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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle G—Other Matters

P. L. 114-

House Conference Report. 114-270

(1) The requirement under subparagraph (A) of such paragraph to submit cost or pricing data for a prime contract entered into during the pilot program period.

(2) The requirement under subparagraph (B) of such paragraph to submit cost or pricing data for the change or modification to a prime contract made during the pilot program period.

(3) The requirement under subparagraph (C) of such paragraph to submit cost or pricing data for a subcontract entered into during the pilot program period.

(4) The requirement under subparagraph (D) of such paragraph to submit cost or pricing data for the change or modification to a subcontract made during the pilot program period.

(c) Risk-based contracting.—

(1) AUTHORITY TO REQUIRE SUBMISSION OF COST OR PRICING DATA ON BELOW-THRESHOLD CONTRACTS.—Subject to paragraph (4), when certified cost or pricing data are not required to be submitted pursuant to subsection (b) for a contract or subcontract entered into or modified during the pilot program period, such data may nevertheless be required to be submitted by the head of the procuring activity, if the head of the procuring activity—

(A) determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract; or

(B) requires the submission of such data in accordance with a risk-based contracting approach established pursuant to paragraph (3).

(2) WRITTEN DETERMINATION REQUIRED.—In any case in which the head of the procuring activity requires certified cost or pricing data to be submitted under paragraph (1)(A), the head of the procuring activity shall justify in writing the reason for such requirement.

(3) RISK-BASED CONTRACTING.—The head of an agency shall establish a risk-based sampling approach under which the submission of certified cost or pricing data may be required for a risk-based sample of contracts, the price of which is expected to exceed $750,000 but not $5,000,000. The authority to require certified cost or pricing data under this paragraph shall not apply to any contract of an offeror that has not been awarded, for at least the one-year period preceding the issuance of a solicitation for the contract, any other contract in excess of $5,000,000 under which the offeror was required to submit certified cost or pricing data under section 2306a of title 10, United States Code.

(4) EXCEPTION.—The head of the procuring activity may not require certified cost or pricing data to be submitted under this subsection for any contract or subcontract, or modification of a contract or subcontract, covered by the exceptions in subparagraph (A) or (B) of section 2306a(b)(1) of title 10, United States Code.

(5) DELEGATION OF AUTHORITY PROHIBITED.—The head of a procuring activity may not delegate functions under this subsection.

(d) Reports.—Not later than January 1, 2017, and January 1, 2019, the Secretary of Defense shall submit to the congressional defense committees a report on activities undertaken under this section.

(e) Definitions.—In this section:

(1) HEAD OF AN AGENCY.—The term “head of an agency” has the meaning given the term in section 2302 of title 10, United States Code.

(2) PILOT PROGRAM PERIOD.—The term “pilot program period” means the period beginning on October 1, 2016, and ending on September 30, 2019.

The House bill contained no similar provision.

The House recedes with an amendment that would establish a pilot program to test this authority.

Senate Report 114-49 to accompany S. 1376 as it was reported out of the Senate Armed Services Committee.

Risk-based contracting for smaller contract actions under the Truth In Negotiations Act (sec. 823)

The committee recommends a provision that would amend the Truth in Negotiations Act (Public Law 87-653; 10 U.S.C. section 2306a) to raise the threshold for the requirement to provide certified cost or pricing data in non-price competitive procurements on non-commercial items from the current $750,000 ($500,000 adjusted for inflation since 1994) to $5.0 million. For non-price competitive procurements valued at less than the new threshold of $5.0 million but more than the current threshold of $750,000, the Department of Defense (DOD) would be required to establish a risk-based contracting approach, under which certified cost or pricing data would be required for a risk-based sample of contracts, to ensure that DOD is getting fair and reasonable prices for such contracts.

The committee believes that a 100 percent review of certified cost or pricing data on thousands of small contracts is not the best use of DOD's limited acquisition and auditing resources, particularly for those contracts that have been awarded based on a technical competition. By enabling DOD to adopt a risk-based contracting approach, this provision should free up significant resources to be applied in areas where they are likely to achieve a better return. In addition, the provision will enable non-traditional contractors to participate in innovative DOD research projects valued at less than $5.0 million without triggering government-unique contracting procedures, enhancing DOD's access to cutting-edge technologies developed by companies that might otherwise be unwilling to do business with the government.