Does an in-scope change requiring certified cost and pricing data require the Contractor to compete the work? Does the Change even if in scope require a J&A if the change is sole sourced to the Prime Contractor? Can the KO waive the audit?
Question 1: Does an in-scope change requiring certified cost and pricing data require the Contractor to compete the work?
Open full Question Details
Response: Unless a contract term in the contracts indicates otherwise, an in-scope change to a prime contract which requires certified cost and pricing data does not require a prime contractor to compete the work. Refer to FAR 15.404-3 for more specific instructions on subcontract pricing considerations.
Question 2: Does the Change, even if in scope, require a J&A if the change is sole sourced to the Prime Contractor?
Response: If the Contracting Officer determines the change is within the general scope of the contract, the Contracting Officer must then determine the authority for making the change. A common authority for changes is the "Changes" clause in the contract. Generally, if the change is made pursuant to a clause in the contract (such as the “Changes” clause), a J&A is not required. In addition, if the modification is the result of something both the Contractor and the Government considered at the time of contract award, and the modification is consistent with the intent of the solicitation and the record in the contract file, generally the modification can be awarded without a J&A. Review FAR Part 43 for more specific information regarding modifications, and FAR Part 6 to determine if a J&A is required. In addition, consider seeking counsel from your local competition advocate and legal advisor.
Question 3: Can the KO waive the audit?
Response: The trigger for requesting an audit is found in FAR 15.404-2, DFARS 215.404-2, and PGI 215.404-2.
- FAR 15.404-2: The Contracting Officer “should consider” requesting an audit (or field pricing assistance) when information available at the buying activity is not adequate to determine the proposed price to be fair and reasonable. The Contracting Officer is encouraged to tailor such requests’ subject areas, level of detail, and even method of reporting depending on the complexity of the analysis required to enable the Contracting Officer to determine the price to be fair and reasonable. While there is not a "mandatory" trigger that states the Contracting Officer shall request an audit at certain dollar thresholds, the Contracting Officer "should consider" requesting the audits....
- DFARS 215.404-2: directs readers to DFARS PGI 215.404-2. This reference also begins with “the Contracting Officer should consider requesting field pricing assistance” when facing certain dollar thresholds and contract types; however, it does not state an audit is mandatory. With respect to FAR 15.404-2, this PGI reference indicates the Contracting Officer should consider requesting such assistance when existing information is inadequate to determine the proposed price to be fair and reasonable, and tailor his request for assistance to address significant areas of uncertainty in the Government’s analysis. The imperative in this PGI reference is, if the dollar values are over $10M for fixed-price, or over $100M for cost-reimbursement contracts, the Contracting Officer’s request for field pricing support must go to DCAA. This is consistent with OSD/DPAP’s policy memo, signed by Shay Assad on January 4, 2011, which states DPAP’s vision for aligning DCAA and DCMA processes.
- Conclusion regarding the question, “can the KO waive the audit?”
The trigger for requesting an audit is the Contracting Officer’s determination of a need for one. If there is no need for an audit or field pricing assistance, the contract file should reflect the Contracting Officer’s decision not to pursue such assistance. A formal “waiver” is not required. If the Contracting Officer believes an audit or field pricing assistance is necessary, then he should tailor the request and reporting method of an audit (or field pricing assistance) to get the right information as quickly as possible.