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Thursday, December 1, 2022

GAO: Increasing Dollar Threshold Halved Number of Contracts Requiring Certified Data

The federal government spends hundreds of billions of dollars each year on products and services. To help ensure that the government pays fair and reasonable prices, contracting officers generally rely on competition.

When a contract is awarded without adequate price competition, contracting officers may rely on certified cost or pricing data from potential contractors – known as offerors – to determine if the prices are reasonable. When this data is not required, contracting officers use data other than certified cost or pricing data, such as information from previous contracts, market research, or the contractor.

Section 811 of the National Defense Authorization Act for Fiscal Year 2018, among other things, increased the dollar threshold above which offerors must submit certified cost or pricing data from $750,000 to $2 million for certain awards, including subcontracts and modifications. It also required Department of Defense (DOD) offerors, when certified cost or pricing data are not required, to submit data other than certified cost or pricing data if requested by the contracting officer to determine that prices are fair and reasonable.

A Government Accountability Office (GAO) review has found that both DOD and the National Aeronautics and Space Administration (NASA) implemented the threshold increase for obtaining certified cost or pricing data by the statutorily effective date of July 1, 2018. They also, in conjunction with other federal agencies and the Office of Management and Budget, incorporated the statutory changes into the Federal Acquisition Regulation on July 2, 2020.

During the review, DOD and NASA officials told GAO they have not formally analyzed the effects of section 811. Using data from the Federal Procurement Data System, GAO estimated that less than 1 percent of DOD’s and NASA’s total number of awards may require submitting certified cost or pricing data depending on the dollar threshold applied. Of that 1 percent, nearly half of the awards are estimated not to require contractors to submit certified cost or pricing data due to the threshold change.

Read the full report at GAO

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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