Would You Certify Cost or Pricing Data that was Never Intended to be Certified?

DoD is proposing to amend its FAR Supplement (DFARS) to implement a section in the 2017 NDAA to address the requirement for certification of cost or pricing data and potential submission of additional certified cost or pricing data when only one offer is received in response to a competitive solicitation.

For adequate price competition to exist, there must be two or more responsive and viable offers from independently competing offerors. Obviously, one bidder would not qualify as competition.

Under the newly proposed regulations, contractors may be required to certify cost or pricing data that was submitted as part of its competitive bid. This could be dangerous for the contractor because the data was never intended to be certified. Contractors need to be careful before agreeing to certify such cost or pricing data.

In any event, here is what the proposed regulation provides.

If only one offer is received when competitive procedures were used and it is not necessary to re-solicit, then

     a. If not additional cost or pricing data are required to determine through cost or price analysis that the offered price is fair and reasonable, the contracting officer shall require that any cost or pricing data provided in the proposal be certified if the acquisition exceed the certified cost or pricing data threshold.

      b. Otherwise, the contracting officer shall obtain additional cost or pricing data to determine a fair and reasonable price. If the acquisition exceeds the certified cost or pricing data threshold and an exception to the requirement for certified cost or pricing data does not apply, the cost or pricing data shall be certified.

     c. If the contracting officer is still unable to determine that the offered price is fair and reasonable, the contracting officer shall enter into negotiations with the offeror to establish a fair and reasonable price. The negotiated price should not exceed the offered price.

Most certainly, any contract awarded under the scenario described in 'a' above is at high risk for a planned defective pricing audit.

Read more about the proposed regulation here.