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    Given the above scenario, can a Certificate of Current Cost and Pricing be extended if the current contract is being extended and all terms and conditions will remain the same? I saw some information about this in FAR 52.215-21, but it seemed specific to commericial items. The items under the PBL are Mil Spec. Thank you, Andrea


    Answer

    1. The FAR references quoted below in pertinent part are applicable to this response.

    FAR 15.403-1(b) -- Exceptions to certified cost or pricing data requirements. The contracting officer shall not require certified cost or pricing data to support any action (contracts, subcontracts, or modifications)—
      (1) When the contracting officer determines that prices agreed upon are based on adequate price competition;
      (2) When the contracting officer determines that prices agreed upon are based on prices set by law or regulation;
      (3) When a commercial item is being acquired;
      (4) When a waiver has been granted; or
      (5) When modifying a contract or subcontract for commercial.

    FAR 15.403-4 -- Requiring Certified Cost or Pricing Data
    (a)(1) The contracting officer shall obtain certified cost or pricing data only if the contracting officer concludes that none of the exceptions in 15.403-1(b) applies. … The threshold for obtaining certified cost or pricing data is $700,000. Unless an exception applies, certified cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold:
      (iii) The modification of any sealed bid or negotiated contract (whether or not cost or pricing data were initially required) … . Price adjustment amounts must consider both increases and decreases (e.g., a $200,000 modification resulting from a reduction of $500,000 and an increase of $300,000 is a pricing adjustment exceeding $700,000).

    (b) When certified cost or pricing data are required, the contracting officer shall require the contractor … to submit to the contracting officer …  the following in support of any proposal:
      (1) The certified cost or pricing data and data other than certified cost or pricing data required by the contracting officer to determine that the price is fair and reasonable.

      (2) A Certificate of Current Cost or Pricing Data, in the format specified in 15.406-2, certifying that to the best of its knowledge and belief, the cost or pricing data were accurate, complete, and current as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price.

    FAR 32.001 -- Definitions
    “Contract action” is any action resulting in a contract, as defined in FAR Subpart 2.1, including contract modifications for additional supplies or services, but not including contract modifications that are within the scope and under the terms of the contract … .

    2. As indicated in GAO Report GAO-05-966, Sep 9, 2005 (http://www.gao.gov/products/GAO-05-966), performance-based logistics contracting means purchasing a defined level of performance over a defined time period at fixed costs to the Government.  Therefore, modifying a PBL contract to extend the period of contract performance would actually be tantamount to executing a new contract action for additional PBL effort that is outside the scope of the existing contract. Consequently, we believe that such new contract action could not be executed as a “no-cost” modification to the contract. Also, even if the contractor has agreed to hold to their current contract prices for the contract extension period, such prices may no longer be “fair and reasonable” due to significantly better than expected reliability, availability, and maintainability experienced by the contractor over the three-year option period that may have greatly reduced the contractor’s costs.

    3. Based on the above, we believe that the contractor must be requested to submit a cost proposal for the contemplated modification to extend the contract performance period. Assuming that the value of this acquisition will exceed $700,000 and that none of the exceptions set forth in FAR 15.403-1(b) apply, then submittal of certified cost or pricing data will be required pursuant to FAR 15.403-4(a)(1)(iii) and FAR 15.403-4(b)(1) so that the Contracting Officer can determine if the proposed price is fair and reasonable. As a result, the contractor must submit a new Certificate of Current Cost or Pricing Data at the conclusion of price negotiations for this added PBL effort pursuant to FAR 15.403-4(b)(2).

    4. Based on the above analysis, we believe that given the scenario described in this inquiry, the Certificate of Current Cost or Pricing Data that was submitted for the negotiation of the previous 3-year option period cannot be extended to cover the contemplated contract extension period, even if contract pricing and all other terms and conditions will remain the same.

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