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Subcontractor certification of current cost data


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I am confused by the dating requirements on the certificate of current cost & pricing data. The prime contractor asked informally if my subcontract data was current before he entered into negotiations last July. It was. The prime contract was settled and awarded in Sept. Now, iseven months later, the prime wants to settle and award my subcontract and wants me to certify that my previously submitted data is TINA compliant as of now. I cannot do so, since my rates and other factors have changed.

I'm thinking that TINA is intended to protect the Government from misrepresentation by the prime and the prime's entire supply chain. So , it seems to me that I should be certifying as of the date that the Government reached agreement with the prime. Is this wrong?

If it is wrong and I need to process another proposal update, should I copy the Government on the updated proposal submission?

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This is a quirk in the regs. FAR 52.215-12(a) requires the prime to obtain certified cost or pricing data from the sub "on the date of agreement on price or the date of award, whichever is later." So, the prime is required to get updated cost or pricing data from you, but it shouldn't have any effect on the price of the prime contract, which has already been awarded. Why the government requires this is a mystery, at least to me.

But, if you've already agreed on the subcontract price, you could point to 52.215-12( B ) and say that your data only needs to be accurate, complete and current "as of the date of agreement on the negotiated price of the subcontract." Knowing how most primes behave, however,I would guess that they haven't agreed on price and hope to ratchet down your proposed subcontract price.

There's no need to copy the government (and the prime probably wouldn't want you to, especially if your rates have gone down).

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Guest Vern Edwards

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Guest Vern Edwards

I am confused by the dating requirements on the certificate of current cost & pricing data. The prime contractor asked informally if my subcontract data was current before he entered into negotiations last July. It was. The prime contract was settled and awarded in Sept. Now, iseven months later, the prime wants to settle and award my subcontract and wants me to certify that my previously submitted data is TINA compliant as of now. I cannot do so, since my rates and other factors have changed.

I'm thinking that TINA is intended to protect the Government from misrepresentation by the prime and the prime's entire supply chain. So , it seems to me that I should be certifying as of the date that the Government reached agreement with the prime. Is this wrong?

If it is wrong and I need to process another proposal update, should I copy the Government on the updated proposal submission?

FAR does not require that you certify that the certified cost or pricing data you submitted last July were accurate, complete, and current as of a later date. Nothing prevents the prime from asking you to do that, but you would be foolish to do so.

The government requires the prime to obtain a Certificate of Current Cost or Pricing Data from you as of the date that you and the prime reached agreement on the subcontract price, not as of an earlier date. See FAR 52.215-12, "Subcontractor Certified Cost or Pricing Data (Dec 2010)," paragraph (B).

The prime will be responsible for any certified cost or pricing data that you submitted to it last July that were defective as of the date that it agreed on price with the government, whether you certified the data then or not. See FAR 52.215-10, "Price Reduction for Defective Certified Cost or Pricing Data (Aug 2011)" paragraph (a). The prime's liability to the government does not depend upon your certification. It depends upon the prime's own certification.

When the prime asked you to submit certified cost or pricing data last July, it should have instructed you at that time (1) to update the data you submitted as soon as new data became available to you and (2) to continue to update the data until you and the prime reached agreement on the subcontract price. It should also have asked you to update your data before it provided a certificate of current cost or pricing data to the government last year, and it should have asked you for a "guarantee" of your data at that time, for its own purposes, not for the government. It should not have asked for a Certificate of Current Cost or Pricing Data until it reached agreement with you on the subcontract price, and it should have asked for it as of the date of that agreement.

If it turns out that the data you submitted last July were defective at that time and if the prime has to agree to a reduction of the price of its contract with the government, it should seek compensation from you based on your "guarantee" to it, not based on the certificate you signed after agreement on the subcontract price months later.

I strongly recommend the following reference: Bodenheimer, Defective Pricing Handbook, 2011-2012 Edition (West, 2011). It is both first rate and indispensable.

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  • 3 weeks later...

Vern, Thanks for the advice - which make sense. I've ordered the book.

I assume that I should continue to perform 'TINA sweeps' of my cost data and update my offer accordingly until I reach agreement with the Prime. Is there ever a need for me to provide these additional data updates to the U.S. Govt? (Some of my rates have dropped & my price is coming down.)

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