DoD Proposes To Amend the DFARS to Update TINA Requirements

On September 26, 2024, the Department of Defense (DoD) issued a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS), implementing requirements for contractors to submit cost and pricing data under Section 811(b) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018, Section 814 of the NDAA for FY 2021, and Section 804 of the NDAA for FY 2022, which updated the Truthful Cost or Pricing Data statute (formerly Truth in Negotiations Act (TINA) and still referred to as TINA). 

Comments are due no later than November 25, 2024. The full text of the notice is available here.

Section 811(b) requires offerors to submit data other than certified cost or pricing data upon the request of the contracting officer in order to help determine the reasonableness of the price of a contract, subcontract, or modification.  (“Other than certified cost or pricing data” is “pricing data, cost data, and judgmental information necessary for the contracting officer to determine a fair and reasonable price or to determine cost realism” and is the same as certified cost or pricing data, “but without the certification.” FAR 2.101.)  Therefore, the proposed rule seeks to amend the solicitation provision at DFARS 252.215-7010, and its Alternate I, and adds a new contract provision for modifications.  These provisions would apply to acquisitions and contracts for commercial products and services above the simplified acquisition threshold. 

Section 814 establishes a $2 million threshold for TINA requirements for all contractual actions, including prime contract modifications, entered into after June 30, 2018, to make it consistent with the threshold for contract awards.  (Currently, the threshold for requesting certified cost or pricing data for prime contract modifications is $750,000.)  At DFARS 215.403-4, the proposed rule makes the $2 million threshold applicable to contract modifications, regardless of the date on which the contract was awarded.  In addition, the proposed rule establishes a new contract clause at DFARS 252.215-70SS, and its Alternate I, in lieu of FAR 52.215-21, implementing the updated $2 million threshold for all DoD contractual actions entered into after June 30, 2018.

Section 804 requires contracting officers to modify contracts, entered into on or before June 30, 2018, to reflect the relevant TINA threshold.  These modifications are expected to be executed “as soon as practicable.”  The proposed rule seeks to amend DFARS 215.403-4 to add six different clauses specifically for use when modifying contracts in accordance with 10 U.S.C. 3702(f).  These six new clauses include the relevant TINA threshold for DoD contracts, and they are designed for use with the FAR clauses that are already in existing contracts. These six DFARS clauses replace the references to the TINA threshold in FAR clauses with the current, relevant TINA threshold for DoD contracts.

Ultimately, the proposed rule would implement a uniform TINA threshold, which is intended to promote efficiency and reduce the costs of administering contracts.  The requirement imposed on contractors to provide data other than certified cost or pricing data (when certified cost or pricing data is not required) may be useful, in certain circumstances, to determining fair and reasonable prices.