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garth

Applicability of TINA on Sub?s Voluntary Price Reductions

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A prime contractor was awarded a number FFP and Cost Reimbursable contracts by the USG for an Weapon System. Cost or Pricing data was required and the prime contracts have the full the compliment of TINA clauses. Additional prime contracts for the same Weapon System are anticipated

The prime executes a number of requirement contracts with their subcontractors ? each requirement subcontract is for items that will go on the various existing prime contracts and anticipate future prime contracts. All of the subcontracts are negotiated definitized FFP requirement contracts and included 52.215-21, 52.215-13 and 52.215-11.

As part of an affordability initiative affecting current and future sales, the subcontractors are approached and requested to lower their prices in the interest of the Program. There is no change in the scope of the subcontract. The modification is solely related to the voluntary reduction in price. If a subcontractor voluntary agrees to lower its price and the adjustment is greater than the TINA threshold is cost or pricing data required. What if the subcontractor?s reduction in price is conditioned on cost or pricing data not being required?

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What if the subcontractor?s reduction in price is conditioned on cost or pricing data not being required?

If the amount of a contractor's reduction exceeds the TINA threshold, and if none of the exceptions apply, then the subs must submit cost or pricing data.

I will assume that a subcontractor is, in fact, required to submit cost or pricing data (i.e., that none of the exceptions apply) and that you want to know how to get around your obligation to get the cost or pricing data from the subcontractor so that you can take the discounts. If that is the case, then it seems to me that the way out is to ask the government to waive the requirement for cost or pricing data as provided in FAR 15.403-1?(4).

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All of your assumptions are correct, and that is the conclusion we arrived at also. It just seems a bit odd. Thanks.

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