What is a Certificate of Independent Price Determination?

There is certainly no shortage of certifications that accompany Government contracts. We've highlighted some of them on these pages; Certificate of Current Complete and Accurate Cost or Pricing Data, the certification required when submitting a claim and the certification that accompany's annual incurred cost proposals, to name a few. And consider all the representations and certifications you agree to when filing or updating your SAM (System for Award Management).

There is another certification required by FAR 3.103 that go along with fixed-price contracts. It a certificate designed to prevent (or perhaps discourage) collusive bidding and called the "Certificate of Independent Price Determination".

When submitting a firm-fixed price contract, the offeror must certify to the following three things:

1. The prices in its offer have been arrived at independently, without, for the purpose of restricting competition, any consultation, communication, or agreement with any other offeror or competitor relating to those prices, the intention to submit an offer, or the methods or factors used to calculate the prices offered
2. Except as otherwise required by law, the offeror has not and will not knowingly disclose the prices in the offer, directly or indirectly, to any other offeror or competitor before bid opening (for sealed bidding) or contract award (for negotiated procurement). 
3. The offeror has not made and will not make any attempt to induce any other concern to submit or not to submit an offer for the purpose of restricting competition.

Contracting officers are required to reject any offers suspected of being collusive. Not only is the contracting officer required to reject the offer but is also required, by law, to report the suspicion or fact to the Attorney General's office.

Collusive bidding practices have been real concerns for Government procurement in overseas contracting environments.