My office issued a sole source FFP non commercial supply RFP with an expected award value that will exceed $1 million. The contractor was required to submit cost or pricing data.

This effort is to assemble a component and integrates it onto a non commercial end item.

A subcontractor is assembling the component and has asserted the six subsystem elements of the component meet FAR 2.101 definition of a commercial item, therefore the assembled component is a commercial item with minor modifications. The subcontractor has refused to provide cost or pricing data to the prime. The subcontractor is not currently selling the assembled component to anyone.

The Government is not able to determine price reasonableness of the Prime?s proposal without cost or pricing data of this key component. The Prime has requested Government assistance in addressing this issue with their subcontractor.

I believe U.S. Code Title 10 Subtitle A Part IV Chapter 137 Section 2306a (a)(1)( C ) requires the subcontractor to submit cost or pricing data.

Is my position valid?

No. The statute requires the agency head (or his representative) to demand certified cost or pricing data. It does not require a prospective contractor or subcontractor to provide it in the same way that the tax code requires persons to file a tax return. It is not against the law to tell a CO to get lost, and there is no legal penalty for doing so. So the question is, what if a prospective subcontractor refuses? What then?

A CO has two choices: (1) get a waiver or (2) tell the prospective prime to get a new sub. If the prospective prime will not or cannot get a new sub and the CO will not or cannot get a waiver, then the CO cannot do business with the prospective prime.

Here is a thought: The sub has been hired to assemble components. It sounds like the prime is providing the components. Is the assembly work a commercial item?

I am afraid the subcontractor is going to tell the CO to get lost. The sub is the manufacturer of the six sub elements and sells them commercially. They have provided pricing of the six sub elements. The problem is that an unknown percentage of each sub element is put into the assembled component.

I am afraid the subcontractor is going to tell the CO to get lost. The sub is the manufacturer of the six sub elements and sells them commercially. They have provided pricing of the six sub elements. The problem is that an unknown percentage of each sub element is put into the assembled component.

What do you mean by "an unknown percentage of each sub element is put into the assembled component"? What do the specifications call for and did the prime submit a bill of material for the assembled component?

Each of the six sub elements has individual components. Some of those components, not all, are used when the six sub elements are put together to make an assembly. The prime takes that assembly and integrates it on an existing non commercial end item. The prime?s cost and price data shows pricing for the subcontractor?s assembly. The subcontractor owns the sub elements and will not release cost or pricing data for the assembled item because the sub elements are commercial.

To close the loop on this posting; we held a meeting with the Prime and their tier one sub and shared the contents of U.S. Code Title 10 Subtitle A Part IV Chapter 137 Section 2306a (a)(1)( C ). Neither the Prime nor the sub was familiar with that section of USC Title 10.

The subcontractor agreed to provide pricing data.

Even though I drew the wrong conclusion from my research I have to say thanks to Vern Edwards for the FAR Bootcamp. The training to research, read, interpret and apply the Federal Acquisition Regulation (FAR) came into play here.

I still have work to do on my interpretation Vern.