Fair Pricing with Cost Transparency Act of 2022
Bill: H.R.8161 | Sponsor: Rep. Maloney, Carolyn B. (D-NY)
Policy area: Government Operations and Politics

Summary:
Fair Pricing with Cost Transparency Act of 2022
This bill revises requirements for government contractors to submit cost or pricing data and information supporting commercial product determinations.
Specifically, in the event the contracting officer is unable to determine that proposed prices are fair and reasonable by any other means, an offeror who fails to make a good faith effort to comply with a reasonable request to submit data shall be ineligible for award unless the head of the contracting activity determines that it is in the best interest of the government to make the award based on specified factors.
The senior procurement executive must submit an annual report to the Office of Federal Procurement Policy identifying offerors that have denied multiple requests for submission of uncertified cost or pricing data over the preceding three-year period but nevertheless received an award.
The bill requires offerors of products proposed or determined to be commercial to identify the comparable commercial product that is used by the general public or nongovernmental entities and provide related information.
Commercial product determinations must be periodically reviewed, at least every five years, to ensure that the initial decision was appropriate and that market conditions continue to support the designation.
The Government Accountability Office must conduct a review of the prevalence and trends of contractors of executive agencies using distributors or other intermediaries as a means of avoiding legal or regulatory requirements.

To amend title 10 and 41, United States Code, to strengthen 
    requirements for Government contractors to submit certified and 
uncertified cost or pricing data and information supporting commercial 
            product determinations, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Pricing with Cost Transparency 
Act of 2022''.

SEC. 2. SUBMISSION OF UNCERTIFIED COST DATA TO CONTRACTING OFFICERS.

    (a) Submission of Uncertified Cost Data to Civilian Agencies.--
Section 3505 of title 41, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``data other than certified'' and 
                inserting ``uncertified''; and
                    (B) by inserting after ``the procurement.'' the 
                following: ``If the contracting officer determines that 
                the uncertified pricing data submitted by the offeror, 
                contractor, or subcontractor is not adequate for 
                evaluating the reasonableness of the price of the 
                contract, subcontract, or modification of the contract 
                or subcontract, the offeror, contractor, or 
                subcontractor shall submit to the contracting officer 
                uncertified cost data to the extent necessary to 
                determine the reasonableness of such price.'';
            (2) by redesignating subsection (b) as subsection (c); and
            (3) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Ineligibility for Award.--
            ``(1) In the event the contracting officer is unable to 
        determine proposed prices are fair and reasonable by any other 
        means, an offeror who fails to make a good faith effort to 
        comply with a reasonable request to submit data in accordance 
        with subsection (a) is ineligible for award unless the head of 
        the contracting activity, or the designee of the head of the 
        contracting activity, determines that it is in the best 
        interest of the Government to make the award to that offeror, 
        based on consideration of pertinent factors, including the 
        following:
                    ``(A) The effort to obtain the data.
                    ``(B) Availability of other sources of supply of 
                the item or service.
                    ``(C) The urgency or criticality of the 
                Government's need for the product or service.
                    ``(D) Reasonableness of the price of the contract, 
                subcontract, or modification of the contract or 
                subcontract based on information available to the 
                contracting officer.
                    ``(E) Rationale or justification made by the 
                offeror for not providing the requested data.
                    ``(F) Risk to the Government if award is not made.
            ``(2)(A) Any new determination made by the head of the 
        contracting activity under paragraph (1) shall be reported to 
        the senior procurement executive on a periodic basis.
    ``(3) Report.--
            ``(A) Annual report.--The senior procurement executive, or 
        a designee, shall submit an annual report to the Administrator 
        of the Office of Federal Procurement Policy identifying 
        offerors that have denied multiple requests for submission of 
        uncertified cost or pricing data over the preceding three-year 
        period, but nevertheless received an award. The report shall 
        identify products or services offered by such offerors that 
        should undergo should-cost analysis.
            ``(B) Notation.--The contracting officer may include a 
        notation on such offerors in the system used by the Federal 
        Government to monitor or record contractor past performance.
            ``(C) Assessment.--The senior procurement executive shall--
                    ``(i) assess the extent to which these offerors are 
                sole source providers; and
                    ``(ii) develop strategies to incentivize new 
                entrants to increase the availability of other sources 
                of supply for the product or service.''.
    (b) Submission of Uncertified Cost Data to Contracting Officers.--
Section 3705 of title 10, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``data other than certified'' and 
                inserting ``uncertified''; and
                    (B) by inserting after ``a fair and reasonable 
                price.'' the following: ``If the contracting officer 
                determines that the uncertified pricing data submitted 
                by the offeror, contractor, or subcontractor is not 
                adequate for evaluating the reasonableness of the price 
                of the contract, subcontract, or modification of the 
                contract or subcontract, the offeror, contractor, or 
                subcontractor shall submit to the contracting officer 
                uncertified cost data to the extent necessary to 
                determine the reasonableness of such price.''; and
            (2) in subsection (b)(1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``head of contracting'' and inserting ``head 
                of the contracting''; and
                    (B) in subparagraph (B), by striking ``item'' and 
                inserting ``product''.
    (c) Application.--The amendments made by subsections (a) and (b) 
shall apply with respect to contracts awarded on or after the date that 
is one year after the date of the enactment of this Act.

SEC. 3. DISCRETION TO REQUIRE CERTIFIED COST OR PRICING DATA ON BELOW-
              THRESHOLD CONTRACTS.

    (a) Discretion.--Section 3504(a) of title 41, United States Code, 
is amended by inserting before ``In any case'' the following: ``The 
head of the procuring activity should consider making such a 
determination when a contractor, offeror, or subcontractor has 
previously failed to provide adequate uncertified cost or pricing data 
when requested or required, or other significant risk factors impede 
the Government's ability to determine the reasonableness of price.''.
    (b) Cost or Pricing Data on Below-Threshold Contracts.--Section 
3704(a) of title 10, United States Code, is amended by inserting before 
``In any case'' the following: ``The head of the procuring activity may 
consider making such a determination when a contractor, offeror, or 
subcontractor has previously failed to provide adequate uncertified 
cost or pricing data when requested or required, or other significant 
risk factors impede the ability of the Government to determine the 
reasonableness of price.''.

SEC. 4. DATA REQUIREMENTS FOR COMMERCIAL PRODUCT PRICING NOT BASED ON 
              ADEQUATE PRICE COMPETITION.

    Section 3705 of title 10, United States Code, is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following new 
        subsection (b):
    ``(b) Authority To Require Submission of Information for Commercial 
Products of a Type Customarily Used by General Public or 
Nongovernmental Entities.--
            ``(1) Data to support commercial product determination.--
        For products proposed as commercial as defined in section 
        103(1) of title 41, and that have not previously been 
        determined commercial in accordance with section 3703(d) of 
        this title, or to the extent necessary to perform a periodic 
        review of a commercial product determination in accordance with 
        section 3703(e) of this title, the offeror shall be required to 
        identify the comparable commercial product that is customarily 
        used by the general public or nongovernmental entities that 
        serves as the basis for the `of a type' assertion. The offeror 
        shall submit a comparison of the essential physical 
        characteristics and functionality between the proposed `of a 
        type' product and the comparable commercial product in support 
        of the `of a type' assertion. The offeror shall also provide 
        the National Stock Numbers for both the comparable commercial 
        product used by the general public, if one is assigned, and the 
        product proposed to meet the Government's requirement, if one 
        is assigned.
            ``(2) Data to support price reasonableness.--When 
        procurements that include products proposed as commercial as 
        defined in 103(1) of title 41 and are not covered by the 
        exceptions in section 3703(a)(1) of this title, and the 
        contracting officer determines data available from within the 
        Government and outside sources are insufficient to determine 
        price reasonableness or the contracting officer determines the 
        proposed price is not reasonable, the offeror shall be required 
        to provide data to support price reasonableness for a contract, 
        subcontract, or modification of a contract or subcontract as 
        follows:
                    ``(A) If the offeror sells the commercial product 
                that is customarily used by the general public or 
                nongovernmental entities, the offeror shall provide the 
                contracting officer access to all unredacted sales data 
                or purchase order history for the commercial product so 
                the contracting officer can review unredacted sales to 
                the general public or nongovernmental entities. If the 
                contracting officer determines the proposed price is 
                not reasonable after evaluating the sales data, the 
                offeror shall be required to provide the contracting 
                officer with cost data, including information on labor 
                cost, material cost, and overhead rates, for the 
                purpose of establishing price reasonableness.
                    ``(B) If the offeror does not sell the commercial 
                product that is customarily used by the general public 
                or nongovernmental entities for purposes other than 
                governmental purposes that serves as the basis for its 
                `of a type' assertion for the proposed product, the 
                offeror shall provide the contracting officer with cost 
                data, including information on labor cost, material 
                cost, and overhead rates, for the purpose of 
                establishing price reasonableness.''.

SEC. 5. PERIODIC REVIEW OF COMMERCIAL PRODUCT DETERMINATIONS.

    (a) Exceptions.--Section 3703 of title 10, United States Code, is 
amended--
            (1) in subsection (d)(1), by inserting after ``such product 
        or service'' the following: ``, subject to the limitation in 
        subsection (e)'';
            (2) by redesignating subsections (e) and (f) as subsections 
        (f) and (g), respectively; and
            (3) by inserting after subsection (d) the following new 
        subsection:
    ``(e) Periodic Review of Certain Commercial Product 
Determinations.--(1) Commercial product determinations shall be 
periodically reviewed, no less frequently than every five years, to 
ensure that the initial decision was appropriate and that the market 
conditions continue to support the designation, if--
            ``(A) the product is not regularly sold in substantial 
        quantities in the commercial marketplace in essentially the 
        same form; and
            ``(B) the product has not been subject to adequate 
        competition, as defined in subsection (a)(1)(A), from a 
        different product or products since the determination was made, 
        unless the procurement is subject to the exception in 
        subsection (a)(1)(B).
    ``(2) Reviews of commercial product determinations shall be 
approved at a level above the contracting officer. The Director of the 
Defense Contract Management Agency, the Director of the Defense 
Contract Audit Agency, or other appropriate experts in the Department 
may support such reviews upon request, consistent with section 
3456(b)(1)(A) of this title.''.
    (b) Commercial Product and Commercial Service Determinations by 
Department of Defense.--Section 3456(c) of title 10, United States 
Code, is amended--
            (1) in paragraph (1), by inserting after ``this chapter'' 
        the following: ``subject to periodic reviews of certain 
        commercial product determinations as set forth in section 
        3703(e) of this title, or''; and
            (2) in paragraph (2)--
                    (A) in the heading, by striking ``Limitation'' and 
                inserting ``Limitations'';
                    (B) in subparagraph (A), by inserting ``and (C)'' 
                after ``subparagraph (B)''; and
                    (C) by inserting at the end the following new 
                subparagraph:
                    ``(C) The limitation under subparagraph (A) does 
                not apply to the periodic review of commercial product 
                determinations as set forth in 3703(e) of this 
                title.''.

SEC. 6. GAO REVIEW AND REPORT ON GOVERNMENT CONTRACTORS USING 
              DISTRIBUTORS TO AVOID SCRUTINY.

    (a) Review Required.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a review of the prevalence and trends of 
        contractors of executive agencies using distributors or other 
        intermediaries as a means of avoiding legal or regulatory 
        requirements, such as requirements to provide certified or 
        uncertified cost or pricing data.
            (2) Additional contents of review.--In conducting the 
        review under paragraph (1), the Comptroller General shall 
        consider--
                    (A) any effects of this practice on the ability of 
                the Government to--
                            (i) acquire needed goods at reasonable 
                        prices; and
                            (ii) avoid waste, fraud, and abuse in the 
                        procurement process; and
                    (B) how executive agencies may differentiate 
                between the legitimate business purposes for the use of 
                distributor relationships, compared to situations where 
                the distributors largely serve to avoid legal and 
                regulatory requirements.
    (b) Report Required.--Not later than one year after the date of the 
enactment of this Act, the Comptroller General shall submit a report 
containing the results of the review required by subsection (a) to--
            (1) the Committees on Armed Services of the Senate and the 
        House of Representatives;
            (2) the Committee on Oversight and Reform of the House of 
        Representatives; and
            (3) the Committee on Homeland Security and Governmental 
        Affairs of the Senate.
    (c) Executive Agency Defined.--In this section, the term 
``executive agency'' has the meaning given that term in section 133 of 
title 41, United States Code.
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