Government Contracts & Investigations

Short Take: Proposed Rule Raises Certified Cost or Pricing Threshold to Implement Section 811 of FY18 NDAA

By | November 12, 2019

On October 2, 2019, DoD, GSA and NASA issued a proposed rule amending the FAR to implement Section 811 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. The amendment increases the threshold for requesting certified cost or pricing data from $750,000 to $2 million for contracts entered into after June 30, 2018.

Truth in negotiations, 10 U.S.C. 2306a, and Required cost or pricing data and certification, 41 U.S.C. 3502, require that the Government obtain certified cost or pricing data for certain contract actions listed at FAR 15.403-4(a)(1), such as negotiated contracts, certain subcontracts and certain contract modifications. Section 811 amends 10 U.S.C. 2306a and 41 U.S.C. 3502 to increase the certified cost or pricing threshold to $2 million. The threshold remains $750,000 for changes and modifications to a prime contract entered into before July 1, 2018, with one exception. Upon request from a contractor that was required to submit certified cost or pricing data in connection with a prime contract—including for modifications of sealed bid contracts—entered into before July 1, 2018, the contracting officer must modify the contract, without requiring consideration, to reflect the $2 million threshold.

The proposed changes are not applicable to contracts at or below the simplified acquisition threshold or to contracts for the acquisition of commercial items.

Interested parties should submit written comments in response to FAR Case 2018-005 on or before December 2, 2019 to be considered in the formation of the final rule. Submission procedures are detailed in the proposed rule.

Contact Eric Whytsell for more information.