USC Chapter 271

USC Chapter 271
in effect

10 U.S.C. § 3701 Definitions

In this chapter: (1) Cost or pricing data.—The term “cost or pricing data” means all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification), or, if applicable consistent with section 3706(a)(2) of this title, another date agreed upon between the parties, a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived. (2) Subcontract.—The term “subcontract” includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or a subcontractor.

10 U.S.C. § 3702 Required cost or pricing data and certification

(a) When Required.—The head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows:(1) Offeror for prime contract.—An offeror for a prime contract under a chapter 137 legacy provision to be entered into using procedures other than sealed-bid procedures that is only expected to receive one bid shall be required to submit cost or pricing data before the award of a contract if—(A) in the case of a prime contract entered into after June 30, 2026, the price of the contract to the United States is expected to exceed $10,000,000; and (B) in the case of a prime contract entered into on or before June 30, 2026, the price of the contract to the United States is expected to exceed $2,000,000. (2) Contractor.—The contractor for a prime contract under a chapter 137 legacy provision shall be required to submit cost or pricing data before the pricing of a change or modification to the contract if the price adjustment is expected to exceed $10,000,000. (3) Offeror for subcontract.—(A) An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if the prime contractor and each higher-tier subcontractor have been required to make available cost or pricing data under this chapter and—(i) in the case of a prime contract entered into after June 30, 2026, the price of the subcontract is expected to exceed $10,000,000; or (ii) in the case of a prime contract entered into on or before June 30, 2026, the price of the subcontract is expected to exceed $2,000,000..11 So in original. (B)(i) An offeror for a subcontract (at any tier) of a contract under this chapter that is required to submit cost or pricing data under subparagraph (A) with respect to such subcontract may submit prices paid for the covered goods and services of such offeror for such subcontract under this clause if—(I) such offeror is a nontraditional defense contractor (as defined in section 3014 of this title); (II) the prices to be submitted are prices that were paid for the same goods and services as such covered goods and services; and (III) the price of such subcontract is not expected to exceed $5,000,000. (ii) The submission of prices paid under clause (i) by an offeror with respect to a subcontract shall be deemed to be the submission of cost or pricing data by such offeror with respect to such subcontract as required by subparagraph (A) if a contracting officer of the Department of Defense determines that the prices submitted under such clause are fair and reasonable based on supported cost or pricing data within the last 12 months. (iii) In this subparagraph, the term “covered goods and services” means, with respect to an offeror for a subcontract (at any tier), the goods and services such offeror would provide under such subcontract. (4) Subcontractor.—The subcontractor for a subcontract covered by paragraph (3) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if the price adjustment is expected to exceed $2,000,000. (b) Certification.—A person required, as an offeror, contractor, or subcontractor, to submit cost or pricing data under subsection (a) (or required by the head of the agency concerned to submit such data under section 3704 of this title) shall be required to certify that, to the best of the person’s knowledge and belief, the cost or pricing data submitted are accurate, complete, and current. (c) To Whom Submitted.—Cost or pricing data required to be submitted under subsection (a) (or under section 3704 of this title), and a certification required to be submitted under subsection (b), shall be submitted—(1) in the case of a submission by a prime contractor (or an offeror for a prime contract), to the contracting officer for the contract (or to a designated representative of the contracting officer); or (2) in the case of a submission by a subcontractor (or an offeror for a subcontract), to the prime contractor. (d) Applicability of Chapter.—Except as provided under section 3703 of this title, this chapter applies to contracts entered into by the head of an agency on behalf of a foreign government. (e) Subcontracts Not Affected by Waiver.—A waiver of requirements for submission of certified cost or pricing data that is granted under section 3703(a)(3) of this title in the case of a contract or subcontract does not waive the requirement under subsection (a)(3) for submission of cost or pricing data in the case of subcontracts under that contract or subcontract unless the head of the procuring activity granting the waiver determines that the requirement under that subsection should be waived in the case of such subcontracts and justifies in writing the reasons for the determination. (f) Modifications to Prior Contracts.—Under subsection (a), in connection with a prime contract entered into on or before June 30, 2018, the head of the agency that entered into such contract shall modify the contract as soon as practicable to reflect paragraphs (1) and (2) of such subsection, without requiring consideration. (g) Adjustment of Amounts.—Effective on October 1 of each year that is divisible by 5, each amount set forth in subsection (a) shall be adjusted in accordance with section 1908 of title 41.

10 U.S.C. § 3703 Exceptions

(a) In general.—Submission of certified cost or pricing data shall not be required under section 3702 of this title in the case of a contract, a subcontract, or modification of a contract or subcontract—(1) for which the price agreed upon is based on—(A) adequate price competition; or (B) prices set by law or regulation; (2) for the acquisition of a commercial product or a commercial service; (3) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this chapter may be waived and justifies in writing the reasons for such determination; or (4) to the extent such data—(A) relates to an offset agreement in connection with a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm; and (B) does not relate to a contract or subcontract under the offset agreement for work performed in such foreign country or by such foreign firm that is directly related to the weapon system or defense-related item being purchased under the contract. (b) Modifications of contracts and subcontracts for commercial products or commercial services.—In the case of a modification of a contract or subcontract for a commercial product or commercial services that is not covered by the exception to the submission of certified cost or pricing data in paragraph (1) or (2) of subsection (a), submission of certified cost or pricing data shall not be required under section 3702 of this title if—(1) the contract or subcontract being modified is a contract or subcontract for which submission of certified cost or pricing data may not be required by reason of paragraph (1) or (2) of subsection (a); and (2) the modification would not change the contract or subcontract, as the case may be, from a contract or subcontract for the acquisition of a commercial product or commercial services to a contract or subcontract for the acquisition of an item other than a commercial product or commercial services. (c) Noncommercial modifications of commercial products.—(1) The exception in subsection (a)(2) does not apply to cost or pricing data on noncommercial modifications of a commercial product that are expected to cost, in the aggregate, more than the amount specified in section 3702(a)(1)(A) of this title, as adjusted from time to time under section 3702(g) of this title, or 5 percent of the total price of the contract (at the time of contract award), whichever is greater. (2) In this subsection, the term “noncommercial modification”, with respect to a commercial product, means a modification of such product that is not a modification described in section 103(3)(A) of title 41. (3) Nothing in paragraph (1) shall be construed—(A) to limit the applicability of the exception in paragraph (1) or (3) of subsection (a) to cost or pricing data on a noncommercial modification of a commercial product; or (B) to require the submission of cost or pricing data on any aspect of an acquisition of a commercial product other than the cost and pricing of noncommercial modifications of such product. (d) Commercial product or commercial service determination.—(1) For purposes of applying the exception under subsection (a)(2) to the required submission of certified cost or pricing data, the contracting officer may presume that a prior commercial product or commercial service determination made by a military department, a Defense Agency, or another component of the Department of Defense shall serve as a determination for subsequent procurements of such product or service. (2) If the contracting officer does not make the presumption described in paragraph (1) and instead chooses to proceed with a procurement of a product or service previously determined to be a commercial product or a commercial service using procedures other than the procedures authorized for the procurement of a commercial product or a commercial service, as the case may be, the contracting officer shall request a review of the commercial product or commercial service determination by the head of the contracting activity. (3) Not later than 30 days after receiving a request for review of a determination under paragraph (2), the head of a contracting activity shall—(A) confirm that the prior determination was appropriate and still applicable; or (B) issue a revised determination with a written explanation of the basis for the revision. (e) A contracting officer shall consider evidence provided by an offeror of recent purchase prices paid by the Government for the same or similar commercial products or commercial services in establishing price reasonableness on a subsequent purchase if the contracting officer is satisfied that the prices previously paid remain a valid reference for comparison after considering the totality of other relevant factors such as the time elapsed since the prior purchase and any differences in the quantities purchased or applicable terms and conditions. (f) Determination by prime contractor.—A prime contractor required to submit certified cost or pricing data under section 3702 of this title with respect to a prime contract shall be responsible for determining whether a subcontract under such contract qualifies for an exception under subsection (a)(1) from such requirement.

10 U.S.C. § 3704 Cost or pricing data on below-threshold contracts

(a) Authority to require submission.—Subject to subsection (b), when certified cost or pricing data are not required to be submitted by section 3702 of this title for a contract, subcontract, or modification of a contract or subcontract, such data may nevertheless be required to be submitted by the head of the procuring activity, but only if the head of the procuring activity determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract. In any case in which the head of the procuring activity requires such data to be submitted under this section, the head of the procuring activity shall justify in writing the reason for such requirement. (b) Exception.—The head of the procuring activity may not require certified cost or pricing data to be submitted under this subsection for any contract or subcontract, or modification of a contract or subcontract, covered by the exceptions in paragraph (1) or (2) of section 3703(a) of this title. (c) Delegation of authority prohibited.—The head of a procuring activity may not delegate functions under this subsection.

10 U.S.C. § 3705 Submission of other information

(a) Authority to require submission.—When certified cost or pricing data are not required to be submitted under this chapter for a contract, subcontract, or modification of a contract or subcontract, the offeror shall be required to submit to the contracting officer data other than certified cost or pricing data (if requested by the contracting officer), to the extent necessary to determine the reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract. Except in the case of a contract or subcontract covered by the exceptions in section 3703(a)(1) of this title, the contracting officer shall require that the data submitted include, at a minimum, appropriate information on the prices at which the same item or similar items have previously been sold that is adequate for evaluating the reasonableness of the price for the procurement. If the contracting officer determines that the offeror does not have access to and cannot provide sufficient information on prices for the same or similar items to determine the reasonableness of price, the contracting officer shall require the submission of information on prices for similar levels of work or effort on related products or services, prices for alternative solutions or approaches, and other information that is relevant to the determination of a fair and reasonable price. Contracting officers shall not determine the price of a contract or subcontract to be fair and reasonable based solely on historical prices paid by the Government. (b) Ineligibility for award.—(1) In the event the contracting officer is unable to determine proposed prices are fair and reasonable by any other means, an offeror who fails to make a good faith effort to comply with a reasonable request to submit data in accordance with subsection (a) is ineligible for award unless the head of the contracting activity, or the designee of the head of contracting activity, determines that it is in the best interest of the Government to make the award to that offeror, based on consideration of pertinent factors, including the following:(A) The effort to obtain the data. (B) Availability of other sources of supply of the item or service. (C) The urgency or criticality of the Government’s need for the item or service. (D) Reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract based on information available to the contracting officer. (E) Rationale or justification made by the offeror for not providing the requested data. (F) Risk to the Government if award is not made. (2)(A) Any new determination made by the head of the contracting activity under paragraph (1) shall be reported to the Principal Director, Defense Pricing and Contracting on a quarterly basis. (B) The Under Secretary of Defense for Acquisition and Sustainment, or a designee, shall produce an annual report identifying offerors that have denied multiple requests for submission of uncertified cost or pricing data over the preceding three-year period, but nevertheless received an award. The report shall identify products or services offered by such offerors that should undergo should-cost analysis. The Secretary of Defense may include a notation on such offerors in the system used by the Federal Government to monitor or record contractor past performance. The Under Secretary shall assess the extent to which these offerors are sole source providers within the defense industrial base and shall develop strategies to incentivize new entrants into the industrial base to increase the availability of other sources of supply for the product or service. The Under Secretary shall make appropriate portions of the report available to the leadership of the offerors named in such report. (C) The Under Secretary of Defense for Acquisition and Sustainment shall develop a framework for revising what constitutes a denial of uncertified cost or pricing data, including—(i) identifying situations under which such denials occur to exclude situations outside the control of the offeror or Federal Government; (ii) identifying whether such denial is from the prime contractor or subcontractor; and (iii) developing an appropriate timeframe for requiring submission of uncertified cost or pricing data before a request for such data is considered a denial, including a standardized determination of a starting point and conclusion for such requests. (3) Alternative Sources Required.—If the head of contracting activity, or the designee of the head of contracting activity, determines it is in the best interest of the Government to make the award under subsection (b)(1), the head of the agency shall conduct an assessment of alternative offerors as a source of supply using authorities provided by sections 865 and 882 of the National Defense Authorization Act for Fiscal Year 2025 (Public Law 118–159). (c) Limitations on authority.—The Federal Acquisition Regulation shall include the following provisions regarding the types of information that contracting officers may require under subsection (a):(1) Reasonable limitations on requests for sales data relating to commercial products or commercial services. (2) A requirement that a contracting officer limit, to the maximum extent practicable, the scope of any request for information relating to commercial products or commercial services from an offeror to only that information that is in the form regularly maintained by the offeror in commercial operations. (3) A statement that any information received relating to commercial products or commercial services that is exempt from disclosure under section 552(b) of title 5 shall not be disclosed by the Federal Government.

10 U.S.C. § 3706 Price reductions for defective cost or pricing data

(a) Provision Requiring Adjustment.—(1) In general.—A prime contract (or change or modification to a prime contract) under which a certificate under section 3702(b) of this title is required shall contain a provision that the price of the contract to the United States, including profit or fee, shall be adjusted to exclude any significant amount by which it may be determined by the head of the agency that such price was increased because the contractor (or any subcontractor required to make available such a certificate) submitted defective cost or pricing data. (2) What constitutes defective cost or pricing data.—For the purposes of this chapter, defective cost or pricing data are cost or pricing data which, as of the date of agreement on the price of the contract (or another date agreed upon between the parties), were inaccurate, incomplete, or noncurrent. If for purposes of the preceding sentence the parties agree upon a date other than the date of agreement on the price of the contract, the date agreed upon by the parties shall be as close to the date of agreement on the price of the contract as is practicable. (b) Valid Defense.—In determining for purposes of a contract price adjustment under a contract provision required by subsection (a) whether, and to what extent, a contract price was increased because the contractor (or a subcontractor) submitted defective cost or pricing data, it shall be a defense that the United States did not rely on the defective data submitted by the contractor or subcontractor. (c) Invalid Defenses.—It is not a defense to an adjustment of the price of a contract under a contract provision required by subsection (a) that—(1) the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted by the contractor or subcontractor because the contractor or subcontractor—(A) was the sole source of the property or services procured; or (B) otherwise was in a superior bargaining position with respect to the property or services procured; (2) the contracting officer should have known that the cost and pricing data in issue were defective even though the contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the contracting officer; (3) the contract was based on an agreement between the contractor and the United States about the total cost of the contract and there was no agreement about the cost of each item procured under such contract; or (4) the prime contractor or subcontractor did not submit a certification of cost and pricing data relating to the contract as required under section 3702(b) of this title. (d) Offsets.—(1) When allowed.—A contractor shall be allowed to offset an amount against the amount of a contract price adjustment under a contract provision required by subsection (a) if—(A) the contractor certifies to the contracting officer (or to a designated representative of the contracting officer) that, to the best of the contractor’s knowledge and belief, the contractor is entitled to the offset; and (B) the contractor proves that the cost or pricing data were available before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with subsection (a)(2), another date agreed upon between the parties, and that the data were not submitted as specified in section 3702(c) of this title before such date. (2) A contractor shall not be allowed to offset an amount otherwise authorized to be offset under paragraph (1) if—(A) the certification under section 3702(b) of this title with respect to the cost or pricing data involved was known to be false when signed; or (B) the United States proves that, had the cost or pricing data referred to in paragraph (1)(B) been submitted to the United States before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with subsection (a)(2), another date agreed upon between the parties, the submission of such cost or pricing data would not have resulted in an increase in that price in the amount to be offset.

10 U.S.C. § 3707 Interest and penalties for certain overpayments

(a) In General.—If the United States makes an overpayment to a contractor under a contract subject to this chapter and the overpayment was due to the submission by the contractor of defective cost or pricing data, the contractor shall be liable to the United States—(1) for interest on the amount of such overpayment, to be computed—(A) for the period beginning on the date the overpayment was made to the contractor and ending on the date the contractor repays the amount of such overpayment to the United States; and (B) at the current rate prescribed by the Secretary of the Treasury under section 6621 of the Internal Revenue Code of 1986; and (2) if the submission of such defective data was a knowing submission, for an additional amount equal to the amount of the overpayment. (b) Liability Not Affected by Refusal to Submit Certification.—Any liability under this section of a contractor that submits cost or pricing data but refuses to submit the certification required by section 3702(b) of this title with respect to the cost or pricing data shall not be affected by the refusal to submit such certification.

10 U.S.C. § 3708 Right to examine contractor records

For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this chapter, the head of an agency shall have the authority provided by section 3841(b)(2) of this title.

10 U.S.C. § 3709 Program to accelerate contracting and pricing processes

(a) In General.—The Secretary of Defense shall establish a program to reform and accelerate the contracting and pricing processes associated with contracts in excess of $50,000,000 by—(1) basing price reasonableness determinations on actual cost and pricing data for purchases of the same or similar products for the Department of Defense; and (2) reducing the cost and pricing data to be submitted in accordance with this chapter. (b) Implementation Guidance.—The Secretary, acting through the Under Secretary of Defense for Acquisition and Sustainment, shall ensure that each senior contracting official (as defined in section 1737 of this title) for a contract described in subsection (a) has the discretion to implement the program under this section efficiently and effectively by ensuring the following:(1) That the program does not include any preferences for contract type or specific contract requirements. (2) That each Secretary of a military department has no unique reporting requirements to the Under Secretary of Defense for Acquisition and Sustainment with respect to the program.

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