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Certified Cost or Pricing Data & TINA Sweep


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The 2 year old Certificate would not apply to a future solicitation or contract. The OP indicated that it wasn’t part of any proposal to the government and “are likely to be tied to a future prime contract”. We don’t even know whether the prime contract itself is an ID/IQ or only the supply subcontract.

We don’t know who agreed with, what it was  for or why there is an ID/IQ or price agreement for out year parts acquisitions. 

On 2/3/2022 at 6:52 PM, TNT1 said:

Thanks Fara & Vern. We might consider that the future releases against the IDIQ are likely to be tied to a future prime contract, but at this time, not tied to the Prime contractor's proposal to the Government. In the event that the IDIQ pricing is incorporated on a future proposal to the Government, then the CCPD would still be "outdated" in the sense that it is from 2020 (or 2022 if we get it refreshed), which one might assume is why the FAR references that the data needs to be current at time of agreement on price.

Most higher up individuals at my company are of the position that the price was agreed upon and the letter of the law dictates that the negotiated pricing does not need to be re-evaluated. The opposite position seems to be rooted in logic...but my research for clarity has not yet yielded a clear result. 

 

 

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TNT1, TINA requires "current" facts and prices. Since your company prohibits new documentation, my position is that your company's Certificate may be questionable to your customer in the following way. The supplier cost or pricing data is not certified as current because that is new documentation.There will be no new documentation concerning potential competition or other non-competitive sources available after a 2 year gap that a prudent negotiator would want to know about. There will be no new documentation regarding assumptions or facts in the cost analysis that may be different 2 years later, which may include price analysis.          

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Thanks all for the responses. While I agree, I am still searching for a clear basis to move forward with (other than what would seem to be obvious logic). To play devil's advocate to my own position:

 

image.thumb.png.471386e476c30c4bc545ed471e6532ef.png

 

The highlighted language seemingly indicates leeway in terms of agreement on the date in which CCPD can be used. If both the contractor and subcontractor agree that the negotiated price 2 years ago was predicated on valid data from that time, under what basis could the customer take exception? It seems like the prudent action would be to receive new CCPD, but is there really any evidence to suggest that the customer would have grounds to assert defective CCPD here? 

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TNT1, here is  how FAR 2.101 defines cost or pricing data.  Cost or pricing data " 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."  Do you think that data that is at least two years old fits that definition in regard to pricing the prime contract?

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TNT1,

I still cannot figure out the facts from your original posting and subsequent postings.  I don't know whether (1) the Government agency is issuing (or recently issued) a contract or modification that requires certified cost or pricing data, and your proposed subcontract has been on the shelf for two years; or (2) the Government agency contract or modification was issued two years ago and you're just now getting around to issuing a subcontract under that prime contract or modification.  I don't think anyone here can tell you anything more than they already have.  You know your facts better than anyone here, and it seems to me that you have been stingy with sharing the facts.

It sounds like you want permission, or validation, or pre-absolution for an understanding of "current" that covers two-year-old certified cost or pricing data -- but no one here can give that to you. 

 

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7 hours ago, ji20874 said:

You know your facts better than anyone here, and it seems to me that you have been stingy with sharing the facts.

I agree. I don’t understand why TNT is reluctant to provide a clear explanation and the full context of the agreement and the associated prime contract action involved after several of us have repeatedly asked. For what purpose did you agree on a price and it get submitted to the government? Thanks in advance . 

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@ji20874@joel hoffman

Apologies for the confusion. The Government is not intimately involved here. I am the prime contractor looking to establish an IDIQ with one of our subcontracts for parts for FY24-25. There is no overarching prime contract for this IDIQ, but the subsequent task orders to be released within FY24-25 will have prime contracts tied to them. 

When the customer (Government) would be involved is when the task Orders are pulled in an audit (CPSR) and the overarching IDIQ is called into question in regards to the 2 year gap between the final negotiated price and the formal placement of the IDIQ. 

The reason for the 2 year delay between a negotiated, finalized price predicated on CCPD between myself (the prime contractor) and the subcontractor is employee turnover and perhaps laziness. 

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@TNT1

  • You say you are a prime contractor and you want to enter into a IDIQ subcontract.
  • But then you say there is "no overarching prime contract for this IDIQ [subcontract]."
  • Then you say that "subsequent task orders... will have prime contracts (plural) tied to them.

???

What I think you mean by all the stuff you have posted is that you want to enter into an IDIQ contract with a company to provide supplies or services for your use when you perform under task orders issued by the Government under IDIQ contracts.

You negotiated with a company a couple of years ago and reached a tentative agreement on prices. You got certified cost or pricing then, but didn't actually sign a contract. Now you want to sign a contract with that company based on the prices you negotiated back then.

When you use its supplies or services in the performance of task orders, that company will be a subcontractor under those orders.

What you want to know is whether you should require the company to update the cost or pricing data that it submitted two years ago before you sign a subcontract. 

Is that what you have been trying say? If not, what of that is not correct?

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TNT1 wants to enter into a long-term agreement (LTA) with a supplier. The supplier will receive orders and the cost of those orders will be charged to a USG prime contract(s). We don't know whether the USG prime contracts will be FFP or Cost-Type, or what.

DCAA has audit guidance on this topic, for what it may be worth.

Quote

An LTA is an agreement entered into between a prime or higher-tier contractor and a subcontractor to establish pricing for future purchases of specified items. It is common for contractors to enter into an LTA with a subcontractor in advance of a specific Government RFP; therefore, DCAA audit assistance may be necessary to ensure the reasonableness of the subcontract price. Before initiating the audit, the following is required:

1. The subcontract proposal has been approved by the appropriate subcontractor management;

2. The prime contractor has submitted the subcontract proposal to the Government with an assertion from the prime contractor’s management that it intends to award an LTA with the subcontractor and identifies the benefit of the LTA to the Government;

3. The subcontract proposal is adequate for examination based on the requirements set forth in FAR Subpart 15.4, Contract Pricing; and

4. The Contracting Officer has determined that subcontract audit support is required based on DFARS PGI 215.404-3 Subcontract pricing considerations.

Bottom-line: I think the government will be more concerned about price reasonableness than it will about TINA compliance. The contractor should be prepared to show how two-year-old pricing will result in a reasonable price.

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17 hours ago, here_2_help said:

Bottom-line: I think the government will be more concerned about price reasonableness than it will about TINA compliance.

While that might be a valid thought with respect to price negotiations, if there are any, it might not be true in later years if the contract is audited for any reason.

In what I think was the biggest (and longest) TINA/False Claims litigation in history, the United Technologies (Pratt & Whitney) aircraft engine defective pricing case, which lasted more than a decade, the Air Force was not concerned about TINA compliance at the time of contract award. The concerns were raised by a DCAA auditor years later, and led to litigation at the ASBCA and in the federal courts.

Never take TINA lightly. Never ever.

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