Cost and Pricing Data

[Daniel]

Can someone please explain to me the difference between cost and pricing data. I mainly work with contract oversight and have had no experience with cost and pricing and was asked the question. Through research the only thing that I was able to come up with was that cost data was more detailed and that price data was viewed as whole. Thanks for any help.

[Guest carl r culham]

The term is read as "cost or pricing data" in Federal contracting. Note the "or" versus "and". The term has a specific definition in the Federal Acquisition Regulations (FAR) in FAR Part 2 as -

?Cost or pricing data? (10 U.S.C. 2306a(h)(1) and 41 U.S.C. 254b) means all facts that, as of the date of price agreement or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are data requiring certification in accordance with 15.406-2. Cost or pricing data are factual, not judgmental; and are 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?

(1) Vendor quotations;

(2) Nonrecurring costs;

(3) Information on changes in production methods and in production or purchasing volume;

(4) Data supporting projections of business prospects and objectives and related operations costs;

(5) Unit-cost trends such as those associated with labor efficiency;

(6) Make-or-buy decisions;

(7) Estimated resources to attain business goals; and

(8) Information on management decisions that could have a significant bearing on costs.

If you are wondering about the difference between "cost" and "price" then your general understanding contained in your post is close. Generally, price is costs plus any fee or profit.

[Guest Vern Edwards]

The term "cost or pricing data" is a term of art that came into use in the late 1950s and was picked up by Congress for use in the Truth in Negotiations Act (TINA), Public Law 87-653, in 1962. Although the term appears to make a distinction between cost data and pricing data, there is no evidence that such a distinction was perceived or intended by the persons who originated the term or by Congress when it enacted the statute. I know of no officially established distinction. It is not necessary to draw any distinction in order to implement or comply with TINA, and any such distinction would not be meaningful with respect to implementation or compliance. To the best of my knowledge, no TINA case law has drawn such a distinction in connection with any judicial holding about TINA and there is no judicially operative distinction.

For a brief history of TINA, see Manos, Government Contract Costs and Pricing, Vol. 1, Ch. 2, Sec. B.