116 
of the contract, the date agreed on by the parties shall be as close to 
the date of agreement on the price of the contract as is practicable. 
(b) VALID DEFENSE.—In determining for purposes of a contract price 
adjustment under a contract provision required by subsection (a) whether, 
and to what extent, a contract price was increased because the contractor 
(or a subcontractor) submitted defective cost or pricing data, it is a defense 
that the Federal Government did not rely on the defective data submitted 
by the contractor or subcontractor. 
(c) INVALID DEFENSES.—It is not a defense to an adjustment of the 
price of a contract under a contract provision required by subsection (a) 
that— 
(1) the price of the contract would not have been modified even if 
accurate, complete, and current cost or pricing data had been sub-
mitted by the contractor or subcontractor because the contractor or 
subcontractor— 
(A) was the sole source of the property or services procured; or 
(B) otherwise was in a superior bargaining position with respect 
to the property or services procured; 
(2) the contracting officer should have known that the cost or pricing 
data in issue were defective even though the contractor or subcon-
tractor took no affirmative action to bring the character of the data 
to the attention of the contracting officer; 
(3) the contract was based on an agreement between the contractor 
and the Federal Government about the total cost of the contract and 
there was no agreement about the cost of each item procured under 
the contract; or 
(4) the prime contractor or subcontractor did not submit a certifi-
cation of cost or pricing data relating to the contract as required by 
section 3502(b) of this title. 
(d) OFFSETS.— 
(1) WHEN ALLOWED.—A contractor shall be allowed to offset an 
amount against the amount of a contract price adjustment under a 
contract provision required by subsection (a) if— 
(A) the contractor certifies to the contracting officer (or to a 
designated representative of the contracting officer) that, to the 
best of the contractor’s knowledge and belief, the contractor is en-
titled to the offset; and 
(B) the contractor proves that the cost or pricing data were 
available before the date of agreement on the price of the contract 
(or price of the modification), or, if applicable, consistent with 
subsection (a)(2), another date agreed on by the parties, and that 
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117 
the data were not submitted as specified in section 3502(c) of this 
title before that date. 
(2) WHEN NOT ALLOWED.—A contractor shall not be allowed to off-
set an amount otherwise authorized to be offset under paragraph (1) 
if— 
(A) the certification under section 3502(b) of this title with re-
spect to the cost or pricing data involved was known to be false 
when signed; or 
(B) the Federal Government proves that, had the cost or pricing 
data referred to in paragraph (1)(B) been submitted to the Fed-
eral Government before date of agreement on the price of the con-
tract (or price of the modification), or, if applicable, under sub-
section (a)(2), another date agreed on by the parties, the submis-
sion of the cost or pricing data would not have resulted in an in-
crease in that price in the amount to be offset. 
§ 3507. Interest and penalties for certain overpayments 
(a) IN GENERAL.—If the Federal Government makes an overpayment to 
a contractor under a contract with an executive agency subject to this chap-
ter and the overpayment was due to the submission by the contractor of 
defective cost or pricing data, the contractor shall be liable to the Federal 
Government— 
(1) for interest on the amount of the overpayment, to be computed— 
(A) for the period beginning on the date the overpayment was 
made to the contractor and ending on the date the contractor re-
pays the amount of the overpayment to the Federal Government; 
and 
(B) at the current rate prescribed by the Secretary of the 
Treasury under section 6621 of the Internal Revenue Code of 
1986 (26 U.S.C. 6621); and 
(2) if the submission of the defective data was a knowing submission, 
for an additional amount equal to the amount of the overpayment. 
(b) LIABILITY NOT AFFECTED
BY REFUSAL TO SUBMIT CERTIFI-
CATION.—Any liability under this section of a contractor that submits cost 
or pricing data but refuses to submit the certification required by section 
3502(b) of this title with respect to the cost or pricing data is not affected 
by the refusal to submit the certification. 
§ 3508. Right to examine contractor records 
For the purpose of evaluating the accuracy, completeness, and currency 
of cost or pricing data required to be submitted by this chapter, an execu-
tive agency shall have the authority provided by section 4706(b)(2) of this 
title. 
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