I would appreciate it if the experts would weigh in on the following scenario:

Background:

Contract XYZ is a multiple award ID/IQ CPFF contract with the U.S. Navy. There were two awardees. The contract is in its 3rd year.

Pre-award: Since the MACs were competitively awarded, no cost or pricing data was required.

Post-award: The contract contains FAR 52.215-21, ?Requirements for Cost or Pricing Data or Information Other than Cost or Pricing Data ? Modifications (OCT 1997).

Scenario: Prime receives an RFP from the KO for a task order proposal response under Contract XYZ. Prime subsequently issues RFP to Sub, who responds with a proposal for $700K. The Government awards the task order to Company P. The KO did not require the submission of cost or pricing data, and did not require submission of a Certificate of C/P data. (Both Prime and Sub are large businesses.)

Before award can be made to Sub, Prime requires Sub to submit a certificate of C/P data because: 1) the value exceeds $650K; 2) the Prime did not compete the effort among the subs under Prime?s contract; and 3) they feel duty bound by the fact that the requirement for C/P is a statutory requirement.

Sub argued that if the KO did not require submission of C/P data, there should be no requirement on the sub. Sub further added: 1) the strong prohibitions against requiring more information than is necessary per FAR 15.402 and the hierarchy that is to be followed before requiring C/P data. The FAR clearly cautions C/P data should be an option of last resort due to the expense to the taxpayers; 2) no ?cost or pricing data? was actually submitted, so there was nothing to certify; and 3) the statutory requirement is imposed on the Contracting Officer, not on contractors.

This resulted in circular discussions that went nowhere.

1. If the KO does not require the submission of C/P data, is the requirement valid for the sub?

2. We often receive requests for the certificate only, but we never submitted C/P data. Wouldn?t the absence of actual C/P data mean there would be no certificate? Would a certificate be valid if no cost or pricing data was prepared or submitted?

(This is my first post - still learning the mechanics so please forgive if this is "lacking" in format or other). Thank you!

Before award can be made to Sub, Prime requires Sub to submit a certificate of C/P data because: 1) the value exceeds $650K; 2) the Prime did not compete the effort among the subs under Prime?s contract; and 3) they feel duty bound by the fact that the requirement for C/P is a statutory requirement.

* * *

1. If the KO does not require the submission of C/P data, is the requirement valid for the sub?

2. We often receive requests for the certificate only, but we never submitted C/P data. Wouldn?t the absence of actual C/P data mean there would be no certificate? Would a certificate be valid if no cost or pricing data was prepared or submitted?

There are actually three questions:

(1) Is the prime obligated by its contract with the government to obtain cost or pricing data from a subcontractor or prospective subcontractor when it receives an order from the government?

(2) Can the prime ask a subcontractor or prospective subcontractor for cost or pricing data when it is not obligated by its contract to get cost or pricing data from the sub?

(3) Should a sub give the prime a certificate of cost or pricing data if the sub did not submit cost or pricing data?

The answer to the first question depends on whether the prime contract includes either the clause at FAR 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997), or 52.215-13, Subcontractor Cost or Pricing Data -- Modifications (OCT 1997).

If (a) the prime contract contains the clause at 52.215-12, and ( the prime is going to award a subcontract so it can comply with an order, and ( c) the subcontract will exceed the TINA threshold, and (d) none of the exceptions at FAR 15.403-4 applies, then the prime is contractually obligated to obtain cost or pricing data from the prospective sub.

If (a) the prime contract does not contain the clause at FAR 52.115-12, but ( does include the clause at FAR 52.215-13, and ( c) the government modifies the prime contract or an order under the prime contract, and (d) the prime is going to award a subcontract in order to comply with the modification, and (e) the subcontract will exceed the TINA threshold, and (f) none of the exceptions at FAR 15.403-1 applies, then the prime is contractually obligated to obtain cost or pricing data from the prospective sub.

The answer to the second question is that the prime can demand cost or pricing data anyway, whether its contract with the government requires it to do so or not, if it wants cost or pricing data for its own reasons.

The answer to the third question is that the sub would be stupid to certify cost or pricing data if it did not submit cost or pricing data. To do should might lead to costly legal consequences.

Bottom line: A prime contractor can demand cost or pricing data and certification from a subcontractor or prospective subcontractor as a condition of doing business whether the CO asks for it or not.

Thank you

Re: Q#1: The prime contract did not contain either FAR 52.215-12 or 52.215-13 at the time of basic contract award. (Sub was part of original team. Upon basic contract award, Sub was issued a Sub Agreement.) The KO just incorporated FAR 52.215-12 and 52.215-13. The task order in question would be an award under an existing Sub Agreement.

Re: Q#2: Due to the proprietary nature of such data, a subcontractor would not provide C/P data to another contractor; if required, such data would only be provided to an independent auditor mutually agreed to by both parties, or directly to DCAA for an assist audit (unlikely given scarcity of resources). So, it seems some primes evade this issue by just requiring the Cert only, without the actual C/P data itself (which leads to your comment re: Q#3).

Any insights/comments on this would be appreciated.

Thank you

Re: Q#1: The prime contract did not contain either FAR 52.215-12 or 52.215-13 at the time of basic contract award. (Sub was part of original team. Upon basic contract award, Sub was issued a Sub Agreement.) The KO just incorporated FAR 52.215-12 and 52.215-13. The task order in question would be an award under an existing Sub Agreement.

Re: Q#2: Due to the proprietary nature of such data, a subcontractor would not provide C/P data to another contractor; if required, such data would only be provided to an independent auditor mutually agreed to by both parties, or directly to DCAA for an assist audit (unlikely given scarcity of resources). So, it seems some primes evade this issue by just requiring the Cert only, without the actual C/P data itself (which leads to your comment re: Q#3).

Any insights/comments on this would be appreciated.

I'm not sure what kinds of "insights/comments" you're looking for. Your company will either submit cost or pricing data (to somebody) or it won't. As for certifying cost or pricing data when you didn't submit it, that's lunacy, but since you apparently have done so in the past, go ahead and do it again, or don't.

Regarding the quote below, I have a comment--though not one that directly applies to the questions asked.

Re: Q#1: The prime contract did not contain either FAR 52.215-12 or 52.215-13 at the time of basic contract award. (Sub was part of original team. Upon basic contract award, Sub was issued a Sub Agreement.) The KO just incorporated FAR 52.215-12 and 52.215-13. The task order in question would be an award under an existing Sub Agreement.

The clauses at FAR 52.215-12 and 52.215-13 should not have both been added. I know this is common, but I believe it is wrong.

Note that in FAR 15.408 you have the following:

( Price Reduction for Defective Cost or Pricing Data. The contracting officer shall, when contracting by negotiation, insert the clause at 52.215-10, Price Reduction for Defective Cost or Pricing Data, in solicitations and contracts when it is contemplated that cost or pricing data will be required from the contractor or any subcontractor (see 15.403-4).

© Price Reduction for Defective Cost or Pricing Data -- Modifications. The contracting officer shall, when contracting by negotiation, insert the clause at 52.215-11, Price Reduction for Defective Cost or Pricing Data -- Modifications, in solicitations and contracts when it is contemplated that cost or pricing data will be required from the contractor or any subcontractor (see 15.403-4) for the pricing of contract modifications, and the clause prescribed in paragraph ( of this section has not been included.

(d) Subcontractor Cost or Pricing Data. The contracting officer shall insert the clause at 52.215-12, Subcontractor Cost or Pricing Data, in solicitations and contracts when the clause prescribed in paragraph ( of this section is included.

(e) Subcontractor Cost or Pricing Data -- Modifications. The contracting officer shall insert the clause at 52.215-13, Subcontractor Cost or Pricing Data -- Modifications, in solicitations and contracts when the clause prescribed in paragraph © of this section is included.

So, according to paragraph (e) you only use 52-215-13 if you have included 52.215-11.

Per paragraph (d) you use 52.215-12 only if you have included 52.215-10,

But, according to paragraph © you use 52.215-11 only when 52.215-10 is not included.

So--52.215-10 and 52.215-11 are an either/or arrangement. You should not have both. Since 52.215-12 depends on the inclusion of 52.215-10 and since 52.215-13 depends on the inclusion of 52.215-11 you should not have both 52.215-12 and 52.215-13.

If you look at the language of 52.215-12 you will see that it applies to modifications as well as the basic contract. 52.215-13 states that it applies to modifications only.

I'll admit this is further confused because 52.215-12, in paragraph ©(2), references 52.215-13. I am not sure why the writers of the clause would reference a clause excluded from use with the clause making the reference--but that is how it is written.

If I'm not sufficiently clear here, or if anyone wants to dispute my conclusions, please say so.

No one should dispute your conclusion. However, to put it a little more simply, FAR 15.408 contemplates either of these combinations:

52.215-10 and 52.215-12 [see FAR 15.408( and (d)] or

52.215-11 and 52.215-13 [see FAR 15.408( c) and (e)].

FAR 15.408 does not contemplate any other combination.

The mention of FAR 52.215-13 in paragraph ( c) of 52.215-12 can be explained as follows:

1) Suppose that the prime contractor had to provide cost or pricing data to the government and the prime contract includes the clauses at FAR 52.215-10 and 52.215-12.

2) Suppose further that the prime wants to award a subcontract valued in excess of the TINA threshold. If no exception applies, the prime must obtain cost or pricing data from the subcontractor before the award and flow 52.215-12 down to the subcontractor. That will require the subcontractor to get cost or pricing data from second-tier subcontractors.

3) But suppose that an exception applies to the subcontract, so that the subcontractor is not required to submit cost or pricing data before award. In that case the prime must obtain cost or pricing data from the subcontractor only before modify the subcontract. In that case, the prime must flow 52.215-13 down to the subcontractor. Thus, the subcontractor, who did not have to submit cost or pricing data before the award of the subcontract, but must submit it for modifications, will, in turn, have to obtain cost or pricing data from second-tier subcontractors only when modifying the second-tier subcontracts.

Make sense?

Apologies, my question wasn't phrased clearly.

I wasn't questioning the sense of including what is in 52.215-13 in 52.215-12. There are circumstances where it would be needed. I question the inclusion, in a contract, of a reference to a clause that is not in the contract. To me, it makes much more sense to simply include the language that is needed from 52.215-13 in the text of 52.215-12.