
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2306a]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                   CHAPTER 137--PROCUREMENT GENERALLY
 
Sec. 2306a. Cost or pricing data: truth in negotiations

    (a) Required Cost or Pricing Data and Certification.--(1) The head 
of an agency shall require offerors, contractors, and subcontractors to 
make cost or pricing data available as follows:
        (A) An offeror for a prime contract under this chapter to be 
    entered into using procedures other than sealed-bid procedures shall 
    be required to submit cost or pricing data before the award of a 
    contract if--
            (i) in the case of a prime contract entered into after 
        December 5, 1990, the price of the contract to the United States 
        is expected to exceed $500,000; and
            (ii) in the case of a prime contract entered into on or 
        before December 5, 1990, the price of the contract to the United 
        States is expected to exceed $100,000.

        (B) The contractor for a prime contract under this chapter shall 
    be required to submit cost or pricing data before the pricing of a 
    change or modification to the contract if--
            (i) in the case of a change or modification made to a prime 
        contract referred to in subparagraph (A)(i), the price 
        adjustment is expected to exceed $500,000;
            (ii) in the case of a change or modification made after 
        December 5, 1991, to a prime contract that was entered into on 
        or before December 5, 1990, and that has been modified pursuant 
        to paragraph (6), the price adjustment is expected to exceed 
        $500,000; and
            (iii) in the case of a change or modification not covered by 
        clause (i) or (ii), the price adjustment is expected to exceed 
        $100,000.

        (C) 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 section and--
            (i) in the case of a subcontract under a prime contract 
        referred to in subparagraph (A)(i), the price of the subcontract 
        is expected to exceed $500,000;
            (ii) in the case of a subcontract entered into after 
        December 5, 1991, under a prime contract that was entered into 
        on or before December 5, 1990, and that has been modified 
        pursuant to paragraph (6), the price of the subcontract is 
        expected to exceed $500,000; and
            (iii) in the case of a subcontract not covered by clause (i) 
        or (ii), the price of the subcontract is expected to exceed 
        $100,000.

        (D) The subcontractor for a subcontract covered by subparagraph 
    (C) shall be required to submit cost or pricing data before the 
    pricing of a change or modification to the subcontract if--
            (i) in the case of a change or modification to a subcontract 
        referred to in subparagraph (C)(i) or (C)(ii), the price 
        adjustment is expected to exceed $500,000; and
            (ii) in the case of a change or modification to a 
        subcontract referred to in subparagraph (C)(iii), the price 
        adjustment is expected to exceed $100,000.

    (2) A person required, as an offeror, contractor, or subcontractor, 
to submit cost or pricing data under paragraph (1) (or required by the 
head of the agency concerned to submit such data under subsection (c)) 
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.
    (3) Cost or pricing data required to be submitted under paragraph 
(1) (or under subsection (c)), and a certification required to be 
submitted under paragraph (2), shall be submitted--
        (A) 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
        (B) in the case of a submission by a subcontractor (or an 
    offeror for a subcontract), to the prime contractor.

    (4) Except as provided under subsection (b), this section applies to 
contracts entered into by the head of an agency on behalf of a foreign 
government.
    (5) A waiver of requirements for submission of certified cost or 
pricing data that is granted under subsection (b)(1)(C) in the case of a 
contract or subcontract does not waive the requirement under paragraph 
(1)(C) 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 paragraph should be waived in the case of such subcontracts 
and justifies in writing the reasons for the determination.
    (6) Upon the request of a contractor that was required to submit 
cost or pricing data under paragraph (1) in connection with a prime 
contract entered into on or before December 5, 1990, the head of the 
agency that entered into such contract shall modify the contract to 
reflect subparagraphs (B)(ii) and (C)(ii) of paragraph (1). All such 
modifications shall be made without requiring consideration.
    (7) Effective on October 1 of each year that is divisible by 5, each 
amount set forth in paragraph (1) shall be adjusted to the amount that 
is equal to the fiscal year 1994 constant dollar value of the amount set 
forth. Any amount, as so adjusted, that is not evenly divisible by 
$50,000 shall be rounded to the nearest multiple of $50,000. In the case 
of an amount that is evenly divisible by $25,000 but not evenly 
divisible by $50,000, the amount shall be rounded to the next higher 
multiple of $50,000.
    (b) Exceptions.--
        (1) In general.--Submission of certified cost or pricing data 
    shall not be required under subsection (a) in the case of a 
    contract, a subcontract, or modification of a contract or 
    subcontract--
            (A) for which the price agreed upon is based on--
                (i) adequate price competition; or
                (ii) prices set by law or regulation;

            (B) for the acquisition of a commercial item; or
            (C) in an exceptional case when the head of the procuring 
        activity, without delegation, determines that the requirements 
        of this section may be waived and justifies in writing the 
        reasons for such determination.

        (2) Modifications of contracts and subcontracts for commercial 
    items.--In the case of a modification of a contract or subcontract 
    for a commercial item that is not covered by the exception to the 
    submission of certified cost or pricing data in paragraph (1)(A) or 
    (1)(B), submission of certified cost or pricing data shall not be 
    required under subsection (a) if--
            (A) 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)(A) or 
        (1)(B); and
            (B) 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 item to a contract or 
        subcontract for the acquisition of an item other than a 
        commercial item.

    (c) Cost or Pricing Data on Below-Threshold Contracts.--
        (1) Authority to require submission.--Subject to paragraph (2), 
    when certified cost or pricing data are not required to be submitted 
    by subsection (a) 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 
    subsection, the head of the procuring activity shall justify in 
    writing the reason for such requirement.
        (2) Exception.--The head of the procuring activity may not 
    require certified cost or pricing data to be submitted under this 
    paragraph for any contract or subcontract, or modification of a 
    contract or subcontract, covered by the exceptions in subparagraph 
    (A) or (B) of subsection (b)(1).
        (3) Delegation of authority prohibited.--The head of a procuring 
    activity may not delegate functions under this paragraph.

    (d) Submission of Other Information.--
        (1) Authority to require submission.--When certified cost or 
    pricing data are not required to be submitted under this section for 
    a contract, subcontract, or modification of a contract or 
    subcontract, the contracting officer shall require submission of 
    data other than certified cost or pricing data 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 subsection (b)(1)(A), 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.
        (2) Limitations on authority.--The Federal Acquisition 
    Regulation shall include the following provisions regarding the 
    types of information that contracting officers may require under 
    paragraph (1):
            (A) Reasonable limitations on requests for sales data 
        relating to commercial items.
            (B) A requirement that a contracting officer limit, to the 
        maximum extent practicable, the scope of any request for 
        information relating to commercial items from an offeror to only 
        that information that is in the form regularly maintained by the 
        offeror in commercial operations.
            (C) A statement that any information received relating to 
        commercial items that is exempt from disclosure under section 
        552(b) of title 5 shall not be disclosed by the Federal 
        Government.

    (e) Price Reductions for Defective Cost or Pricing Data.--(1)(A) A 
prime contract (or change or modification to a prime contract) under 
which a certificate under subsection (a)(2) 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.
    (B) For the purposes of this section, 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.
    (2) In determining for purposes of a contract price adjustment under 
a contract provision required by paragraph (1) 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.
    (3) It is not a defense to an adjustment of the price of a contract 
under a contract provision required by paragraph (1) that--
        (A) 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--
            (i) was the sole source of the property or services 
        procured; or
            (ii) otherwise was in a superior bargaining position with 
        respect to the property or services procured;

        (B) 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;
        (C) 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
        (D) the prime contractor or subcontractor did not submit a 
    certification of cost and pricing data relating to the contract as 
    required under subsection (a)(2).

    (4)(A) A contractor shall be allowed to offset an amount against the 
amount of a contract price adjustment under a contract provision 
required by paragraph (1) if--
        (i) 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
        (ii) 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 
    paragraph (1)(B), another date agreed upon between the parties, and 
    that the data were not submitted as specified in subsection (a)(3) 
    before such date.

    (B) A contractor shall not be allowed to offset an amount otherwise 
authorized to be offset under subparagraph (A) if--
        (i) the certification under subsection (a)(2) with respect to 
    the cost or pricing data involved was known to be false when signed; 
    or
        (ii) the United States proves that, had the cost or pricing data 
    referred to in subparagraph (A)(ii) 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 
    paragraph (1)(B), 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.

    (f) Interest and Penalties for Certain Overpayments.--(1) If the 
United States makes an overpayment to a contractor under a contract 
subject to this section 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--
        (A) for interest on the amount of such overpayment, to be 
    computed--
            (i) 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
            (ii) at the current rate prescribed by the Secretary of the 
        Treasury under section 6621 of the Internal Revenue Code of 
        1986; and

        (B) if the submission of such defective data was a knowing 
    submission, for an additional amount equal to the amount of the 
    overpayment.

    (2) Any liability under this subsection of a contractor that submits 
cost or pricing data but refuses to submit the certification required by 
subsection (a)(2) with respect to the cost or pricing data shall not be 
affected by the refusal to submit such certification.
    (g) Right of United States 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 section, the head of an 
agency shall have the authority provided by section 2313(a)(2) of this 
title.
    (h) Definitions.--In this section:
        (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 subsection (e)(1)(B), 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 items between divisions, subsidiaries, or affiliates 
    of a contractor or a subcontractor.
        (3) Commercial item.--The term ``commercial item'' has the 
    meaning provided such term in section 4(12) of the Office of Federal 
    Procurement Policy Act (41 U.S.C. 403(12)).

(Added Pub. L. 99-500, Sec. 101(c) [title X, Sec. 952(a)], Oct. 18, 
1986, 100 Stat. 1783-82, 1783-166, and Pub. L. 99-591, Sec. 101(c) 
[title X, Sec. 952(a)], Oct. 30, 1986, 100 Stat. 3341-82, 3341-166; Pub. 
L. 99-661, div. A, title IX, formerly title IV, Sec. 952(a), Nov. 14, 
1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100-26, Sec. 3(5), 
Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100-180, div. A, title 
VIII, Sec. 804(a), (b), Dec. 4, 1987, 101 Stat. 1125; Pub. L. 101-510, 
div. A, title VIII, Sec. 803(a)(1), (d), Nov. 5, 1990, 104 Stat. 1589, 
1590; Pub. L. 102-25, title VII, Sec. 701(b), (f)(8), Apr. 6, 1991, 105 
Stat. 113, 115; Pub. L. 102-190, div. A, title VIII, Sec. 804(a)-(c)(1), 
title X, Sec. 1061(a)(9), Dec. 5, 1991, 105 Stat. 1415, 1416, 1472; Pub. 
L. 103-355, title I, Secs. 1201-1209, Oct. 13, 1994, 108 Stat. 3273-
3277; Pub. L. 104-106, div. D, title XLII, Sec. 4201(a), title XLIII, 
Sec. 4321(a)(2), (b)(7), Feb. 10, 1996, 110 Stat. 649, 671, 672; Pub. L. 
104-201, div. A, title X, Sec. 1074(a)(12), Sept. 23, 1996, 110 Stat. 
2659; Pub. L. 105-85, div. A, title X, Sec. 1073(a)(46), Nov. 18, 1997, 
111 Stat. 1902; Pub. L. 105-261, div. A, title VIII, Secs. 805(a), 
808(a), Oct. 17, 1998, 112 Stat. 2083, 2085.)

                       References in Text

    Section 6621 of the Internal Revenue Code of 1986, referred to in 
subsec. (f)(1)(A)(ii), is classified to section 6621 of Title 26, 
Internal Revenue Code.

                          Codification

    Pub. L. 99-591 is a corrected version of Pub. L. 99-500.
    Pub. L. 99-500, Pub. L. 99-591, and Pub. L. 99-661 added identical 
sections.


                               Amendments

    1998--Subsec. (a)(5). Pub. L. 105-261, Sec. 805(a), amended par. (5) 
generally. Prior to amendment, par. (5) read as follows: ``For purposes 
of paragraph (1)(C), a contractor or subcontractor granted a waiver 
under subsection (b)(1)(C) shall be considered as having been required 
to make available cost or pricing data under this section.''
    Subsec. (d)(1). Pub. L. 105-261, Sec. 808(a), substituted ``the 
contracting officer shall require that the data submitted'' for ``the 
data submitted shall''.
    1997--Subsec. (a)(5). Pub. L. 105-85 substituted ``subsection 
(b)(1)(C)'' for ``subsection (b)(1)(B)''.
    1996--Subsec. (b). Pub. L. 104-106, Sec. 4321(a)(2), made technical 
correction to directory language of Pub. L. 103-355, Sec. 1202(a). See 
1994 Amendment note below.
    Pub. L. 104-106, Sec. 4201(a)(1), amended subsec. (b) generally, 
revising and restating as pars. (1) and (2) the provisions of former 
pars. (1) and (2) and striking out par. (3).
    Subsec. (c). Pub. L. 104-106, Sec. 4201(a)(1), amended subsec. (c) 
generally, revising and restating as subsec. (c) the provisions of 
former subsec. (c)(1).
    Subsec. (d). Pub. L. 104-106, Sec. 4321(b)(7)(A), which directed 
amendment of subsec. (d)(2)(A)(ii), by inserting ``to'' after ``The 
information referred'', could not be executed because subsec. (d)(2)(A) 
did not contain a cl. (ii) or the language ``The information referred'' 
subsequent to amendment by Pub. L. 104-106, Sec. 4201(a)(1). See below.
    Pub. L. 104-106, Sec. 4201(a)(1), amended subsec. (d) generally, 
revising and restating as pars. (1) and (2) provisions of former 
subsecs. (c)(2) and (d)(2), (4) and striking out provisions of former 
subsec. (d)(1), (3) relating to procurements based on adequate price 
competition and authority to audit.
    Subsec. (e)(4)(B)(ii). Pub. L. 104-106, Sec. 4321(b)(7)(B), struck 
out second comma after ``parties''.
    Subsec. (h). Pub. L. 104-106, Sec. 4201(a)(2), redesignated subsec. 
(i) as (h) and struck out former subsec. (h) which read as follows: 
``Required Regulations.--The Federal Acquisition Regulation shall 
contain provisions concerning the types of information that offerors 
must submit for a contracting officer to consider in determining whether 
the price of a procurement to the Government is fair and reasonable when 
certified cost or pricing data are not required to be submitted under 
this section because the price of the procurement to the United States 
is not expected to exceed the applicable threshold amount set forth in 
subsection (a) (as adjusted pursuant to paragraph (7) of such 
subsection). Such information, at a minimum, shall include 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 of the proposed contract or subcontract for the 
procurement.''
    Subsec. (h)(3). Pub. L. 104-201 inserted ``(41 U.S.C. 403(12))'' 
before period at end.
    Subsec. (i). Pub. L. 104-106, Sec. 4201(a)(2)(B), redesignated 
subsec. (i) as (h).
    Subsec. (i)(3). Pub. L. 104-106, Sec. 4321(b)(7)(C), which directed 
amendment of subsec. (i)(3) by inserting ``(41 U.S.C. 403(12))'' before 
period at end, could not be executed because section did not contain a 
subsec. (i) subsequent to the amendment by Pub. L. 104-106, 
Sec. 4201(a)(2)(B), redesignating subsec. (i) as (h). See above.
    1994--Subsec. (a)(1)(A)(i). Pub. L. 103-355, Sec. 1201(a)(1), struck 
out ``and before January 1, 1996,'' after ``December 5, 1990,''.
    Subsec. (a)(1)(A)(ii). Pub. L. 103-355, Sec. 1201(a)(2), struck out 
``or after December 31, 1995,'' after ``December 5, 1990,''.
    Subsec. (a)(5). Pub. L. 103-355, Sec. 1202(b), substituted 
``subsection (b)(1)(B)'' for ``subsection (b)(2)''.
    Subsec. (a)(6). Pub. L. 103-355, Sec. 1201(c), struck out subpar. 
(A) designation and subpar. (B) which read as follows: ``The head of an 
agency is not required to modify a contract under subparagraph (A) if 
that head of an agency determines that the submission of cost or pricing 
data with respect to that contract should be required under subsection 
(c).''
    Subsec. (a)(7). Pub. L. 103-355, Sec. 1201(b), added par. (7).
    Subsec. (b). Pub. L. 103-355, Sec. 1202(a), as amended by Pub. L. 
104-106, Sec. 4321(a)(2), amended heading and text of subsec. (b) 
generally. Prior to amendment, text read as follows: ``This section need 
not be applied to a contract or subcontract--
        ``(1) for which the price agreed upon is based on--
            ``(A) adequate price competition;
            ``(B) established catalog or market prices of commercial 
        items sold in substantial quantities to the general public; or
            ``(C) prices set by law or regulation; or
        ``(2) in an exceptional case when the head of the agency 
    determines that the requirements of this section may be waived and 
    states in writing his reasons for such determination.''
    Subsec. (c). Pub. L. 103-355, Sec. 1203, amended heading and text of 
subsec. (c) generally. Prior to amendment, text read as follows: ``When 
cost or pricing data are not required to be submitted by subsection (a), 
such data may nevertheless be required to be submitted by the head of 
the agency if the head of the agency determines that such data are 
necessary for the evaluation by the agency of the reasonableness of the 
price of the contract or subcontract. In any case in which the head of 
the agency requires such data to be submitted under this subsection, the 
head of the agency shall document in writing the reasons for such 
requirement.''
    Subsec. (d). Pub. L. 103-355, Sec. 1204, added subsec. (d) and 
redesignated former subsec. (d) as (e).
    Subsec. (e). Pub. L. 103-355, Sec. 1204(1), redesignated subsec. (d) 
as (e). Former subsec. (e) redesignated (f).
    Subsec. (e)(4)(A)(ii), (B)(ii). Pub. L. 103-355, Sec. 1207, inserted 
``or, if applicable consistent with paragraph (1)(B), another date 
agreed upon between the parties,'' after ``(or price of the 
modification)''.
    Subsec. (f). Pub. L. 103-355, Sec. 1204(1), redesignated subsec. (e) 
as (f). Former subsec. (f) redesignated (g).
    Subsec. (f)(1). Pub. L. 103-355, Sec. 1209, struck out ``with the 
Department of Defense'' before ``subject to this section'' in 
introductory provisions.
    Subsec. (g). Pub. L. 103-355, Sec. 1205, added subsec. (g) and 
struck out heading and text of former subsec. (g). Text read as follows:
    ``(1) For the purpose of evaluating the accuracy, completeness, and 
currency of cost or pricing data required to be submitted by this 
section with respect to a contract or subcontract, the head of the 
agency, acting through any authorized representative of the head of the 
agency who is an employee of the United States or a member of the armed 
forces, shall have the right to examine all records of the contractor or 
subcontractor related to--
        ``(A) the proposal for the contract or subcontract;
        ``(B) the discussions conducted on the proposal;
        ``(C) pricing of the contract or subcontract; or
        ``(D) performance of the contract or subcontract.
    ``(2) The right of the head of an agency under paragraph (1) shall 
expire three years after final payment under the contract or 
subcontract.
    ``(3) In this subsection, the term `records' includes books, 
documents, and other data.''
    Pub. L. 103-355, Sec. 1204(1), redesignated subsec. (f) as (g). 
Former subsec. (g) redesignated (i).
    Subsec. (h). Pub. L. 103-355, Sec. 1206, added subsec. (h).
    Subsec. (i). Pub. L. 103-355, Sec. 1208, amended heading and text of 
subsec. (i) generally. Prior to amendment, text read as follows: ``In 
this section, 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), 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.''
    Pub. L. 103-355, Sec. 1204(1), redesignated subsec. (g) as (i).
    1991--Subsec. (a)(1)(A). Pub. L. 102-190, Sec. 804(a), amended 
subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: 
``An offeror for a prime contract under this chapter to be entered into 
using procedures other than sealed-bid procedures shall be required to 
submit cost or pricing data before the award of the contract if the 
price of the contract to the United States is expected to exceed 
$500,000 or, in the case of a contract to be awarded after December 31, 
1995, $100,000.''
    Subsec. (a)(1)(B). Pub. L. 102-190, Sec. 804(a), amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``The 
contractor for a contract under this chapter 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 the dollar 
amount applicable under subparagraph (A) to that contract (or such 
lesser amount as may be prescribed by the head of the agency).''
    Pub. L. 102-25, Sec. 701(b)(1), substituted ``the dollar amount 
applicable under subparagraph (A) to that contract'' for ``$500,000 (or 
such lesser amount as may be prescribed by the head of the agency) or, 
in the case of a change or modification to a contract to be made after 
December 31, 1995, $100,000''.
    Subsec. (a)(1)(C). Pub. L. 102-190, Sec. 804(a), amended subpar. (C) 
generally. Prior to amendment, subpar. (C) read as follows: ``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--
        ``(i) the price of the subcontract is expected to exceed the 
    dollar amount applicable under subparagraph (A) to the prime 
    contract of that subcontract; and
        ``(ii) the prime contractor and each higher-tier subcontractor 
    have been required to make available cost or pricing data under this 
    section.''
    Subsec. (a)(1)(C)(i). Pub. L. 102-25, Sec. 701(b)(2), substituted 
``the dollar amount applicable under subparagraph (A) to the prime 
contract of that subcontract'' for ``$500,000 or, in the case of a 
subcontract to be awarded after December 31, 1995, $100,000''.
    Subsec. (a)(1)(D). Pub. L. 102-190, Sec. 804(a), amended subpar. (D) 
generally. Prior to amendment, subpar. (D) read as follows: ``The 
subcontractor for a subcontract covered by subparagraph (C) 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 the dollar amount applicable under subparagraph (A) to the 
prime contract of that subcontract (or such lesser amount as may be 
prescribed by the head of the agency).''
    Pub. L. 102-25, Sec. 701(b)(3), substituted ``the dollar amount 
applicable under subparagraph (A) to the prime contract of that 
subcontract'' for ``$500,000 (or such lesser amount as may be prescribed 
by the head of the agency) or, in the case of a change or modification 
to be made after December 31, 1995, $100,000''.
    Subsec. (a)(5). Pub. L. 102-190, Sec. 804(c)(1), substituted 
``paragraph (1)(C)'' for ``paragraph (1)(C)(ii)''.
    Subsec. (a)(6). Pub. L. 102-190, Sec. 804(b), added par. (6).
    Subsec. (e)(1)(A)(i). Pub. L. 102-25, Sec. 701(f)(8), which directed 
the substitution of ``Internal Revenue Code of 1986'' for ``Internal 
Revenue Code of 1954'', could not be executed because ``Internal Revenue 
Code of 1954'' does not appear.
    Subsec. (e)(1)(A)(ii). Pub. L. 102-190, Sec. 1061(a)(9), substituted 
``Internal Revenue Code of 1986'' for ``Internal Revenue Code of 1954''.
    1990--Subsec. (a)(1)(A). Pub. L. 101-510, Sec. 803(a)(1)(A), 
substituted ``$500,000 or, in the case of a contract to be awarded after 
December 31, 1995, $100,000'' for ``$100,000''.
    Subsec. (a)(1)(B). Pub. L. 101-510, Sec. 803(a)(1)(B), substituted 
``$500,000 (or such lesser amount as may be prescribed by the head of 
the agency) or, in the case of a change or modification to a contract to 
be made after December 31, 1995, $100,000'' for ``$100,000''.
    Subsec. (a)(1)(C)(i). Pub. L. 101-510, Sec. 803(a)(1)(C), 
substituted ``$500,000 or, in the case of a subcontract to be awarded 
after December 31, 1995, $100,000'' for ``$100,000''.
    Subsec. (a)(1)(D). Pub. L. 101-510, Sec. 803(a)(1)(D), substituted 
``$500,000 (or such lesser amount as may be prescribed by the head of 
the agency) or, in the case of a change or modification to be made after 
December 31, 1995, $100,000'' for ``$100,000''.
    Subsec. (c). Pub. L. 101-510, Sec. 803(d), inserted at end ``In any 
case in which the head of the agency requires such data to be submitted 
under this subsection, the head of the agency shall document in writing 
the reasons for such requirement.''
    1987--Subsec. (a)(5). Pub. L. 100-180, Sec. 804(b)(1), substituted 
``a waiver under subsection (b)(2)'' for ``such a waiver'', and struck 
out first sentence authorizing head of an agency to waive requirement 
under this subsection for contractor, subcontractor, or offeror to 
submit cost or pricing data.
    Subsec. (e)(2). Pub. L. 100-180, Sec. 804(b)(2), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``Except as 
provided under subsection (d), the liability of a contractor under this 
subsection shall not be affected by the contractor's refusal to submit a 
certification under subsection (a)(2) with respect to the cost or 
pricing data involved.''
    Subsec. (g). Pub. L. 100-180, Sec. 804(a), amended subsec. (g) 
generally. Prior to amendment, subsec. (g) read as follows: ``In this 
section, the term `cost or pricing data' means all information that is 
verifiable and that, as of the date of agreement on the price of a 
contract (or the price of a contract modification), 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.''


                    Effective Date of 1996 Amendment

    For effective date and applicability of amendment by sections 
4201(a) and 4321(b)(7) of Pub. L. 104-106, see section 4401 of Pub. L. 
104-106, set out as a note under section 251 of Title 41, Public 
Contracts.
    Section 4321(a) of Pub. L. 104-106 provided that the amendment made 
by that section is effective as of Oct. 13, 1994, and as if included in 
Pub. L. 103-355 as enacted.


                    Effective Date of 1994 Amendment

    For effective date and applicability of amendment by Pub. L. 103-
355, see section 10001 of Pub. L. 103-355, set out as a note under 
section 251 of Title 41, Public Contracts.


                    Effective Date of 1990 Amendment

    Section 803(a)(2) of Pub. L. 101-510, as amended by Pub. L. 102-25, 
title VII, Sec. 704(a)(4), Apr. 6, 1991, 105 Stat. 118, provided that 
the amendments to this section by Pub. L. 101-510 would apply to 
contracts entered into after Dec. 5, 1990, subcontracts under such 
contracts, and modifications or changes to such contracts and 
subcontracts, prior to repeal by Pub. L. 102-190, div. A, title VIII, 
Sec. 804(c)(2), Dec. 5, 1991, 105 Stat. 1416.


                    Effective Date of 1987 Amendment

    Section 804(c) of Pub. L. 100-180 provided that:
    ``(1) Subsection (a) [amending this section] shall apply to any 
contract, or modification of a contract, entered into after the end of 
the 30-day period beginning on the date of the enactment of this Act 
[Dec. 4, 1987].
    ``(2) The amendments made by subsection (b) [amending this section] 
shall apply with respect to contracts, or modifications of contracts, 
entered into after the end of the 120-day period beginning on October 
18, 1986.''


                    Effective Date of 1986 Amendment

    Section 101(c) [title X, Sec. 952(d)] of Pub. L. 99-500 and Pub. L. 
99-591, and section 952(d) of title IX, formerly title IV, of Pub. L. 
99-661, renumbered title IX, Pub. L. 100-26, Sec. 3(5), Apr. 21, 1987, 
101 Stat. 273, provided that:
    ``(1) Except as provided in paragraph (2), section 2306a of title 
10, United States Code (as added by subsection (a)), and the amendment 
and repeal made by subsection (b) [amending section 2306 of this title 
and repealing a provision set out as a note under section 2304 of this 
title], shall apply with respect to contracts or modifications on 
contracts entered into after the end of the 120-day period beginning on 
the date of the enactment of this Act [Oct. 18, 1986].
    ``(2) Subsection (e) of such section shall apply with respect to 
contracts or modifications on contracts entered into after November 7, 
1985.''


                               Regulations

    Section 803(c) of Pub. L. 101-510, directed Secretary of Defense to 
prescribe regulations identifying type of procurements for which 
contracting officers should consider requiring submission of certified 
cost or pricing data under subsec. (c) of this section, and also 
directed Secretary to prescribe regulations concerning types of 
information that offerors had to submit for contracting officer to 
consider in determining whether price of procurement to Government was 
fair and reasonable when certified cost or pricing data were not 
required to be submitted under this section because price of procurement 
to the United States was not expected to exceed $500,000, such 
information, at minimum, to include appropriate information on prices at 
which such offeror had previously sold same or similar products, with 
such regulations to be prescribed not later than six months after Nov. 
5, 1990, prior to repeal by Pub. L. 103-355, title I, Sec. 1210, Oct. 
13, 1994, 108 Stat. 3277.


            Defense Commercial Pricing Management Improvement

    Pub. L. 105-261, div. A, title VIII, Sec. 803, Oct. 17, 1998, 112 
Stat. 2081, as amended by Pub. L. 106-65, div. A, title X, Sec. 1067(3), 
Oct. 5, 1999, 113 Stat. 774, provided that:
    ``(a) Modification of Pricing Regulations for Certain Commercial 
Items Exempt From Cost or Pricing Data Certification Requirements.--(1) 
The Federal Acquisition Regulation issued in accordance with sections 6 
and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405, 
421) shall be revised to clarify the procedures and methods to be used 
for determining the reasonableness of prices of exempt commercial items 
(as defined in subsection (d)).
    ``(2) The regulations shall, at a minimum, provide specific guidance 
on--
        ``(A) the appropriate application and precedence of such price 
    analysis tools as catalog-based pricing, market-based pricing, 
    historical pricing, parametric pricing, and value analysis;
        ``(B) the circumstances under which contracting officers should 
    require offerors of exempt commercial items to provide--
            ``(i) information on prices at which the offeror has 
        previously sold the same or similar items; or
            ``(ii) other information other than certified cost or 
        pricing data;
        ``(C) the role and responsibility of Department of Defense 
    support organizations in procedures for determining price 
    reasonableness; and
        ``(D) the meaning and appropriate application of the term 
    `purposes other than governmental purposes' in section 4(12) of the 
    Office of Federal Procurement Policy Act (41 U.S.C. 403(12)).
    ``(3) This subsection shall cease to be effective 1 year after the 
date on which final regulations prescribed pursuant to paragraph (1) 
take effect.
    ``(b) Unified Management of Procurement of Exempt Commercial 
Items.--The Secretary of Defense shall develop and implement procedures 
to ensure that, whenever appropriate, a single item manager or 
contracting officer is responsible for negotiating and entering into all 
contracts from a single contractor for the procurement of exempt 
commercial items or for the procurement of items in a category of exempt 
commercial items.
    ``(c) Commercial Price Trend Analysis.--(1) The Secretary of Defense 
shall develop and implement procedures that, to the maximum extent that 
is practicable and consistent with the efficient operation of the 
Department of Defense, provide for the collection and analysis of 
information on price trends for categories of exempt commercial items 
described in paragraph (2).
    ``(2) A category of exempt commercial items referred to in paragraph 
(1) consists of exempt commercial items--
        ``(A) that are in a single Federal Supply Group or Federal 
    Supply Class, are provided by a single contractor, or are otherwise 
    logically grouped for the purpose of analyzing information on price 
    trends; and
        ``(B) for which there is a potential for the price paid to be 
    significantly higher (on a percentage basis) than the prices 
    previously paid in procurements of the same or similar items for the 
    Department of Defense, as determined by the head of the procuring 
    Department of Defense agency or the Secretary of the procuring 
    military department on the basis of criteria prescribed by the 
    Secretary of Defense.
    ``(3) The head of a Department of Defense agency or the Secretary of 
a military department shall take appropriate action to address any 
unreasonable escalation in prices being paid for items procured by that 
agency or military department as identified in an analysis conducted 
pursuant to paragraph (1).
    ``(4) Not later than April 1 of each of fiscal years 2000, 2001, and 
2002, the Secretary of Defense shall submit to the Committee on Armed 
Services of the Senate and the Committee on Armed Services of the House 
of Representatives] a report on the analyses of price trends that were 
conducted for categories of exempt commercial items during the preceding 
fiscal year under the procedures prescribed pursuant to paragraph (1). 
The report shall include a description of the actions taken to identify 
and address any unreasonable price escalation for the categories of 
items.
    ``(d) Exempt Commercial Items Defined.--For the purposes of this 
section, the term `exempt commercial item' means a commercial item that 
is exempt under subsection (b)(1)(B) of section 2306a of title 10, 
United States Code, or subsection (b)(1)(B) of section 304A of the 
Federal Property and Administrative Services Act of 1949 (41 U.S.C. 
254b), from the requirements for submission of certified cost or pricing 
data under that section.''


                       Review by Inspector General

    Section 803(b) of Pub. L. 101-510 provided that (1) after increase 
in threshold for submission of cost or pricing data under subsec. (a) of 
this section, as amended by section 803(a) of Pub. L. 101-510, had been 
in effect for three years, Inspector General of Department of Defense 
was to conduct review of effects of increase in threshold, (2) that such 
review was to address whether increasing threshold improved acquisition 
process in terms of reduced paperwork, financial or other savings to 
government, an increase in number of contractors participating in 
defense contracting process, and adequacy of information available to 
contracting officers in cases in which certified cost or pricing data 
were not required under this section, (3) that Inspector General was to 
submit to Secretary of Defense a report on review conducted under 
paragraph (1), with Secretary of Defense required to submit such report 
to Congress, along with appropriate comments, upon completion of report 
(and comments) but not later than date on which President submitted 
budget to Congress pursuant to section 1105 of Title 31, Money and 
Finance, for fiscal year 1996, prior to repeal by Pub. L. 103-355, title 
I, Sec. 1210, Oct. 13, 1994, 108 Stat. 3277.

                  Section Referred to in Other Sections

    This section is referred to in sections 2306, 2313, 2343, 2375, 2473 
of this title; title 15 section 4602; title 41 section 423.
