Time to use the pseudonym in case I'm the only one that is baffled by these clauses. After all, that's what anonymity is for.

Anyhow, my question concerns subcontractor cost or pricing ("C or P") data. My understanding always has been that C or P data is not required below the threshhold (currently $550,000), or if any of the exceptions are met. Please explain to me then the following language from FAR 15.404-3:

"(c) Any contractor or subcontractor that is required to submit cost or pricing data also shall obtain and analyze cost or pricing data before awarding any subcontract, purchase order, or modification expected to exceed the cost or pricing data threshold, unless an exception in 15.403-1(b) applies to that action.
(1) The contractor shall submit, or cause to be submitted by the subcontractor(s), cost or pricing data to the Government for subcontracts that are the lower of either --
(i) $10,000,000 or more; or
(ii) Both more than the pertinent cost or pricing data threshold and more than 10 percent of the prime contractor's proposed price, unless the contracting officer believes such submission is unnecessary."

Does this mean that a prime would obtain and analyze C or P data from its subs if a sub K is expected to exceed the threshhold, but then must submit the data to the Government only if it exceeds $10,000,000 or 10% of the prime's price?

For an ancillary question (and bonus points): who does the sub's C or P data go to when it is submitted in connection with a) the prime's proposal, and b) the award of the sub K.

By joel hoffman on Monday, June 10, 2002 - 08:49 pm:

If the sub must submit cost or pricing data, the prime submits it to the Government. The sub only certifies to the prime that the data are current complete and accurate. The prime certifies this to the Government, as part of its proposal, upon completion of negotiations.

The $10 million or over $550k AND 10% rules are to determine whether the sub has to submit C&P data. Apparently, if the prime contractor's proposal is over 100 million, a 9 million dollar subcontract wouldn't require submission of C&P data. If the prime's proposal is 5 million, a $550k subcontract proposal would require C&P data (all of the above assumes no exceptions are applicable. happy sails! joel hoffman

By Vern Edwards on Tuesday, June 11, 2002 - 06:38 am:

Fara and Joel:

The regulation requires the prime to obtain cost or pricing data from a subcontractor when (a) the prime had to submit cost or pricing data to the government, (b) the subcontract is expected to exceed $550,000, and (c) no exemptions apply.

If the prime must obtain cost or pricing data from a sub, the prime must forward the sub's cost or pricing data to the government(or have the sub forward its data to the government) only if the subcontract will exceed $10 million, or 10 percent of the prime contract and $550,000.

By joel hoffman on Tuesday, June 11, 2002 - 07:35 am:

I agree with you, Vern. I was wrong, last night. I believe that the threshold for submitting subcontractor C&P to the Government used to be $1 million or 10% of the proposal, but don't have access to my old FARs, here.

At any rate, I hadn't read closely enough to catch the distinction in the levels between the prime obtaining the info and providing it to the Gov't.

I'll have to find an old FAR and see if it was that way when the limit was lower. It probably was and I never noticed it. happy sails! joel

By Formerfed2 on Tuesday, June 11, 2002 - 10:29 am:

In addition to the above, also be aware that the contractor is required to justify all of their prices as "Fair And Reasonable." If a subcontractor's price can not be supported as fair and reasonable, and an exception does not apply, cost or pricing data may still be requested below the CP Data Threshold (Currently $550K), but NOT below the simplified acquisition threshold (currently $100K).
To have an approved purchasing system contractors live by the same rules in the relationship between the prime contractor and purchases from subcontractors.

By AnonYmus on Tuesday, June 11, 2002 - 01:17 pm:

Following up on Formerfed2's comments, you should also be aware that, in order to determine that the price is fair and reasonable, the contractor must perform price or cost analysis on the subcontractor's cost proposal -- and that the government considers the results of the analysis to be cost or pricing data to be submitted by the prime. Failure to submit could be considered to be defective pricing.

There was a moderate flap about this issue a year or so ago, vis-a-vis a major contractor's problems in getting its estimating system approved. You can find an old MRD on this at the DCAA's website under "open audit guidance."

By FormerFed2 on Tuesday, June 11, 2002 - 04:07 pm:

AnonYmus - If you have a link for the DCAA web site please pass it to me.

Thanks

By FormerFed2 on Tuesday, June 11, 2002 - 05:12 pm:

I found it. It was too simple.  http://www.dcaa.mil/  Thanks anyway!

By Fara Fasat on Tuesday, June 11, 2002 - 09:10 pm:

Thanks everyone. That seems to be the only way to make sense of the different dollar thresholds.