contract Pricing Reference Guide:

"Responsibility for Updating Subcontract Cost or Pricing Data (FAR 15.404-3?(4)). The offeror is responsible for assuring that subcontractor cost or pricing data are accurate, complete, and current as of the date of price agreement or, if applicable, another date agreed upon between the parties, given on the contractor's Certificate of Current Cost or Pricing Data. Accordingly, the offeror is also responsible for updating a prospective subcontractor's cost or pricing data.

Remember that subcontract proposals are an integral part of prime contract proposals. As a result, when a prospective subcontractor's cost or pricing data are not accurate, complete, and current, the prospective prime contractor's proposal cannot be accurate, complete, and current."

Thanks for the information and after reading FAR 14.403-1 (c ) (1) Standards for exceptions from certified cost or pricing data requirements -- Adequate price competition: If the procurement was full and open competition with adequate price competition and the CO had no other reasons to request a Certificate of Current, Cost or Pricing data at the Prime level, then Subcontractor B has no grounds to request a Certificate from Subcontractor C.

Do we concur?

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Again -- If the prime did not have to submit certified cost or pricing data to the government, then the prime does not have to get certified cost or pricing data from any of its subs, and its subs don't have to get certified cost or pricing data from their subs.

If the prime did have to submit certified cost or pricing data to the Government, but did not have to get certified cost or pricing data from its sub, then that sub does not have to get certified cost or pricing data from its own sub.

All you have to do in order to understand the above is to read FAR 15.403. You may have to read it more than once and then think about it, but it's not very complicated. I don't understand why you are asking for confirmation.

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