Cost or Pricing Data
Contents |
Objective of Cost and Pricing Data
The objective of Cost and Pricing Data is to make available information that is necessary to establish a fair and reasonable price. (FAR 15.402(a)(2).
Definitions/General
“Cost or pricing data” (10 U.S.C. 2306a(h)(1) and 41 U.S.C. 254b) means all facts that, as of the date of price agreement, or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly.
"Cost or pricing data" means all facts that, as of the date of price agreement or, if applicable, another date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are data requiring certification in accordance with 15.804-4. Cost or pricing data are factual, not judgmental, and are therefore verifiable. While they do not indicate the accuracy of the prospective contractor's judgment about estimated future costs or projections, they do include the data forming the basis for that judgment. Cost or pricing data are more than historical accounting data; they are all the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred. They also include such factors as:[1]
(a) vendor quotations;
(b) nonrecurring costs;
(c) information on changes in production methods and in production or purchasing volume;
(d) data supporting projections of business prospects and objectives and related operations costs;
(e) unit-cost trends such as those associated with labor efficiency;
(f) make-or-buy decisions;
(g) estimated resources to attain business goals; and (
h) information on management decisions that could have a significant bearing on costs[2].
Cost or pricing data is factual information that is verifiable. It is not judgmental. Cost and Pricing data does not indicate the accuracy of the prospective contractor’s judgment about estimated future costs or projections, it does include the data forming the basis for that judgment.
Judgement vs. Cost Or Pricing Data
Judgment and Cost or Pricing Data (Texas Instruments, Inc., 87-3 BCA ¶20,195 and Grumman Aerospace Corp., 86-3 BCA ¶19,091). Cost or pricing data are facts and do not include any contractor judgment used to estimate future costs. However, there are cases where the Boards of Contract Appeals (BCAs) have found that fact and judgment were so entwined that the judgments must be disclosed.
Order of Preference in Determing the Type of Data Required FAR 15.402(a)(2)
When Certified Cost or Pricing Data is not required the following is the order of preference in determing the type of data required. Price data is the first order of precedance. This is because evaluating price data is far less time consuming, than evaluating individual cost elements.
Price Data
- (i) No additional data from the offeror, if the price is based on adequate price competition, (excluding exceptions in FAR 15.403-3(b)),
- (ii) Data other than certified cost or pricing data, such as:
(A) Data related to prices (e.g. established catalog or market prices, sales to non-governmental and governmental entities. Reliance on this data follows the following preferences:
- 1. Data within the government,
- 2. Data obtained from other sources, other than the offeror,
- 3. Data from the offeror.
Cost Data
Cost data to the extent necessary for the Contracting Officer (CO) to determine a fair and reasonable price.
See Also
Certified Cost or Pricing Data
