NDAA for Fiscal Year 2012

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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS Subtitle C—Amendments to General Contracting Authorities, Procedures, and Limitations
P. L. 112-	House Conference Report 112-705
SEC. 831. GUIDANCE AND TRAINING RELATED TO EVALUATING REASONABLENESS OF PRICE. (a) Guidance- Not later than 180 days after the date of the enactment of this Act, the Under Secretary of Defense for Acquisition, Technology, and Logistics shall issue guidance on the use of the authority provided by sections 2306a(d) and 2379 of title 10, United States Code. The guidance shall-- (1) include standards for determining whether information on the prices at which the same or similar items have previously been sold is adequate for evaluating the reasonableness of price; (2) include standards for determining the extent of uncertified cost information that should be required in cases in which price information is not adequate for evaluating the reasonableness of price; (3) ensure that in cases in which such uncertified cost information is required, the information shall be provided in the form in which it is regularly maintained by the offeror in its business operations; and (4) provide that no additional cost information may be required by the Department of Defense in any case in which there are sufficient non-Government sales to establish reasonableness of price. (b) Training and Expertise- Not later than 270 days after the date of the enactment of this Act, the Under Secretary of Defense for Acquisition, Technology, and Logistics shall develop and begin implementation of a plan of action to-- (1) train the acquisition workforce on the use of the authority provided by sections 2306a(d) and 2379 of title 10, United States Code, in evaluating reasonableness of price in procurements of commercial items; and (2) develop a cadre of experts within the Department of Defense to provide expert advice to the acquisition workforce in the use of the authority provided by such sections in accordance with the guidance issued pursuant to subsection (a). (c) Documentation Requirements- The Under Secretary of Defense for Acquisition, Technology, and Logistics shall ensure that requests for uncertified cost information for the purposes of evaluating reasonableness of price are sufficiently documented. The Under Secretary shall require that the contract file include, at a minimum, the following: (1) A justification of the need for additional cost information. (2) A copy of any request from the Department of Defense to a contractor for additional cost information. (3) Any response received from the contractor to the request, including any rationale or justification provided by the contractor for a failure to provide the requested information. (d) Comptroller General Review and Report- (1) REVIEW REQUIREMENT- The Comptroller General of the United States shall conduct a review of data collected pursuant to sections 2306a(d) and 2379 of title 10, United States Code, during the two-year period beginning on the date of the enactment of this Act. (2) REPORT REQUIREMENT- Not later than 180 days after the end of the two-year period referred to in paragraph (1), the Comptroller General shall submit to the congressional defense committees a report on-- (A) the extent to which the Department of Defense needed access to additional cost information pursuant to sections 2306a(d) and 2379 of title 10, United States Code, during such two-year period in order to determine price reasonableness; (B) the extent to which acquisition officials of the Department of Defense complied with the guidance issued pursuant to subsection (a) during such two-year period; (C) the extent to which the Department of Defense needed access to additional cost information during such two-year period to determine reasonableness of price, but was not provided such information by the contractor on request; and (D) recommendations for improving evaluations of reasonableness of price by Department of Defense acquisition professionals, including recommendations for any amendments to law, regulations, or guidance.	Guidance and training related to evaluating reasonableness of price (sec. 831) The Senate amendment contained a provision (sec. 841) that would authorize the Department of Defense (DOD) to require contractors to provide additional data, including certified cost or pricing data, when necessary to evaluate the price reasonableness of certain commercial items that are procured for the support of a major system. The House bill contained no similar provision. The House recedes with an amendment that would require DOD to issue guidance on the use of the authority provided by sections 2379 and 2306a(d) of title 10, United States Code to evaluate the reasonableness of contractor prices. The conferees have determined that sections 2379 and 2306a(d) provide the Department with the authority that it needs to obtain price information and uncertified cost information, when necessary to evaluate the price reasonableness of commercial items. The inconsistent use of this authority by the Department appears to have created uncertainty in the vendor community without assuring reasonable prices. The conferees expect the guidance required by this section to address these problems.
	Senate Report 112-173
	Applicability of Truth in Negotiations Act to major systems and related subsystems, components, and support services (sec. 841) The committee recommends a provision that would authorize the Department of Defense (DOD) to request additional contractor data, where necessary to evaluate the price reasonableness of commercial items (other than commercially available off-the-shelf items and other items that are developed exclusively at private expense) that are procured for the support of a major weapon system. The Administration requested legislation that would amend the definition of commercial items in section 103 of title 41, United States Code, to exclude items that are merely `offered for sale' or `of a type' offered for sale in the commercial marketplace. The committee declines to make this change. The Federal Acquisition Streamlining Act of 1994 (FASA) (Public Law 103-355) adopted a broad definition of commercial items to ensure that federal agencies would have ready access to products that are available in the commercial marketplace--including new products and modified products that are just becoming available. Such access remains particularly critical in fast moving commercial markets, including the markets for information technology and other advanced products. At the same time, the committee shares the Administration's concern that some contractors have abused the commercial item definition to obscure cost and price information with regard to spare parts and components for DOD weapon systems. As DOD has pointed out, the Government Accountability Office and the DOD Inspector General have both criticized the Department for using commercial item procedures to procure items that are misclassified as commercial items and are not subject to competitive price pressure in the commercial marketplace. In 2011, the DOD Inspector General found that non-competitive spare parts provided by two different contractors were significantly overpriced because of inadequate and inaccurate data supplied by the contractors. The provision recommended by the committee would provide the Department with additional tools to collect needed data for products and services that may arguably qualify as commercial items, without undermining the widely accepted definition of commercial items.

SEC. 831. GUIDANCE AND TRAINING RELATED TO EVALUATING REASONABLENESS OF PRICE.