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HR 1107 RFS 
(3) SUBCONTRACT.—The term ‘‘subcontract’’ includes a transfer of 
commercial items between divisions, subsidiaries, or affiliates of a con-
tractor or a subcontractor. 
(b) REGULATIONS.— 
(1) MINIMIZING ABUSE OF COMMERCIAL SERVICES ITEM AUTHOR-
ITY.—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 com-
petitively 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 reason-
ableness 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 government and com-
mercial customers; and 
(B) if the contracting officer determines that the information 
described in subparagraph (A) is not sufficient to determine the 
reasonableness of price, other relevant information regarding the 
basis for price or cost, including information on labor costs, mate-
rial costs, and overhead rates. 
§ 3502. Required cost or pricing data and certification 
(a) WHEN REQUIRED.—The head of an executive agency shall require 
offerors, contractors, and subcontractors to make cost or pricing data avail-
able as follows: 
(1) OFFEROR FOR PRIME CONTRACT.—An offeror for a prime con-
tract under this division to be entered into using procedures other than 
sealed-bid procedures shall be required to submit cost or pricing data 
before the award of a contract if— 
(A) in the case of a prime contract entered into after October 
13, 1994, the price of the contract to the Federal Government is 
expected to exceed $500,000; and 
(B) in the case of a prime contract entered into on or before 
October 13, 1994, the price of the contract to the Federal Govern-
ment is expected to exceed $100,000. 
(2) CONTRACTOR.—The contractor for a prime contract under this 
division shall be required to submit cost or pricing data before the pric-
ing of a change or modification to the contract if— 
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HR 1107 RFS 
(A) in the case of a change or modification made to a prime 
contract referred to in paragraph (1)(A), the price adjustment is 
expected to exceed $500,000; 
(B) in the case of a change or modification made to a prime 
contract that was entered into on or before October 13, 1994, and 
that has been modified pursuant to subsection (f), the price ad-
justment is expected to exceed $500,000; and 
(C) in the case of a change or modification not covered by sub-
paragraph (A) or (B), the price adjustment is expected to exceed 
$100,000. 
(3) OFFEROR FOR SUBCONTRACT.—An offeror for a subcontract (at 
any tier) of a contract under this division shall be required to submit 
cost or pricing data before the award of the subcontract if the prime 
contractor and each higher-tier subcontractor have been required to 
make available cost or pricing data under this chapter and— 
(A) in the case of a subcontract under a prime contract referred 
to in paragraph (1)(A), the price of the subcontract is expected 
to exceed $500,000; 
(B) in the case of a subcontract entered into under a prime con-
tract that was entered into on or before October 13, 1994, and 
that has been modified pursuant to subsection (f), the price of the 
subcontract is expected to exceed $500,000; and 
(C) in the case of a subcontract not covered by subparagraph 
(A) or (B), the price of the subcontract is expected to exceed 
$100,000. 
(4) SUBCONTRACTOR.—The subcontractor for a subcontract covered 
by paragraph (3) shall be required to submit cost or pricing data before 
the pricing of a change or modification to the subcontract if— 
(A) in the case of a change or modification to a subcontract re-
ferred to in paragraph (3)(A) or (B), the price adjustment is ex-
pected to exceed $500,000; and 
(B) in the case of a change or modification to a subcontract re-
ferred to in paragraph (3)(C), the price adjustment is expected to 
exceed $100,000. 
(b) CERTIFICATION.—A person required, as an offeror, contractor, or 
subcontractor, to submit cost or pricing data under subsection (a) (or re-
quired by the head of the procuring activity concerned to submit the data 
under section 3504 of this title) shall be required to certify that, to the best 
of the person’s knowledge and belief, the cost or pricing data submitted are 
accurate, complete, and current. 
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(c) TO WHOM SUBMITTED.—Cost or pricing data required to be sub-
mitted under subsection (a) (or under section 3504 of this title), and a cer-
tification required to be submitted under subsection (b), shall be sub-
mitted— 
(1) in the case of a submission by a prime contractor (or an offeror 
for a prime contract), to the contracting officer for the contract (or a 
designated representative of the contracting officer); or 
(2) in the case of a submission by a subcontractor (or an offeror for 
a subcontract), to the prime contractor. 
(d) APPLICATION OF CHAPTER.—Except as provided under section 3503 
of this title, this chapter applies to contracts entered into by the head of 
an executive agency on behalf of a foreign government. 
(e) SUBCONTRACTS NOT AFFECTED BY WAIVER.—A waiver of require-
ments for submission of certified cost or pricing data that is granted under 
section 3503(a)(3) of this title in the case of a contract or subcontract does 
not waive the requirement under subsection (a)(3) of this section for sub-
mission of cost or pricing data in the case of subcontracts under that con-
tract or subcontract unless the head of the procuring activity granting the 
waiver determines that the requirement under subsection (a)(3) of this sec-
tion should be waived in the case of those subcontracts and justifies in writ-
ing the reason for the determination. 
(f) MODIFICATIONS TO PRIOR CONTRACTS.—On the request of a con-
tractor that was required to submit cost or pricing data under subsection 
(a) in connection with a prime contract entered into on or before October 
13, 1994, the head of the executive agency that entered into the contract 
shall modify the contract to reflect paragraphs (2)(B) and (3)(B) of sub-
section (a). All those modifications shall be made without requiring consid-
eration. 
(g) ADJUSTMENT OF AMOUNTS.—Effective on October 1 of each year 
that is divisible by 5, each amount set forth in subsection (a) shall be ad-
justed to the amount that is equal to the fiscal year 1994 constant dollar 
value of the amount set forth. Any amount, as so adjusted, that is not even-
ly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. 
In the case of an amount that is evenly divisible by $25,000 but not evenly 
divisible by $50,000, the amount shall be rounded to the next higher mul-
tiple of $50,000. 
§ 3503. Exceptions 
(a) IN GENERAL.—Submission of certified cost or pricing data shall not 
be required under section 3502 of this title in the case of a contract, a sub-
contract, or a modification of a contract or subcontract— 
(1) for which the price agreed on is based on— 
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HR 1107 RFS 
(A) adequate price competition; or 
(B) prices set by law or regulation; 
(2) for the acquisition of a commercial item; or 
(3) in an exceptional case when the head of the procuring activity, 
without delegation, determines that the requirements of this chapter 
may be waived and justifies in writing the reasons for the determina-
tion. 
(b) MODIFICATIONS OF CONTRACTS AND SUBCONTRACTS FOR COMMER-
CIAL ITEMS.—In the case of a modification of a contract or subcontract for 
a commercial item that is not covered by the exception to the submission 
of certified cost or pricing data in paragraph (1) or (2) of subsection (a), 
submission of certified cost or pricing data shall not be required under sec-
tion 3502 of this title if— 
(1) the contract or subcontract being modified is a contract or sub-
contract for which submission of certified cost or pricing data may not 
be required by reason of paragraph (1) or (2) of subsection (a); and 
(2) the modification would not change the contract or subcontract 
from a contract or subcontract for the acquisition of a commercial item 
to a contract or subcontract for the acquisition of an item other than 
a commercial item. 
§ 3504. Cost or pricing data on below-threshold contracts 
(a) AUTHORITY TO REQUIRE SUBMISSION.—Subject to subsection (b), 
when certified cost or pricing data are not required to be submitted by sec-
tion 3502 of this title for a contract, subcontract, or modification of a con-
tract or subcontract, the data may nevertheless be required to be submitted 
by the head of the procuring activity, but only if the head of the procuring 
activity determines that the data are necessary for the evaluation by the 
agency of the reasonableness of the price of the contract, subcontract, or 
modification of a contract or subcontract. In any case in which the head 
of the procuring activity requires the data to be submitted under this sec-
tion, the head of the procuring activity shall justify in writing the reason 
for the requirement. 
(b) EXCEPTION.—The head of the procuring activity may not require cer-
tified cost or pricing data to be submitted under this section for any con-
tract or subcontract, or modification of a contract or subcontract, covered 
by the exceptions in section 3503(a)(1) or (2) of this title. 
(c) DELEGATION OF AUTHORITY PROHIBITED.—The head of a procuring 
activity may not delegate the functions under this section. 
§ 3505. Submission of other information 
(a) AUTHORITY TO REQUIRE SUBMISSION.—When certified cost or pric-
ing data are not required to be submitted under this chapter for a contract, 
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