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  • Question

    Can a Cost Analysis be preformed by the Cost Engineering Division that did the IGE without using or checking the validity of the Contractor's Certified Cost and Pricing Data (audit)? The KO is required to get certified Cost and Pricing Data, but can't request an audit to verify the Cost and Pricing Data. Is this correct? These Changes do not have a waiver and aren't eligible for waive of Cost and Pricing Data. The Changes are being awarded sole source. Can the Cost Analysis be used to prove "Fair and Reasonable Price? If not how can the KO determine a fair and reasonable cost on questionable in-scope single source changes?


    Answer

    No, the submission of Certified Cost and Pricing Data does not automatically trigger a corresponding audit of that data.  Cost analysis, as required by FAR 15.404-1(a)(3), can be performed without validating (auditing) the submitted data.  The Government does have the right to examine the records that formed the basis for the pricing proposal up until time of award (see the instruction under FAR Table 15-2).  After award, the Government can initiate defective pricing proceedings if the Certified Cost and Pricing Data is found to be inaccurate and it was relied upon by the Government in negotiations.  So while your modification is below the proposal review threshold for DCAA, you are still responsible to protect the Government's interests and obtain a fair and reasonable price.

     

    Also, consider DCMA support for assistance with the indirect rates used in the modification proposal.

     

    There is one other item to consider.  You mentioned that you have ten changes on your contract.  If you are combining separate and unrelated changes into one modification for purposes of administrative efficiency, you would not need to combine their cumulative dollar value when considering if Certified Cost or Pricing Data is required (see FAR 15.403-4(a)(1)(iii)).

     

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