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JMG

TINA Cert with no data

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Scenario:

-Settled on price on a hardware buy

- Contractor conducted final TINA sweep

- Contractor certified within a few days without providing any data or pricing updates. However, I am aware of updates (minor supplier cost increases) from a pre-sweep conducted by the contractor. The pre-sweep data was not submitted but was socialized in face to face negotiations. It was agreed that the handshake price would be updated upon final TINA sweep, but no data or updates were received

Is this cert valid, or is there a defective pricing risk, even if disclosing the most current data would not be detrimental to the Govt? Thoughts, suggestions?

Thanks.

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Scenario:

-Settled on price on a hardware buy

- Contractor conducted final TINA sweep

- Contractor certified within a few days without providing any data or pricing updates. However, I am aware of updates (minor supplier cost increases) from a pre-sweep conducted by the contractor. The pre-sweep data was not submitted but was socialized in face to face negotiations. It was agreed that the handshake price would be updated upon final TINA sweep, but no data or updates were received

Is this cert valid, or is there a defective pricing risk, even if disclosing the most current data would not be detrimental to the Govt? Thoughts, suggestions?

Thanks.

Scenario:

-Settled on price on a hardware buy

- Contractor conducted final TINA sweep

- Contractor certified within a few days without providing any data or pricing updates. However, I am aware of updates (minor supplier cost increases) from a pre-sweep conducted by the contractor. The pre-sweep data was not submitted but was socialized in face to face negotiations. It was agreed that the handshake price would be updated upon final TINA sweep, but no data or updates were received

Is this cert valid, or is there a defective pricing risk, even if disclosing the most current data would not be detrimental to the Govt? Thoughts, suggestions?

Thanks.

Please clarify, thanks

1. Was the handshake price based upon any of the higher costs than the data available before the negotiations ("The pre-sweep data was not submitted but was socialized in face to face negotiations.). What does socialized mean??

2. What is the effective date of the certification?

3. What does "It was agreed that the handshake price would be updated upon final TINA sweep" mean?

4. What does "if disclosing the most current data would not be detrimental to the Govt" mean??

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Is this cert valid, or is there a defective pricing risk, even if disclosing the most current data would not be detrimental to the Govt? Thoughts, suggestions?

The Certificate of Current Cost or Pricing Data covers the data that were submitted and says that those date were accurate, complete and current as of the date of price agreement. It sounds like some price information was disclosed orally during negotiations ("socialized"), but not submitted in writing. Thus,the data that were submitted might not have been accurate, complete, and current on the date of price agreement. That raises the possibility of defective pricing.

Whether defective pricing actually occurred would depend on all of the facts, and I'm not going to speculate. However, even if it turns out that the submitted data were defective, it might be that the negotiated price was not increased due to the non-submission. If that is the case, then you might have defective pricing, but the government would have no grounds for a price reduction if the defective pricing did not cause a price increase. See FAR 15.407-1, FAR 52.215-10(a), and United Technologies Corp., ASBCA 53349, 53089, and 51410, 05-1 BCA ¶ 32860 (January 19, 2005).

The problem is that the issue might not come up for a long time. Years. By the time it does come up the government's negotiators might not be with the agency any longer or they might not remember the oral disclosure and say that had they known of the other pricing information they would have negotiated a lower price. The contractor might have a hard time showing that the non-submission did not affect the price negotiations. Even if the contractor could prove the oral disclosure, such disclosure was not submission "in writing," and the determination of whether or not the information that was not submitted would have had an impact on the negotiations would be largely subjective and subject to debate.

If I were the contractor I would disclose the non-submission immediately and in writing, submit the other information, and irenegotiate if necessary. I would thoroughly document all communications, understandings, and agreements. That might protect the contractor from defective pricing and false claim accusations years from now.

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JMG, would further disclosure of the data have had an impact on the price negotiated? If not, how does it qualify as cost or pricing data?

Yes. The unit pricing of the hardware we are procuring would have increased, though it would have been minor. We walked through the BOM changes in person and discussed when the prices had changes. We just never received the data in a writing. The contractor shorted himself. Now, perhaps they went back out to their suppliers and demanded they honor the older pricing as initially proposed, thus no update would be required.

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Please clarify, thanks

1. Was the handshake price based upon any of the higher costs than the data available before the negotiations ("The pre-sweep data was not submitted but was socialized in face to face negotiations.). What does socialized mean??

-discussed amongst the parties in person (slang use of the verb)

2. What is the effective date of the certification?

- three days after the handshake

3. What does "It was agreed that the handshake price would be updated upon final TINA sweep" mean?

- We had agreement in principal on the unit pricing subject to any TINA sweep updates. This is a common practice as far as I am aware. In this case, the updates were discussed and disclosed orally, so we told the contractor the price would be updated upon the final sweep.

4. What does "if disclosing the most current data would not be detrimental to the Govt" mean??

- it means the Govt would pay more, thus no price reduction for defective pricing would be applicable.

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The Certificate of Current Cost or Pricing Data covers the data that were submitted and says that those date were accurate, complete and current as of the date of price agreement. It sounds like some price information was disclosed orally during negotiations ("socialized"), but not submitted in writing. Thus,the data that were submitted might not have been accurate, complete, and current on the date of price agreement. That raises the possibility of defective pricing.

Whether defective pricing actually occurred would depend on all of the facts, and I'm not going to speculate. However, even if it turns out that the submitted data were defective, it might be that the negotiated price was not increased due to the non-submission. If that is the case, then you might have defective pricing, but the government would have no grounds for a price reduction if the defective pricing did not cause a price increase. See FAR 15.407-1, FAR 52.215-10(a), and United Technologies Corp., ASBCA 53349, 53089, and 51410, 05-1 BCA ¶ 32860 (January 19, 2005).

The problem is that the issue might not come up for a long time. Years. By the time it does come up the government's negotiators might not be with the agency any longer or they might not remember the oral disclosure and say that had they known of the other pricing information they would have negotiated a lower price. The contractor might have a hard time showing that the non-submission did not affect the price negotiations. Even if the contractor could prove the oral disclosure, such disclosure was not submission "in writing," and the determination of whether or not the information that was not submitted would have had an impact on the negotiations would be largely subjective and subject to debate.

If I were the contractor I would disclose the non-submission immediately and in writing, submit the other information, and irenegotiate if necessary. I would thoroughly document all communications, understandings, and agreements. That might protect the contractor from defective pricing and false claim accusations years from now.

Vern,

While I dig into the case law you have so generously provided, you have answered my question. I must comply with FAR 15.407(a). This is the answer I was looking for.

Ultimately, no defective pricing should be realized because the Government officials would not request a post-award (defective pricing) audit unless a price-reduction could be achieved. The occurrences here are just irresponsible of the contractor, in my opinion. It's my job to bring the matter to their attention.

Thank you.

JMG

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Please clarify, thanks

1. Was the handshake price based upon any of the higher costs than the data available before the negotiations ("The pre-sweep data was not submitted but was socialized in face to face negotiations.). What does socialized mean??

-discussed amongst the parties in person (slang use of the verb)

2. What is the effective date of the certification?

- three days after the handshake

3. What does "It was agreed that the handshake price would be updated upon final TINA sweep" mean?

- We had agreement in principal on the unit pricing subject to any TINA sweep updates. This is a common practice as far as I am aware. In this case, the updates were discussed and disclosed orally, so we told the contractor the price would be updated upon the final sweep.

4. What does "if disclosing the most current data would not be detrimental to the Govt" mean??

- it means the Govt would pay more, thus no price reduction for defective pricing would be applicable.

Thanks for the response JMG. Here's my problem. I cant tell if you settled, based upon the higher prices that you "socialized" or on the prices for which you actually had the data (as submitted with the proposed, I assume). If you settled on anything higher than the data that you have, the answer is that Contractor must provide the updated, certified data to support it.

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While I dig into the case law you have so generously provided, you have answered my question. I must comply with FAR 15.407(a). This is the answer I was looking for.

JMG: There is no 15.407(a). You must mean 15.407-1(a), which would mean that you have not yet reached final agreement on price. Is that right?

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JMG: There is no 15.407(a). You must mean 15.407-1(a), which would mean that you have not yet reached final agreement on price. Is that right?

Sorry for the typo, yes 15.407-1(a). We agreed to the price on handshake day, subject to any TINA sweep updates (which again, I expected). In general, am I wrong to think final agreement on price never really occurs until TINA sweep, contractor certification, and Govt acceptance of any adjustments? In this case, they certified with no updates, but I am not sure if I agree as I know there were updates. Do you think I am not required to bring it to their attention at this time (post- certification)?

- let me know if I need to rephrase the scenario as I seem to have added some confusion. Thank you.

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Thanks for the response JMG. Here's my problem. I cant tell if you settled, based upon the higher prices that you "socialized" or on the prices for which you actually had the data (as submitted with the proposed, I assume). If you settled on anything higher than the data that you have, the answer is that Contractor must provide the updated, certified data to support it.

Joel- The latter; we settled on the lower prices.

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We agreed to the price on handshake day, subject to any TINA sweep updates (which again, I expected). In general, am I wrong to think final agreement on price never really occurs until TINA sweep, contractor certification, and Govt acceptance of any adjustments?

Final agreement occurs when the parties say it occurs. As a rule, presentation of a dated and signed certificate of current cost or pricing data settles that question, although in this case I don't think it did.

Do you think I am not required to bring it to their attention at this time (post- certification)?

I think you should notify them. See FAR 15.407-1(a) again. You know there is a problem and you haven't yet signed a contract. Fix the problem.

My advice is to notify them, conclude negotiations, get a new certificate, and return the old one. You're a business person dealing with other business people, not a Treasury agent trying to catch a counterfeiter. Document everything in the memorandum of price negotiation.

This is not a big deal. Don't make it one. Now sign out of Wifcon, and take the rest of the weekend off.

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