Thursday, October 3, 2019

Proposed FAR Rule to Increase TINA Threshold to $2 Million

Section 811 of the 2018 NDAA (National Defense Authorization Act) increased the TINA (Truth in Negotiations Act) threshold from $750 thousand to $2 million. This threshold marks the point at which contractors must certify that the cost or pricing data they submit in support of a pricing action is current, complete, and accurate.

In May 2018, the Defense Department issued a class deviation to implement the new threshold for contracts awarded after July 1, 2018, The Civilian Acquisition Council issued a similar class deviation shortly thereafter, applicable to non-DoD contracts. In both cases, modifications to contracts awarded prior to that date were subject to the old lower threshold.

The FAR councils have just issued a proposed regulation that will make these class deviations permanent. The proposed regulations does not significantly differ from the provisions of the temporary class deviations which everyone has been operating under for the past 15 months.

The Government's estimate of cost savings that will result from this threshold is interesting, if true. The Government estimates that savings accruing to contractors will average $41 million per year and savings to the Government will average $6 million annually. Those figures represent the reduced work required to ensure the accuracy of cost or pricing data.

The full text of the proposed regulation can be accessed here.

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