H. R. 1107—86 
product, must satisfy to become qualified, with those require-
ments to be limited to those least restrictive to meet the pur-
poses necessitating the establishment of the qualification 
requirement; 
(3) specify an estimate of the cost of testing and evaluation 
likely to be incurred by a potential offeror to become qualified; 
(4) ensure that a potential offeror is provided, on request, 
a prompt opportunity to demonstrate at its own expense (except 
as provided in subsection (d)) its ability to meet the standards 
specified for qualification using— 
(A) qualified personnel and facilities— 
(i) of the agency concerned; 
(ii) of another agency obtained through interagency 
agreement; or 
(iii) under contract; or 
(B) other methods approved by the agency (including 
use of approved testing and evaluation services not pro-
vided under contract to the agency); 
(5) if testing and evaluation services are provided under 
contract to the agency for the purposes of paragraph (4), provide 
to the extent possible that those services be provided by a 
contractor that— 
(A) is not expected to benefit from an absence of addi-
tional qualified sources; and 
(B) is required in the contract to adhere to any restriction 
on technical data asserted by the potential offeror seeking 
qualification; and 
(6) ensure that a potential offeror seeking qualification is 
promptly informed whether qualification is attained and, if 
not attained, is promptly furnished specific information about 
why qualification was not attained. 
(c) APPLICABILITY, WAIVER
AUTHORITY, 
AND
REFERRAL
OF 
OFFERS.— 
(1) APPLICABILITY.—Subsection (b) does not apply to a quali-
fication requirement established by statute prior to October 
30, 1984. 
(2) WAIVER AUTHORITY.— 
(A) 
SUBMISSION
OF
DETERMINATION
OF 
UNREASONABLENESS.—Except as provided in subparagraph 
(C), if it is unreasonable to specify the standards for quali-
fication that a prospective offeror or its product must sat-
isfy, a determination to that effect shall be submitted to 
the advocate for competition of the procuring activity 
responsible for the purchase of the item subject to the 
qualification requirement. 
(B) AUTHORITY TO GRANT WAIVER.—After considering any 
comments of the advocate for competition reviewing the 
determination, the head of the procuring activity may waive 
the requirements of paragraphs (2) to (5) of subsection 
(b) for up to 2 years with respect to the item subject 
to the qualification requirement. 
(C) NONAPPLICABILITY TO QUALIFIED PRODUCTS LIST.— 
Waiver authority under this paragraph does not apply with 
respect to a qualified products list. 
(3) SUBMISSION AND CONSIDERATION OF OFFER NOT TO BE 
DENIED.—A potential offeror may not be denied the opportunity 
to submit and have considered an offer for a contract solely 
because the potential offeror has not been identified as meeting
H. R. 1107—87 
a qualification requirement if the potential offeror can dem-
onstrate to the satisfaction of the contracting officer that the 
potential offeror or its product meets the standards established 
for qualification or can meet those standards before the date 
specified for award of the contract. 
(4) REFERRAL
TO
SMALL
BUSINESS
ADMINISTRATION
NOT 
REQUIRED.—This subsection does not require the referral of 
an offer to the Small Business Administration pursuant to 
section 8(b)(7) of the Small Business Act (15 U.S.C. 637(b)(7)) 
if the basis for the referral is a challenge by the offeror to 
either the validity of the qualification requirement or the 
offeror’s compliance with that requirement. 
(5) DELAY OF PROCUREMENT NOT REQUIRED.—The head of 
an agency need not delay a proposed procurement to comply 
with subsection (b) or to provide a potential offeror with an 
opportunity to demonstrate its ability to meet the standards 
specified for qualification. 
(d) FEWER THAN 2 ACTUAL MANUFACTURERS.— 
(1) SOLICITATION AND TESTING OF ADDITIONAL SOURCES OR 
PRODUCTS.—If the number of qualified sources or qualified prod-
ucts available to compete actively for an anticipated future 
requirement is fewer than 2 actual manufacturers or the prod-
ucts of 2 actual manufacturers, respectively, the head of the 
agency concerned shall— 
(A) publish notice periodically soliciting additional 
sources or products to seek qualification, unless the con-
tracting officer determines that doing so would compromise 
national security; and 
(B) subject to paragraph (2), bear the cost of conducting 
the specified testing and evaluation (excluding the cost 
associated with producing the item or establishing the 
production, quality control, or other system to be tested 
and evaluated) for a small business concern or a product 
manufactured by a small business concern that has met 
the standards specified for qualification and that could 
reasonably be expected to compete for a contract for that 
requirement. 
(2) WHEN AGENCY MAY BEAR COST.—The head of the agency 
concerned may bear the cost under paragraph (1)(B) only if 
the head of the agency determines that the additional qualified 
sources or products are likely to result in cost savings from 
increased competition for future requirements sufficient to 
offset (within a reasonable period of time considering the dura-
tion and dollar value of anticipated future requirements) the 
cost incurred by the agency. 
(3) CERTIFICATION REQUIRED.—The head of the agency shall 
require a prospective contractor requesting the Federal Govern-
ment to bear testing and evaluation costs under paragraph 
(1)(B) to certify its status as a small business concern under 
section 3 of the Small Business Act (15 U.S.C. 632). 
(e) EXAMINATION AND REVALIDATION OF QUALIFICATION REQUIRE-
MENT.—Within 7 years after the establishment of a qualification 
requirement, the need for the requirement shall be examined and 
the standards of the requirement revalidated in accordance with 
the requirements of subsection (b). This subsection does not apply 
in the case of a qualification requirement for which a waiver is 
in effect under subsection (c)(2).
H. R. 1107—88 
(f) WHEN ENFORCEMENT OF QUALIFICATION REQUIREMENT NOT 
ALLOWED.—Except in an emergency as determined by the head 
of the agency, after the head of the agency determines not to 
enforce a qualification requirement for a solicitation, the agency 
may not enforce the requirement unless the agency complies with 
the requirements of subsection (b). 
CHAPTER 35—TRUTHFUL COST OR PRICING DATA 
Sec. 
3501.
General. 
3502.
Required cost or pricing data and certification. 
3503.
Exceptions. 
3504.
Cost or pricing data on below-threshold contracts. 
3505.
Submission of other information. 
3506.
Price reductions for defective cost or pricing data. 
3507.
Interest and penalties for certain overpayments. 
3508.
Right to examine contractor records. 
3509.
Notification of violations of Federal criminal law or overpayments. 
§ 3501. General 
(a) DEFINITIONS.—In this chapter: 
(1) COMMERCIAL ITEM.—The term ‘‘commercial item’’ has the 
meaning provided the term by section 103 of this title. 
(2) COST OR PRICING DATA.—The term ‘‘cost or pricing data’’ 
means all facts that, as of the date of agreement on the price 
of a contract (or the price of a contract modification) or, if 
applicable consistent with section 3506(a)(2) of this title, 
another date agreed upon between the parties, a prudent buyer 
or seller would reasonably expect to affect price negotiations 
significantly. The term does not include information that is 
judgmental, but does include factual information from which 
a judgment was derived. 
(3) SUBCONTRACT.—The term ‘‘subcontract’’ includes a 
transfer of commercial items between divisions, subsidiaries, 
or affiliates of a contractor or a subcontractor. 
(b) REGULATIONS.— 
(1) MINIMIZING
ABUSE
OF
COMMERCIAL
SERVICES
ITEM 
AUTHORITY.—The Federal Acquisition Regulation shall ensure 
that 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, may be treated as commercial 
items for purposes of this chapter only if the contracting officer 
determines in writing that the offeror has submitted sufficient 
information to evaluate, through price analysis, the reasonable-
ness of the price for the services. 
(2) INFORMATION
TO
SUBMIT.—To the extent necessary to 
make a determination under paragraph (1), the contracting 
officer may request the offeror to submit— 
(A) prices paid for the same or similar commercial items 
under comparable terms and conditions by both govern-
ment and commercial customers; and 
(B) if the contracting officer determines that the informa-
tion described in subparagraph (A) is not sufficient to deter-
mine the reasonableness of price, other relevant informa-
tion regarding the basis for price or cost, including informa-
tion on labor costs, material costs, and overhead rates.