Certified cost or pricing data (TINA)

Why this matters: certified cost or pricing data (often called TINA, after the Truth in Negotiations Act) is where a negotiated price meets a signed certificate. Get it wrong and a price agreed long ago can be adjusted downward after award. This lesson covers what the data are, when certification is required, what the certificate says and what happens when the data turn out to be defective.

What counts as cost or pricing data

Cost or pricing data are all the facts that, as of the date of price agreement, prudent buyers and sellers would reasonably expect to affect price negotiations significantly 1. They are factual, not judgmental, and they are verifiable 2. They do not show whether your judgment about future costs is accurate, but they do include the data forming the basis for that judgment 3.

The definition reaches beyond the general ledger. It includes information on changes in production methods and in production or purchasing volume 4, and information on management decisions that could have a significant bearing on costs 5.

Practice: think "facts a careful buyer would want before agreeing to this price." Typical examples are vendor and subcontractor quotes, recent purchase prices, labor actuals and rates, scrap and yield history, and decisions already taken to move work, buy instead of make, or change a supplier. An estimator's forecast is judgment; the actuals and quotes behind it are data.

Check 1

Which statement matches the FAR 2.101 definition of cost or pricing data?They are factual, not judgmental, and verifiableThey are the contractor's best guess of future costsThey are limited to historical accounting entriesThey include only data the government asks for by name

When certification is required

The contracting officer shall obtain certified cost or pricing data only if none of the exceptions in FAR 15.403-1(b) applies 6. Certified cost or pricing data shall not be obtained for acquisitions at or below the simplified acquisition threshold 7.

FAR 15.403-4(a)(1) sets a dollar threshold for requiring certified data. When a clause refers to that threshold and it is adjusted for inflation, the changed threshold applies throughout the remaining term of the contract, unless there is a subsequent threshold adjustment 8. The requirement flows down too: it covers the award of a subcontract at any tier if the contractor and each higher-tier subcontractor were required to furnish certified cost or pricing data 9.

Read the current threshold in FAR 15.403-4(a)(1) and the figure your contract clauses state, not a number remembered from an old proposal. Thresholds move with inflation adjustments, and a contract keeps the figure its clauses refer to.

The exceptions

The contracting officer shall not require certified cost or pricing data to support any action, though they may still require data other than certified cost or pricing data to support a determination of a fair and reasonable price or cost realism 10, in these cases: when prices agreed upon are based on adequate price competition 11; when they are based on prices set by law or regulation 12; when a waiver has been granted 13. An acquisition the contracting officer determines meets the commercial product or commercial service definition is also covered by the commercial exception 14.

Practice: an exception removes the certificate, not the scrutiny. Expect requests for "data other than certified cost or pricing data" such as sales history, catalog prices or a cost build-up, and keep the same discipline in your support files that you would for a certified proposal.

Check 2

Which situation is one of the FAR 15.403-1(b) exceptions to requiring certified cost or pricing data?Prices agreed upon are based on adequate price competitionThe contractor is a sole sourceThe contract is the contractor's first with that agencyThe proposal was submitted early

What the certificate says

When certified data are required, the contractor submits a Certificate of Current Cost or Pricing Data 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 15. The certificate covers data submitted, either actually or by specific identification in writing, to the contracting officer 16.

The certificate speaks as of price agreement, not proposal submission. Weeks or months can pass between the two. Practice: before signing, run a documented "sweep" of everything that changed since the proposal (new vendor quotes, updated actuals, subcontract awards, management decisions), and disclose it in writing with a list, not by leaving it in a shared drive.

Worked example. Contractor P proposes a subcontracted assembly at $400,000, based on a supplier quote. Two weeks before price agreement, the supplier sends a revised quote of $340,000. The buyer files it; nobody tells the pricing team. Contractor P signs the certificate at handshake. A later audit finds the revised quote in the purchasing file.

Check 3

As of what date does the certificate say the cost or pricing data were accurate, complete and current?The date of agreement on priceThe date the proposal was submittedThe date of contract awardThe date of the first invoice

Defective pricing: what happens after award

FAR 15.407-1 covers the case where, after award, certified cost or pricing data are found to be inaccurate, incomplete or noncurrent as of the date of final agreement on price 17. The government is then entitled to a price adjustment, including profit or fee, of any significant amount by which the price was increased because of the defective data 18. The contract clause carries this out: the price or cost shall be reduced accordingly and the contract modified to reflect the reduction 19.

In arriving at a price adjustment, the contracting officer considers when the data became reasonably available to the contractor and the extent to which the government relied upon the defective data 20. Being a sole source supplier, or otherwise in a superior bargaining position, does not affect the government's right to a price adjustment 21.

Certification also opens your records. To evaluate the accuracy, completeness and currency of certified data, the contracting officer or an authorized representative has the right to examine and audit all of the contractor's records, including computations and projections 22.

What an auditor usually asks for first (practice, not a rule): the basis-of-estimate file for each cost element, the log of vendor quotes with the date each arrived, the list of what was disclosed between submission and price agreement, and who ran the sweep before the certificate was signed. If you cannot produce these quickly, fix that before your next certified proposal.

Public award data can help you position a price, but it is not your cost or pricing data. Bids2Bank's Price Check says so on the page: it is a benchmark, not the government's estimate, and your price should come from your own costs 23.

Check 4

After award, an audit finds that a lower supplier quote received before price agreement was never disclosed, and it increased the price by a significant amount. What is the government entitled to?A price adjustment, including profit or fee, for the significant amount the price was increasedNothing, because the contractor was the only sourceOnly the quote difference, with profit left in placeNothing, because the quote was in the contractor's files

Indented paragraphs are invented worked examples. Tool links open Bids2Bank and need a free account.

Certified cost or pricing data (TINA)

By the end you can

What counts as cost or pricing data

When certification is required

The exceptions

What the certificate says

Defective pricing: what happens after award

Certified cost or pricing data (TINA)

By the end you can

What counts as cost or pricing data

When certification is required

The exceptions

What the certificate says

Defective pricing: what happens after award