52.214-27 Price Reduction for Defective

Certified Cost or Pricing Data-ModificationsSealed Bidding.

As prescribed in 14.201-7(b), insert the following clause:

Price Reduction for Defective Certified Cost or Pricing Data-Modifications-Sealed Bidding (Jun 2020)

(a) This clause shall become operative only for any modification to this contract involving aggregate

increases and/or decreases in costs, plus applicable profits, expected to exceed the threshold for the

submission of certified cost or pricing data in Federal Acquisition Regulation (FAR) 15.403-4(a)(1)

on the date of execution of the modification, except that this clause does not apply to a modification

if an exception under FAR 15.403-1(b) applies.

(b) If any price, including profit, negotiated in connection with any modification under this clause,

was increased by any significant amount because (1) the Contractor or a subcontractor furnished

certified cost or pricing data that were not complete, accurate, and current as certified in its

Certificate of Current Cost or Pricing Data, (2)a subcontractor or prospective subcontractor

furnished the Contractor certified cost or pricing data that were not complete, accurate, and current

as certified in the Contractor’s Certificate of Current Cost or Pricing Data, or (3) any of these parties

furnished data of any description that were not accurate, the price shall be reduced accordingly and

the contract shall be modified to reflect the reduction. This right to a price reduction is limited to

that resulting from defects in data relating to modifications for which this clause becomes operative

under paragraph (a) of this clause

(c) Any reduction in the contract price under paragraph (b) of this clause due to defective data from

a prospective subcontractor that was not subsequently awarded the subcontract shall be limited to

the amount, plus applicable overhead and profit markup, by which (1) the actual subcontract or (2)

the actual cost to the Contractor, if there was no subcontract, was less than the prospective

subcontract cost estimate submitted by the Contractor; provided, that the actual subcontract price

was not itself affected by defective certified cost or pricing data.

(d)

(1) If the Contracting Officer determines under paragraph (b) of this clause that a price or cost

reduction should be made, the Contractor agrees not to raise the following matters as a defense:

(i) The Contractor or subcontractor was a sole source supplier or otherwise was in a superior

bargaining position and thus the price of the contract would not have been modified even if

accurate, complete, and current certified cost or pricing data had been submitted.

(ii) The Contracting Officer should have known that the certified cost or pricing data in issue were

defective even though the Contractor or subcontractor took no affirmative action to bring the

character of the data to the attention of the Contracting Officer.

(iii) The contract was based on an agreement about the total cost of the contract and there was no

agreement about the cost of each item procured under the contract.
(iv) The Contractor or subcontractor did not submit a Certificate of Current Cost or Pricing Data.

(2)

(i) Except as prohibited by subdivision (d)(2)(ii) of this clause, an offset in an amount determined

appropriate by the Contracting Officer based upon the facts shall be allowed against the amount of a

contract price reduction if-

(A) The Contractor certifies to the Contracting Officer that, to the best of the Contractor’s

knowledge and belief, the Contractor is entitled to the offset in the amount requested; and

(B) The Contractor proves that the certified cost or pricing data were available before the date of

agreement on the price of the contract (or price of the modification) and that the data were not

submitted before such date.

(ii) An offset shall not be allowed if-

(A) The understated data was known by the Contractor to be understated when the Certificate of

Current Cost or Pricing Data was signed; or

(B) The Government proves that the facts demonstrate that the contract price would not have

increased in the amount to be offset even if the available data had been submitted before the date of

agreement on price.

(e) If any reduction in the contract price under this clause reduces the price of items for which

payment was made prior to the date of the modification reflecting the price reduction, the

Contractor shall be liable to and shall pay the United States at the time such overpayment is repaid-

(1) Interest compounded daily, as required by 26U.S.C.6622, the amount of such overpayment to be

computed from the date(s) of overpayment to the Contractor to the date the Government is repaid by

the Contractor at the applicable underpayment rate effective for each quarter prescribed by the

Secretary of the Treasury under 26 U.S.C. 6621(a)(2); and

(2) A penalty equal to the amount of the overpayment, if the Contractor or subcontractor knowingly

submitted certified cost or pricing data which were incomplete, inaccurate, or noncurrent.

(End of clause)

Parent topic: 52.214 [Reserved]