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    What is the proper dollar threshold basis for a subcontractor to be required to produce certified cost & pricing data? In the scenario described above, the prime contractor value is clearly above the TINA threshold so it must provide certified data, but the subcontractor's value is under the same threshold. Should the subcontractor in this scenario be required to produce certified cost or pricing data? (It is understood that the PCO can request other-than certified cost and pricing data at any time.)


    Answer

    Excellent, you were correct in referencing CD 2018-O0015.

    We’ll start with the second (2nd) paragraph and some of paragraph three (3rd), note, bold added by me for emphasis:

    “In the case of a change or modification made to a prime contract that was entered into before July 1, 2018, the threshold for obtaining certified cost or pricing data remains $750,000, with the following exception.  Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall use the clauses provided in Attachment 1 of this deviation in lieu of FAR clauses 52.215-12 and 52.215-13 to modify the contract to reflect a $2 million threshold for obtaining certified cost or pricing data for subcontracts entered into after July 1, 2018.  Contracting officers shall make all such modifications without requiring consideration.”

    “In addition, effective July 1, 2018, contracting officers shall use the provision and clauses provided in Attachment 2 of this deviation in lieu of FAR clauses 52.230-1 through 52.230-5 ...  this class deviation also increases the threshold for applicability of the cost accounting standards to $2 million.”

    What this means:  If the prime contract from your scenario was awarded before July 1, 2018 and the contractor has NOT requested the contract be modified to add the deviated clauses; the threshold is $750,000.

    Now, from Attachment 2:

    52.215-12 Subcontractor Certified Cost or Pricing Data (Deviation 2018-00015). (MAY2018)

    (a) Unless an exception under FAR 15.403-1 applies, the Contractor shall require the subcontractor to submit certified cost or pricing data ( actually or by specific identification in writing), in accordance with FAR 15.408, Table 15-2 (to include any information reasonably required to explain the subcontractor's estimating process such as the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data, and the nature and amount of any contingencies included in the price) –

    (1) Before awarding any subcontract expected to exceed $750,000 prior to July 1, 2018, or modifying any subcontract that was awarded prior to July 1, 2018, involving a pricing adjustment expected to exceed $750,000, or

    (2) Before awarding any subcontract expected to exceed $2 million on or after July 1, 2018, or modifying any subcontract that was awarded on or after July 1, 2018, involving a pricing adjustment expected to exceed $2 million.

    What this means:

    (a) If the prime contract from your scenario was awarded before July 1, 2018 and the contractor has requested the contract be modified to add the deviated clauses; the threshold is $2,000,000.

    (b) If the prime contract from your scenario was awarded on or after July 1, 2018; the threshold is $2,000,000.

    UNLESS:  the contracting officer has an approved waiver from the HCA IAW FAR 15.403-4(a)(2).  If this is the case, the threshold could be as low as one penny (cent) above the simplified acquisition threshold (SAT).

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