When Does a Management Decision Have To Be Disclosed Under TINA

TINA requires the disclosure in price negotiations of “cost or pricing data,” that is, all facts a prudent buyer or seller would reasonably expect to affect price negotiations significantly. 10 U.S.C. § 2306a(g). The Government takes the position that business plans and projections represent either “management decisions that could have a significant bearing on cost” or “facts that can be reasonably expected to contribute to the soundness of estimates of future costs” which FAR 15.801 includes within its expansive definition of cost or pricing data. Thus the Government asserts defective pricing claims based on a contractor’s failure to disclose such information, even when the plans or projections are not implemented nor finally adopted before agreement on price. Contractors’ efforts to resist such claims have in the past been hampered by the lack of clear direction from the courts and agency boards of contract appeal.

Over the years there have been arguments as to whether management plans, business strategies, budget forecasts, estimates and other judgmental projects represent cost or pricing data, and what is a contractor's duty under the Truth in Negotiations Act (TINA) to disclose. The Armed Services Board of Contract Appeals (ASBCA) had attempted to resolve some of the confusion, setting forth "bright line" rules for when plans and projections constitute "disclosable cost or pricing data.