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55 Procurement Law. 1 (2020)

handle is hein.journals/procurlw55 and id is 1 raw text is: SECTION OF PUBLIC CONTRACT LAW AMERICAN BAR ASSOCIATION AMERICANBARASSOCIATION VOLUME 55, NUMBER 1 Public Contract Law Section WINTER 2020 Cost or Pricing Data Requirements: Emerging Developments and Risk Areas By ALEXANDER O. CANIZARES One of the recurring chal- lenges facing companies that do business with the government is having to turn over cost or pricing data to the government during contract negotia- tions. Under the Truthful Cost or Pricing Data Act, commonly referred to by its former name, the Truth in Negotiations Act or TINA, the government may, in certain circumstances, obtain certified (or uncertified) cost or pricing data from con- tractors as a means of verifying that prices are reason- able. Enacted in 1962 in response to reports of wide- spread overcharging by defense contractors, TINA was intended to protect the taxpayer by giving contracting officers more information when negotiating prices with offerors. But cost or pricing data submissions may result in administrative burdens and delays in the acquisition system that can frustrate other policy goals. This article focuses on four recent developments that bear upon the scope of cost or pricing data requirements and their impact on contractors: The increase in the TINA threshold from $750,000 to $2 million, which significantly nar- rows the scope of contracts subject to the statute; The Section 809 Panel's findings that the Alexander O. Canizares, a senior counsel with Perkins Coie LLP, Washington, D.C., is an editorial board member of The Procurement Lawyer and a vice-chair of the Section's Contract Claims and Disputes Resolution Committee. Views and opinions expressed in this article are the author's only. Department of Defense (DoD) overuses cost or pricing data and should change its practices to at- tract commercial companies to the federal market and help streamline the procurement process; A February 2019 DoD Inspector General (IG) re- port and DoD policy changes addressing prices charged by sole-source contractors; and Provisions in the FY 2020 National Defense Au- thorization Act (NDAA) that would amend TINA to incentivize companies to comply with re- quests for other than certified cost or pricing data, among other changes. TINA and Certifed Cast or Pricing Data Requirements TINA was enacted in 1962 in Public Law 87-653 in re- sponse to General Accounting Office (GAO)' findings of extensive overpricing by federal contractors.2 In 1959, after audits of DoD negotiated contracts, GAO reported to Congress that some contractors overcharged the de- partment and obtained unwarranted profits.3 Prompted by GAO's findings, in 1959, DoD revised its price nego- tiation policies and procedures in the Armed Services continued on page 20 Published in The Procurement Lawyer, Volume 55, Number 1, Winter 2020. © 2020 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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