NDAA 2020 - GAP to Review Price Reasonableness Determinations

We are spending a few days reviewing provisions of the 2020 NDAA (National Defense Authorization Act) that just emerged from conference committee and which the President said that he would sign. Yesterday we began with a provision (Section 803) designed to severely curtail the situations where contractors can dictate prices by refusing to provide cost or pricing data necessary for contracting officers to establish that the quoted prices are fair and reasonable. If a contractor does not provide the requested data, it becomes ineligible for award. But there are exceptions to the rule as we noted in yesterday's post. But will contracting officers utilize those exceptions to any significant degree? Well, the very next section, Section 804, would certainly discourage its use.

Section 804 requires GAO (Government Accountability Office) of the success of securing data relating to the price reasonableness of sole-source offers. This required report must include the following:

1. the number of, and justification for, any waiver of requirements for submission of certified cost or pricing data for sole source contracts for spare parts.
2. the number of, and justification for, any exception to the requirements for submission of certified cost or pricing data for sole source contracts for spare parts.
3. the number of contracts awarded for which a request for cost or pricing data, including data other than certified cost or pricing data, to determine price reasonableness was denied by an offeror at the time of award
4. actions take by the Secretary (of Defense) if an offeror refused to provide requested data  including

• whether the contracting officer included a notation in the system used by the Federal Government to monitor or record contractor past performance regarding the refusal of an offeror to provide such data
• any strategies developed by the Secretary to acquire the good that was the subject of a contract for which the offeror refused to provide such data in the future without the need for such a waiver.

With this level of GAO oversight, it would seem to us that contracting officers will, or be urged to do everything in their power to avoid granting waivers.