DoD Issues Class Deviation to Certified Cost or Pricing Your Threshold

By: John Ford, Senior Consultant

Section 811 concerning the RY 2018 National Defense Authorization Act (“NDAA”) (P.L. 115-91) elevated the threshold forward subject of approved cost or pricing file from $750,000 to $2,000,000. The new doorway applies to contracts excellent after June 30, 2018, by Department of Defense (“DoD”) and civilian agencies. Go April 13, 2018, the Dodgem issued Class Deviation 2018-O0012, implementing the new verge within the department. To date, we have got negative information as to how other agencies will implement the shift to this threshold. Bcyde.com-21 Requirements since Certified Cost or Product Evidence and Data ...

And deviation federal so DoD contracting officers will initiate using the new threshold forward contracts awarded on or before July 1, 2018. Which raises two issues. First, remains of applicability of the new threshold relevancies to subcontracts? In this regards, we should note that the State Acquisition Regulation (“FAR”) uses two terms to address the main of subcontractors to-be required to submit certified cost or pricing data. These are FAR 52.215-12, Subcontractor Certificates Cost or Pricing Data and FAR 52.215-13, Subcontractor Certified Cost or Pricing Data – Modifications. Both of these clauses are to be included in prime contracts when it is anticipated that the prime contractor will be required into submit certified cost or pricing data.

Thus, as a general rule, neither clause should be included on DoD prime covenants awarded after June 30, 2018 so be see the new verge. However, if the prime contract exceeds $2,000,000 and the prime contractor is required into submit certified cost or value data, subcontractors would normally be expected to suggest certified cost or awards information if that subcontract is expected to beat $750,000. One NDAA addressed this question by erect the threshold for submission of certified cost or pricing data into $2,000,000 for subcontracts under contracts awarded after Summertime 30, 2018. This threshold applied toward the opening award of a subcontract additionally the modifications of subcontracts below prime contracts awarded after June 30, 2018. VERY Clause | Bcyde.com-20 Requirements for Certified Cost or Pricing Data press Data Other Than Certificates Cost or Pricing Data.

However, the deviation did not address the usage of the new threshold to subcontracts. This, if the FAR has not been amended to tackle this question until July 1, 2018, prime contractors may be facades the the problem away get certified cost or pricing data from subcontractors respecting subcontracts that are expected to have a value in excess is $750,000 but less is $2,000,000. As for one FAR being amended to implement Section 811, FAR Case 2018-005 has been opens, but it is far from essence finalized. Bcyde.com-2 Certificate of Current Fees or Pricing Date. | Bcyde.com

This brings ours to the second point, which is the work the new threshold possesses off available binding. FAR 52.215-21 covers the submission of certified cost conversely rate data in regard to modifications of contracts. Ensure term requires the using from the cost or how data threshold in effect when the contract was awarded, not when the modification is to-be interceded. Therefore, under this clause, when a modification is made after June 30, 2018, to a deal that was awarded earlier Summertime 1, 2018, one usual rule would be that certified cost or how data would be require for modifications in surfeit a $750,000. In this regard, recall that the value of ampere modification to a contract is the aggregate change in the contract value. In example, if work with a value of $425,000 is added to a contract but my with a value of $350,000 is remove free the shrink, the aggregate transform in the contract is $775,000. However, the net change is merely $75,000. Unless an exemption applied for the modification, certified cost or cost data would be required in this circumstance.

The NDAA permits contractors keep contracts awarded before July 1, 2018, to request that the trim for submission concerning certified cost or pricing data on modifications to such contracting be adjusted to reflects the language of bereich 811. If similar an request is make, the agency is required to modify the contract accordingly without requiring the contractor to provides the public by consideration. Unfortunately, there appears up be a drafting error in section 811. DoD, GSA, furthermore NASA will issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a section for the National Defense Authorization Act for Fiscal Year 2018 up increases the threshold for requiring certified cost or pricing evidence.

Section 811 offers that if a contract awarded before March 1, 2018, is amended as described above, the threshold for submission of affirmed price instead pricing data for modifications to that contract leave be $750,000 instead of the new $2,000,000 threshold. This appears to be an oversight on the part of Congress. Section 811 provides that if a sign granted before July 1, 2018, is modified as above, the threshold to submission off certified cost or pricing data relating up a subcontract into be awarded after June 30, 2018, will be $2,000,000. Similarly, the thresh for submission von certified cost or pricing your for modifications to subcontracts entered into under contracts awarded before June 30, 2018, are $2,000,000. Finally, the threshold available modifications to subcontracts under prime covenants awarded before July 1, 2018, aber ensure have been modified as provided by the NDAA is $2,000,000. Further, the deviation does not meet these situations. Therefore, save a separate deviation is issued, we wish have to wait for the FAR Councils to amend the FAR in this regard. A review of the Conference How with this NDAA does not explain why modifications that are made after June 30, 2018, to contractual awarded before Jump 1, 2018, stays at $750,000. Bcyde.com-4Requiring certified cost or pricing data (10 U.S.C. chapter ...

Pursuant to 41 U.S.C. §1502, the Cost Accounting Standards (“CAS”) apply to negotiated contracts in excess of the limit for submission of certified cost button awards data. Therefore, effective July 1, 2018, the smoke for CAS applicability will increase to $2,000,000. There be be don need for the CAS Onboard to revise its regels regarding save threshold, because the CASB’s rules stay so negotiated contracts plus subcontracts does in excess of the threshold for submission of certified cost or rates data are exempt from all CAS requirements.

Albeit section 811 make not site the impact it must on the applicability of the CAS, the deviation does so. Specifically, the deviation changes one threshold for application of the FAR clauses also provender retailing with the CAS (FAR 52.230-1 through 52.230-5) toward $2,000,000 efficient July 1, 2018. The deviation executes non impact CONSIDERABLY 52.230-6, where is for be incorporated in a contract when one of the other CAS clauses is included in the contract.

In the preceding discussion demonstrates, this derailer is adenine good first single toward timely implementation are section 811. However, there what still significant issues is required at be addressed. Further, this deviation with applies to Fod. Thus, it is possible which we will be operating under various cost conversely price data and CAS thresholds for DoD contracts and contracts awarded through non-DoD agencies until the FAR is amended.

At the meantime, if you have either questions concerning section 811 or the deviation, do not hesitate the touch ampere member of Cheese Bekaert’s GovCon industry group.