DoD thresholds for cost and pricing data poised to increase to $2M, reducing contractor risks of defective pricing and CAS liability

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In just over two months, the dollar threshold triggering the requirement for certified cost and pricing data under Federal Acquisition Regulation (“FAR”) 15.403-4 and application of the Cost Accounting Standards (“CAS”) pursuant to FAR 9903.201-1 will increase from $750,000 to $2 million for all Department of Defense (“DoD”) contracts.

In a memorandum, dated April 13, 2018, the Defense Pricing/Defense Procurement and Acquisition Policy (“DP/DPAP”) advises DoD contracting officers that, effective July 1, 2018, they shall use $2 million as the threshold for obtaining certified cost and pricing data (a requirement rooted in the Truthful Cost or Pricing Data statute, still commonly referred to as the “Truth in Negotiations Act” or “TINA”).  See Mem. from Shay Assad, Director, Defense Pricing/Defense Procurement and Acquisition Policy, DARS Tracking No: 2018-O0012 (Apr. 13, 2018) (“Memorandum”).  The $2 million figure represents a 167% increase over the previous threshold of $750,000 and will still be subject to periodic updating to keep pace with inflation, pursuant to 41 U.S.C. § 1908.

By: Dentons

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