Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations 53135 

and (j)(2) ‘‘$10,000’’ and adding 

‘‘$15,000’’ in its place. 

52.228–15 [Amended] 

■ 74. Amend section 52.228–15 by 

removing from the clause heading ‘‘(Nov 

2006)’’ and adding ‘‘(Oct 2010)’’ in its 

place; and removing from the 

introductory text of paragraph (b) 

‘‘$100,000’’ and adding ‘‘$150,000’’ in its 

place. 

52.244–6 [Amended] 

■ 75. Amend section 52.244–6 by— 

■ a. Removing from the clause heading 

‘‘(Jun 2010)’’ and adding ‘‘(Oct 2010)’’ in 

its place; 

■ b. Removing from paragraph (c)(1)(iii) 

‘‘$550,000’’ and adding ‘‘$650,000’’ in its 

place, and removing ‘‘$1,000,000’’ and 

adding ‘‘$1.5 million’’ in its place; and 

■ c. Removing from paragraph (c)(1)(vi) 

‘‘(Jun 1998)’’ and adding ‘‘(Oct 2010)’’ in 

its place. 

52.248–1 [Amended] 

■ 76. Amend section 52.248–1 by 

removing from the clause heading ‘‘(Feb 

2000)’’ and adding ‘‘(Oct 2010)’’ in its 

place; and removing from paragraph (l) 

‘‘$100,000’’ and adding ‘‘$150,000’’ in its 

place. 

52.248–3 [Amended] 

■ 77. Amend section 52.248–3 by 

removing from the clause heading ‘‘(Sep 

2006)’’ and adding ‘‘(Oct 2010)’’ in its 

place; and removing from paragraph (h) 

‘‘$55,000’’ and adding ‘‘$65,000’’ in its 

place. 

[FR Doc. 2010–21025 Filed 8–27–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 2, 4, 12, 14, 15, 16, 19, 

27, 30, 31, 32, 42, 44, 49, and 52 

[FAC 2005–45; FAR Case 2005–036; Item 

II; Docket 2007–0001, Sequence 15] 

RIN 9000–AK74 

Federal Acquisition Regulation; 

Definition of Cost or Pricing Data 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to clarify the 

distinction between ‘‘certified cost or 

pricing data’’ and ‘‘data other than 

certified cost or pricing data’’, and to 

clarify requirements for submission of 

cost or pricing data. 

DATES: Effective Date: October 1, 2010. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Mr. 

Edward N. Chambers, Procurement 

Analyst, at (202) 501–3221. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–45, FAR 

case 2005–036. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Subpart 15.4 of the FAR describes the 

contracting officer’s responsibility to 

purchase supplies and services at fair 

and reasonable prices and the use of 

data and information in meeting this 

requirement. This subpart incorporates 

the requirements of the Truth In 

Negotiations Act (TINA), 10 U.S.C. 

2306a and 41 U.S.C. 254b, which 

address the requirements for the 

submission of cost or pricing data and 

the circumstances under which a 

contractor must certify to their accuracy, 

completeness, and currency. 

The Councils believe that the 

implementation of TINA in FAR subpart 

15.4 is not sufficiently clear. In 

particular, there is confusion regarding 

the right of the Government to request 

‘‘data other than certified cost or pricing 

data,’’ the obligation of the offeror to 

provide this data, and the definition of 

this term. 

This lack of clarity is due, in large 

part, to definitions that overlap and are 

not identical to TINA. For example, the 

term ‘‘cost or pricing data’’ is defined in 

the FAR to mean certified cost or 

pricing data, whereas TINA does not 

make certification part of the definition 

of this term. This regulatory refinement 

has led to confusion regarding the level 

of information that a contracting officer 

may request to establish fair and 

reasonable pricing including a 

misunderstanding by some that the data 

elements that comprise cost or pricing 

data cannot be requested by the 

Government unless the data are required 

by law to be submitted to the 

contracting officer in a certified form. 

This confusion has been exacerbated by 

the FAR’s use of the phrase ‘‘information 

other than cost or pricing data,’’ which 

has made it difficult for contracting 

officers to understand the circumstances 

when data other than certified cost or 

pricing data should be obtained to 

protect the Government from paying 

unreasonable prices. 

Even the basic articulation of policy 

regarding the use of data to establish the 

fairness and reasonableness of offered 

prices in the introductory paragraph of 

FAR 15.402(a) has lacked a certain level 

of clarity that creates uncertainty. For 

many years, this paragraph has 

appropriately cautioned contracting 

officers not to obtain more information 

than is necessary—and the FAR must 

continue to do so. However this 

paragraph should also, but currently 

does not, expressly mention the 

underlying statutory authority to collect 

‘‘data other than certified cost or pricing 

data.’’ Because of this omission, some 

contracting officers may be under the 

misperception that there is a greater 

responsibility to avoid asking 

unnecessarily for the submission of cost 

or pricing data than there is, in the first 

instance, to determine whether and how 

much of this data may be required, in 

a given case, to establish price fairness 

and reasonableness. In fact, both 

responsibilities—i.e., obtaining data that 

are adequate for evaluating the 

reasonableness of the price and taking 

appropriate care not to ask for more data 

than is necessary—are inextricably 

interrelated and equally important. As 

such, the FAR needs to communicate 

this message more clearly. 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

72 FR 20092, April 23, 2007, to revise 

the FAR definition of ‘‘cost or pricing 

data’’; change the term ‘‘information 

other than cost or pricing data’’ to ‘‘data 

other than certified cost or pricing data’’; 

add a definition of ‘‘certified cost or 

pricing data’’ to make the terms and 

definitions consistent with TINA and 

more understandable to the general 

reader; change terminology throughout 

the FAR; and clarify the need for 

contracting officers to obtain ‘‘data other 

than certified cost or pricing data’’ when 

there is no other means to determine fair 

and reasonable pricing during price 

analysis. 

Based on comments received on the 

proposed rule, a public meeting held on 

November 1, 2007, and additional 

deliberations (which are all discussed in 

greater detail below), the Councils have 

adopted a final rule that— 

• Clarifies terminology used in the 

FAR to make it consistent with TINA, 

resulting in (i) refinements to the 

regulatory definition of cost or pricing 

data, (ii) the addition of a definition for 

‘‘certified cost or pricing data,’’ (iii) the 

addition of a definition for ‘‘data other 

than certified cost or pricing data,’’ and 


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53136 Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations 

(iv) deletion of the phrase ‘‘information 

other than cost or pricing data’’; 

• Clarifies responsibilities regarding 

the request for, and submission of, ‘‘data 

other than certified cost or pricing data’’ 

to establish fair and reasonable pricing, 

both in the case when ‘‘certified cost or 

pricing data’’ is required and is not 

required; 

• Retains the current order of 

preference for determining the type of 

cost or pricing data required to establish 

fair and reasonable prices when 

certified cost or pricing data are not 

required; 

• Retains and reinforces important 

statements to explain why contracting 

officers must not require, unnecessarily, 

the submission of ‘‘data other than 

certified cost or pricing data’’; 

• Clarifies the instructions for offerors 

preparing a contract pricing proposal 

when cost or pricing data are required 

so that such instructions are consistent 

with the clarified terminology and 

policies for determining the type and 

quantity of data necessary to establish a 

fair and reasonable price; and 

• Supplements existing coverage to 

clarify current coverage and achieve 

greater understanding by contracting 

officers and contractors. 

This rule neither expands nor 

diminishes the existing rights of 

contracting officers to request cost or 

pricing data (whether certified or other 

than certified) or other information, or 

the existing responsibilities of the 

offeror to submit such data or other 

information. Similarly, the rule does not 

require, encourage, or authorize 

contracting officers to obtain cost or 

pricing data or other information unless 

it is needed to determine that prices 

offered are fair and reasonable, which 

may include the request for such data in 

connection with a cost realism analysis. 

As the rule explains, requiring 

contractors to submit more data than 

what is needed can ‘‘lead to increased 

proposal preparation costs, generally 

extend acquisition lead time, and 

consume additional contractor and 

Government resources.’’ 

Whether a contractor must submit 

‘‘certified cost or pricing data’’ is based 

on the requirements of TINA and its 

stated exceptions. With respect to ‘‘data 

other than certified cost or pricing data,’’ 

the introductory policy statement in 

FAR 15.402(a) has been clarified to tie 

together the contracting officer’s 

longstanding statutory responsibility to 

request the data and information 

necessary to establish a fair and 

reasonable price—as stated in TINA at 

10 U.S.C. 2306a(d)(1) and 41 U.S.C. 

254b(d)(1)—with the caution that, in 

doing so, the contracting officer must 

not request more data than is necessary. 

By doing so, the FAR will provide a 

more complete articulation of the policy 

underlying the use of ‘‘data other than 

certified cost or pricing data’’ in 

establishing price fairness and 

reasonableness, in furtherance of the 

contracting officer’s duty to serve as a 

responsible steward of the taxpayer’s 

resources. 

B. Public Comments 

The first comment period closed on 

June 22, 2007. Comments were received 

from 11 respondents. As a result of the 

comments received, a public meeting 

was scheduled with notice provided at 

72 FR 61854 on November 1, 2007. The 

public meeting was held on November 

15, 2007, and was followed by a one 

week period for submission of 

additional comments. Several 

respondents submitted additional 

comments. The public comments are 

addressed in the following analysis: 

General Comments 

Some respondents noted that the 

proposed changes should alleviate 

confusion. Others raised the following 

general concerns regarding various 

aspects of the proposed rule. 

1. Some respondents were concerned 

that the proposed rule will result in 

contracting officers by-passing normal 

market research and pricing techniques 

and require contractors to submit full 

cost or pricing data as if the Truth in 

Negotiations Act (TINA) applied. 

Response: The current FAR, as well as 

the proposed and final rule, protect 

against this practice. Contracting 

officers must generally follow the order 

of preference at FAR 15.402, and are 

required by that section to ‘‘obtain the 

type and quantity of data necessary to 

establish a fair and reasonable price, but 

not more data than is necessary.’’ In 

theory, this could include all of the 

elements prescribed under FAR 15.408, 

Table 

15–2. However, in most cases the data 

necessary for a contracting officer to 

determine cost fairness and 

reasonableness, or cost realism, will fall 

short of this level of data. The rule 

should not result in contracting officers 

requiring contractors to submit full cost 

or pricing data as if certification will be 

required when it is not necessary. 

2. Public comments did point out an 

error where the proposed rule changed 

the FAR to require certified cost or 

pricing data ‘‘and’’ data other than 

certified cost or pricing data. 

Response: The final rule corrects 

several instances where ‘‘and’’ was 

incorrectly used, replacing it with ‘‘or’’. 

However, there are circumstances where 

‘‘and’’ is appropriate and those have 

been retained. The final rule recognizes 

that the contracting officer may need to 

request data other than certified cost or 

pricing data, in addition to certified cost 

or pricing data, to establish fair and 

reasonable pricing. 

3. Some respondents were concerned 

about the broadening of the definition of 

‘‘information other than cost or pricing 

data’’ by adding the words ‘‘and 

judgmental information.’’ 

Response: Data used to support an 

offer will necessarily contain some 

information that is non-factual, i.e., 

judgmental information. Due to its 

nature, judgmental information cannot 

be certified. Even in situations where 

‘‘certified cost or pricing data’’ are 

required, judgmental information is not 

certified, and it is part of ‘‘data other 

than certified cost or pricing data’’ that 

supplements certified cost or pricing 

data. The final rule deletes the phrase 

‘‘information other than cost or pricing 

data,’’ but includes ‘‘judgmental 

information’’ and ‘‘judgmental factors’’ in 

the definition of ‘‘data other than 

certified cost or pricing data.’’ The final 

rule also includes additional language to 

provide consistency with FAR 15.408, 

Table 15–2 (i.e., any information 

reasonably required to explain the 

estimating process, including the 

judgmental factors applied and the 

mathematical or other methods used in 

the estimate, including those used in 

projecting from known data; and the 

nature and amount of any contingencies 

included in the proposed price). 

Aligning the definition of ‘‘data other 

than certified cost or pricing data’’ and 

the text of the language in FAR 15.408, 

Table 15–2, keeps the definition 

consistent with the current FAR 

requirements and TINA. The Councils 

note that the existence of a judgment is 

factual, but the nature and amount of 

the judgment are not. 

4. Many respondents were concerned 

that the proposed rule inappropriately 

adds the phrase ‘‘data other than 

certified cost or pricing data’’ 

throughout the proposed rule when only 

certified cost or pricing data apply. 

Response: The final rule deletes that 

addition in some instances. There are 

other instances where both phrases: 

‘‘Certified cost or pricing data’’ and ‘‘data 

other than certified cost or pricing data’’ 

are applicable. See the response to 

General Comments number 2. 

5. Several respondents were 

concerned that offerors of commercial 

items would be required to submit cost 

data in all instances. 

Response: Such an outcome would be 

contrary to the intent of the rule, which 

does not alter the current intent of the 


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Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations 53137 

FAR regarding the type and quantity of 

data to determine if the price of a 

commercial item is fair and reasonable. 

FAR 15.403–1(c)(3) specifically exempts 

commercial items from certified cost or 

pricing data requirements, and this rule 

does not change that exception. Also, 

FAR 15.403–3(c)(2) sets limitations on 

the type of cost data or pricing data that 

can be requested regarding commercial 

items. When contracting officers 

determine that they can use price 

analysis to determine the price to be fair 

and reasonable, the order of preference 

at FAR 15.402 means cost data will 

generally not be obtained for pricing 

commercial items. Contracting officers 

are to obtain only that information 

needed to determine a fair and 

reasonable price, which, in some cases, 

may include contractor cost data 

(without certification) for commercial 

items. 

Specific Comments 

1. Comment: Add a definition of ‘‘cost 

data,’’ which is referenced at FAR 

15.402(a)(2)(ii). 

Response: We do not believe a 

separate definition is required. The 

revised definition of ‘‘data other than 

certified cost or pricing data’’ and the 

existing definition of ‘‘information other 

than cost or pricing data’’ both 

encompass cost data and pricing data 

depending on what is needed by the 

contracting officer, using the order of 

preference at FAR 15.402(a). The 

definition simply breaks out various 

aspects of ‘‘data other than certified cost 

or pricing data.’’ The cost data refers to 

data related to a contractor’s costs. 

2. Comment: Separate enumeration of 

‘‘cost or pricing data’’ in FAR 

4.803(a)(17)(i) ‘‘Content of Contract 

Files’’ is unnecessary because it is 

repetitive with existing definitions in 

FAR 2.101. 

Response: The final rule revises FAR 

4.803(a)(17)(i) to read ‘‘certified cost or 

pricing data’’ consistent with the revised 

definition. The requirement at FAR 

4.803(a)(17) is for documenting the 

contract file for the contracting officer’s 

determination of a fair and reasonable 

price, and lists the types of data that 

should be maintained. ‘‘Certified cost or 

pricing data’’ includes all data that 

conforms to FAR 15.408, Table 15–2, 

while ‘‘data other than certified cost or 

pricing data’’ includes only the level of 

data the contracting officer needs to 

determine the price fair and reasonable. 

Whichever is required to be submitted, 

this section makes it clear that it shall 

be documented in the contract file. 

3. Comment: FAR 13.106–3(a)(2)(iii) 

contradicts FAR 15.404–1(b)(2)(iv) as 

FAR 13.106–3(a)(2)(iii) appears to 

indicate non-acceptability of price lists 

and catalogs as a price analysis stand 

alone technique. 

Response: Neither of the referenced 

texts is part of this rulemaking. 

Nonetheless, we note that the references 

do not conflict. Both references list 

various techniques and types of 

information the contracting officer may 

use, either individually or collectively. 

The type and extent of data needed is 

based on the contracting officer’s 

business judgment. FAR 13.106– 

3(a)(2)(iii) simply adds a cautionary 

note when using catalog prices. 

4. Comment: Change language in the 

proposed FAR 15.403–3(a)(1)(ii) from ‘‘If 

the contracting officer cannot obtain 

adequate data from sources other than 

the offeror, the contracting officer shall 

require’’ to ‘‘If the contracting officer 

determines that adequate data from 

sources other than the offeror is not 

available, the contracting officer shall 

require.’’ 

Response: We concur that the 

contracting officer should determine 

when adequate data is not available and 

have clarified the final rule accordingly. 

However, ‘‘data’’ is plural and requires 

the verb ‘‘are available’’ rather than ‘‘is 

available’’. 

5. Comment: The new language at 

FAR 15.404–1(b) confuses the difference 

between cost analysis and price analysis 

when it states that ‘‘Price analysis may 

include evaluating data other than 

certified cost or pricing data obtained 

from the offeror or contractor when 

there is no other means for determining 

a fair and reasonable price.’’ Price 

analysis should only be applied to sales 

data obtained from the offeror. 

Response: The referenced paragraph 

is a discussion of ‘‘price’’ analysis. The 

referenced text simply points out that in 

performing price analysis, the 

contracting officer may require data 

other than certified cost or pricing data. 

Price analysis is not limited to sales 

data. 

6. Comment: Language at FAR 

15.404–1(b)(2)(ii) needs clarification. 

Response: Changes have been made to 

FAR 15.404–1(b)(2)(ii) to clarify the text. 

7. Comment: In reference to FAR 

15.408, Table 15–2, changing the word 

‘‘information’’ to the phrase ‘‘data other 

than certified cost or pricing data’’ 

means that the contractor does not have 

to certify all the cost or pricing data. 

Changing these terms is changing the 

requirement under TINA. 

Response: The final rule utilizes the 

term ‘‘information’’ in a few instances, 

not as a term of art as it had been used 

in FAR part 15 prior to this revision, but 

generically. The requirements under 

TINA have not been changed. 

8. Comment: The proposed language 

that adds ‘‘certified cost or pricing data 

and data other than certified cost or 

pricing data’’ at FAR 15.408, Table 

15–2, means that the offeror could 

withhold disclosure or certification of 

cost or pricing data related to its 

subcontractors, in cases when the 

subcontractor is not required to certify. 

Response: When ‘‘certified cost or 

pricing data’’ is required, the prime 

contractor is responsible for certifying 

the completeness of all cost or pricing 

data, which includes subcontractor 

price quotes and cost data when the 

subcontractor is not required to certify 

to its data. The requirement for the 

prime contractor to certify that it has 

submitted all of the facts regarding 

subcontractor cost data or pricing data, 

even if the subcontractor is not required 

to submit ‘‘certified cost or pricing data,’’ 

is implicitly in the certification 

language at FAR 15.406–2(a). 

9. Comment: Throughout the 

proposed rule, including the clauses, 

change ‘‘required certified cost or 

pricing data and data other than 

certified cost or pricing data’’ back to 

‘‘required certified cost or pricing data, 

or data other than certified cost or 

pricing data.’’ 

Response: The phrases ‘‘certified cost 

or pricing data’’ and ‘‘data other than 

certified cost or pricing data’’ are joined 

with ‘‘and’’ when they are used to refer 

to both types of data collectively. The 

phrases are joined with ‘‘or’’ when the 

phrases are used to refer to either one 

or the other type of data. See the 

response to General Comments number 

2. 

10. Comment: FAR 52.214–26, Audit 

and Records—Sealed Bidding, expand 

the Government’s rights by allowing the 

Government to audit and review the 

contractor’s records when certified cost 

or pricing data are not required. There 

is no authority to do this. 

Response: This change was in error 

and the final rule deletes that addition. 

11. Comment: The proposed rule 

inappropriately adds the phrase ‘‘data 

other than certified cost or pricing data’’ 

to clauses and FAR 15.408, Table 15–2, 

when only certified cost or pricing data 

apply. 

Response: The final rule adds 

clarifying language to indicate that, 

when certified cost or pricing data is 

required, data other than certified cost 

or pricing data may also be required. 

See the responses to General Comments 

numbers 2 and 4, and Specific 

Comments number 9. 

12. Comment: Why is Alternate I of 

FAR 52.215–21(b) marked reserved? It 

shouldn’t be. 


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Response: The final rule retains 

Alternate I. 

13. Comment: The Councils are 

inappropriately prescribing the use of 

FAR 15.408, Table 15–2, for both 

‘‘certified cost or pricing data’’ and ‘‘data 

other than certified cost or pricing data’’. 

By doing so, the Councils are advocating 

cost analysis on commercial items. 

Response: This comment is similar to 

the Specific Comments numbers 7 and 

9. The language in the table and clauses 

is revised in the final rule. FAR 15.408, 

Table 15–2, applies only when certified 

cost or pricing data are required. 

However, when certified cost or pricing 

data are required, data other than 

certified cost or pricing data may also be 

required. Additionally, cost analysis can 

be used when an item that was thought 

initially to be commercial is found not 

to have sufficient sales data or other 

information for determining the price to 

be fair and reasonable. In each situation, 

and in accordance with FAR 1.602–2, 

the contracting officer must exercise 

business judgment as to the level and 

type of data needed to determine that 

prices are fair and reasonable following 

the order of preference at FAR 15.402(a). 

See the responses to General Comments 

numbers 2 and 4, and to Specific 

Comments numbers 7 and 9. 

14. Comment: The rule will not 

address situations when a contracting 

officer inappropriately determines an 

item to be commercial. 

Response: Commercial item 

determinations are beyond the scope of 

this rule. This rule is to clarify what 

data are needed to determine whether 

prices are fair and reasonable as 

required by FAR part 15. The 

procedures for making the 

determination under FAR part 12 are 

outside the scope of this rule about the 

definitions of phrases associated with 

cost or pricing data, and the 

requirements for their submission. 

15. Comment: Cost data should only 

be used when there are no other means 

to determine whether price is fair and 

reasonable. 

Response: The order of preference at 

FAR 15.402(a) has been restructured, 

but is essentially unchanged. Certified 

cost or pricing data must be obtained 

when required by TINA. When certified 

cost or pricing data are not required, the 

order of preference at FAR 15.402(a) 

must generally be followed. 

16. Comment: Contracting officers 

should never have to rely on cost data 

from the offeror to determine if the price 

for a commercial item is fair and 

reasonable. 

Response: The contracting officer 

retains the authority to request cost data 

where other information, including 

pricing data, is either unavailable or 

inadequate to establish that prices 

offered for a commercial item are fair 

and reasonable. However, the FAR 

policy is to only require submission of 

‘‘data other than certified cost or pricing 

data,’’ and only to the extent necessary 

to support the contracting officer’s 

determination of a fair and reasonable 

price. 

17. Comment: The proposed rule 

demands that the contracting officer 

obtains additional data (and ‘‘all facts’’) 

regardless of needs and reverses the 

presumption of the present FAR, which 

asserts that the contracting officer 

should not obtain more information 

than needed. The proposed rule requires 

greatly increased amounts of 

information even where certified cost or 

pricing data is not required. This is 

contrary to the language of the statute 

(TINA). 

Response: The language in FAR 

15.402(a); FAR 15.408, FAR Table 15–2; 

and the clauses are revised in the final 

rule. When certified cost or pricing data 

are required, data other than certified 

cost or pricing data may also be 

required. The contracting officer is 

cautioned to obtain data other than 

certified cost or pricing as necessary to 

establish a fair and reasonable price. See 

section A, Background; see also the 

responses to the Specific Comments 

numbers 7, 9, and 16. 

18. Comment: The proposed FAR 

15.403–3(c)(1) implies that contractors 

face vague and unbounded disclosure 

obligations (i.e., ‘‘cost data, or any other 

information the contracting officer 

requires’’ and ‘‘at a minimum, 

appropriate data on * * * prices’’) that 

likely will be highly varied in 

application to different procurements. 

This costly burden is unnecessary— 

certainly where it applies to exempt 

procurements, e.g., commercial items. 

Proposed changes conflict with TINA. 

Response: TINA and the existing FAR 

permit a contracting officer to obtain all 

data that is needed, in the contracting 

officer’s discretion (which may vary 

among contracting officers), to 

determine the price to be fair and 

reasonable. See the order of preference 

at FAR 15.402(a), Pricing Policy. The 

present rule does not change that. The 

intent is to leave latitude for contracting 

officers to exercise business judgment 

(FAR 1.602–2) in obtaining whatever 

data are required in order to be able to 

determine a price fair and reasonable, 

following the order of preference at FAR 

15.402(a). No negotiated procurements, 

including procurements of commercial 

items, are ‘‘exempt’’ from a contracting 

officer requiring submission of data 

other than certified cost or pricing data 

when it is needed to determine a fair 

and reasonable price. The proposed rule 

is consistent with the existing FAR, the 

requirements of TINA, the Federal 

Acquisition Streamlining Act of 1994 

(Pub. L. 103–355), and the Clinger 

Cohen Act of 1996 (Pub. L. 104–106). It 

does not add any requirements that do 

not already exist in the statutes and 

FAR. See the response to Specific 

Comments number 16. 

19. Comment: The proposed rule adds 

the requirement that price be ‘‘fair’’ and 

‘‘reasonable’’ in circumstances where the 

previous FAR required only 

demonstration of price 

‘‘reasonableness.’’ 

Response: Under the existing FAR, 

the contracting officer must determine 

prices to be fair and reasonable (see FAR 

15.402(a)). The final rule makes no 

changes to this basic policy. 

20. Comment: The proposed rule also 

obligates the contracting officer to 

require submission of ‘‘data other than 

certified cost or pricing data.’’ This is a 

profound change because the contractor 

must submit both certified cost or 

pricing data and something else. 

Response: See section A, Background. 

Also, see responses to Specific 

Comments numbers 7, 9, and 11. 

21. Comment: The proposed rule at 

FAR 15.404–1(b)(1) adds a new term, 

‘‘price or cost data.’’ What is ‘‘price or 

cost data?’’ 

Response: The language has been 

removed. The final rule clarifies the 

language at FAR 15.404–1(b) to correct 

‘‘price or cost data’’ to ‘‘data other than 

certified cost or pricing data’’. 

22. Comment: What is ‘‘commercial 

item analysis’’ at FAR 15.404–1(b)? 

Response: The phrase has been 

deleted. 

23. Comment: The proposed rule at 

FAR 15.404–1(b)(2)(ii) creates extensive 

additional disclosure requirements, 

which affect the eligibility for the 

‘‘commercial item’’ exemption. These 

include very particular demands 

concerning ‘‘prior price,’’ ‘‘terms and 

conditions,’’ ‘‘market and economic 

factors,’’ ‘‘differences between the 

similar item and the item being 

procured’’ and encouragement to use 

expert technical advice to evaluate 

‘‘minor modifications.’’ The effect of 

these requirements is to reduce the 

availability and utility of the 

‘‘commercial item’’ exception and to 

create, again, a whole class of 

‘‘surrogate’’ data that is uncertified but 

nevertheless burdensome and expensive 

to produce. 

Response: The contracting officer 

must be able to determine that the price 

is fair and reasonable. The fair and 

reasonable price can be the commercial 


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price. To the extent there are sufficient 

commercial sales of the item being 

procured for the same or similar 

quantities, both the validity of the 

comparison and the reasonableness of 

the previous prices can be established, 

and the company shares that 

commercial sales data with the 

contracting officer when it cannot be 

obtained by the Government through 

normal market research, so that the 

contracting officer can determine a fair 

and reasonable price, obtaining further 

‘‘data other than certified cost or pricing 

data’’ will not be necessary. See section 

A, Background, and the responses to 

Specific Comments numbers 7, 9, and 

11. 

24. Comment: The rule will create 

confusion when commercial items are 

being procured by putting contracting 

officers in a position where the only safe 

alternative will be to demand the 

maximum amount of data from an 

offeror. 

Response: There is no fundamental 

change from the existing requirements 

that contracting officers: ‘‘shall not 

obtain more data or information than 

necessary.’’ To the extent there are 

sufficient commercial sales of the item 

for the same or similar quantities, both 

the validity of the comparison and the 

reasonableness of the previous price can 

be established, and the company shares 

that information with the contracting 

officer when it cannot be obtained by 

the Government through normal market 

research, so that the contracting officer 

can determine a fair and reasonable 

price, additional data requests will not 

be required. This is not a departure from 

the existing FAR requirement. See 

section A, Background. 

25. Comment: We believe the FAR 

Council is expressing dissatisfaction 

with the ability of the acquisition 

workforce to do price analysis rather 

than the more familiar cost analysis and 

recommend providing adequate training 

rather than making significant changes 

to established regulations. 

Response: See section A, Background, 

and the Background section of the 

proposed rule Federal Register notice 

(72 FR 20092, April 23, 2007), 

concerning the confusion over the 

current FAR language, and further 

expressed in these public comments 

about existing FAR requirements. 

Training of our acquisition workforce in 

all types of proposal analysis is an 

ongoing effort. The workforce needs the 

cooperation of contractors to submit 

required data so that contracting officers 

can ensure a fair and reasonable price. 

We believe this final rule helps clarify 

requirements for submitting data 

consistent with the existing FAR. The 

Councils anticipate the development of 

training to help the workforce 

understand and apply the rule. 

26. Comment: Recommend Councils 

conduct a public meeting. 

Response: A public meeting was held 

on November 15, 2007, to ensure that all 

interested parties had an opportunity to 

provide additional input. The public 

meeting was followed by the 

opportunity for interested parties to 

submit comments. 

27. Comment: Existing regulations 

delineate that data provided in support 

of proposals fall into two distinct 

categories: ‘‘cost or pricing data’’ and 

‘‘information other than cost or pricing 

data.’’ The primary differentiator 

between cost or pricing data and 

information other than cost or pricing 

data is that the former requires 

certification in accordance with FAR 

15.406–2, while the latter is any type of 

information that does not require 

certification per FAR 15.406–2. The 

existing regulations clearly state that 

‘‘information other than cost or pricing 

data’’ is ‘‘any type of information that is 

not required to be certified’’ and that the 

definition ‘‘includes cost or pricing data 

for which certification is determined 

inapplicable after submission.’’ As a 

result, there is no ambiguity as to the 

type of data that can be requested or 

obtained through the submission of 

‘‘information other than cost or pricing 

data.’’ The Councils have changed the 

type of non-certifiable data to include 

‘‘cost data’’ rather than what was 

previously referred to as ‘‘cost 

information.’’ The FAR Council’s intent 

to clarify that the two terms result in 

underlying data that is the same, 

appears to be in direct conflict with the 

statutory definition. That statute does 

not eliminate the possibility that the 

data may be the same but it provides a 

different standard for ‘‘other 

information.’’ Accordingly, there are two 

different types of data defined in TINA, 

‘‘cost or pricing data’’ that is required to 

be certified and ‘‘other information’’ that 

is not required to be certified. 

Response: We believe this comment 

demonstrates the confusion reported to 

the Councils. TINA and FAR 15.402(a) 

require that the contracting officer shall 

require submission of data other than 

certified cost or pricing data to the 

extent necessary to determine the 

reasonableness of the price. We agree 

with the respondent’s comment that the 

definition of ‘‘information other than 

cost or pricing data’’, in effect prior to 

this final rule, included cost or pricing 

data for which certification is 

determined inapplicable after 

submission. The contracting officer 

must obtain whatever level of data is 

needed to determine price 

reasonableness, but cannot require 

certification of cost or pricing data 

(should cost or pricing data be needed) 

if the certification requirement of TINA 

does not apply. However, some 

contractors incorrectly believed that the 

FAR definition of ‘‘information other 

than cost or pricing data’’ in effect prior 

to this final rule, precluded the 

contracting officer from obtaining 

uncertified cost or pricing data. 

Section 2306a(h) of Title 10, as well 

as section 254b(h) of Title 41 of the U.S. 

Code, define both ‘‘cost or pricing data’’ 

and the circumstances under which that 

data must be certified. When the data 

must be certified, that data becomes 

‘‘certified cost or pricing data.’’ If, after 

submittal, no certification is required, 

the data becomes ‘‘data other than 

certified cost or pricing data.’’ Sections 

2306a(d)(1) and 254b(d)(1) state: ‘‘When 

certified cost or pricing data are not 

required * * * the contracting officer 

shall require submission of data other 

than certified cost or pricing data to the 

extent necessary to determine the 

reasonableness of the price * * * the 

contracting officer shall require that the 

data submitted include, at a minimum, 

appropriate information on prices at 

which the same or similar items have 

previously been sold. * * *’’ The 

statutory requirement is to obtain data 

necessary to determine the 

reasonableness of the price. The 

contracting officer cannot require 

certification of the data submitted if 

TINA does not require it to be certified. 

If the contracting officer has no other 

means to determine the reasonableness 

of the price (the main requirement of 

TINA), then the contracting officer shall 

require the submission of the necessary 

data needed to make that determination, 

including, at a minimum, prices at 

which the same or similar items have 

been previously sold. TINA does not 

prohibit obtaining cost or pricing data 

when ‘‘certified cost or pricing data’’ is 

not required to be obtained, but TINA 

(10 U.S.C. 2306(d)), as well as the FAR, 

provide requirements to ensure the 

contracting officer does not require 

more data than is necessary to 

determine that the prices are fair and 

reasonable. 

28. Comment: The proposed rule 

would lead contracting officers to 

expect offerors to maintain traditional 

Government cost accounting data for 

commercial items. 

Response: There is no requirement for 

anything more than the type of 

commercial data customarily 

maintained. See FAR 15.403–3(a)(2), 

FAR 15.403–3(c)(2), and FAR 15.403– 

5(b)(2). 


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29. Comment: Use of the word 

‘‘claimed’’ at FAR 15.403–1(c)(3)(i) 

reveals a great deal about the underlying 

philosophy that is perpetuated 

throughout the proposed rule. 

Response: The word ‘‘claimed’’ in FAR 

15.403–1(c)(3)(i) is not new; it is part of 

the existing language. There is no 

inference of intent on the use of the 

word. The intent of the rule is to make 

it clear that contracting officers must 

obtain the level of data needed in order 

to meet the requirements of TINA (10 

U.S.C. 2306a(d)(1) and 41 U.S.C. 

254b(d)(1)), which states that ‘‘* * * the 

contracting officer shall require 

submission of data * * * necessary to 

determine the reasonableness of the 

price * * *.’’ 

30. Comment: FAR subpart 15.4 

should not be used to determine 

whether or not an item being offered is 

a commercial item. 

Response: FAR subpart 15.4 is not 

used to determine whether or not an 

item is a commercial item. However, it 

is appropriate in FAR subpart 15.4 to 

require contracting officers to 

affirmatively decide if an item being 

offered meets the definition of 

‘‘commercial item’’ before asking a 

contractor to provide cost or pricing 

data, if cost analysis is the contracting 

officer’s only means to determine the 

price to be fair and reasonable. 

31. Comment: The proposed change to 

FAR 15.403–3(c), Commercial Items, 

states that even if an offeror provides 

catalog or market pricing, the 

contracting officer cannot assume that 

such information would be sufficient to 

establish a fair and reasonable price, 

and therefore, the contracting officer 

‘‘shall require’’ the offeror to submit data 

other than certified cost or pricing data 

to support further analysis. 

Response: There was no substantive 

change in the language in question; it is 

essentially the existing language. The 

language gives no mention to ‘‘market 

pricing.’’ Considering FAR subpart 15.4 

in its entirety, if there is adequate 

market pricing, the contracting officer is 

prohibited from requiring data from the 

contractor (FAR 15.402(a) and FAR 

15.403–3(a)). The current language and 

revised language in this final rule only 

requires submission of data other than 

certified cost or pricing data in 

accordance with the order of preference 

at FAR 15.402(a), and then only to the 

level of detail needed to support a 

determination of a fair and reasonable 

price. 

32. Comment: The proposed change to 

FAR 52.215–20, illustrates the 

tremendous confusion the proposed rule 

will cause and the onerous nature of the 

pricing requirements for commercial 

items. The proposed rule would 

‘‘require’’ contracting officers to demand 

that offerors proposing commercial 

items submit ‘‘data other than certified 

cost or pricing data’’ if the contracting 

officer believes it is necessary to 

determine prices fair and reasonable. 

Proposed paragraph (b) of FAR 52.215– 

20 then states that if the offeror is not 

granted an exception from TINA, then 

the offeror shall submit ‘‘data other than 

certified cost or pricing data.’’ 

Response: FAR 52.215–20 clause 

requires offerors to submit ‘‘data other 

than certified cost or pricing data’’ if the 

contracting officer believes it is 

necessary to determine prices to be fair 

and reasonable. The final rule clarifies 

in paragraph (b) of the contract clause 

FAR 52.215–20 that the data required 

under Table 15–2 includes ‘‘data other 

than certified cost or pricing data’’ as 

well as ‘‘certified cost or pricing data’’. 

33. Comment: Within the proposed 

rule, the Councils have made significant 

changes that result in the reprioritizing 

of the Government’s pricing policy as 

detailed at FAR 15.402. 

Response: In response to comments, 

the final rule reorganizes the FAR 

15.402(a) to clarify the policy, but the 

policy remains essentially unchanged. 

See section A, Background. 

34. Comment: The proposed rule 

revisions at FAR 15.402(a) suggests that 

the ‘‘data other than certified cost or 

pricing data’’ is preferred over ‘‘certified 

cost or pricing data’’, even when 

certification is required by FAR 15.403– 

4. 

Response: In response to comments, 

the final rule reorganizes FAR 15.402(a) 

to emphasize that certified cost or 

pricing data shall be obtained when 

required by TINA. When certified cost 

or pricing data are not required, the 

order of preference at FAR 15.402(a)(2) 

should generally be followed. 

35. Comment: The DoD-specific issues 

cited in the proposed rule and at the 

public meeting have been adequately 

addressed by the Director of Defense 

Procurement and Acquisition Policy 

through recent policy memos, policy 

guidance, and contract pricing training. 

These actions should be given a chance 

to work before further regulatory 

changes are made that would impede 

the U.S. Government’s access to the 

commercial marketplace. 

Response: The purpose of the FAR 

rulemaking is to eliminate confusion 

throughout the Government and to 

clarify for all agencies and their 

contractors definitions and associated 

responsibilities for the request and 

submission of certified cost or pricing 

data and data other than certified cost 

or pricing data. While DoD guidance is 

helpful to the DoD acquisition 

workforce, years of experiences 

throughout Government show that the 

current FAR language is causing 

confusion over what a contractor is 

required to submit to support prices. 

This confusion leads to inefficient 

procurement processes and sometimes 

leads to the Government paying 

unreasonable prices. The revised 

language clarifies the regulation, and is 

consistent with TINA, by requiring the 

contracting officer to obtain only the 

data necessary to determine the fairness 

and reasonableness of the price. 

36. Comment: The current FAR rules, 

when properly exercised, are already 

capable of achieving fair and reasonable 

prices and, in this respondent’s opinion, 

the definitions are clear and 

unambiguous, and contracting officers 

have significant latitude under current 

regulations to acquire data from 

contractors to support price 

reasonableness of commercial items. 

Response: See section A, Background, 

and also the responses to Specific 

Comments numbers 7, 9, 11, and 23. 

37. Comment: There are no proposed 

changes to make contracting officers 

aware that cost data from commercial 

companies will most likely not be in a 

form that complies with their 

expectations, training, or experience. 

Cost data from commercial companies 

will not comply with Cost Accounting 

Standards, FAR part 31, and are not 

generally suitable for certification under 

the Truth in Negotiations Act. The FAR 

council should not use terminology that 

is part of a cost-based contracting 

process. 

Response: Current regulations and 

TINA already require contractors to 

provide certified cost or pricing data, 

and data other than certified cost or 

pricing data as necessary, that will 

enable the contracting officer to 

determine fair and reasonable prices. 

The rule clarifies the regulations by 

using language consistent with TINA 

more precisely. The rule does not 

expand the contracting officer’s 

authority to request data from 

commercial companies when needed for 

the determination that prices are fair 

and reasonable. The challenge the 

comment reflects may be real, but it is 

not affected by the rule. 

38. Comment: The proposed rule 

would revise the order of preference of 

data at FAR 15.402(a) and would 

eliminate the distinction between ‘‘cost 

or pricing data’’ and ‘‘information other 

than cost or pricing data.’’ 

Response: The order of preference is 

not changed. By eliminating the 

ambiguous phrase ‘‘information other 

than cost or pricing data,’’ the rule 


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clarifies and maintains the distinction 

between ‘‘certified cost or pricing data’’ 

and ‘‘data other than certified cost or 

pricing data,’’ tracking the statutory 

distinctions. As stated in other 

responses herein, the revised definitions 

clearly describe what is required by 

TINA and intended by this rule. TINA 

defines ‘‘cost or pricing data,’’ and then 

prescribes when such data shall be 

certified. The nature and extent of ‘‘cost 

or pricing data’’ is the same regardless 

of whether it is certified or not. The 

statute also prescribes when a contractor 

must provide ‘‘data other than certified 

cost or pricing data’’ (which includes 

‘‘cost or pricing data’’ and judgmental 

information) without being required to 

certify it. Under the current law and 

regulations, a contracting officer is 

empowered to obtain all the data and 

judgmental information needed to 

determine a fair and reasonable price, 

but is restricted as to which data, and 

when that data, must be certified. 

39. Comment: By eliminating the term 

‘‘information’’ and substituting the term 

‘‘data’’ the rule would add ambiguity as 

to the legal status of the submission by 

commercial companies that cannot 

provide FAR compliant cost data. 

Response: The use of the term ‘‘data’’ 

is consistent with the statute and with 

the Government’s need to obtain factual 

information to be used as a basis for 

reasoning, discussion, or calculation. 

The rule does not change the existing 

strong limitations in the FAR on the 

circumstances under which a 

contracting officer can obtain certified 

cost or pricing data from commercial 

sources. It does not change the current 

restrictions on the amount of data a 

contracting officer can obtain (i.e., only 

that data to the extent necessary to 

determine fair and reasonable prices.) 

The rule also retains the existing 

flexibility to use contractor data formats. 

40. Comment: The ‘‘of a type’’ 

language in the proposed rule at FAR 

15.404–1(b)(2)(i) and FAR 

15.401(b)(ii)(C) introduces ambiguity as 

to the meaning of a commercial item. It 

is recommended that the ‘‘of a type’’ 

language be deleted from the proposed 

rule as it seems to add no clarity to the 

definition of a commercial item or how 

commercial items are to be priced. 

Response: We believe the respondent 

meant FAR 15.404–1(b)(2)(ii) and FAR 

15.404–1(b)(2)(ii)(C). The references in 

the comment either do not have the ‘‘of 

a type’’ text, or the reference is 

erroneous. These subparagraphs of the 

FAR provide requirements for price 

analysis and appropriately directs 

contracting officers to consider price 

comparisons even in situations when 

the proposed item is ‘‘of a type’’ that is 

customarily used by the general public 

or non-governmental entities for 

purposes other than governmental 

purposes, a term used consistently in 

the definition of commercial item at 

FAR 2.101. This section also 

appropriately directs contracting 

officers to obtain technical assistance. 

41. Comment: The proposed rule fails 

to address the confusion in pricing 

noncompetitive (sole-source) 

commercial items and guides the 

contracting officer to perform price 

analysis of previous DoD (Government) 

prices to determine price 

reasonableness. 

Response: The intent of the rule is for 

contracting officers to follow the order 

of preference, which includes price 

analysis (including price analysis of 

previous Government and nonGovernment sales). The Councils 

recognize, however, that there has been 

confusion over the type and amount of 

data that can be required by a 

contracting officer, particularly in noncompetitive (sole-source) acquisitions of 

commercial items. Accordingly, for the 

sake of clarification, changes were made 

at FAR 15.402(a)(2)(ii)(A), FAR 15.403– 

1(c)(3)(i), and FAR 15.403–3(c) to 

emphasize the need for the contracting 

officer to review the history of sales to 

non-governmental and governmental 

entities, determine whether an item is a 

commercial item, and decide whether 

certified cost or pricing data are 

required. The changes to FAR 15.402(a) 

provide sufficient flexibility to the 

contracting officer to address the 

specific contracting situation. As 

revised, this rule clarifies that TINA 

authorizes a contracting officer to obtain 

data other than certified cost or pricing 

data to the extent necessary to establish 

a fair and reasonable price, even when 

the acquisition is for a commercial item. 

Therefore, the rule sets forth appropriate 

guidance for determining fair and 

reasonable prices. 

This is a significant regulatory action 

and, therefore, was subject to review 

under Section 6(b) of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

not a major rule under 5 U.S.C. 804. 

C. Regulatory Flexibility Act 

The Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because the 

rule does not expand or diminish the 

existing rights of the contracting officer 

to obtain cost data or pricing data. 

Further, most acquisitions involving 

small entities are under the threshold 

for the submission of certified cost or 

pricing data of $700,000, the new TINA 

threshold (see FAR Case 2008–024, Item 

I of this FAC). Finally, this rule will 

benefit all entities, both large and small, 

by clarifying the requirements for the 

submission of ‘‘certified cost or pricing 

data’’ and ‘‘data other than certified cost 

or pricing data.’’ 

D. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply; however, these changes to the 

FAR do not impose additional 

information collection requirements to 

the paperwork burden previously 

approved under OMB Control Number 

9000–0013. 

List of Subjects in 48 CFR Parts 2, 4, 12, 

14, 15, 16, 19, 27, 30, 31, 32, 42, 44, 49, 

and 52 

Government procurement. 

Dated: August 18, 2010. 

Edward Loeb, 

Director, Acquisition Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 2, 4, 12, 14, 15, 16, 

19, 27, 30, 31, 32, 42, 44, 49, and 52 as 

set forth below: 

■ 1. The authority citation for 48 CFR 

parts 2, 4, 12, 14, 15, 16, 19, 27, 30, 31, 

32, 42, 44, 49, and 52 continues to read 

as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 2—DEFINITIONS OF WORDS 

AND TERMS 

■ 2. Amend section 2.101 in paragraph 

(b)(2) by— 

■ a. Adding, in alphabetical order, the 

definition ‘‘Certified cost or pricing 

data’’; 

■ b. Revising the introductory text of the 

definition ‘‘Cost or pricing data’’; 

■ c. Adding, in alphabetical order, the 

definition ‘‘Data other than certified cost 

or pricing data’’; and 

■ d. Removing the definition 

‘‘Information other than cost or pricing 

data’’. 

The added and revised text reads as 

follows: 

2.101 Definitions 

* * * * * 

(b) * * * 

(2) * * * 

Certified cost or pricing data means 

‘‘cost or pricing data’’ that were required 

to be submitted in accordance with FAR 

15.403–4 and 15.403–5 and have been 

certified, or are required to be certified, 


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in accordance with 15.406–2. This 

certification states that, to the best of the 

person’s knowledge and belief, the cost 

or pricing data are accurate, complete, 

and current as of a date certain before 

contract award. Cost or pricing data are 

required to be certified in certain 

procurements (10 U.S.C. 2306a and 41 

U.S.C. 254b). 

* * * * * 

Cost or pricing data (10 U.S.C. 

2306a(h)(1) and 41 U.S.C. 254b) 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. 

Cost or pricing data are factual, not 

judgmental; and are verifiable. While 

they do not indicate the accuracy of the 

prospective contractor’s judgment about 

estimated future costs or projections, 

they do include the data forming the 

basis for that judgment. Cost or pricing 

data are more than historical accounting 

data; they are all the facts that can be 

reasonably expected to contribute to the 

soundness of estimates of future costs 

and to the validity of determinations of 

costs already incurred. They also 

include, but are not limited to, such 

factors as— 

* * * * * 

Data other than certified cost or 

pricing data means pricing data, cost 

data, and judgmental information 

necessary for the contracting officer to 

determine a fair and reasonable price or 

to determine cost realism. Such data 

may include the identical types of data 

as certified cost or pricing data, 

consistent with Table 15–2 of 15.408, 

but without the certification. The data 

may also include, for example, sales 

data and any information reasonably 

required to explain the offeror’s 

estimating process, including, but not 

limited to— 

(1) The judgmental factors applied 

and the mathematical or other methods 

used in the estimate, including those 

used in projecting from known data; and 

(2) The nature and amount of any 

contingencies included in the proposed 

price. 

* * * * * 

PART 4—ADMINISTRATIVE MATTERS 

4.704 [Amended] 

■ 3. Amend section 4.704 in paragraph 

(b) by removing ‘‘for cost’’ and adding 

‘‘for certified cost’’ in its place. 

■ 4. Amend section 4.803 by revising 

paragraphs (a)(17) and (b)(4) to read as 

follows: 

4.803 Contents of contract files. 

* * * * * 

(a) * * * 

(17) Data and information related to 

the contracting officer’s determination 

of a fair and reasonable price. This may 

include— 

(i) Certified cost or pricing data; 

(ii) Data other than certified cost or 

pricing data; 

(iii) Justification for waiver from the 

requirement to submit certified cost or 

pricing data; or 

(iv) Certificates of Current Cost or 

Pricing Data. 

* * * * * 

(b) * * * 

(4) Certified cost or pricing data, 

Certificates of Current Cost or Pricing 

Data, or data other than certified cost or 

pricing data; cost or price analysis; and 

other documentation supporting 

contractual actions executed by the 

contract administration office. 

* * * * * 

PART 12—ACQUISITON OF 

COMMERCIAL ITEMS 

12.102 [Amended] 

■ 5. Amend section 12.102 in paragraph 

(f)(2)(ii) by removing ‘‘Cost or pricing’’ 

and adding ‘‘Certified cost or pricing’’ in 

its place. 

12.504 [Amended] 

■ 6. Amend section 12.504 in paragraph 

(a)(7) by removing ‘‘provide cost’’ and 

adding ‘‘provide certified cost’’ in its 

place. 

PART 14—SEALED BIDDING 

■ 7. Amend section 14.201–7 by 

removing from paragraph (a)(1)(ii) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place; and by revising paragraphs (b)(1) 

and (c)(1) to read as follows: 

14.201–7 Contract clauses. 

* * * * * 

(b)(1) When contracting by sealed 

bidding, the contracting officer shall 

insert the clause at 52.214–27, Price 

Reduction for Defective Certified Cost or 

Pricing Data—Modifications—Sealed 

Bidding, in solicitations and contracts if 

the contract amount is expected to 

exceed the threshold for submission of 

certified cost or pricing data at 15.403– 

4(a)(1). 

* * * * * 

(c)(1) When contracting by sealed 

bidding, the contracting officer shall 

insert the clause at 52.214–28, 

Subcontractor Certified Cost or Pricing 

Data—Modifications—Sealed Bidding, 

in solicitations and contracts if the 

contract amount is expected to exceed 

the threshold for submission of certified 

cost or pricing data at 15.403–4(a)(1). 

* * * * * 

PART 15—CONTRACTING BY 

NEGOTIATION 

■ 8. Amend section 15.204–5 by 

revising paragraph (b)(5) to read as 

follows: 

15.204–5 Part IV—Representations and 

Instructions. 

* * * * * 

(b) * * * 

(5) Certified cost or pricing data (see 

Table 15–2 of 15.408) or data other than 

certified cost or pricing data. 

* * * * * 

■ 9. Amend section 15.402 by revising 

the introductory text and paragraph (a) 

to read as follows: 

15.402 Pricing policy. 

Contracting officers shall— 

(a) Purchase supplies and services 

from responsible sources at fair and 

reasonable prices. In establishing the 

reasonableness of the offered prices, the 

contracting officer— 

(1) Shall obtain certified cost or 

pricing data when required by 15.403– 

4, along with data other than certified 

cost or pricing data as necessary to 

establish a fair and reasonable price; or 

(2) When certified cost or pricing data 

are not required by 15.403–4, obtain 

data other than certified cost or pricing 

data as necessary to establish a fair and 

reasonable price, generally using the 

following order of preference in 

determining the type of data required: 

(i) No additional data from the offeror, 

if the price is based on adequate price 

competition, except as provided by 

15.403–3(b). 

(ii) Data other than certified cost or 

pricing data such as— 

(A) Data related to prices (e.g., 

established catalog or market prices, 

sales to non-governmental and 

governmental entities), relying first on 

data available within the Government; 

second, on data obtained from sources 

other than the offeror; and, if necessary, 

on data obtained from the offeror. When 

obtaining data from the offeror is 

necessary, unless an exception under 

15.403–1(b)(1) or (2) applies, such data 

submitted by the offeror shall include, 

at a minimum, appropriate data on the 

prices at which the same or similar 

items have been sold previously, 

adequate for evaluating the 

reasonableness of the price. 

(B) Cost data to the extent necessary 

for the contracting officer to determine 

a fair and reasonable price. 

(3) Obtain the type and quantity of 

data necessary to establish a fair and 


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reasonable price, but not more data than 

is necessary. Requesting unnecessary 

data can lead to increased proposal 

preparation costs, generally extend 

acquisition lead time, and consume 

additional contractor and Government 

resources. Use techniques such as, but 

not limited to, price analysis, cost 

analysis, and/or cost realism analysis to 

establish a fair and reasonable price. If 

a fair and reasonable price cannot be 

established by the contracting officer 

from the analyses of the data obtained 

or submitted to date, the contracting 

officer shall require the submission of 

additional data sufficient for the 

contracting officer to support the 

determination of the fair and reasonable 

price. 

* * * * * 

■ 10. Amend section 15.403 by revising 

the section heading to read as follows: 

15.403 Obtaining certified cost or pricing 

data. 

* * * * * 

■ 11. Amend section 15.403–1 by— 

■ a. Revising the section heading, 

paragraph (a), the introductory text of 

paragraph (b), the heading to paragraph 

(c) introductory text, and paragraph 

(c)(3)(i); 

■ b. Removing from paragraph 

(c)(3)(iii)(A) ‘‘of cost’’ and adding ‘‘of 

certified cost’’ in its place; 

■ c. Revising paragraphs (c)(3)(iii)(B) 

and (c)(3)(iii)(C); 

■ d. Removing from paragraph (c)(3)(iv) 

‘‘for cost’’ and adding ‘‘for certified cost’’ 

in its place; and 

■ e. Revising the introductory text of 

paragraph (c)(4). 

The revised text reads as follows: 

15.403–1 Prohibition on obtaining certified 

cost or pricing data (10 U.S.C. 2306a and 41 

U.S.C. 254b). 

(a) Certified cost or pricing data shall 

not be obtained for acquisitions at or 

below the simplified acquisition 

threshold. 

(b) Exceptions to certified cost or 

pricing data requirements. The 

contracting officer shall not require 

certified cost or pricing data to support 

any action (contracts, subcontracts, or 

modifications) (but may require data 

other than certified cost or pricing data 

as defined in FAR 2.101 to support a 

determination of a fair and reasonable 

price or cost realism)— 

* * * * * 

(c) Standards for exceptions from 

certified cost or pricing data 

requirements—* * * 

(3) * * * 

(i) Any acquisition of an item that the 

contracting officer determines meets the 

commercial item definition in 2.101, or 

any modification, as defined in 

paragraph (3)(i) of that definition, that 

does not change the item from a 

commercial item to a noncommercial 

item, is exempt from the requirement for 

certified cost or pricing data. If the 

contracting officer determines that an 

item claimed to be commercial is, in 

fact, not commercial and that no other 

exception or waiver applies, (e.g. the 

acquisition is not based on adequate 

price competition; the acquisition is not 

based on prices set by law or regulation; 

and the acquisition exceeds the 

threshold for the submission of certified 

cost or pricing data at 15.403–4(a)(1)) 

the contracting officer shall require 

submission of certified cost or pricing 

data. 

* * * * * 

(iii) * * * 

(B) For acquisitions funded by DoD, 

NASA, or Coast Guard, such 

modifications of a commercial item are 

exempt from the requirement for 

submission of certified cost or pricing 

data provided the total price of all such 

modifications under a particular 

contract action does not exceed the 

greater of the threshold for obtaining 

certified cost or pricing data in 15.403– 

4 or 5 percent of the total price of the 

contract at the time of contract award. 

(C) For acquisitions funded by DoD, 

NASA, or Coast Guard such 

modifications of a commercial item are 

not exempt from the requirement for 

submission of certified cost or pricing 

data on the basis of the exemption 

provided for at 15.403–1(c)(3) if the total 

price of all such modifications under a 

particular contract action exceeds the 

greater of the threshold for obtaining 

certified cost or pricing data in 15.403– 

4 or 5 percent of the total price of the 

contract at the time of contract award. 

* * * * * 

(4) Waivers. The head of the 

contracting activity (HCA) may, without 

power of delegation, waive the 

requirement for submission of certified 

cost or pricing data in exceptional cases. 

The authorization for the waiver and the 

supporting rationale shall be in writing. 

The HCA may consider waiving the 

requirement if the price can be 

determined to be fair and reasonable 

without submission of certified cost or 

pricing data. For example, if certified 

cost or pricing data were furnished on 

previous production buys and the 

contracting officer determines such data 

are sufficient, when combined with 

updated data, a waiver may be granted. 

If the HCA has waived the requirement 

for submission of certified cost or 

pricing data, the contractor or highertier subcontractor to whom the waiver 

relates shall be considered as having 

been required to provide certified cost 

or pricing data. Consequently, award of 

any lower-tier subcontract expected to 

exceed the certified cost or pricing data 

threshold requires the submission of 

certified cost or pricing data unless— 

* * * * * 

■ 12. Revise section 15.403–2 to read as 

follows: 

15.403–2 Other circumstances where 

certified cost or pricing data are not 

required. 

(a) The exercise of an option at the 

price established at contract award or 

initial negotiation does not require 

submission of certified cost or pricing 

data. 

(b) Certified cost or pricing data are 

not required for proposals used solely 

for overrun funding or interim billing 

price adjustments. 

■ 13. Revise section 15.403–3 to read as 

follows: 

15.403–3 Requiring data other than 

certified cost or pricing data. 

(a)(1) In those acquisitions that do not 

require certified cost or pricing data, the 

contracting officer shall— 

(i) Obtain whatever data are available 

from Government or other secondary 

sources and use that data in determining 

a fair and reasonable price; 

(ii) Require submission of data other 

than certified cost or pricing data, as 

defined in 2.101, from the offeror to the 

extent necessary to determine a fair and 

reasonable price (10 U.S.C. 2306a(d)(1) 

and 41 U.S.C. 254b(d)(1)) if the 

contracting officer determines that 

adequate data from sources other than 

the offeror are not available. This 

includes requiring data from an offeror 

to support a cost realism analysis; 

(iii) Consider whether cost data are 

necessary to determine a fair and 

reasonable price when there is not 

adequate price competition; 

(iv) Require that the data submitted by 

the offeror include, at a minimum, 

appropriate data on the prices at which 

the same item or similar items have 

previously been sold, adequate for 

determining the reasonableness of the 

price unless an exception under 15.403– 

1(b)(1) or (2) applies; and 

(v) Consider the guidance in section 

3.3, chapter 3, volume I, of the Contract 

Pricing Reference Guide cited at 15.404– 

1(a)(7) to determine the data an offeror 

shall be required to submit. 

(2) The contractor’s format for 

submitting the data should be used (see 

15.403–5(b)(2)). 

(3) The contracting officer shall 

ensure that data used to support price 

negotiations are sufficiently current to 


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permit negotiation of a fair and 

reasonable price. Requests for updated 

offeror data should be limited to data 

that affect the adequacy of the proposal 

for negotiations, such as changes in 

price lists. 

(4) As specified in section 808 of the 

Strom Thurmond National Defense 

Authorization Act for Fiscal Year 1999 

(Pub. L. 105–261), an offeror who does 

not comply with a requirement to 

submit data for a contract or subcontract 

in accordance with paragraph (a)(1) of 

this subsection is ineligible for award 

unless the HCA determines that it is in 

the best interest of the Government to 

make the award to that offeror, based on 

consideration of the following: 

(i) The effort made to obtain the data. 

(ii) The need for the item or service. 

(iii) Increased cost or significant harm 

to the Government if award is not made. 

(b) Adequate price competition. When 

adequate price competition exists (see 

15.403–1(c)(1)), generally no additional 

data are necessary to determine the 

reasonableness of price. However, if 

there are unusual circumstances where 

it is concluded that additional data are 

necessary to determine the 

reasonableness of price, the contracting 

officer shall, to the maximum extent 

practicable, obtain the additional data 

from sources other than the offeror. In 

addition, the contracting officer should 

request data to determine the cost 

realism of competing offers or to 

evaluate competing approaches. 

(c) Commercial items. (1) At a 

minimum, the contracting officer must 

use price analysis to determine whether 

the price is fair and reasonable 

whenever the contracting officer 

acquires a commercial item (see 15.404– 

1(b)). The fact that a price is included 

in a catalog does not, in and of itself, 

make it fair and reasonable. If the 

contracting officer cannot determine 

whether an offered price is fair and 

reasonable, even after obtaining 

additional data from sources other than 

the offeror, then the contracting officer 

shall require the offeror to submit data 

other than certified cost or pricing data 

to support further analysis (see 15.404– 

1). This data may include history of 

sales to non-governmental and 

governmental entities, cost data, or any 

other information the contracting officer 

requires to determine the price is fair 

and reasonable. Unless an exception 

under 15.403–1(b)(1) or (2) applies, the 

contracting officer shall require that the 

data submitted by the offeror include, at 

a minimum, appropriate data on the 

prices at which the same item or similar 

items have previously been sold, 

adequate for determining the 

reasonableness of the price. 

(2) Limitations relating to commercial 

items (10 U.S.C. 2306a(d)(2) and 41 

U.S.C. 254b(d)(2)). (i) The contracting 

officer shall limit requests for sales data 

relating to commercial items to data for 

the same or similar items during a 

relevant time period. 

(ii) The contracting officer shall, to 

the maximum extent practicable, limit 

the scope of the request for data relating 

to commercial items to include only 

data that are in the form regularly 

maintained by the offeror as part of its 

commercial operations. 

(iii) The Government shall not 

disclose outside the Government data 

obtained relating to commercial items 

that is exempt from disclosure under 

24.202(a) or the Freedom of Information 

Act (5 U.S.C. 552(b)). 

(3) For services that are not offered 

and sold competitively in substantial 

quantities in the commercial 

marketplace, but are of a type offered 

and sold competitively in substantial 

quantities in the commercial 

marketplace, see 15.403–1(c)(3)(ii). 

14. Amend section 15.403–4 by 

revising the section heading, and 

paragraphs (a), (b), and (c) to read as 

follows: 

15.403–4 Requiring certified cost or 

pricing data (10 U.S.C. 2306a and 41 U.S.C. 

254b). 

(a)(1) The contracting officer shall 

obtain certified cost or pricing data only 

if the contracting officer concludes that 

none of the exceptions in 15.403–1(b) 

applies. However, if the contracting 

officer has reason to believe exceptional 

circumstances exist and has sufficient 

data available to determine a fair and 

reasonable price, then the contracting 

officer should consider requesting a 

waiver under the exception at 15.403– 

1(b)(4). The threshold for obtaining 

certified cost or pricing data is 

$700,000. Unless an exception applies, 

certified cost or pricing data are 

required before accomplishing any of 

the following actions expected to exceed 

the current threshold or, in the case of 

existing contracts, the threshold 

specified in the contract: 

(i) The award of any negotiated 

contract (except for undefinitized 

actions such as letter contracts). 

(ii) The award of a subcontract at any 

tier, if the contractor and each highertier subcontractor were required to 

furnish certified cost or pricing data (but 

see waivers at 15.403–1(c)(4)). 

(iii) The modification of any sealed 

bid or negotiated contract (whether or 

not certified cost or pricing data were 

initially required) or any subcontract 

covered by paragraph (a)(1)(ii) of this 

subsection. Price adjustment amounts 

must consider both increases and 

decreases (e.g., a $200,000 modification 

resulting from a reduction of $500,000 

and an increase of $300,000 is a pricing 

adjustment exceeding $700,000). This 

requirement does not apply when 

unrelated and separately priced changes 

for which certified cost or pricing data 

would not otherwise be required are 

included for administrative convenience 

in the same modification. Negotiated 

final pricing actions (such as 

termination settlements and total final 

price agreements for fixed-price 

incentive and redeterminable contracts) 

are contract modifications requiring 

certified cost or pricing data if— 

(A) The total final price agreement for 

such settlements or agreements exceeds 

the pertinent threshold set forth at 

paragraph (a)(1) of this subsection; or 

(B) The partial termination settlement 

plus the estimate to complete the 

continued portion of the contract 

exceeds the pertinent threshold set forth 

at paragraph (a)(1) of this subsection 

(see 49.105(c)(15)). 

(2) Unless prohibited because an 

exception at 15.403–1(b) applies, the 

head of the contracting activity, without 

power of delegation, may authorize the 

contracting officer to obtain certified 

cost or pricing data for pricing actions 

below the pertinent threshold in 

paragraph (a)(1) of this subsection, 

provided the action exceeds the 

simplified acquisition threshold. The 

head of the contracting activity shall 

justify the requirement for certified cost 

or pricing data. The documentation 

shall include a written finding that 

certified cost or pricing data are 

necessary to determine whether the 

price is fair and reasonable and the facts 

supporting that finding. 

(b) When certified cost or pricing data 

are required, the contracting officer 

shall require the contractor or 

prospective contractor to submit to the 

contracting officer (and to have any 

subcontractor or prospective 

subcontractor submit to the prime 

contractor or appropriate subcontractor 

tier) the following in support of any 

proposal: 

(1) The certified cost or pricing data 

and data other than certified cost or 

pricing data required by the contracting 

officer to determine that the price is fair 

and reasonable. 

(2) A Certificate of Current Cost or 

Pricing Data, in the format specified in 

15.406–2, certifying that to the best of 

its knowledge and belief, the cost or 

pricing data were accurate, complete, 

and current as of the date of agreement 

on price or, if applicable, an earlier date 

agreed upon between the parties that is 


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as close as practicable to the date of 

agreement on price. 

(c) If certified cost or pricing data are 

requested and submitted by an offeror, 

but an exception is later found to apply, 

the data must not be considered 

certified cost or pricing data as defined 

in 2.101 and must not be certified in 

accordance with 15.406–2. 

* * * * * 

■ 15. Revise section 15.403–5 to read as 

follows: 

15.403–5 Instructions for submission of 

certified cost or pricing data and data other 

than certified cost or pricing data. 

(a) Taking into consideration the 

policy at 15.402, the contracting officer 

shall specify in the solicitation (see 

15.408 (l) and (m))— 

(1) Whether certified cost or pricing 

data are required; 

(2) That, in lieu of submitting certified 

cost or pricing data, the offeror may 

submit a request for exception from the 

requirement to submit certified cost or 

pricing data; 

(3) Any requirement for data other 

than certified cost or pricing data; and 

(4) The requirement for necessary 

preaward or postaward access to 

offeror’s records. 

(b)(1) Format for submission of 

certified cost or pricing data. When 

certification is required, the contracting 

officer may require submission of 

certified cost or pricing data in the 

format indicated in Table 15–2 of 

15.408, specify an alternative format, or 

permit submission in the contractor’s 

format (See 15.408(l)(1)), unless the data 

are required to be submitted on one of 

the termination forms specified in 

subpart 49.6. 

(2) Format for submission of data 

other than certified cost or pricing data. 

When required by the contracting 

officer, data other than certified cost or 

pricing data may be submitted in the 

offeror’s own format unless the 

contracting officer decides that use of a 

specific format is essential for 

evaluating and determining that the 

price is fair and reasonable and the 

format has been described in the 

solicitation. 

(3) Format for submission of data 

supporting forward pricing rate 

agreements. Data supporting forward 

pricing rate agreements or final indirect 

cost proposals shall be submitted in a 

form acceptable to the contracting 

officer. 

■ 16. Amend section 15.404–1 by— 

■ a. Removing from paragraphs (a)(2) 

and (a)(3) ‘‘when cost’’ and adding 

‘‘when certified cost’’ in its place; 

■ b. Revising paragraph (a)(4) and the 

second sentence of paragraph (a)(6); 

■ c. Revising the heading of paragraph 

(b); 

■ d. Adding three sentences to the end 

of paragraph (b)(1); 

■ e. Revising the second sentence of 

paragraph (b)(2)(i), and paragraphs 

(b)(2)(ii) and (b)(2)(vii); 

■ f. Revising paragraph (c)(1); 

■ g. Removing from the introductory 

text of paragraph (c)(2)(i) ‘‘cost or’’ and 

adding ‘‘cost data or’’ in its place; 

■ h. Revising paragraph (c)(2)(v); 

■ i. Removing from paragraph (d)(3) 

‘‘contractors’’ and adding ‘‘contractors’ ’’ 

in its place; 

■ j. Removing from paragraph (e)(1) 

‘‘may’’ and adding ‘‘should’’ in its place, 

and removing ‘‘equipment, real’’ and 

adding ‘‘equipment or real’’ in its place; 

■ k. Adding paragraph (e)(3); and 

■ l. Removing from the third sentence of 

paragraph (f)(2) ‘‘may’’ and adding 

‘‘should’’ in its place. 

The revised and added text reads as 

follows: 

15.404–1 Proposal analysis techniques. 

(a) * * * 

(4) Cost analysis may also be used to 

evaluate data other than certified cost or 

pricing data to determine cost 

reasonableness or cost realism when a 

fair and reasonable price cannot be 

determined through price analysis alone 

for commercial or non-commercial 

items. 

* * * * * 

(6) * * * Any discrepancy or mistake 

of fact (such as duplications, omissions, 

and errors in computation) contained in 

the certified cost or pricing data or data 

other than certified cost or pricing data 

submitted in support of a proposal shall 

be brought to the contracting officer’s 

attention for appropriate action. 

* * * * * 

(b) Price analysis for commercial and 

non-commercial items. (1) * * * Unless 

an exception from the requirement to 

obtain certified cost or pricing data 

applies under 15.403–1(b)(1) or (b)(2), at 

a minimum, the contracting officer shall 

obtain appropriate data, without 

certification, on the prices at which the 

same or similar items have previously 

been sold and determine if the data is 

adequate for evaluating the 

reasonableness of the price. Price 

analysis may include evaluating data 

other than certified cost or pricing data 

obtained from the offeror or contractor 

when there is no other means for 

determining a fair and reasonable price. 

Contracting officers shall obtain data 

other than certified cost or pricing data 

from the offeror or contractor for all 

acquisitions (including commercial item 

acquisitions), if that is the contracting 

officer’s only means to determine the 

price to be fair and reasonable. 

(2) * * * 

(i) * * * Normally, adequate price 

competition establishes a fair and 

reasonable price (see 15.403–1(c)(1)). 

(ii) Comparison of the proposed prices 

to historical prices paid, whether by the 

Government or other than the 

Government, for the same or similar 

items. This method may be used for 

commercial items including those ‘‘of a 

type’’ or requiring minor modifications. 

(A) The prior price must be a valid 

basis for comparison. If there has been 

a significant time lapse between the last 

acquisition and the present one, if the 

terms and conditions of the acquisition 

are significantly different, or if the 

reasonableness of the prior price is 

uncertain, then the prior price may not 

be a valid basis for comparison. 

(B) The prior price must be adjusted 

to account for materially differing terms 

and conditions, quantities and market 

and economic factors. For similar items, 

the contracting officer must also adjust 

the prior price to account for material 

differences between the similar item 

and the item being procured. 

(C) Expert technical advice should be 

obtained when analyzing similar items, 

or commercial items that are ‘‘of a type’’ 

or requiring minor modifications, to 

ascertain the magnitude of changes 

required and to assist in pricing the 

required changes. 

* * * * * 

(vii) Analysis of data other than 

certified cost or pricing data (as defined 

at 2.101) provided by the offeror. 

* * * * * 

(c) * * * (1) Cost analysis is the 

review and evaluation of any separate 

cost elements and profit or fee in an 

offeror’s or contractor’s proposal, as 

needed to determine a fair and 

reasonable price or to determine cost 

realism, and the application of judgment 

to determine how well the proposed 

costs represent what the cost of the 

contract should be, assuming reasonable 

economy and efficiency. 

* * * * * 

(2) * * * 

(v) Review to determine whether any 

cost data or pricing data, necessary to 

make the offeror’s proposal suitable for 

negotiation, have not been either 

submitted or identified in writing by the 

offeror. If there are such data, the 

contracting officer shall attempt to 

obtain and use them in the negotiations 

or make satisfactory allowance for the 

incomplete data. 

* * * * * 

(e) * * * 


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(3) The contracting officer should 

request technical assistance in 

evaluating pricing related to items that 

are ‘‘similar to’’ items being purchased, 

or commercial items that are ‘‘of a type’’ 

or requiring minor modifications, to 

ascertain the magnitude of changes 

required and to assist in pricing the 

required changes. 

* * * * * 

■ 17. Amend section 15.404–2 by— 

■ a. Revising the section heading; 

■ b. Removing from the second sentence 

in paragraph (a)(1) and the introductory 

text of paragraph (a)(2) ‘‘must’’ and 

adding ‘‘shall’’ in its place; 

■ c. Revising the introductory text of 

paragraph (a)(2)(iii) and paragraph 

(a)(2)(iii)(F); and 

■ d. Removing from the introductory 

text of paragraph (c)(1) ‘‘may’’ and 

adding ‘‘should’’ in its place. 

The revised text reads as follows: 

15.404–2 Data to support proposal 

analysis. 

(a) * * * 

(2) * * * 

(iii) Information to help contracting 

officers determine commerciality and a 

fair and reasonable price, including— 

* * * * * 

(F) Identifying general market 

conditions affecting determinations of 

commerciality and a fair and reasonable 

price. 

* * * * * 

■ 18. Amend section 15.404–3 by— 

■ a. Revising paragraphs (a) and (b)(3); 

■ b. Revising the introductory text of 

paragraph (c); 

■ c. Removing from the introductory 

text of paragraph (c)(1) 

‘‘subcontractor(s), cost’’ and adding 

‘‘subcontractor(s), certified cost’’ in its 

place; 

■ d. Removing from paragraph (c)(1)(ii) 

‘‘pertinent cost’’ and adding ‘‘pertinent 

certified cost’’ in its place; 

■ e. Revising paragraph (c)(2); 

■ f. Removing from paragraphs (c)(3) 

and (c)(4) ‘‘Subcontractor cost’’ and 

adding ‘‘Subcontractor certified cost’’ in 

its place; and 

■ g. Removing from paragraph (c)(5) 

‘‘Government cost’’ and adding 

‘‘Government certified cost’’ in its place. 

The revised text reads as follows: 

15.404–3 Subcontract pricing 

considerations. 

(a) The contracting officer is 

responsible for the determination of a 

fair and reasonable price for the prime 

contract, including subcontracting costs. 

The contracting officer should consider 

whether a contractor or subcontractor 

has an approved purchasing system, has 

performed cost or price analysis of 

proposed subcontractor prices, or has 

negotiated the subcontract prices before 

negotiation of the prime contract, in 

determining the reasonableness of the 

prime contract price. This does not 

relieve the contracting officer from the 

responsibility to analyze the contractor’s 

submission, including subcontractor’s 

certified cost or pricing data. 

(b) * * * 

(3) When required by paragraph (c) of 

this subsection, submit subcontractor 

certified cost or pricing data to the 

Government as part of its own certified 

cost or pricing data. 

(c) Any contractor or subcontractor 

that is required to submit certified cost 

or pricing data also shall obtain and 

analyze certified cost or pricing data 

before awarding any subcontract, 

purchase order, or modification 

expected to exceed the certified cost or 

pricing data threshold, unless an 

exception in 15.403–1(b) applies to that 

action. 

* * * * * 

(2) The contracting officer should 

require the contractor or subcontractor 

to submit to the Government (or cause 

submission of) subcontractor certified 

cost or pricing data below the 

thresholds in paragraph (c)(1) of this 

subsection and data other than certified 

cost or pricing data that the contracting 

officer considers necessary for 

adequately pricing the prime contract. 

* * * * * 

■ 19. Amend section 15.406–2 by 

revising the introductory text of 

paragraph (a), and paragraph (e) to read 

as follows: 

15.406–2 Certificate of current cost or 

pricing data. 

(a) When certified cost or pricing data 

are required, the contracting officer 

shall require the contractor to execute a 

Certificate of Current Cost or Pricing 

Data, using the format in this paragraph, 

and must include the executed 

certificate in the contract file. 

* * * * * 

(e) If certified cost or pricing data are 

requested by the Government and 

submitted by an offeror, but an 

exception is later found to apply, the 

data shall not be considered certified 

cost or pricing data and shall not be 

certified in accordance with this 

subsection. 

■ 20. Amend section 15.406–3 by 

revising paragraphs (a)(5) and (a)(6), and 

the second and third sentences of 

paragraph (a)(7) to read as follows: 

15.406–3 Documenting the negotiation. 

(a) * * * 

(5) If certified cost or pricing data 

were not required in the case of any 

price negotiation exceeding the certified 

cost or pricing data threshold, the 

exception used and the basis for it. 

(6) If certified cost or pricing data 

were required, the extent to which the 

contracting officer— 

(i) Relied on the certified cost or 

pricing data submitted and used them in 

negotiating the price; 

(ii) Recognized as inaccurate, 

incomplete, or noncurrent any certified 

cost or pricing data submitted; the 

action taken by the contracting officer 

and the contractor as a result; and the 

effect of the defective data on the price 

negotiated; or 

(iii) Determined that an exception 

applied after the data were submitted 

and, therefore, considered not to be 

certified cost or pricing data. 

(7) * * * Where the determination of 

a fair and reasonable price is based on 

cost analysis, the summary shall address 

each major cost element. When 

determination of a fair and reasonable 

price is based on price analysis, the 

summary shall include the source and 

type of data used to support the 

determination. 

* * * * * 

■ 21. Amend section 15.407–1 by— 

■ a. Revising the section heading; 

■ b. Removing from the first sentence in 

paragraph (a) ‘‘any cost’’ and adding 

‘‘any certified cost’’ in its place; 

■ c. Revising paragraph (b)(1); 

■ d. Removing from paragraphs (b)(2) 

and (b)(3)(ii) ‘‘the cost’’ and adding ‘‘the 

certified cost’’ in its place; 

■ e. Revising paragraph (b)(3)(iv); 

■ f. Removing from paragraph (b)(4) 

‘‘understated cost’’ and adding 

‘‘understated certified cost’’ in its place; 

■ g. Removing from paragraph (b)(5)(ii) 

‘‘the cost’’ and adding ‘‘the certified cost’’ 

in its place; 

■ h. Removing from the first sentence in 

paragraph (b)(7)(iii) ‘‘defective cost’’ and 

adding ‘‘defective certified cost’’ in its 

place; 

■ i. Removing from the first sentence in 

paragraph (e) ‘‘Defective Cost’’ each time 

it appears (twice) and adding ‘‘Defective 

Certified Cost’’ in its place; and 

■ j. Removing from the first sentence in 

the introductory text of paragraph (f) 

and the first sentence of paragraph (f)(2) 

‘‘subcontractor cost’’ and adding 

‘‘subcontractor certified cost’’ in its 

place. 

The revised text reads as follows: 

15.407–1 Defective certified cost or pricing 

data. 

* * * * * 

(b)(1) If, after award, certified cost or 

pricing data are found to be inaccurate, 


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incomplete, or noncurrent as of the date 

of final agreement on price or an earlier 

date agreed upon by the parties given on 

the contractor’s or subcontractor’s 

Certificate of Current Cost or Pricing 

Data, the Government is entitled to a 

price adjustment, including profit or fee, 

of any significant amount by which the 

price was increased because of the 

defective data. This entitlement is 

ensured by including in the contract one 

of the clauses prescribed in 15.408(b) 

and (c) and is set forth in the clauses at 

52.215–10, Price Reduction for 

Defective Certified Cost or Pricing Data, 

and 52.215–11, Price Reduction for 

Defective Certified Cost or Pricing 

Data—Modifications. The clauses give 

the Government the right to a price 

adjustment for defects in certified cost 

or pricing data submitted by the 

contractor, a prospective subcontractor, 

or an actual subcontractor. 

* * * * * 

(3) * * * 

(iv) Certified cost or pricing data were 

required; however, the contractor or 

subcontractor did not submit a 

Certificate of Current Cost or Pricing 

Data relating to the contract. 

* * * * * 

15.407–2 [Amended] 

■ 22. Amend section 15.407–2 in 

paragraph (c)(1) by removing ‘‘requiring 

cost’’ and adding ‘‘requiring certified 

cost’’ in its place. 

■ 23. Amend section 15.407–3 by 

revising paragraph (a) to read as follows: 

15.407–3 Forward pricing rate agreements. 

(a) When certified cost or pricing data 

are required, offerors are required to 

describe any forward pricing rate 

agreements (FPRAs) in each specific 

pricing proposal to which the rates 

apply and to identify the latest cost or 

pricing data already submitted in 

accordance with the FPRA. All data 

submitted in connection with the FPRA, 

updated as necessary, form a part of the 

total data that the offeror certifies to be 

accurate, complete, and current at the 

time of agreement on price for an initial 

contract or for a contract modification. 

(See the Certificate of Current Cost or 

Pricing Data at 15.406–2.) 

* * * * * 

■ 24. Amend section 15.408 by— 

■ a. Revising paragraphs (b), (c), (d), (e), 

and (g); 

■ b. Removing from paragraph (j) ‘‘that 

cost’’ and adding ‘‘that certified cost’’ in 

its place; 

■ c. Revising paragraph (k), the 

introductory text of paragraph (l), and 

paragraphs (l)(1), (l)(4), and (m); and 

■ d. In Table 15–2, which follows 

paragraph (n), by— 

■ 1. Revising the table heading, the 

introductory text, and Notes 1 and 2; 

■ 2. Revising the first sentence of 

paragraph B., and paragraph C. of the I. 

General Instructions; and 

■ 3. Revising the introductory text of 

paragraph A. and paragraph A.(2) of the 

II. Cost Elements. 

The revised text reads as follows: 

15.408 Solicitation provisions and 

contract clauses. 

* * * * * 

(b) Price Reduction for Defective 

Certified Cost or Pricing Data. The 

contracting officer shall, when 

contracting by negotiation, insert the 

clause at 52.215–10, Price Reduction for 

Defective Certified Cost or Pricing Data, 

in solicitations and contracts when it is 

contemplated that certified cost or 

pricing data will be required from the 

contractor or any subcontractor (see 

15.403–4). 

(c) Price Reduction for Defective 

Certified Cost or Pricing Data— 

Modifications. The contracting officer 

shall, when contracting by negotiation, 

insert the clause at 52.215–11, Price 

Reduction for Defective Certified Cost or 

Pricing Data—Modifications, in 

solicitations and contracts when it is 

contemplated that certified 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 (b) of this section has not 

been included. 

(d) Subcontractor Certified Cost or 

Pricing Data. The contracting officer 

shall insert the clause at 52.215–12, 

Subcontractor Certified Cost or Pricing 

Data, in solicitations and contracts 

when the clause prescribed in paragraph 

(b) of this section is included. 

(e) Subcontractor Certified Cost or 

Pricing Data—Modifications. The 

contracting officer shall insert the clause 

at 52.215–13, Subcontractor Certified 

Cost or Pricing Data—Modifications, in 

solicitations and contracts when the 

clause prescribed in paragraph (c) of 

this section is included. 

* * * * * 

(g) Pension Adjustments and Asset 

Reversions. The contracting officer shall 

insert the clause at 52.215–15, Pension 

Adjustments and Asset Reversions, in 

solicitations and contracts for which it 

is anticipated that certified cost or 

pricing data will be required or for 

which any preaward or postaward cost 

determinations will be subject to part 

31. 

* * * * * 

(k) Notification of Ownership 

Changes. The contracting officer shall 

insert the clause at 52.215–19, 

Notification of Ownership Changes, in 

solicitations and contracts for which it 

is contemplated that certified cost or 

pricing data will be required or for 

which any preaward or postaward cost 

determination will be subject to subpart 

31.2. 

(l) Requirements for Certified Cost or 

Pricing Data and Data Other Than 

Certified Cost or Pricing Data. 

Considering the hierarchy at 15.402, the 

contracting officer shall insert the 

provision at 52.215–20, Requirements 

for Certified Cost or Pricing Data and 

Data Other Than Certified Cost or 

Pricing Data, in solicitations if it is 

reasonably certain that certified cost or 

pricing data or data other than certified 

cost or pricing data will be required. 

This provision also provides 

instructions to offerors on how to 

request an exception from the 

requirement to submit certified cost or 

pricing data. The contracting officer 

shall— 

(1) Use the provision with its 

Alternate I to specify a format for 

certified cost or pricing data other than 

the format required by Table 15–2 of 

this section; 

* * * * * 

(4) Replace the basic provision with 

its Alternate IV if certified cost or 

pricing data are not expected to be 

required because an exception may 

apply, but data other than certified cost 

or pricing data will be required as 

described in 15.403–3. 

(m) Requirements for Certified Cost or 

Pricing Data and Data Other Than 

Certified Cost or Pricing Data— 

Modifications. Considering the 

hierarchy at 15.402, the contracting 

officer shall insert the clause at 52.215– 

21, Requirements for Certified Cost or 

Pricing Data and Data Other Than 

Certified Cost or Pricing Data— 

Modifications, in solicitations and 

contracts if it is reasonably certain that 

certified cost or pricing data or data 

other than certified cost or pricing data 

will be required for modifications. This 

clause also provides instructions to 

contractors on how to request an 

exception from the requirement to 

submit certified cost or pricing data. 

The contracting officer shall— 

(1) Use the clause with its Alternate 

I to specify a format for certified cost or 

pricing data other than the format 

required by Table 15–2 of this section; 

(2) Use the clause with its Alternate 

II if copies of the proposal are to be sent 

to the ACO and contract auditor; 


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53148 Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations 

(3) Use the clause with its Alternate 

III if submission via electronic media is 

required; and 

(4) Replace the basic clause with its 

Alternate IV if certified cost or pricing 

data are not expected to be required 

because an exception may apply, but 

data other than certified cost or pricing 

data will be required as described in 

15.403–3. 

* * * * * 

Table 15–2—Instructions for Submitting 

Cost/Price Proposals When Certified 

Cost or Pricing Data Are Required 

This document provides instructions 

for preparing a contract pricing proposal 

when certified cost or pricing data are 

required. 

Note 1: There is a clear distinction between 

submitting certified cost or pricing data and 

merely making available books, records, and 

other documents without identification. The 

requirement for submission of certified cost 

or pricing data is met when all accurate 

certified cost or pricing data reasonably 

available to the offeror have been submitted, 

either actually or by specific identification, to 

the Contracting Officer or an authorized 

representative. As later data come into your 

possession, it should be submitted promptly 

to the Contracting Officer in a manner that 

clearly shows how the data relate to the 

offeror’s price proposal. The requirement for 

submission of certified cost or pricing data 

continues up to the time of agreement on 

price, or an earlier date agreed upon between 

the parties if applicable. 

Note 2: By submitting your proposal, you 

grant the Contracting Officer or an authorized 

representative the right to examine records 

that formed the basis for the pricing proposal. 

That examination can take place at any time 

before award. It may include those books, 

records, documents, and other types of 

factual data (regardless of form or whether 

the data are specifically referenced or 

included in the proposal as the basis for 

pricing) that will permit an adequate 

evaluation of the proposed price. 

I. General Instructions 

* * * * * 

B. In submitting your proposal, you 

must include an index, appropriately 

referenced, of all the certified cost or 

pricing data and information 

accompanying or identified in the 

proposal. * * * 

C. As part of the specific information 

required, you must submit, with your 

proposal— 

(1) Certified cost or pricing data (as 

defined at FAR 2.101). You must clearly 

identify on your cover sheet that 

certified cost or pricing data are 

included as part of the proposal. 

(2) Information reasonably required to 

explain your estimating process, 

including— 

(i) The judgmental factors applied and 

the mathematical or other methods used 

in the estimate, including those used in 

projecting from known data; and 

(ii) The nature and amount of any 

contingencies included in the proposed 

price. 

* * * * * 

II. Cost Elements 

* * * * * 

A. Materials and services. Provide a 

consolidated priced summary of 

individual material quantities included 

in the various tasks, orders, or contract 

line items being proposed and the basis 

for pricing (vendor quotes, invoice 

prices, etc.). Include raw materials, 

parts, components, assemblies, and 

services to be produced or performed by 

others. For all items proposed, identify 

the item and show the source, quantity, 

and price. Conduct price analyses of all 

subcontractor proposals. Conduct cost 

analyses for all subcontracts when 

certified cost or pricing data are 

submitted by the subcontractor. Include 

these analyses as part of your own 

certified cost or pricing data 

submissions for subcontracts expected 

to exceed the appropriate threshold in 

FAR 15.403–4. Submit the subcontractor 

certified cost or pricing data and data 

other than certified cost or pricing data 

as part of your own certified cost or 

pricing data as required in paragraph 

IIA(2) of this table. These requirements 

also apply to all subcontractors if 

required to submit certified cost or 

pricing data. 

* * * * * 

(2) All Other. Obtain certified cost or 

pricing data from prospective sources 

for those acquisitions (such as 

subcontracts, purchase orders, material 

order, etc.) exceeding the threshold set 

forth in FAR 15.403–4 and not 

otherwise exempt, in accordance with 

FAR 15.403–1(b) (i.e., adequate price 

competition, commercial items, prices 

set by law or regulation or waiver). Also 

provide data showing the basis for 

establishing source and reasonableness 

of price. In addition, provide a summary 

of your cost analysis and a copy of 

certified cost or pricing data submitted 

by the prospective source in support of 

each subcontract, or purchase order that 

is the lower of either $12.5 million or 

more, or both more than the pertinent 

certified cost or pricing data threshold 

and more than 10 percent of the prime 

contractor’s proposed price. Also submit 

any information reasonably required to 

explain your estimating process 

(including the judgmental factors 

applied and the mathematical or other 

methods used in the estimate, including 

those used in projecting from known 

data, and the nature and amount of any 

contingencies included in the price). 

The Contracting Officer may require you 

to submit cost or pricing data in support 

of proposals in lower amounts. 

Subcontractor certified cost or pricing 

data must be accurate, complete and 

current as of the date of final price 

agreement, or an earlier date agreed 

upon by the parties, given on the prime 

contractor’s Certificate of Current Cost 

or Pricing Data. The prime contractor is 

responsible for updating a prospective 

subcontractor’s data. For standard 

commercial items fabricated by the 

offeror that are generally stocked in 

inventory, provide a separate cost 

breakdown, if priced based on cost. For 

interorganizational transfers priced at 

cost, provide a separate breakdown of 

cost elements. Analyze the certified cost 

or pricing data and submit the results of 

your analysis of the prospective source’s 

proposal. When submission of a 

prospective source’s certified cost or 

pricing data is required as described in 

this paragraph, it must be included as 

part of your own certified cost or pricing 

data. You must also submit any data 

other than certified cost or pricing data 

obtained from a subcontractor, either 

actually or by specific identification, 

along with the results of any analysis 

performed on that data. 

* * * * * 

PART 16—TYPES OF CONTRACTS 

16.202–2 [Amended] 

■ 25. Amend section 16.202–2 by 

removing from paragraph (b) ‘‘valid 

cost’’ and adding ‘‘valid certified cost’’ in 

its place. 

■ 26. Amend section 16.203–2 by 

revising paragraph (b) to read as follows: 

16.203–2 Application. 

* * * * * 

(b) In contracts that do not require 

submission of certified cost or pricing 

data, the contracting officer shall obtain 

adequate data to establish the base level 

from which adjustment will be made 

and may require verification of data 

submitted. 

■ 27. Amend section 16.603–2 by 

revising the first sentence of paragraph 

(c) to read as follows: 

16.603–2 Application. 

* * * * * 

(c) Each letter contract shall, as 

required by the clause at 52.216–25, 

Contract Definitization, contain a 

negotiated definitization schedule 

including (1) dates for submission of the 

contractor’s price proposal, required 

certified cost or pricing data and data 


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other than certified cost or pricing data; 

and, if required, make-or-buy and 

subcontracting plans, (2) a date for the 

start of negotiations, and (3) a target date 

for definitization, which shall be the 

earliest practicable date for 

definitization. * * * 

* * * * * 

■ 28. Amend section 16.603–4 by 

revising the second sentence of 

paragraph (b)(3) to read as follows: 

16.603–4 Contract clauses. 

* * * * * 

(b) * * * 

(3) * * * If at the time of entering 

into the letter contract, the contracting 

officer knows that the definitive 

contract will be based on adequate price 

competition or will otherwise meet the 

criteria of 15.403–1 for not requiring 

submission of certified cost or pricing 

data, the words ‘‘and certified cost or 

pricing data in accordance with FAR 

15.408, Table 15–2 supporting its 

proposal’’ may be deleted from 

paragraph (a) of the clause. * * * 

* * * * * 

PART 19—SMALL BUSINESS 

PROGRAMS 

■ 29. Amend section 19.705–4 by— 

■ a. Removing from the introductory 

text and paragraph (a) introductory text 

‘‘must’’ and adding ‘‘shall’’ in its place; 

and 

■ b. Revising paragraph (d)(3) to read as 

follows: 

19.705–4 Reviewing the subcontracting 

plan. 

* * * * * 

(d) * * * 

(3) Ensure that the subcontracting 

goals are consistent with the offeror’s 

certified cost or pricing data or data 

other than certified cost or pricing data. 

* * * * * 

■ 30. Amend section 19.806 by revising 

the second and third sentences of 

paragraph (a) to read as follows: 

19.806 Pricing the 8(a) contract. 

(a) * * * If required by subpart 15.4, 

the SBA shall obtain certified cost or 

pricing data from the 8(a) contractor. If 

the SBA requests audit assistance to 

determine the proposed price to be fair 

and reasonable in a sole source 

acquisition, the contracting activity 

shall furnish it to the extent it is 

available. 

* * * * * 

19.807 [Amended] 

■ 31. Amend section 19.807 by 

removing from paragraph (b) ‘‘including 

cost’’ and adding ‘‘including certified 

cost’’ in its place. 

PART 27—PATENTS, DATA, AND 

COPYRIGHTS 

27.202–5 [Amended] 

■ 32. Amend section 27.202–5 by 

removing from paragraph (a)(1)(i) 

‘‘which cost’’ and adding ‘‘which 

certified cost’’ in its place. 

PART 30—COST ACCOUNTING 

STANDARDS ADMINISTRATION 

30.201–5 [Amended] 

■ 33. Amend section 30.201–5 in 

paragraph (c)(6) by removing ‘‘Whether 

cost’’ and adding ‘‘Whether certified 

cost’’ in its place. 

PART 31—CONTRACT COST 

PRINCIPLES AND PROCEDURES 

31.205–6 [Amended] 

■ 34. Amend section 31.205–6 in 

paragraph (j)(3)(i)(B), the second 

sentence of paragraph (j)(3)(ii), and the 

second sentence of paragraph (o)(5) by 

removing ‘‘which cost’’ and adding 

‘‘which certified cost’’ in its place. 

PART 32—CONTRACT FINANCING 

32.601 [Amended] 

■ 35. Amend section 32.601 in 

paragraph (b)(2) by removing ‘‘defective 

cost’’ and adding ‘‘defective certified 

cost’’ in its place. 

32.607–2 [Amended] 

■ 36. Amend section 32.607–2 in 

paragraph (g)(3) by removing ‘‘Defective 

Cost’’ and adding ‘‘Defective Certified 

Cost’’ in its place. 

PART 33—PROTESTS, DISPUTES, 

AND APPEALS 

33.207 [Amended] 

■ 37. Amend section 33.207 in 

paragraph (d) by removing ‘‘regarding 

cost’’ and adding ‘‘regarding certified 

cost’’ in its place. 

PART 36—CONSTRUCTION AND 

ARCHITECT-ENGINEER CONTRACTS 

■ 38. Amend section 36.214 by— 

■ a. Revising the introductory text of 

paragraph (b); and 

■ b. Removing from paragraph (b)(1) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place. 

■ The revised text reads as follows: 

36.214 Special procedures for price 

negotiation in construction contracting. 

* * * * * 

(b) The contracting officer shall 

evaluate proposals and associated 

certified cost or pricing data and data 

other than certified cost or pricing data 

and shall compare them to the 

Government estimate. 

* * * * * 

PART 42—CONTRACT 

ADMINISTRATION AND AUDIT 

SERVICES 

42.705–1 [Amended] 

■ 39. Amend section 42.705–1 in 

paragraph (b)(5)(iii) by giving separate 

indention to paragraphs (b)(5)(iii)(A), 

(B), (C), and (D) and by removing from 

(b)(5)(iii)(D) ‘‘of cost’’ and adding ‘‘of 

certified cost’’ in its place. 

■ 40. Amend section 42.1304 by 

revising paragraph (d) to read as 

follows: 

42.1304 Government delay of work. 

* * * * * 

(d) The contracting officer shall retain 

in the file a record of all negotiations 

leading to any adjustment made under 

the clause, and related certified cost or 

pricing data, or data other than certified 

cost or pricing data. 

■ 41. Amend section 42.1701 by— 

■ a. In paragraph (b), revising the first 

sentence, and removing the last 

sentence; and 

■ b. Revising the second sentence of 

paragraph (c). The revised text reads as 

follows: 

42.1701 Procedures. 

* * * * * 

(b) The ACO shall obtain the 

contractor’s forward pricing rate 

proposal and require that it include cost 

or pricing data that are accurate, 

complete, and current as of the date of 

submission (but see 15.407–3(c)). * * * 

(c) * * * The agreement shall provide 

for cancellation at the option of either 

party and shall require the contractor to 

submit to the ACO and to the cognizant 

contract auditor any significant change 

in cost or pricing data used to support 

the FPRA. 

* * * * * 

PART 44—SUBCONTRACTING 

POLICIES AND PROCEDURES 

■ 42. Amend section 44.202–2 by 

revising paragraph (a)(8) to read as 

follows: 

44.202–2 Considerations. 

(a) * * * 

(8) Has the contractor performed 

adequate cost or price analysis or price 

comparisons and obtained certified cost 

or pricing data and data other than 

certified cost or pricing data? 

* * * * * 


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■ 43. Amend section 44.303 by revising 

paragraph (c) to read as follows: 

44.303 Extent of review. 

* * * * * 

(c) Pricing policies and techniques, 

including methods of obtaining certified 

cost or pricing data, and data other than 

certified cost or pricing data; 

* * * * * 

44.305–3 [Amended] 

■ 44. Amend section 44.305–3 in 

paragraph (a)(1) by removing ‘‘Cost’’ and 

adding ‘‘Certified cost’’ in its place. 

PART 45—GOVERNMENT PROPERTY 

45.104 [Amended] 

■ 45. Amend section 45.104 by 

removing from paragraph (a)(4) ‘‘of cost’’ 

and adding ‘‘of certified cost’’ in its 

place. 

PART 49—TERMINATION OF 

CONTRACTS 

49.603–1 [Amended] 

■ 46. Amend section 49.603–1 in 

paragraph (b)(7)(x) of the agreement by 

removing ‘‘defective cost’’ and adding 

‘‘defective certified cost’’ in its place. 

49.603–2 [Amended] 

■ 47. Amend section 49.603–2 in 

paragraph (b)(8)(vii) of the agreement by 

removing ‘‘defective cost’’ and adding 

‘‘defective certified cost’’ in its place. 

49.603–3 [Amended] 

■ 48. Amend section 49.603–3 in 

paragraph (b)(7)(xv) of the agreement by 

removing ‘‘defective cost’’ and adding 

‘‘defective certified cost’’ in its place. 

49.603–4 [Amended] 

■ 49. Amend section 49.603–4 in 

paragraph (b)(4)(viii) of the agreement 

by removing ‘‘defective cost’’ and adding 

‘‘defective certified cost’’ in its place. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 50. Amend section 52.214–26 by— 

■ a. Revising the date of the clause; 

■ b. Revising the introductory text of 

paragraph (b); and 

■ c. Removing from paragraph (e) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place. 

The revised text reads as follows: 

52.214–26 Audit and Records—Sealed 

Bidding. 

* * * * * 

Audit and Records—Sealed Bidding 

(Oct 2010) 

* * * * * 

(b) Certified cost or pricing data. If the 

Contractor has been required to submit 

certified cost or pricing data in connection 

with the pricing of any modification to this 

contract, the Contracting Officer, or an 

authorized representative of the Contracting 

Officer, in order to evaluate the accuracy, 

completeness, and currency of the certified 

cost or pricing data, shall have the right to 

examine and audit all of the Contractor’s 

records, including computations and 

projections, related to— 

* * * * * 

■ 51. Amend section 52.214–27 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Removing from paragraph (a) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place; 

■ d. Removing from paragraph (b) 

‘‘furnished cost’’ and adding ‘‘furnished 

certified cost’’ in its place; removing 

‘‘Contractor cost’’ and adding 

‘‘Contractor certified cost’’ in its place; 

and removing ‘‘(a) above’’ and adding 

‘‘(a) of this clause’’ in its place; 

■ e. Removing from paragraph (c) ‘‘(b) 

above’’ and adding ‘‘(b) of this clause’’ in 

its place, and removing ‘‘defective cost’’ 

and adding ‘‘defective certified cost’’ in 

its place; 

■ f. Removing from paragraph (d)(1)(i) 

‘‘current cost’’ and adding ‘‘current 

certified cost’’ in its place; and removing 

from paragraph (d)(1)(ii) ‘‘the cost’’ and 

adding ‘‘the certified cost’’ in its place; 

■ g. Removing from paragraph 

(d)(2)(i)(B) ‘‘the cost’’ and adding ‘‘the 

certified cost’’ in its place; and 

■ h. Removing from paragraph (e)(2) 

‘‘submitted cost’’ and adding ‘‘submitted 

certified cost’’ in its place; 

The revised text reads as follows: 

52.214–27 Price Reduction for Defective 

Certified Cost or Pricing Data— 

Modifications—Sealed Bidding. 

* * * * * 

Price Reduction for Defective Certified 

Cost or Pricing Data—Modifications— 

Sealed Bidding (Oct 2010) 

* * * * * 

■ 52. Amend section 52.214–28 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Giving separate indention to 

paragraphs (a)(1) and (2) and by 

removing from paragraph (a)(1) ‘‘of cost’’ 

and adding ‘‘of certified cost’’ in its 

place; 

■ d. Revising paragraph (b); and 

■ e. Removing from paragraph (d) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place. 

The revised text reads as follows: 

52.214–28 Subcontractor Certified Cost or 

Pricing Data—Modifications—Sealed 

Bidding. 

* * * * * 

Subcontractor Certified Cost or Pricing 

Data—Modifications—Sealed Bidding 

(Oct 2010) 

* * * * * 

(b) Before awarding any subcontract 

expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4(a)(1), on the date of agreement 

on price or the date of award, whichever is 

later, or before pricing any subcontract 

modifications involving aggregate increases 

and/or decreases in costs, plus applicable 

profits, expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4(a)(1), the Contractor shall 

require the subcontractor to submit certified 

cost or pricing data (actually or by specific 

identification in writing), as part of the 

subcontractor’s proposal in accordance with 

FAR 15.408, Table 15–2 (to include any 

information reasonably required to explain 

the subcontractor’s estimating process such 

as the judgmental factors applied and the 

mathematical or other methods used in the 

estimate, including those used in projecting 

from known data, and the nature and amount 

of any contingencies included in the price), 

unless an exception under FAR 15.403–1(b) 

applies. 

* * * * * 

■ 53. Amend section 52.215–2 by— 

■ a. Revising the date of the clause; 

■ b. Revising the introductory text of 

paragraph (c); and 

■ c. Removing from introductory text of 

paragraph (g) ‘‘paragraph (a)’’ and adding 

‘‘paragraph (g)’’ in its place; and 

removing from paragraph (g)(2) ‘‘which 

cost’’ and adding ‘‘which certified cost’’ 

in its place. 

The revised text reads as follows: 

52.215–2 Audit and Records-Negotiation. 

* * * * * 

Audit and Records—Negotiation (Oct 

2010) 

* * * * * 

(c) Certified cost or pricing data. If the 

Contractor has been required to submit 

certified cost or pricing data in connection 

with any pricing action relating to this 

contract, the Contracting Officer, or an 

authorized representative of the Contracting 

Officer, in order to evaluate the accuracy, 

completeness, and currency of the certified 

cost or pricing data, shall have the right to 

examine and audit all of the Contractor’s 

records, including computations and 

projections, related to— 

* * * * * 

■ 54. Amend section 52.215–9 by— 

■ a. Revising the date of Alternate I and 

paragraph (d)(1); and 

■ b. Revising the date of Alternate II and 

paragraph (d)(1). 

The revised text reads as follows: 


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52.215–9 Changes or Additions to Makeor-Buy Program. 

* * * * * 

Alternate I (Oct 2010). * * * 

(d) * * * 

(1) Support its proposal with certified cost 

or pricing data in accordance with FAR 

15.408, Table 15–2 when required by FAR 

15.403, and data other than certified cost or 

pricing data, to permit evaluation; and 

* * * * * 

Alternate II (Oct 2010). * * * 

(d) * * * 

(1) Support its proposal with certified cost 

or pricing data in accordance with FAR 

15.408, Table 15–2, when required by FAR 

15.403, and data other than certified cost or 

pricing data, to permit evaluation; and 

* * * * * 

■ 55. Amend section 52.215–10 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Removing from paragraph (a)(1) 

‘‘furnished cost’’ and adding ‘‘furnished 

certified cost’’ in its place, and removing 

from paragraph (a)(2) ‘‘Contractor cost’’ 

and adding ‘‘Contractor certified cost’’ in 

its place; 

■ d. Revising paragraph (b); 

■ e. Removing from paragraph (c)(1)(i) 

‘‘current cost’’ and adding ‘‘current 

certified cost’’ in its place, and removing 

from paragraphs (c)(1)(ii) and (c)(2)(i)(B) 

‘‘the cost’’ and adding ‘‘the certified cost’’ 

in its place; and 

■ f. Removing from paragraph (d)(2) 

‘‘submitted cost’’ and adding ‘‘submitted 

certified cost’’ in its place. 

The revised text reads as follows: 

52.215–10 Price Reduction for Defective 

Certified Cost or Pricing Data. 

* * * * * 

Price Reduction for Defective Certified 

Cost or Pricing Data (Oct 2010) 

* * * * * 

(b) Any reduction in the contract price 

under paragraph (a) 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. 

* * * * * 

■ 56. Amend section 52.215–11 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Removing from paragraph (a) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place; 

■ d. Removing from paragraph (b) 

‘‘furnished cost’’ and adding ‘‘furnished 

certified cost’’ in its place; and removing 

‘‘Contractor cost’’ and adding 

‘‘Contractor certified cost’’ in its place; 

■ e. Revising paragraph (c); 

■ f. Removing from paragraph (d)(1)(i) 

‘‘current cost’’ and adding ‘‘current 

certified cost’’ in its place; and removing 

from paragraphs (d)(1)(ii) and 

(d)(2)(i)(B) ‘‘the cost’’ and adding ‘‘the 

certified cost’’ in its place; and 

■ g. Removing from paragraph (e)(2) 

‘‘submitted cost’’ and adding ‘‘submitted 

certified cost’’ in its place. 

The revised text reads as follows: 

52.215–11 Price Reduction for Defective 

Certified Cost or Pricing Data— 

Modifications. 

* * * * * 

Price Reduction for Defective Certified 

Cost or Pricing Data—Modifications 

(Oct 2010) 

* * * * * 

(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. 

* * * * * 

■ 57. Amend section 52.215–12 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Revising paragraph (a); 

■ d. Removing from the introductory 

text of paragraph (c) and paragraph 

(c)(1) ‘‘of cost’’ and adding ‘‘of certified 

cost’’ in its place; and 

■ e. Removing from paragraph (c)(2) 

‘‘Subcontractor Cost’’ and adding 

‘‘Subcontractor Certified Cost’’ in its 

place. 

The revised text reads as follows: 

52.215–12 Subcontractor Certified Cost or 

Pricing Data. 

* * * * * 

Subcontractor Certified Cost or Pricing 

Data (Oct 2010) 

* * * * * 

(a) Before awarding any subcontract 

expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4, on the date of agreement on 

price or the date of award, whichever is later; 

or before pricing any subcontract 

modification involving a pricing adjustment 

expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4, the Contractor shall require 

the subcontractor to submit certified cost or 

pricing data (actually or by specific 

identification in writing), in accordance with 

FAR 15.408, Table 15–2 (to include any 

information reasonably required to explain 

the subcontractor’s estimating process such 

as the judgmental factors applied and the 

mathematical or other methods used in the 

estimate, including those used in projecting 

from known data, and the nature and amount 

of any contingencies included in the price), 

unless an exception under FAR 15.403–1 

applies. 

* * * * * 

■ 58. Amend section 52.215–13 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Removing from paragraph (a)(1) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place; 

■ d. Revising paragraph (b); and 

■ e. Removing from paragraph (d) ‘‘of 

cost’’ and adding ‘‘of certified cost’’ in its 

place; 

The revised text reads as follows: 

52.215–13 Subcontractor Certified Cost or 

Pricing Data—Modifications. 

* * * * * 

Subcontractor Certified Cost or Pricing 

Data—Modifications (Oct 2010) 

* * * * * 

(b) Before awarding any subcontract 

expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4, on the date of agreement on 

price or the date of award, whichever is later; 

or before pricing any subcontract 

modification involving a pricing adjustment 

expected to exceed the threshold for 

submission of certified cost or pricing data at 

FAR 15.403–4, the Contractor shall require 

the subcontractor to submit certified cost or 

pricing data (actually or by specific 

identification in writing), in accordance with 

FAR 15.408, Table 15–2 (to include any 

information reasonably required to explain 

the subcontractor’s estimating process such 

as the judgmental factors applied and the 

mathematical or other methods used in the 

estimate, including those used in projecting 

from known data, and the nature and amount 

of any contingencies included in the price), 

unless an exception under FAR 15.403–1 

applies. 

* * * * * 

52.215–14 [Amended] 

■ 59. Amend section 52.215–14 by— 

■ a. Revising the date of the clause to 

read ‘‘(Oct 2010)’’; and 

■ b. Removing from the last sentence of 

paragraph (a) ‘‘of cost’’ and adding ‘‘of 

certified cost’’ in its place. 

52.215–15 [Amended] 

■ 60. Amend section 52.215–15 by 

revising the date of the clause to read 

‘‘(Oct 2010)’’; and removing from 

paragraph (b)(2) and the second 

sentence of paragraph (c) ‘‘which cost’’ 


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and adding ‘‘which certified cost’’ in its 

place. 

■ 61. Amend section 52.215–20 by— 

■ a. Revising the section heading; 

■ b. Revising the provision heading and 

date of the provision; 

■ c. Revising the introductory text of 

paragraph (a); and removing from the 

first sentence of paragraph (a)(1) 

‘‘submitting cost’’ and adding 

‘‘submitting certified cost’’ in its place; 

■ d. Revising the introductory text of 

paragraph (b) and paragraph (b)(1); 

■ e. Revising Alternate I; and 

■ f. Revising the date of Alternate IV 

and paragraphs (a) and (b). 

The revised text reads as follows: 

52.215–20 Requirements for Certified Cost 

or Pricing Data and Data Other Than 

Certified Cost or Pricing Data. 

* * * * * 

Requirements for Certified Cost or 

Pricing Data and Data Other Than 

Certified Cost or Pricing Data (Oct 

2010) 

(a) Exceptions from certified cost or pricing 

data. 

* * * * * 

(b) Requirements for certified cost or 

pricing data. If the offeror is not granted an 

exception from the requirement to submit 

certified cost or pricing data, the following 

applies: 

(1) The offeror shall prepare and submit 

certified cost or pricing data, data other than 

certified cost or pricing data, and supporting 

attachments in accordance with the 

instructions contained in Table 15–2 of FAR 

15.408, which is incorporated by reference 

with the same force and effect as though it 

were inserted here in full text. The 

instructions in Table 15–2 are incorporated 

as a mandatory format to be used in this 

contract, unless the Contracting Officer and 

the Contractor agree to a different format and 

change this clause to use Alternate I. 

* * * * * 

Alternate I (Oct 2010). As prescribed in 

15.408(1) (and see 15.403–5(b)(1)), substitute 

the following paragraph (b)(1) for paragraph 

(b)(1) of the basic provision: 

(b)(1) The offeror shall submit certified cost 

or pricing data, data other than certified cost 

or pricing data, and supporting attachments 

in the following format: [Insert description of 

the data and format that are required, and 

include access to records necessary to permit 

an adequate evaluation of the proposed price 

in accordance with 15.408, Table 15–2, Note 

2. The description may be inserted at the 

time of issuing the solicitation, or the 

Contracting Officer may specify that the 

offeror’s format will be acceptable, or the 

description may be inserted as the result of 

negotiations.] 

* * * * * 

Alternate IV (Oct 2010). * * * 

(a) Submission of certified cost or pricing 

data is not required. 

(b) Provide data described below: [Insert 

description of the data and the format that 

are required, including the access to records 

necessary to permit an adequate evaluation 

of the proposed price in accordance with 

15.403–3.] 

■ 62. Amend section 52.215–21 by— 

■ a. Revising the section heading; 

■ b. Revising the clause heading and 

date of the clause; 

■ c. Revising the introductory text of 

paragraph (a); and removing from the 

introductory text of paragraph (a)(1) 

‘‘submitting cost’’ and adding 

‘‘submitting certified cost’’ in its place; 

■ d. Removing from paragraph 

(a)(1)(ii)(A)(1) ‘‘from cost’’ and adding 

‘‘from certified cost’’ in its place; 

■ e. Revising the introductory text of 

paragraph (b) and paragraph (b)(1); 

■ f. Revising Alternate I; and 

■ g. Revising the date of Alternate IV 

and paragraphs (a) and (b). 

The revised text reads as follows: 

52.215–21 Requirements for Certified Cost 

or Pricing Data and Data Other Than 

Certified Cost or Pricing Data— 

Modifications. 

* * * * * 

Requirements for Certified Cost or 

Pricing Data and Data Other Than 

Certified Cost or Pricing Data— 

Modifications (Oct 2010) 

(a) Exceptions from certified cost or pricing 

data. 

* * * * * 

(b) Requirements for certified cost or 

pricing data. If the Contractor is not granted 

an exception from the requirement to submit 

certified cost or pricing data, the following 

applies: 

(1) The Contractor shall submit certified 

cost or pricing data, data other than certified 

cost or pricing data, and supporting 

attachments in accordance with the 

instructions contained in Table 15–2 of FAR 

15.408, which is incorporated by reference 

with the same force and effect as though it 

were inserted here in full text. The 

instructions in Table 15–2 are incorporated 

as a mandatory format to be used in this 

contract, unless the Contracting Officer and 

the Contractor agree to a different format and 

change this clause to use Alternate I. 

* * * * * 

Alternate I (Oct 2010). As prescribed in 

15.408(m) and 15.403–5(b)(1), substitute the 

following paragraph (b)(1) for paragraph 

(b)(1) of the basic clause. 

(b)(1) The Contractor shall submit certified 

cost or pricing data, data other than certified 

cost or pricing data, and supporting 

attachments prepared in the following 

format: [Insert description of the data and 

format that are required and include access 

to records necessary to permit an adequate 

evaluation of the proposed price in 

accordance with 15.408, Table 15–2, Note 2. 

The description may be inserted at the time 

of issuing the solicitation, or the Contracting 

Officer may specify that the offeror’s format 

will be acceptable, or the description may be 

inserted as the result of negotiations.] 

* * * * * 

Alternate IV (Oct 2010). * * * 

(a) Submission of certified cost or pricing 

data is not required. 

(b) Provide data described below: [Insert 

description of the data and the format that 

are required, including the access to records 

necessary to permit an adequate evaluation 

of the proposed price in accordance with 

15.403–3.] 

■ 63. Amend section 52.216–25 by— 

■ a. Revising the date of the clause; 

■ b. Revising paragraph (a); and 

■ c. Removing from the paragraph (b) 

‘‘and cost’’ and adding ‘‘and certified 

cost’’ in its place. 

The revised text reads as follows: 

52.216–25 Contract Definitization. 

* * * * * 

Contract Definitization (Oct 2010) 

(a) A ____ [insert specific type of contract] 

definitive contract is contemplated. The 

Contractor agrees to begin promptly 

negotiating with the Contracting Officer the 

terms of a definitive contract that will 

include (1) all clauses required by the 

Federal Acquisition Regulation (FAR) on the 

date of execution of the letter contract, (2) all 

clauses required by law on the date of 

execution of the definitive contract, and (3) 

any other mutually agreeable clauses, terms, 

and conditions. The Contractor agrees to 

submit a ____ [insert specific type of proposal 

(e.g., fixed-price or cost-and-fee)] proposal, 

including data other than certified cost or 

pricing data, and certified cost or pricing 

data, in accordance with FAR 15.408, Table 

15–2, supporting its proposal. 

* * * * * 

52.230–2 [Amended] 

■ 64. Amend section 52.230–2 by 

revising the date of the clause to read 

‘‘(Oct 2010)’’; and removing from the 

first sentences of paragraphs (a)(3) and 

(d) ‘‘submitted cost’’ and adding 

‘‘submitted certified cost’’ in its place. 

52.230–5 [Amended] 

■ 65. Amend section 52.230–5 by 

revising the date of the clause to read 

‘‘(Oct 2010)’’; and removing from the 

first sentence of paragraph (a)(3) and the 

introductory text of paragraph (d) 

‘‘submitted cost’’ and adding ‘‘submitted 

certified cost’’ in its place. 

52.232–17 [Amended] 

■ 66. Amend section 52.232–17 by 

revising the date of the clause to read 

‘‘(Oct 2010)’’; and removing from the 

first sentence of paragraph (a) ‘‘Defective 

Cost’’ and adding ‘‘Defective Certified 

Cost’’ in its place. 

52.244–2 [Amended] 

■ 67. Amend section 52.244–2 by— 


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Federal Register / Vol. 75, No. 167 / Monday, August 30, 2010 / Rules and Regulations 53153 

■ a. Revising the date of the clause to 

read ‘‘(Oct 2010)’’; 

■ b. Removing from paragraph (e)(1)(v) 

‘‘accurate cost’’ and adding ‘‘accurate 

certified cost’’ in its place; 

■ c. Removing from paragraph 

(e)(1)(vii)(C) ‘‘reason cost’’ and adding 

‘‘reason certified cost’’ in its place; and 

■ d. Removing from paragraphs 

(e)(1)(vii)(D) and (e)(1)(vii)(E) 

‘‘subcontractor’s cost’’ and adding 

‘‘subcontractor’s certified cost’’ in its 

place. 

[FR Doc. 2010–21026 Filed 8–27–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 2, 5, 25, and 52 

[FAC 2005–45; FAR Case 2009–008; Item 

III; Docket 2009–0008, Sequence 1] 

RIN 9000–AL22 

Federal Acquisition Regulation; 

American Recovery and Reinvestment 

Act of 2009 (the Recovery Act)—Buy 

American Requirements for 

Construction Material 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council (the 

Councils) have adopted as final, with 

changes, an interim rule amending the 

Federal Acquisition Regulation (FAR) to 

implement the American Recovery and 

Reinvestment Act of 2009 (Recovery 

Act) with respect to the ‘‘Buy 

American—Recovery Act’’ provision, 

section 1605 in Division A. 

DATES: Effective Date: October 1, 2010. 

Applicability Date: The rule applies to 

solicitations issued and contracts 

awarded on or after the effective date of 

this rule. Contracting officers shall 

modify, on a bilateral basis, in 

accordance with FAR 1.108(d)(3), 

existing contracts to include the 

appropriate FAR clause for future work, 

if Recovery Act funds will be used. In 

the event that a contractor refuses to 

accept such a modification, the 

contractor will not be eligible for award 

of any work that uses Recovery Act 

funds. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Cecelia L. Davis, Procurement Analyst, 

at (202) 219–0202. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at (202) 501–4755. Please 

cite FAC 2005–45, FAR case 2009–008. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule implements the unique 

‘‘Buy American—Recovery Act’’ 

provision, section 1605 of the Recovery 

Act, by revising FAR subpart 25.6, and 

related provisions and clauses at FAR 

part 52, with conforming changes to 

FAR subparts 2.1, 5.2, 25.0, and 25.11. 

An interim rule was published in the 

Federal Register at 74 FR 14623, March 

31, 2009. The public comment period 

ended June 1, 2009. 

As required by section 1605, the final 

rule makes it clear that there will be full 

compliance with U.S. obligations under 

all international trade agreements when 

undertaking construction covered by 

such agreements with Recovery Act 

funds. The new required provisions and 

clauses implement U.S. obligations 

under our trade agreements in the same 

way as they are currently implemented 

in non-Recovery Act construction 

contracts. The Caribbean Basin 

countries are excluded from the 

definition of ‘‘Recovery Act designated 

country,’’ because the treatment 

provided to them is not as a result of a 

U.S. international obligation. 

B. Discussion and Analysis 

The Regulatory Secretariat received 

35 responses, but 2 responses lacked 

attached comments and 1 response 

appeared unrelated to the case. The 

responses included multiple comments 

on a wide range of issues addressed in 

the interim rule. Each issue is discussed 

by topic in the following sections. 

Table of Contents 

1. Comments on Section 1605 of the 

Recovery Act 

2. Applicability of Section 1605 of the 

Recovery Act 

a. Relation to the Buy American Act 

b. Applicability to Construction Projects/ 

Contracts 

c. Applicability to Construction Materials 

or Supplies 

d. Manufacture vs. Substantial 

Transformation or Tariff Shift 

e. Iron and Steel 

f. Components 

g. Summary Matrix of Requirements for 

Domestic Construction Material 

3. Applicability of International Agreements 

a. Trade Agreements 

b. G20 Summit Pledge 

4. Other Definitions 

a. Construction Material 

b. Public Building or Public Work 

c. Manufactured Construction Material/ 

Unmanufactured Construction Material 

5. Exceptions 

a. Class Exceptions 

b. Public Interest 

c. Nonavailability 

d. Unreasonable Cost 

6. Determinations That an Exception Applies 

a. Process and Publication 

b. Requests for Specific Exceptions 

7. Exemption for Acquisitions Below the 

Simplified Acquisition Threshold 

8. Remedies for Noncompliance 

9. Funding Mechanisms 

a. Modifications to Existing Contracts 

b. Treatment of Mixed Funding 

10. Interim Rule Improper 

11. Inconsistencies Between This Rule and 

Pre-Existing FAR Rule and the OMB 

Grants Guidance 

a. Inconsistency With Pre-Existing FAR 

b. Inconsistency With the OMB Grants 

Guidance 

12. Need for Additional Guidance 

1. Comments on Section 1605 of the 

Recovery Act 

Comments: Although the respondents 

expressed general support for the goals 

of the Recovery Act to stimulate the U.S. 

economy, many were concerned about 

the Recovery Act Buy American 

restrictions of section 1605. For 

example: 

Several entities representing other 

countries objected to the potential 

restrictions on trade. They alleged that 

the Recovery Act Buy American 

requirement in section 1605 is not in 

conformity with the U.S. pledge to 

refrain from raising new barriers in the 

framework of the Summit on Financial 

Markets and the World Economy, 

November 2008, and the G20 pledge, 

April 2009. They alleged that it will 

have a negative impact on the world 

trade and economy. One respondent 

stated that it is not rational for the U.S. 

to take trade protection actions such as 

the ‘‘Buy American—Recovery Act’’ 

provision, because it will not be useful 

for the American and global economy in 

promoting recovery from the current 

downturn. Another respondent stated 

that, to the extent 1605 imposes more 

restrictive requirements than previously 

existed, it represents a new barrier to 

trade in goods between the United 

States and Canada. One respondent 

found several aspects of section 1605 

problematic because of their ‘‘inherent 

lack of clarity.’’ 

Some United States industry 

associations also had concerns about 

section 1605. One objected that the reallife burdens of complying with these 

country-of-origin requirements cannot 

be overstated. This respondent 

concluded that, where the U.S. 

Government places a premium on 


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