[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Rules and Regulations]
[Pages 48208-48224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22776]



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DEPARTMENT OF DEFENSE
48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45, 46, 49, 52, and 53

[FAC 90-32; FAR Cases 94-720 and 94-721; Item I]
RIN 9000-AG19; 9000-AG30


Federal Acquisition Regulation; Truth in Negotiations Act and 
Related Changes

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rules.

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[[Page 48209]]


SUMMARY: These final rules are issued pursuant to the Federal 
Acquisition Streamlining Act of 1994 to implement those portions of 
Pub. L. 103-355 that make specific changes to the Truth in Negotiations 
Act (TINA) or that impact other areas of the FAR that affect contract 
pricing. These regulatory actions were subject to Office of Management 
and Budget review under Executive Order 12866, dated September 30, 
1993.

EFFECTIVE DATE: October 1, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Al Winston, Truth in Negotiations 
Act (TINA) Team Leader, at (703) 602-2119 in reference to this FAR 
case. For general information, contact the FAR Secretariat, Room 4037, 
GSA Building, Washington, DC 20405, (202) 501-4755. Please cite FAR 
case 94-721.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355) 
(the Act) provides authorities that streamline the acquisition process 
and minimize burdensome government-unique requirements.
    FAR case 94-721 implements Sections 1201 through 1210 and Sections 
1251 and 1252 of the Act. Highlights include making TINA requirements 
for civilian agencies substantially the same as those for the 
Department of Defense (increasing the threshold for submission of 
``cost or pricing data'' to $500,000 and adding penalties for defective 
pricing). Provisions are also included that increase the threshold for 
cost or pricing data submission every 5 years beginning October 1, 
1995. A new exception is added to the requirement for the submission of 
``cost or pricing data'' for commercial items; the approval level for 
waivers is changed, and prohibitions are placed on acquiring ``cost or 
pricing data'' when an exception applies. The coverage includes a clear 
explanation of adequate price competition as required by the Act.
    Also, FAR coverage has been included that addresses (1) 
``information other than cost or pricing data'', (2) exceptions based 
on established catalog or market price, (3) inter-divisional transfers 
of commercial items at price, and (4) price competition when only one 
offer has been received.
    The FAR language primarily modifies Part 15, together with 
associated Part 52 clauses and Part 53 forms. However, changes are also 
made to clauses where threshold changes are made in Part 14 pertaining 
to sealed bid contracting, and in Part 31 where the cost principle on 
material costs has been amended to address inter-divisional transfers 
of commercial items at price. Additional miscellaneous changes in Parts 
1, 4, 16, 33, 36, 45, 46, and 49 have also been included.
    The interim rule published at 59 FR 62498, December 5, 1994 (FAR 
case 94-720, FAC 90-22) is adopted as final, as amended by this FAR 
case 94-721. FAR case 94-720 provided for an immediate increase to the 
threshold for ``cost or pricing data'' submission by contractors to 
civilian agencies to $500,000. FAC 90-22 (FAR case 94-720) also removed 
the certification requirement of commercial pricing for parts or 
components for contractors doing business with civilian agencies.

Policy for Determining Reasonableness of Price

    Two major changes are found in the new coverage. The first change 
shifts the policy of FAR Part 15 with respect to determining price 
reasonableness. A hierarchical policy preference for the types of 
information to be used in assessing reasonableness of price is 
established. The policy states that no additional information should be 
obtained from the contractor if there is adequate price competition. 
This is followed by allowing progressively more intrusive types of data 
requirements. Obtaining ``cost or pricing data'' is designated as the 
last choice. Use of ``cost or pricing data'' is coupled with a reminder 
that unnecessarily requiring that type of data is not desirable and can 
lead to additional costs to both the Government and the contractor.
    New FAR coverage, based on the Act, is presented that expands the 
exception based on adequate price competition and provides for a 
special exception for commercial items. A new section addressing 
``information other than cost or pricing data'' is created and a 
Standard Form 1448 is provided for use by contractors.
    The new policy at FAR 15.804-1(b)(1)(ii) recognizes circumstances 
when it can be determined that adequate price competition exists even 
though only one offeror has responded to the Government's requirement.

Defining ``Cost or Pricing Data''

    The second major change accomplished by the coverage is the 
clarification of the meaning of the term ``cost or pricing data.'' 
Currently, the FAR uses the term inconsistently. In some places, 
``certified cost or pricing data'' is used and in other locations, it 
states ``cost or pricing data.'' In the new coverage, the term has been 
clarified in the definition to mean that, among other things, ``cost or 
pricing data'' is required to be certified in accordance with TINA and 
FAR 15.804-4, and means all facts that as of the date of agreement on 
price (or other mutually agreeable date) prudent buyers and sellers 
would reasonably expect to affect the price negotiations significantly.
Information Other Than Cost or Pricing Data

    Since a bright-line test for ``cost or pricing data'' has now been 
established, it is also possible to craft a second category of data--
''information other than cost or pricing data''--that may be required 
by the contracting officer in order to establish cost realism or price 
reasonableness. This information can include limited cost information, 
sales data or pricing information. The intent is also clear with 
respect to this category of information. Because it is not ``cost or 
pricing data,'' certification shall not be required and approval to 
obtain this information is vested in the contracting officer. The new 
FAR coverage gives a detailed discussion of ``information other than 
cost or pricing data'' at 15.804-5.

B. Regulatory Flexibility Act

    The proposed rule was not expected to have a significant impact on 
a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Accordingly, an 
initial regulatory flexibility analysis was not prepared. Although 
there were no public comments on this rule that indicated that this 
line of reasoning was incorrect nor that treatment of small entities in 
the proposed rule was inappropriate, the final rule may have a 
significant economic impact on a substantial number of small entities 
because the final rule will substantially affect the price negotiations 
of non-competitive commercial item contracts. Small businesses may 
receive a substantial portion of these awards. The rule is expected to 
decrease the administrative expense of negotiating these awards by 
reducing the amount of cost or pricing data that must be submitted, 
reducing the amount of information necessary to qualify for an 
exception from cost or pricing data requirements, and streamlining the 
requirements for information supporting price proposals. Accordingly, a 
Final Regulatory Flexibility Analysis (FRFA) has been prepared and 
provided to the Chief Counsel for Advocacy for the Small Business 
Administration. A copy of the FRFA may be obtained from the FAR 
Secretariat. 

[[Page 48210]]


C. Paperwork Reduction Act

    The Paperwork Reduction Act, Pub. L. 96-511, is deemed to apply 
because this final rule contains information collection requirements. 
Approval was obtained from the Office of Management and Budget (OMB) on 
March 24, 1995, under OMB Control No. 9000-0013. A request for a three-
year extension was submitted to OMB on July 11, 1995. Public comments 
concerning this request were invited through a Federal Register notice 
at 60 FR 36406, July 17, 1995.

D. Public Comments

    On January 6, 1995, a proposed rule was published in the Federal 
Register (60 FR 2282). The proposed rule afforded the public a 60-day 
comment period. During that time, 40 organizations submitted more than 
213 comments. A public meeting was also held on this rule on February 
13, 1995. Based upon comments received, the TINA drafting team refined 
the coverage.
    On June 19, 1995, at 60 FR 31935, a notification of additional 
changes was published that revised the original January 6, 1995 
proposed rule. Interested parties were advised that the original rule 
had been modified as a result of earlier comments and that a copy of 
the revised proposed rule could be obtained from the FAR Secretariat. 
Those who had commented on the original rule were provided with the 
updated document. A 30-day written comment period was provided for, and 
another public hearing was conducted on July 7, 1995. As a result of 
the second public comment period, the Team received 148 pages of 
written comments from 18 commenters and one telephonic comment. Based 
upon comments received, the TINA drafting team further refined the 
coverage.
    The following are highlights of changes that were made to the 
proposed rule as a result of both rounds of public comments and both 
public meetings:
     The Rule was edited to improve readability.
     The hierarchical policy at FAR 15.802 was clarified to 
ensure that it is consistent with TINA and FASA.
     Regulatory guidance implementing the catalog or market 
price exception to TINA was replaced with more flexible procedures (See 
52.215-41 & -42).

--The Standard Form (SF) 1412, ``Request for Exemption from Submission 
of Cost or Pricing Data,'' was eliminated.
--Relational tests were eliminated.
--Disclosure of lowest prices is no longer mandated.
--TINA based postaward audit access is no longer required.
--Expanded guidance was provided on what constitutes substantial sales.
--Requirement for offerors to account for ``government end use'' when 
addressing sales to the general public was eliminated.
--Reference to GSA certifications was removed.

     Flexibility in requesting an exception to TINA was 
improved via generic provisions at FAR 52.215-41 & 52.215-42 that 
provide broad guidelines on the type of data that would be needed to 
qualify for a TINA exception.
     The barriers in the proposed rule that prevented easier 
access to the new commercial item exception have been substantially 
decreased, to the maximum extent permitted by FASA.
     A Commercial Item definition cross-reference was given.
     A definition of cost realism was added.
     Additional data requirements were removed for 
qualification under the commercial item exception created by FASA 
(rebates, credits, warranties, sales to resellers).
     Expanded guidance was provided on effective dates for 
certification of cost or pricing data.
     The new SF 1448 has been substantially revised to remove 
reference to cost related information that may not be appropriate for 
all users of the form.

Disposition of Public Comments

Commercial Exception

    Several commenters expressed concern that the proposed coverage 
continued to subordinate the new commercial item exception to TINA to 
the traditional TINA exceptions of adequate price competition, catalog 
or market price, or price set by law or regulation.
    The Team has carefully considered this issue. The Team concludes 
that making the new commercial item exception (Section 1204(d)(2), 
1251(d)(2)) co-equal with the original TINA exceptions is consistent 
with the philosophy of FASA which is intended to make it easier for 
commercial companies to do business with the Government. However, the 
Team also concludes that the language at (d)(2), ``and the procurement 
is not covered by an exception in subsection (b),'' is clear on its 
face and prevents an absolute co-equal relationship. Nevertheless, upon 
further consideration of the issue, the Team has decided that there is 
sufficient statutory flexibility to provide for a more liberal 
regulatory implementation of the commercial item exception. Therefore, 
the Team has modified its proposed FAR language to make regulatory use 
of the commercial item exception more readily available while still 
providing for a consistent interpretation of statutory requirements. 
This is accomplished by replacing the words, ``if an exception does not 
apply'' with the words ``if the contracting officer does not have 
sufficient information to support an exception'' at 15.804-1(a)(2) and 
15.804-1(b)(4).
    The Team has also reduced the contractor's risk of doing business 
with the Government by including a statement in the solicitation 
provision at 52.215-41 that indicates that providing information on one 
TINA exception is not a representation that only one TINA exception may 
apply.

Most Favored Customer

    Other commenters were pleased to see that the SF 1412, ``Request 
for Exemption from Submission of Cost or Pricing Data,'' had been 
eliminated from the coverage. However, the treatment of ``most favored 
customer'' pricing remains a major concern. The commenters continue to 
press for a FAR prohibition on asking for this type of information.
    The Team believes that establishing a FAR prohibition on any 
specific contracting practice is contrary to the philosophy of FASA to 
empower the contracting officer and to provide for regulatory 
flexibility. Furthermore, it is bad policy guidance to construct an 
absolute prohibition because it is not possible to foresee all 
circumstances and an absolute prohibition could preclude a reasonable 
course of action under circumstances that could not be foreseen.
    With respect to the specific issue, just as the Team believes 
having requirements that always mandate obtaining ``most favored 
customer'' pricing is flawed, so would a policy that prohibits 
obtaining this kind of information also be flawed. The Team is 
convinced that both policy and procedural rules need to be constructed 
in a flexible manner so they may be adapted to specific sets of 
circumstances. As a result of earlier comments, the Team removed the 
Standard Form 1412 and its associated requirement to disclose this type 
of information as a condition of applying for a catalog or market price 
exception to TINA.
    The Team has also included policy guidance at 15.802 that indicates 
a strong preference for pricing contracts with the minimum amount of 
data needed to accomplish the task. 

[[Page 48211]]
Specifically, when adequate price competition is present, the 
contracting officer is strongly admonished not to obtain any additional 
information from the offeror. As the situation moves away from that of 
adequate price competition, the negotiation position between the 
parties moves more in favor of the contractor and the contracting 
officer is allowed to use more pricing tools. Nevertheless, the policy 
is to price the contract in the least intrusive manner.

SF 1448, ``Proposal Cover Sheet/Cost or Pricing Data Not Required''

    Concern was also expressed that with the elimination of the SF 
1412, contracting officers might request submission of catalog or 
market price exception data on the new SF 1448. The commenters believed 
that the SF 1448 was not properly designed for that purpose.
    Although the SF 1448 is not intended as a substitute for the SF 
1412, the Team modified the SF 1448 to eliminate reference to cost 
related information. This preserves the bright line between ``cost or 
pricing data'' that can only be submitted on an SF 1411 and all other 
``information other than cost or pricing data'' that may be submitted 
using the SF 1448.

Cost Accounting Standards

    Several commenters stated that the Cost Accounting Standards (CAS) 
needed to be revised to narrow the definition of what constitutes 
``cost or pricing data'' for purposes of CAS covered contracts. The 
commenters believe that until CAS is modified the coverage in the TINA 
rule would not completely address the issue of commercial contractors 
being required to expose cost data to the Government and to be 
accountable for such data.
    The Team believes the commenters have identified a valid concern. 
However, the matter rests with the CAS Board as the problem is that the 
CAS definition of ``cost data'' is more broadly based than the ``cost 
or pricing data'' definition in the FAR coverage.

Market Price Exception

    Commenters also stated that for the market price exception to be 
useful to industry it should not be tied to independent verification.
    The Team does not agree with the commenters. It believes that it 
makes sense to maintain this requirement as FASA requires clear FAR 
standards as to what is required to qualify for a TINA exception. The 
Team believes independent verification is an essential element of a 
market price. Furthermore, with the creation of the new FASA commercial 
item exception to TINA, it is useful to differentiate a price 
reasonableness determination based on market price from information 
provided directly by an offeror under the authority of the new FASA 
commercial item exception.

List of Subjects in 48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45, 46, 
49, 52, and 53

    Government procurement.

    Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.

    The interim rule published at 59 FR 62498, December 5, 1994, FAC 
90-22, FAR case 94-720, is adopted as final, as amended by this FAR 
case 94-721. Therefore, 48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45, 
46, 49, 52, and 53 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 1, 4, 14, 15, 16, 31, 
33, 36, 45, 46, 49, 52, and 53 continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

    2. The table in section 1.106 is amended under the ``FAR Segment'' 
and ``OMB Control Number'' columns by removing ``52.215-32'' and 
``9000-0105'', and ``SF 1412'' and ``9000-0013''; and adding entries, 
in numerical order, to read as follows:


1.106  OMB approval under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                                                             OMB control
                        FAR segment                              No.    
------------------------------------------------------------------------
                                                                        
                  *        *        *        *        *                 
52.215-41..................................................    9000-0013
52.215-42..................................................    9000-0013
                                                                        
                  *        *        *        *        *                 
SF 1448....................................................    9000-0013
SF 1449....................................................    9000-0136
------------------------------------------------------------------------

PART 4--ADMINISTRATIVE MATTERS

    3. Section 4.702 is amended by adding paragraph (a)(3) to read as 
follows:


4.702  Applicability.

* * * * *
    (a)(3) Audit--Commercial Items (52.215-43).
* * * * *
    4. Section 4.803 is amended by revising paragraphs (a)(17) and 
(b)(4) to read as follows:


4.803  Contents of contract files.

* * * * *
    (a) * * *
    (17) Cost or pricing data and Certificates of Current Cost or 
Pricing Data or a required justification for waiver, or information 
other than cost or pricing data.
* * * * *
    (b) * * *
    (4) Cost or pricing data, Certificates of Current Cost or Pricing 
Data, or information other than cost or pricing data; cost or price 
analysis; and other documentation supporting contractual actions 
executed by the contract administration office.
* * * * *

PART 14--SEALED BIDDING


14.201-7  [Amended]

    5. Section 14.201-7 is amended by removing paragraph (d) and 
redesignating paragraph ``(e)'' as paragraph ``(d).''
PART 15--CONTRACTING BY NEGOTIATION

    6. Section 15.106-2 is added to read as follows:


15.106-2  Audit--Commercial items.

    (a) This subsection implements 10 U.S.C. 2306a(d)(2) and (3) and 41 
U.S.C. 254b(d)(2) and (3).
    (b) The contracting officer shall, when contracting by negotiation, 
insert clause 52.215-43, Audit--Commercial Items, in solicitations and 
contracts when submission of cost or pricing data is expected to be 
excepted under 15.804-1(a)(2) (i.e., a commercial item where price is 
otherwise fair and reasonable). The clause shall also be included in 
solicitations and contracts when cost or pricing data are required, for 
incorporation into subcontracts that may be excepted under 15.804-
1(a)(2).


15.406-5  [Amended]

    7. Section 15.406-5(b) is amended by inserting at the end of the 
paragraph the parenthetical ``(see 15.804-6 and 15.804-8).''.
    8. Section 15.703(a)(2) is revised to read as follows:


15.703  Acquisitions requiring make-or-buy programs.

    (a) * * *
    (2) Qualifies for an exception from the requirement to submit cost 
or pricing data under 15.804-1; or
* * * * * 

[[Page 48212]]

    9. Section 15.801 is amended by revising the definitions of ``Cost 
analysis'' and ``Cost or pricing data'', and adding in alphabetical 
order ``Information other than cost or pricing data'', ``Subcontract'', 
``Commercial item'', and ``Cost realism'' to read as follows:


15.801  Definitions.

    Commercial item is defined in 2.101.
    Cost analysis means the review and evaluation of the separate cost 
elements and proposed profit of (a) an offeror's or contractor's cost 
or pricing data or information other than cost or pricing data and (b) 
the judgmental factors applied in projecting from the data to the 
estimated costs in order to form an opinion on the degree to which the 
proposed costs represent what the cost of the contract should be, 
assuming reasonable economy and efficiency.
    Cost or pricing data means all facts that, as of the date of price 
agreement or, if applicable, another date agreed upon between the 
parties that is as close as practicable to the date of agreement on 
price, prudent buyers and sellers would reasonably expect to affect 
price negotiations significantly. Cost or pricing data are data 
requiring certification in accordance with 15.804-4. Cost or pricing 
data are factual, not judgmental, and are therefore verifiable. While 
they do not indicate the accuracy of the prospective contractor's 
judgment about estimated future costs or projections, they do include 
the data forming the basis for that judgment. Cost or pricing data are 
more than historical accounting data; they are all the facts that can 
be reasonably expected to contribute to the soundness of estimates of 
future costs and to the validity of determinations of costs already 
incurred. They also include such factors as--
    (a) Vendor quotations;
    (b) Nonrecurring costs;
    (c) Information on changes in production methods and in production 
or purchasing volume;
    (d) Data supporting projections of business prospects and 
objectives and related operations costs;
    (e) Unit-cost trends such as those associated with labor 
efficiency;
    (f) Make-or-buy decisions;
    (g) Estimated resources to attain business goals; and
    (h) Information on management decisions that could have a 
significant bearing on costs.
    Cost realism means the costs in an offeror's proposal are (a) 
realistic for the work to be performed; (b) reflect a clear 
understanding of the requirements; and (c) are consistent with the 
various elements of the offeror's technical proposal.
* * * * *
    Information other than cost or pricing data means any type of 
information that is not required to be certified, in accordance with 
15.804-4, that is necessary to determine price reasonableness or cost 
realism. For example, such information may include pricing, sales, or 
cost information, and includes cost or pricing data for which 
certification is determined inapplicable after submission.
* * * * *
    Subcontract, as used in this subpart, includes a transfer of 
commercial items between divisions, subsidiaries, or affiliates of a 
contractor or a subcontractor.
* * * * *
    10. Section 15.802 is revised to read as follows:


15.802  Policy.

    Contracting officers shall--
    (a) Purchase supplies and services from responsible sources at fair 
and reasonable prices. In establishing the reasonableness of the 
offered prices, the contracting officer shall not obtain more 
information than is necessary. To the extent that the Truth in 
Negotiations Act, as implemented in 15.804-2 and 15.804-5(b) permits, 
the contracting officer shall generally use the following order of 
preference in determining the type of information required:
    (1) No further information from the offeror if the price is based 
on adequate price competition, except as provided by 15.804-5(a)(3).
    (2) Information other than cost or pricing data:
    (i) Information related to prices (e.g., established catalog or 
market prices), relying first on information available within the 
Government; second, on information obtained from sources other than the 
offeror; and, if necessary, on information obtained from the offeror.
    (ii) Cost information, which does not meet the definition of cost 
or pricing data at 15.801.
    (3) Cost or pricing data. The contracting officer should use every 
means available to ascertain a fair and reasonable price prior to 
requesting cost or pricing data. Contracting officers shall not 
unnecessarily require the submission of cost or pricing data, because 
it leads to increased proposal preparation costs, generally extends 
acquisition lead-time, and wastes both contractor and Government 
resources.
    (b) Price each contract separately and independently and not--
    (1) Use proposed price reductions under other contracts as an 
evaluation factor, or
    (2) Consider losses or profits realized or anticipated under other 
contracts.
    (c) Not include in a contract price any amount for a specified 
contingency to the extent that the contract provides for a price 
adjustment based upon the occurrence of that contingency.
    11. Section 15.803 is amended in paragraph (a) by revising the last 
sentence to read as follows:


15.803  General.

    (a) * * * This prohibition does not preclude disclosing 
discrepancies or mistakes of fact (such as duplications, omissions, and 
errors in computation) contained in the cost or pricing data or 
information other than cost or pricing data supporting the proposal.


15.804  Cost or pricing data and information other than cost or pricing 
data.

    12. Section 15.804, heading, is revised to read as set forth above.
    13. Section 15.804-1 is revised to read as follows:


15.804-1  Prohibition on obtaining cost or pricing data.

    (a) Exceptions to cost or pricing data requirements. The 
contracting officer shall not, pursuant to 10 U.S.C. 2306a and 41 
U.S.C. 254b, require submission of cost or pricing data (but may 
require information other than cost or pricing data to support a 
determination of price reasonableness or cost realism)--
    (1) If the contracting officer determines that prices agreed upon 
are based on--
    (i) Adequate price competition (see exception standards at 
paragraph (b)(1) of this subsection);
    (ii) Established catalog or market prices of commercial items sold 
in substantial quantities to the general public (see exception 
standards at paragraph (b)(2) of this section); or
    (iii) Prices set by law or regulation (see exception standards at 
paragraph (b)(3) of this subsection).
    (2) For acquisition of a commercial item, if the contracting 
officer does not have sufficient information to support an exception 
under paragraph (a)(1) of this section, but the contracting officer can 
determine the price is fair and reasonable (see exception standards at 
paragraph (b)(4) of this section and pricing requirements at 15.804-
5(b));
    (3) For exceptional cases where a waiver has been granted (see 
exception standards at paragraph (b)(5) of this section); or
    (4) For modifications to contracts or subcontracts for commercial 
items, if 

[[Page 48213]]
the basic contract or subcontract was awarded without the submission of 
cost or pricing data because the action was granted an exception from 
cost or pricing data requirements under paragraph (a)(1) of this 
section and the modification does not change the contract or 
subcontract to a contract or subcontract for the acquisition of other 
than a commercial item (see exception standards at paragraph (b)(6) of 
this subsection).
    (b) Standards for exceptions from cost or pricing data 
requirements--(1) Adequate price competition. A price is based on 
adequate price competition if--
    (i) Two or more responsible offerors, competing independently, 
submit priced offers responsive to the Government's expressed 
requirement and if--
    (A) Award will be made to a responsible offeror whose proposal 
offers either--
    (1) The greatest value (see 15.605(c)) to the Government and price 
is a substantial factor in source selection; or
    (2) The lowest evaluated price; and
    (B) There is no finding that the price of the otherwise successful 
offeror is unreasonable. Any such finding must be supported by a 
statement of the facts and approved at a level above the contracting 
officer;
    (ii) There was a reasonable expectation, based on market research 
or other assessment, that two or more responsible offerors, competing 
independently, would submit priced offers responsive to the 
solicitation's expressed requirement, even though only one offer is 
received from a responsible, responsive offeror and if--
    (A) Based on the offer received, the contracting officer can 
reasonably conclude that the offer was submitted with the expectation 
of competition, e.g., circumstances indicate that--
    (1) The offeror believed that at least one other offeror was 
capable of submitting a meaningful, responsive offer; and
    (2) The offeror had no reason to believe that other potential 
offerors did not intend to submit an offer; and
    (B) The determination that the proposed price is based on adequate 
price competition and is reasonable is approved at a level above the 
contracting officer; or
    (iii) Price analysis clearly demonstrates that the proposed price 
is reasonable in comparison with current or recent prices for the same 
or similar items purchased in comparable quantities, under comparable 
terms and conditions under contracts that resulted from adequate price 
competition.
    (2) Established catalog or market prices--(i) Established catalog 
price. Established catalog prices are prices (including discount 
prices) recorded in a catalog, price list, schedule, or other 
verifiable and established record that (A) are regularly maintained by 
the manufacturer or vendor; and (B) are published or otherwise 
available for customer inspection.
    (ii) Established market price. An established market price is a 
price that is established in the course of ordinary and usual trade 
between buyers and sellers free to bargain and that can be 
substantiated by data from sources independent of the offeror.
    (iii) Based on. A price may also be based on an established catalog 
or market price if the item or class of items being purchased is not 
itself a catalog or market priced commercial item but is sufficiently 
similar to the catalog or market priced commercial item to ensure that 
any difference in prices can be identified and justified without 
resorting to cost analysis.
    (iv) Sold in substantial quantities. An item is sold in substantial 
quantities if there are sales of more than a nominal quantity based on 
the norm of the industry segment. In determining what constitutes a 
substantial quantity, the contracting officer should consider such 
things as the size of the market; and how recently the item was 
introduced into the market. Models, samples, prototypes, and 
experimental units are not substantial quantities. For services to be 
sold in substantial quantities, they must also be customarily provided 
by the offeror, using personnel regularly employed and equipment (if 
any is necessary) regularly maintained principally to provide the 
services.
    (A) The method used to establish sales may be sales order, 
contract, shipment, invoice, actual recorded sales, or other records, 
so long as the method used is consistent, provides an accurate 
indication of sales activity, and is verifiable. If the item would not 
otherwise qualify for an exception, sales of the item by affiliates may 
be considered. In addition, sales of essentially the same commercial 
item by other manufacturers or vendors may be considered in determining 
whether sales are substantial, provided that the price of those sales 
is also considered. Data to support sales quantities may also come from 
other manufacturers, industry associations or marketing groups, annual 
financial reports, etc.
    (B) An exception may apply for an item based on the market price of 
the item regardless of the quantity of sales of the item previously 
made by the offeror or the types of customers for these sales, provided 
that sales of the same or similar items by other sellers meet the 
exception criteria.
    (v) General public. The general public ordinarily consists of 
buyers other than the U.S. Government or its instrumentalities, e.g., 
U.S. Government corporations. Sales to the general public do not 
include sales to affiliates of the offerors or purchases by the U.S. 
Government on behalf of foreign governments, such as for Foreign 
Military Sales. If the contracting officer can determine without 
requiring information from the offeror that sales are for Government 
end use, these sales need not be considered sales to the general 
public.
    (3) Prices set by law or regulation. Pronouncements in the form of 
periodic rulings, reviews, or similar actions of a governmental body, 
or embodied in the laws are sufficient to set a price.
    (4) Commercial items. For acquisition of a commercial item, if the 
contracting officer does not have sufficient information to support an 
exception under 15.804-1(a)(1) or (a)(4), the contracting officer shall 
grant an exception for a contract, subcontract, or modification of a 
contract or subcontract if the contracting officer obtains the pricing 
information described in 15.804-5(b). Cost or pricing data may be 
obtained for such a commercial item only if the contracting officer 
makes a written determination that the pricing information is 
inadequate for performing a price analysis and determining price 
reasonableness.
    (5) Exceptional cases. The head of the contracting activity may, 
without power of delegation, waive the requirement for submission of 
cost or pricing data. The authorization for the waiver and the reasons 
for granting it shall be in writing. A waiver may be considered if 
another exception does not apply but the price can be determined to be 
fair and reasonable without submission of cost or pricing data. For 
example, if cost or pricing data were furnished on previous production 
buys and the contracting officer determines such data are sufficient, 
when combined with updated information, a waiver may be granted. If the 
head of the contracting activity has waived the requirement for 
submission of cost or pricing data, the contractor or higher-tier 
subcontractor to whom the waiver relates shall be considered as having 
been required to make available cost or pricing data. Consequently, 
award of any lower-tier subcontract expected to exceed the cost or 
pricing data threshold requires the submission of cost or pricing data 
unless an exception otherwise applies to the subcontract. 

[[Page 48214]]

    (6) Modifications. This exception only applies when the original 
contract or subcontract was exempt from cost or pricing data based on 
adequate price competition, catalog or market price, or price set by 
law or regulation (15.804-1(a)(1)). For modifications of contracts or 
subcontracts for commercial items, the exception at 15.804-1(a)(4) 
applies if the modification does not change the item from a commercial 
item to a noncommercial item. However, if the modification to a 
contract or a subcontract changes the nature of the work under the 
contract or subcontract either by a change to the commercial item or by 
the addition of other noncommercial work, the contracting officer is 
not prohibited from obtaining cost or pricing data for the added work.
    (c) Special circumstances when purchasing commercial items. (1) It 
is not necessary to obtain information supporting an exception for each 
line item. Sampling techniques may be used.
    (2) If the U.S. Government has acted favorably on an exception 
request for the same or similar items, the contracting officer may 
consider the prior submissions as support for the current exception 
request. Relief from the submission of new information does not relieve 
the contracting officer from the requirement to determine 
reasonableness of price on the current acquisition.
    (3) When acquiring by separate contract an item included on an 
active Federal Supply Service or Information Technology Service 
Multiple Award Schedule contract, the contracting officer should grant 
an exception and not require documentation if the offeror has provided 
proof that an exception has been granted for the schedule item. Price 
analysis shall be performed in accordance with 15.805-2 to determine 
reasonableness of price.
    (4) The contracting officer and offeror may make special 
arrangements for the submission of exception requests for repetitive 
acquisitions. These arrangements can take any form as long as they set 
forth an effective period and the exception criteria at 15.804-1 are 
satisfied. Such arrangements may be extended to other Government 
offices with their concurrence.
    (d) Requesting an exception. In order to qualify for an exception, 
other than an exception for adequate price competition, from the 
requirements to submit cost or pricing data, the offeror must submit a 
written request. The solicitation provision at 52.215-41 or other 
methods may be used. It is the responsibility of the contracting 
officer to determine, based on the information submitted, and any other 
information available to the contracting officer, which exception, if 
any, applies.
    14. Section 15.804-2 is revised to read as follows:


15.804-2  Requiring cost or pricing data.

    (a) (1) Pursuant to 10 U.S.C. 2306a and 41 U.S.C. 254b, cost or 
pricing data shall be obtained only if the contracting officer 
concludes that none of the exceptions in 15.804-1 applies. However, if 
the contracting officer has sufficient information available to 
determine price reasonableness, then a waiver under the exception at 
15.804-1(b)(5) should be considered. The threshold for obtaining cost 
or pricing data is $500,000. This amount will be subject to adjustment, 
effective October 1, 1995, and every five years thereafter. Unless an 
exception applies, cost or pricing data are required before 
accomplishing any of the following actions expected to exceed the 
threshold in effect on the date of agreement on price, or the date of 
award, whichever is later; or, in the case of existing contracts, the 
threshold specified in the contract:
    (i) The award of any negotiated contract (except for undefinitized 
actions such as letter contracts).
    (ii) The award of a subcontract at any tier, if the contractor and 
each higher-tier subcontractor have been required to furnish cost or 
pricing data (but see exceptional cases at 15.804-1(b)(5)).
    (iii) The modification of any sealed bid or negotiated contract 
(whether or not cost or pricing data were initially required) or 
subcontract covered by paragraph (a)(1)(ii) of this subsection. Price 
adjustment amounts shall consider both increases and decreases. (For 
example, a $150,000 modification resulting from a reduction of $350,000 
and an increase of $200,000 is a pricing adjustment exceeding 
$500,000.) This requirement does not apply when unrelated and 
separately priced changes for which cost or pricing data would not 
otherwise be required are included for administrative convenience in 
the same modification.
    (2) Unless prohibited because an exception at 15.804-1(a)(1) 
applies, the head of the contracting activity, without power of 
delegation, may authorize the contracting officer to obtain cost or 
pricing data for pricing actions below the pertinent threshold in 
paragraph (a)(1) of this subsection provided the action exceeds the 
simplified acquisition threshold. The head of the contracting activity 
shall justify the requirement for cost or pricing data. The 
documentation shall include a written finding that cost or pricing data 
are necessary to determine whether the price is fair and reasonable and 
the facts supporting that finding.
    (b) When cost or pricing data are required, the contracting officer 
shall require the contractor or prospective contractor to submit to the 
contracting officer (and to have any subcontractor or prospective 
subcontractor submit to the prime contractor or appropriate 
subcontractor tier) the following in support of any proposal:
    (1) The cost or pricing data.
    (2) A certificate of current cost or pricing data, in the format 
specified in 15.804-4, certifying that to the best of its knowledge and 
belief, the cost or pricing data were accurate, complete, and current 
as of the date of agreement on price or, if applicable, another date 
agreed upon between the parties that is as close as practicable to the 
date of agreement on price.
    (c) If cost or pricing data are requested and submitted by an 
offeror, but an exception is later found to apply, the data shall not 
be considered cost or pricing data as defined in 15.801 and shall not 
be certified in accordance with 15.804-4.
    (d) The requirements of this section also apply to contracts 
entered into by the head of an agency on behalf of a foreign 
government.


15.804-3  [Reserved]

    15. Section 15.804-3 is removed and reserved.
    16. Section 15.804-4 is amended by revising paragraph (a), the 
double asterisk footnote to the certification statement following 
paragraph (a), paragraph (c), and paragraph (e); and in paragraphs (f) 
and (h) by removing the word ``certified''. The revised text reads as 
follows:


15.804-4  Certificate of Current Cost or Pricing Data.

    (a) When cost or pricing data are required, the contracting officer 
shall require the contractor to execute a Certificate of Current Cost 
or Pricing Data, shown following this paragraph (a), and shall include 
the executed certificate in the contract file.

Certificate of Current Cost or Pricing Data

* * * * *
* * * Insert the day, month, and year when price negotiations were 
concluded and price agreement was reached or, if applicable, another 
date agreed upon between the parties that is as close as practicable 
to the date of agreement on price.
* * * * *
    (c) The contracting officer and contractor are encouraged to reach 
a prior agreement on criteria for establishing closing or cutoff dates 
when appropriate in order to minimize 

[[Page 48215]]
delays associated with proposal updates. Closing or cutoff dates should 
be included as part of the data submitted with the proposal and, before 
agreement on price, data should be updated by the contractor to the 
latest closing or cutoff dates for which the data are available. Use of 
cutoff dates coinciding with reports is acceptable, as certain data may 
not be reasonably available before normal periodic closing dates (e.g., 
actual indirect costs). Data within the contractor's or a 
subcontractor's organization on matters significant to contractor 
management and to the Government will be treated as reasonably 
available. What is significant depends upon the circumstances of each 
acquisition.
* * * * *
    (e) If cost or pricing data are requested and submitted by an 
offeror, but an exception is later found to apply, the data shall not 
be considered cost or pricing data and shall not be certified in 
accordance with this subsection.
* * * * *
    17. Section 15.804-5 is added to read as follows:


15.804-5 Requiring information other than cost or pricing data.

    (a)(1) If cost or pricing data are not required because an 
exception applies, or an action is at or below the cost or pricing data 
threshold, the contracting officer shall make a price analysis to 
determine the reasonableness of the price and any need for further 
negotiation.
    (2) The contracting officer may require submission of information 
other than cost or pricing data only to the extent necessary to 
determine reasonableness of the price or cost realism. The contractor's 
format for submitting such information shall be used unless the 
contracting officer determines that use of a specific format is 
essential. The contracting officer shall ensure that information used 
to support price negotiations is sufficiently current to permit 
negotiation of a fair and reasonable price. Requests for updated 
offeror information should be limited to information that affects the 
adequacy of the proposal for negotiations, such as changes in price 
lists. Such data shall not be certified in accordance with 15.804-4.
    (3) When an acquisition is based on adequate price competition, 
generally no additional information is necessary to determine the 
reasonableness of price. However, if it is determined that additional 
information is necessary to determine the reasonableness of the price, 
the contracting officer shall, to the maximum extent practicable, 
obtain the additional information from sources other than the offeror. 
In addition, the contracting officer may request information to 
determine the cost realism of competing offers or to evaluate competing 
approaches.
    (4) When cost or pricing data are not required because an action is 
at or below the cost or pricing data threshold, information requested 
shall include, as a minimum, appropriate information on the prices and 
quantities at which the same or similar items have previously been 
sold, that is adequate for evaluating the reasonableness of the 
proposed price. Cost information may also be required. For example, 
cost information might be necessary to support an analysis of material 
costs.
    (b)(1) When acquiring commercial items for which an exception under 
15.804-1(a)(2) may apply, the contracting officer shall seek to obtain 
from the offeror or contractor information on prices at which the same 
or similar items have been sold in the commercial market, that is 
adequate for evaluating, through price analysis, the reasonableness of 
the price of the action.
    (2) If such information is not available from the offeror or 
contractor, the contracting officer shall seek to obtain such 
information from another source or sources.
    (3) Requests for sales data relating to commercial items shall be 
limited to data for the same or similar items during a relevant time 
period.
    (4) In requesting information from an offeror under this paragraph 
(b), the contracting officer shall, to the maximum extent practicable, 
limit the scope of the request to include only information that is in 
the form regularly maintained by the offeror in commercial operations.
    (5) Any information obtained pursuant to this paragraph (b) that is 
exempt from disclosure under the Freedom of Information Act (5 U.S.C. 
552(b)) shall not be disclosed by the Government.
    (c) If, after receipt of offers, the contracting officer concludes 
there is insufficient information available to determine price 
reasonableness and none of the exceptions applies, then cost or pricing 
data shall be obtained.
    18. Section 15.804-6 is amended by revising the heading and 
paragraphs (a) and (b);
    Amending Table 15-2 by:
    (a) Revising the heading;
    (b) Adding introductory text;
    (c) Revising the first paragraph of item 1, and the fourth 
paragraph of Item 1 entitled ``Established Catalog or Market Prices/
Prices Set by Law or Regulation'';
    (d) Revising item 4; and
    (e) Amending 8B by revising the paragraph ``Under Column (2)'' 
instruction under the table;
    Adding Table 15-3 following Table 15-2;
    And revising paragraph (c) of 15.804-6; and revising the first 
sentence of paragraph (d).
    The revised and added text reads as follows:


15.804-6  Instructions for submission of cost or pricing data or 
information other than cost or pricing data.

    (a) Taking into consideration the hierarchy at 15.802, the 
contracting officer shall specify in the solicitation (see 15.804-8 (h) 
and (i))--
    (1) Whether cost or pricing data are required;
    (2) That, in lieu of submitting cost or pricing data, the offeror 
may submit a request for exception from the requirement to submit cost 
or pricing data;
    (3) Whether information other than cost or pricing data is 
required, if cost or pricing data are not necessary;
    (4) The format (see paragraph (b) of this subsection) in which the 
cost or pricing data or information other than cost or pricing data 
shall be submitted; and
    (5) Necessary preaward or postaward access to offeror's records if 
not provided by the use of a standard form or clause.
    (b)(1) Cost or pricing data shall be submitted on a SF 1411 unless 
required to be submitted on one of the termination forms specified in 
subpart 49.6. The SF 1411 shall not be used unless cost or pricing data 
are required to be submitted. Contract pricing proposals submitted on a 
SF 1411 with supporting attachments shall be prepared in accordance 
with Table 15-2 or as specified by the contracting officer. Data 
supporting forward pricing rate agreements or final indirect cost 
proposals shall be submitted in a format acceptable to the contracting 
officer.
    (2) If information other than cost or pricing data is required to 
support price reasonableness or cost realism, the contracting officer 
may require such information to be submitted using a SF 1448. Requests 
for information should be tailored so that only necessary data are 
requested. The information is not considered cost or pricing data and 
shall not be certified in accordance with 15.804-4. Information 
submitted on a SF 1448 shall be prepared following the instructions 
provided in Table 15-3.

[[Page 48216]]


Table 15-2  Instructions for Submission of a Contract Pricing Proposal 
When Cost or Pricing Data are Required

    The SF 1411 provides a cover sheet for use by offerors to submit 
to the Government a pricing proposal of estimated and/or actual 
costs only when cost or pricing data are required.
    1. The pricing proposal shall be segregated by contract line 
item with sufficient detail to permit cost analysis. Attach cost-
element breakdowns, using the applicable formats prescribed in Item 
8A, B, or C of this section, for each proposed line item. These 
breakdowns must conform to the instructions in the solicitation and 
any specific requirements established by the contracting officer. 
Furnish supporting breakdowns for each cost element, consistent with 
the offeror's cost accounting system.
* * * * *
    Established Catalog or Market Prices or Prices Set by Law or 
Regulation or Commercial Item Not Covered By Another Exception--When 
an exception from the requirement to submit cost or pricing data is 
requested, whether the item was produced by others or by the 
offeror, provide justification for the exception as required by 
15.804-1(d).
* * * * *
    4. There is a clear distinction between submitting cost or 
pricing data and merely making available books, records, and other 
documents without identification. The requirement for submission of 
cost or pricing data is met when all accurate cost or pricing data 
reasonably available to the offeror have been submitted, either 
actually or by specific identification, to the contracting officer 
or an authorized representative. As later information comes into the 
offeror's possession, it should be promptly submitted to the 
contracting officer in a manner that clearly shows how the 
information relates to the offeror's price proposal. The requirement 
for submission of cost or pricing data continues up to the time of 
agreement on price, or another date agreed upon between the parties 
if applicable.
* * * * *
    8. Headings for Submission of Line-Item Summaries:
* * * * *
    B. Change Orders, Modifications, and Claims.
* * * * *
    Under Column (2)--Include the current estimates of what the cost 
would have been to complete the deleted work not yet performed (not 
the original proposal estimates), and the cost of deleted work 
already performed.
* * * * *

Table 15-3  Instructions for Submission of Information Other Than Cost 
or Pricing Data

    SF 1448 is a cover sheet for use by offerors to submit 
information to the Government when cost or pricing data are not 
required but the contracting officer has requested information to 
help establish price reasonableness or cost realism. Such 
information is not considered cost or pricing data, and shall not be 
certified in accordance with 15.804-4.
    1. The information submitted shall be at the level of detail 
described in the solicitation or specified by the contracting 
officer. The offeror's own format is acceptable unless the 
contracting officer determines that use of a specific format is 
essential.
    A. If adequate price competition is expected, the information 
may include cost or technical information necessary to determine the 
cost realism and adequacy of the offeror's proposal, e.g., 
information adequate to validate that the proposed costs are 
consistent with the technical proposal, or cost breakdowns to help 
identify unrealistically priced proposals.
    B. If the offer is expected to be at or below the cost or 
pricing data threshold, and adequate price competition is not 
expected, the information may consist of data to permit the 
contracting officer and authorized representatives to determine 
price reasonableness, e.g., information to support an analysis of 
material costs (when sufficient information on labor and overhead 
rates is already available), or information on prices and quantities 
at which the offeror has previously sold the same or similar items.
    2. Any information submitted must support the price proposed. 
Include sufficient detail or cross references to clearly establish 
the relationship of the information provided to the price proposed. 
Support any information provided by explanations or supporting 
rationale as needed to permit the contracting officer and authorized 
representatives to evaluate the documentation.
* * * * *
    (c) Closing or cutoff dates should be included as part of the data 
submitted with the proposal (see 15.804-4(c)).
    (d) The requirement for submission of cost or pricing data is met 
if all cost or pricing data reasonably available to the offeror are 
either submitted or specifically identified in writing by the time of 
agreement on price or another time agreed upon by the parties. * * *
* * * * *
    19. Section 15.804-7 is amended by revising paragraphs (b)(7)(i), 
(ii)(B), and (iii) to read as follows:


15.804-7  Defective cost or pricing data.

* * * * *
    (b) * * *
    (7)(i) In addition to the price adjustment amount, the Government 
is entitled to interest on any overpayments. The Government is also 
entitled to penalty amounts on certain of these overpayments. 
Overpayment occurs only when payment is made for supplies or services 
accepted by the Government. Overpayments would not result from amounts 
paid for contract financing as defined in 32.902.
    (ii) * * *
    (B) Consider the date of each overpayment (the date of overpayment 
for this interest calculation shall be (1) the date payment was made 
for the related completed and accepted contract items, or (2) for 
subcontract defective pricing, the date payment was made to the prime 
contractor, based on prime contract progress billings or deliveries, 
which included payments for a completed and accepted subcontract item); 
and
* * * * *
    (iii) In arriving at the amount due for penalties on contracts 
where the submission of defective cost or pricing data was a knowing 
submission, the contracting officer shall obtain an amount equal to the 
amount of overpayment made. Before taking any contractual actions 
concerning penalties, the contracting officer shall obtain the advice 
of counsel.
* * * * *
    20. Section 15.804-8 is amended by revising the heading and adding 
paragraphs (h) and (i) to read as follows:


15.804-8  Contract clauses and solicitation provisions.

* * * * *
    (h) Requirements for cost or pricing data or information other than 
cost or pricing data. Considering the hierarchy at 15.802, the 
contracting officer may insert the provision at 52.215-41, Requirements 
for Cost or Pricing Data or Information Other Than Cost or Pricing 
Data, in solicitations if it is reasonably certain that cost or pricing 
data or information other than cost or pricing data will be required. 
This provision also provides instructions to offerors on how to request 
an exception. Use the provision with Alternate I to specify a format 
for cost or pricing data other than the format required by Table 15-2 
of 15.804-6(b). Use the provision with Alternate II when copies of the 
proposal are to be sent to the administrative contracting officer and 
contract auditor. Use the provision with Alternate III when submission 
via electronic media is required. Replace the basic provision with 
Alternate IV when a SF 1411 will not be required because an exception 
may apply, but information other than cost or pricing data is required 
as described in 15.804-5.
    (i) Requirements for cost or pricing data or information other than 
cost or pricing data--modifications. Considering the hierarchy at 
15.802, the contracting officer may insert the clause at 52.215-42, 
Requirements for Cost or Pricing Data or Information Other Than Cost or 
Pricing Data--Modifications, in solicitations and contracts if it is 
reasonably certain that cost or pricing data or information other than 
cost or pricing data will be required for modifications. This clause 
also provides 

[[Page 48217]]
instructions to contractors on how to request an exception. Use the 
clause with Alternate I to specify a format for cost or pricing data 
other than the format required by Table 15-2 of 15.804-6(b). Use the 
clause with Alternate II if copies of the proposal are to be sent to 
the administrative contracting officer and contract auditor. Use the 
clause with Alternate III if submission via electronic media is 
required. Replace the basic clause with Alternate IV if a SF 1411 is 
not required because an exception may apply, but information other than 
cost or pricing data is required as described in 15.804-5.
    21. Section 15.805-1 is amended in the first sentence of paragraph 
(a) by inserting a comma after the word ``engineering''; and by adding 
paragraph (d) to read as follows:


15.805-1  General.

* * * * *
    (d) The Armed Services Pricing Manual (ASPM Volume I, ``Contract 
Pricing,'' and Volume 2, ``Price Analysis'') was issued by the 
Department of Defense to guide pricing and negotiating personnel. The 
ASPM provides detailed discussion and examples applying pricing 
policies to pricing problems. The ASPM is available for use for 
instruction and professional guidance. However, it is not directive and 
its references to Department of Defense forms and regulations should be 
considered informational only. Copies of ASPM Vol. 1 (Stock No. 008-
000-00457-9) and Vol. 2 (Stock No. 008-000-00467-6) may be purchased 
from the Superintendent of Documents, U.S. Government Printing Office, 
by telephone (202) 512-1800 or facsimile (202) 512-2250, or by mail 
order from the Superintendent of Documents, P. O. Box 371954, 
Pittsburgh, PA 15250-7954.
    22. Section 15.805-2 is amended by adding paragraph (f) to read as 
follows:


15.805-2  Price analysis.

* * * * *
    (f) Comparison of proposed prices with prices for the same or 
similar items obtained through market research.
    23. Section 15.806-1 is amended in the first sentence of paragraph 
(a)(2) by removing the phrase ``claims for exemption'' and inserting 
``requests for exception'' in its place, and revising (b) to read as 
follows:


15.806-1  General.

* * * * *
    (b) Unless the subcontract qualifies for an exception under 15.804-
1, any contractor required to submit cost or pricing data also shall 
obtain cost or pricing data before awarding any subcontract or purchase 
order expected to exceed the cost or pricing data threshold, or issuing 
any modification involving a price adjustment expected to exceed the 
cost or pricing data threshold.
* * * * *
    24. Section 15.806-2 is amended by revising paragraph (a), the 
first sentence of (c), and (d) to read as follows:


15.806-2  Prospective subcontractor cost or pricing data.

    (a) The contracting officer shall require a contractor that is 
required to submit cost or pricing data also to submit to the 
Government (or cause submission of) accurate, complete, and current 
cost or pricing data from prospective subcontractors in support of each 
subcontract cost estimate that is
    (1) $1,000,000 or more,
    (2) Both more than the cost or pricing data threshold and more than 
10 percent of the prime contractor's proposed price, or
    (3) Considered to be necessary for adequately pricing the prime 
contract. These subcontract cost or pricing data may be submitted using 
a Standard Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost 
or Pricing Data Required).
* * * * *
    (c) If the prospective contractor satisfies the contracting officer 
that a subcontract will be priced on the basis of one of the 
exceptions, the contracting officer shall not require submission of 
cost or pricing data to the Government in that case. * * *
    (d) Subcontractor cost or pricing data shall be accurate, complete, 
and current as of the date of price agreement or, if applicable, 
another date agreed upon between the parties, given on the contractor's 
Certificate of Current Cost or Pricing Data. The prospective contractor 
shall be responsible for updating a prospective subcontractor's data.
* * * * *
    25. Section 15.808 is amended in paragraph (a)(5) introductory text 
by removing the word ``certified''; by revising paragraph (a)(6); by 
removing paragraph (a)(7) and redesignating paragraphs (a)(8) through 
(a)(10) as (a)(7) through (a)(9) to read as follows:


15.808  Price negotiation memorandum.

    (a) * * *
    (6) If cost or pricing data were not required in the case of any 
price negotiation exceeding the cost or pricing data threshold, the 
exception used and the basis for it.
* * * * *
    26. Section 15.812-1 is amended by revising paragraph (b) and the 
second sentence of paragraph (c) to read as follows:


15.812-1  General.

* * * * *
    (b) However, the policy in paragraph (a) of this subsection does 
not apply to any contract or subcontract item of supply for which the 
price is, or is based on, an established catalog or market price of a 
commercial item sold in substantial quantities to the general public 
under 15.804-1(b)(2) or a commercial item exception under 15.804-
1(b)(4).
    (c) * * * The contracting officer shall require similar information 
when contracting by negotiation with full and open competition if 
adequate price competition is not expected (see 15.804-1(b)(1)). * * *

PART 16--TYPES OF CONTRACTS


16.203-4  [Amended]

    27. Section 16.203-4 is amended in paragraphs (a)(1)(ii) and 
(b)(1)(ii) by removing ``15.804-3'' and inserting ``15.804-1'' in its 
place.
    28. Section 16.501(c) is amended by revising the first sentence to 
read as follows:


16.501  General.

* * * * *
    (c) Indefinite-delivery contracts may provide for firm-fixed-prices 
(see 16.202), fixed prices with economic price adjustment (see 16.203), 
fixed prices with prospective redetermination (see 16.205), or prices 
based on catalog or market prices (see 15.804-1(b)(2)). * * *
    28a. Section 16.603-4 is amended after the first sentence in 
paragraph (b)(3) by adding a sentence to read as follows:


16.603-4  Contract clauses.

* * * * *
    (b)(3) * * * If, at the time of entering into the letter contract, 
the contracting officer knows that the definitive contract will be 
based on adequate price competition or will otherwise meet the criteria 
of 15.804-1 for not requiring submission of cost or pricing data, the 
words ``and cost or pricing data supporting its proposal'' may be 
deleted from paragraph (a) of the clause. * * *
* * * * * 

[[Page 48218]]


PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    29. Section 31.205-26 is amended by revising paragraphs (e) and (f) 
to read as follows:


31.205-26  Material costs.

* * * * *
    (e) Allowance for all materials, supplies, and services that are 
sold or transferred between any divisions, subdivisions, subsidiaries, 
or affiliates of the contractor under a common control shall be on the 
basis of cost incurred in accordance with this subpart. However, 
allowance may be at price when it is the established practice of the 
transferring organization to price interorganizational transfers at 
other than cost for commercial work of the contractor or any division, 
subsidiary, or affiliate of the contractor under a common control, and 
when the item being transferred qualifies for an exception under 
15.804-1 and the contracting officer has not determined the price to be 
unreasonable.
    (f) When a catalog or market price exception under 15.804-
1(a)(1)(ii) applies under paragraph (e) of this subsection, the price 
should be adjusted to reflect the quantities being acquired and may be 
adjusted to reflect the actual cost of any modifications necessary 
because of contract requirements.

PART 33--PROTESTS, DISPUTES, AND APPEALS

    30. Section 33.207(d) is revised to read as follows:


33.207  Contractor certification.

* * * * *
    (d) The aggregate amount of both increased and decreased costs 
shall be used in determining when the dollar thresholds requiring 
certification are met (see example in 15.804-2(a)(1)(iii) regarding 
cost or pricing data).
* * * * *

PART 36--CONSTRUCTION AND ARCHITECT ENGINEERING CONTRACTS

    31. Section 36.402 is amended by revising the introductory text of 
paragraph (b) and (b)(1) to read as follows:


36.402  Price negotiation.

* * * * *
    (b) The contracting officer shall evaluate proposals and associated 
cost or pricing data or information other than cost or pricing data and 
shall compare them to the Government estimate.
    (1) When submission of cost or pricing data is not required (see 
15.804-1 and 15.804-2), and any element of proposed cost differs 
significantly from the Government estimate, the contracting officer 
should request the offeror to submit cost information concerning that 
element (e.g., wage rates or fringe benefits, significant materials, 
equipment allowances, and subcontractor costs).
* * * * *

PART 45--GOVERNMENT PROPERTY

    32. Section 45.103(b)(1) is revised to read as follows:


45.103  Responsibility and liability for Government property.

* * * * *
    (b) * * *
    (1) Negotiated fixed-price contracts for which the contract price 
is not based upon an exception at 15.804-1;
* * * * *
    33. Section 45.106(b)(2) is revised to read as follows:


45.106  Government property clauses.

* * * * *
    (b) * * *
    (2) If the contract is--
    (i) A negotiated fixed-price contract for which prices are not 
based on an exception at 15.804-1; or
    (ii) A fixed-price service contract which is performed primarily on 
a Government installation, provided the contracting officer determines 
it to be in the best interest of the Government (see 45.103(b)(4)), the 
contracting officer shall use the clause with its Alternate I.
* * * * *
PART 46--QUALITY ASSURANCE


46.804  [Amended]

    34. Section 46.804 is amended by removing the parenthetical ``(see 
15.804-3(c))'' and inserting ``(see 15.804-1(b)(2))''.

PART 49--TERMINATION OF CONTRACTS

    35. Section 49.208 is amended in the introductory paragraph by 
revising the last sentence to read as follows:


49.208  Equitable adjustment after partial termination.

    * * * The contractor shall submit the proposal on SF 1411, Contract 
Pricing Proposal Cover Sheet (Cost or Pricing Data Required).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    35a. Part 52 is amended by removing the derivation lines following 
all ``(End of provision)'' or ``(End of clause)'' parentheticals and 
Alternates.
    36. Section 52.214-27 is amended by revising the date of the clause 
and paragraphs (a) and (e)(2) to read as follows:


52.214-27  Price Reduction for Defective Cost or Pricing Data--
Modifications--Sealed Bidding.

* * * * *

Price Reduction for Defective Cost or Pricing Data--Modifications--
Sealed Bidding (Oct. 1995)

    (a) This clause shall become operative only for any modification 
to this contract involving aggregate increases and/or decreases in 
costs, plus applicable profits, expected to exceed the threshold for 
the submission of cost or pricing data at FAR 15.804-2(a)(1), except 
that this clause does not apply to a modification if an exception 
under FAR 15.804-1 applies.
* * * * *
    (e) * * *
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
which were incomplete, inaccurate, or noncurrent.
(End of clause.)

    37. Section 52.214-28 is amended by revising the date of the clause 
and paragraphs (b) and (d) to read as follows:


52.214-28  Subcontractor Cost or Pricing Data--Modifications--Sealed 
Bidding.

* * * * *

Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding (Oct. 
1995)

* * * * *
    (b) Before awarding any subcontract expected to exceed the 
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award, 
whichever is later; or before pricing any subcontract modifications 
involving aggregate increases and/or decreases in costs, plus 
applicable profits, expected to exceed the threshold for submission 
of cost or pricing data at FAR 15.804-2(a)(1), the Contractor shall 
require the subcontractor to submit cost or pricing data (actually 
or by specific identification in writing), unless an exception under 
FAR 15.804-1 applies.
* * * * *
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that, when entered 
into, exceeds the threshold for submission of cost or pricing data 
at FAR 15.804-2(a)(1).
(End of clause.)


52.214-29  [Amended]

    37a. Section 52.214-29 is amended in the introductory text by 
removing the citation ``14.201-7(e)'' and inserting ``14.201-7(d)'' in 
its place.
    38. Section 52.215-22 is amended by revising the date of the 
clause, and paragraph (d)(2) to read as follows: 

[[Page 48219]]



52.215-22  Price Reduction for Defective Cost or Pricing Data.

* * * * *

Price Reduction for Defective Cost or Pricing Data (Oct. 1995)

* * * * *
    (d) * * *
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
which were incomplete, inaccurate, or noncurrent.
(End of clause.)

    39. Section 52.215-23 is amended by revising the clause date and 
paragraphs (a) and (e)(2) to read as follows:


52.215-23  Price Reduction for Defective Cost or Pricing Data--
Modifications

* * * * *

Price Reduction for Defective Cost or Pricing Data--Modifications (Oct. 
1995)

    (a) This clause shall become operative only for any modification 
to this contract involving a pricing adjustment expected to exceed 
the threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), except that this clause does not apply to any modification 
if an exception under FAR 15.804-1 applies.
* * * * *
    (e) * * *
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
which were incomplete, inaccurate, or noncurrent.
(End of clause)

    40. Section 52.215-24 is amended by revising the date of the 
clause, and paragraph (a) to read as follows:


52.215-24  Subcontractor Cost or Pricing Data.

* * * * *

Subcontractor Cost or Pricing Data (Oct 1995)

    (a) Before awarding any subcontract expected to exceed the 
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award, 
whichever is later; or before pricing any subcontract modification 
involving a pricing adjustment expected to exceed the threshold for 
submission of cost or pricing data at FAR 15.804-2(a)(1), the 
Contractor shall require the subcontractor to submit cost or pricing 
data (actually or by specific identification in writing), unless an 
exception under FAR 15.804-1 applies.
* * * * *
    41. Section 52.215-25 is amended by revising the date of the clause 
and paragraphs (b) and (d) to read as follows:


52.215-25  Subcontractor Cost or Pricing Data--Modifications.

* * * * *

Subcontractor Cost or Pricing Data--Modifications (Oct 1995)

    (b) Before awarding any subcontract expected to exceed the 
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award, 
whichever is later; or before pricing any subcontract modification 
involving a pricing adjustment expected to exceed the threshold for 
submission of cost or pricing data at FAR 15.804-2(a)(1), the 
Contractor shall require the subcontractor to submit cost or pricing 
data (actually or by specific identification in writing), unless an 
exception under FAR 15.804-1 applies.
* * * * *
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that exceeds the 
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1) on the date of agreement on price or the date of award, 
whichever is later.
(End of clause)

    42. Section 52.215-26 is amended by revising the clause date and 
paragraph (b) to read as follows:


52.215-26  Integrity of Unit Prices.

* * * * *

Integrity of Unit Prices (Oct 1995)

* * * * *
    (b) The requirement in paragraph (a) of this clause does not apply 
to any contract or subcontract item of supply for which the unit price 
is, or is based on, an established catalog or market price for a 
commercial item sold in substantial quantities to the general public or 
to an item qualifying for a commercial item exception to cost or 
pricing data. A price is based on an established catalog or market 
price only if the item being purchased is sufficiently similar to the 
catalog or market priced commercial item to ensure that any difference 
in prices can be identified and justified without resort to cost 
analysis.
* * * * *
    43. Sections 52.215-41 through 52.215-43 are added to read as 
follows:


52.215-41  Requirements for Cost or Pricing Data or Information Other 
Than Cost or Pricing Data.

    As prescribed in 15.804-8(h), insert the following provision:

Requirements for Cost or Pricing Data or Information Other Than Cost or 
Pricing Data (Oct 1995)

    (a) Exceptions from cost or pricing data. (1) In lieu of 
submitting cost or pricing data, offerors may submit a written 
request for exception by submitting the information described in the 
following subparagraphs. The Contracting Officer may require 
additional supporting information, but only to the extent necessary 
to determine whether an exception should be granted, and whether the 
price is fair and reasonable.
    (i) Information relative to an exception granted for prior or 
repetitive acquisitions.
    (ii) Catalog price information as follows:
    (A) Attach a copy of or identify the catalog and its date, or 
the appropriate pages for the offered items, or a statement that the 
catalog is on file in the buying office to which this proposal is 
being made.
    (B) Provide a copy or describe current discount policies and 
price lists (published or unpublished), e.g., wholesale, original 
equipment manufacturer, and reseller.
    (C) Additionally, for each catalog item that exceeds ______ * 
(extended value not unit price), provide evidence of substantial 
sales to the general public. This may include sales order, contract, 
shipment, invoice, actual recorded sales or other records that are 
verifiable. In addition, if the basis of the price proposal is sales 
of essentially the same commercial item by affiliates, other 
manufacturers or vendors, those sales may be included. The offeror 
shall explain the basis of each offered price and its relationship 
to the established catalog price. When substantial general public 
sales have also been made at prices other than catalog or price list 
prices, the offeror shall indicate how the proposed price relates to 
the price of such recent sales in quantities similar to the proposed 
quantities.

    *Insert dollar amount for sampling (see 15.804-1(c)(1))
---------------------------------------------------------------------------

    (iii) Market price information. Include the source and date or 
period of the market quotation or other basis for market price, the 
base amount, and applicable discounts. The nature of the market 
should be described. The supply or service being purchased should be 
the same as or similar to the market price supply or service. Data 
supporting substantial sales to the general public is also required.
    (iv) Identification of the law or regulation establishing the 
price offered. If the price is controlled under law by periodic 
rulings, reviews, or similar actions of a governmental body, attach 
a copy of the controlling document, unless it was previously 
submitted to the contracting office.
    (v) For a commercial item exception, information on prices at 
which the same item or similar items have been sold in the 
commercial market.
    (2) The offeror grants the Contracting Officer or an authorized 
representative the right to examine, at any time before award, 
books, records, documents, or other directly pertinent records to 
verify any request for an exception under this provision, and the 
reasonableness of price. Access does not extend to cost or profit 
information or other data relevant solely to the offeror's 
determination of the prices to be offered in the catalog or 
marketplace.
    (b) Requirements for cost or pricing data. If the offeror is not 
granted an exception from the requirement to submit cost or pricing 
data, the following applies: 

[[Page 48220]]

    (1) The offeror shall submit cost or pricing data on Standard 
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or 
Pricing Data Required), with supporting attachments prepared in 
accordance with Table 15-2 of FAR 15.804-6(b)(2).
    (2) As soon as practicable after agreement on price, but before 
contract award (except for unpriced actions such as letter 
contracts), the offeror shall submit a Certificate of Current Cost 
or Pricing Data, as prescribed by FAR 15.804-4.
    (c) By submitting information to qualify for an exception, an 
offeror is not representing that this is the only exception that may 
apply.
(End of provision)

    Alternate I (Oct 1995). As prescribed in 15.804-8(h), substitute 
the following paragraph (b)(1) for paragraph (b)(1) of the basic 
provision:
    (b)(1) The offeror shall submit cost or pricing data on Standard 
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or 
Pricing Data Required), with supporting attachments prepared in the 
following format:
    Alternate II (Oct 1995). As prescribed in 15.804-8(h), add the 
following paragraph (d) to the basic provision:
    (c) When the proposal is submitted, also submit one copy each, 
including the SF 1411 and supporting attachments, to: (1) the 
Administrative Contracting Officer, and (2) the Contract Auditor.
    Alternate III (Oct. 1995). As prescribed in 15.804-8(h), add the 
following paragraph (d) to the basic provision (if Alternate II is 
also used, redesignate as paragraph (e)):
    (d) Submit the cost portion of the proposal via the following 
electronic media: (Insert media format, e.g., electronic spreadsheet 
format, electronic mail, etc.).
    Alternate IV (Oct. 1995). As prescribed in 15.804-8(h), replace 
the text of the basic provision with the following:
    (a) Submission of cost or pricing data is not required.
    (b) Provide information described below: (Insert description of 
the information and the format that are required, including access 
to records necessary to permit an adequate evaluation of the 
proposed price in accordance with 15.804-6(a)(5). Standard Form 
1448, Proposal Cover Sheet (Cost or Pricing Data Not Required), may 
be used for information other than cost or pricing data).


52.215-42  Requirements for Cost or Pricing Data or Information Other 
Than Cost or Pricing Data--Modifications.

    As prescribed in 15.804-8(i), insert the following clause:

Requirements for Cost or Pricing Data or Information Other Than Cost or 
Pricing Data--Modifications (Oct. 1995)

    (a) Exceptions from cost or pricing data. (1) In lieu of 
submitting cost or pricing data for modifications under this 
contract, for price adjustments expected to exceed the threshold set 
forth at FAR 15.804-2(a)(1) on the date of the agreement on price or 
the date of the award, whichever is later, the Contractor may submit 
a written request for exception by submitting the information 
described in the following subparagraphs. The Contracting Officer 
may require additional supporting information, but only to the 
extent necessary to determine whether an exception should be 
granted, and whether the price is fair and reasonable--
    (i) Information relative to an exception granted for prior or 
repetitive acquisitions.
    (ii) Catalog price information as follows:
    (A) Attach a copy of or identify the catalog and its date, or 
the appropriate pages for the offered items, or a statement that the 
catalog is on file in the buying office to which this proposal is 
being made.
    (B) Provide a copy or describe current discount policies and 
price lists (published or unpublished), e.g., wholesale, original 
equipment manufacturer, and reseller.
    (C) Additionally, for each catalog item that exceeds ______* 
(extended value not unit price), provide evidence of substantial 
sales to the general public. This may include sales order, contract, 
shipment, invoice, actual recorded sales or other records that are 
verifiable. In addition, if the basis of the price proposal is sales 
of essentially the same commercial item by affiliates, other 
manufacturers or vendors, those sales may be included. The offeror 
shall explain the basis of each offered price and its relationship 
to the established catalog price. When substantial general public 
sales have also been made at prices other than catalog or price list 
prices, the offeror shall indicate how the proposed price relates to 
the price of such recent sales in quantities similar to the proposed 
quantities.

    *Insert dollar amount for sampling (see 15.804-1(c)(1)).
---------------------------------------------------------------------------

    (iii) Market price information. Include the source and date or 
period of the market quotation or other basis for market price, the 
base amount, and applicable discounts. The nature of the market 
should be described. The supply or service being purchased should be 
the same as or similar to the market price supply or service. Data 
supporting substantial sales to the general public is also required.
    (iv) Identification of the law or regulation establishing the 
price offered. If the price is controlled under law by periodic 
rulings, reviews, or similar actions of a governmental body, attach 
a copy of the controlling document, unless it was previously 
submitted to the contracting office.
    (v) Information on modifications of contracts or subcontracts 
for commercial items.
    (A) If (1) The original contract or subcontract was granted an 
exception from cost or pricing data requirements because the price 
agreed upon was based on adequate price competition, catalog or 
market prices of commercial items, or prices set by law or 
regulation; and (2) the modification (to the contract or 
subcontract) is not exempted based on one of these exceptions, then 
the Contractor may provide information to establish that the 
modification would not change the contract or subcontract from a 
contract or subcontract for the acquisition of a commercial item to 
a contract or subcontract for the acquisition of an item other than 
a commercial item.
    (B) For a commercial item exception, the Contractor may provide 
information on prices at which the same item or similar items have 
been sold in the commercial market.
    (2) The Contractor grants the Contracting Officer or an 
authorized representative the right to examine, at any time before 
award, books, records, documents, or other directly pertinent 
records to verify any request for an exception under this clause, 
and the reasonableness of price. Access does not extend to cost or 
profit information or other data relevant solely to the Contractor's 
determination of the prices to be offered in the catalog or 
marketplace.
    (3) By submitting information to qualify for an exception, an 
offeror is not representing that this is the only exception that may 
apply.
    (b) Requirements for cost or pricing data. If the Contractor is 
not granted an exception from the requirement to submit cost or 
pricing data, the following applies:
    (1) The Contractor shall submit cost or pricing data on Standard 
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or 
Pricing Data Required), with supporting attachments prepared in 
accordance with Table 15-2 of FAR 15.804-6(b)(2).
    (2) As soon as practicable after agreement on price, but before 
award (except for unpriced actions), the Contractor shall submit a 
Certificate of Current Cost or Pricing Data, as prescribed by FAR 
15.804-4.

(End of clause.)

    Alternate I (Oct. 1995). As prescribed in 15.804-8(i), 
substitute the following paragraph (b)(1) for paragraph (b)(1) of 
the basic clause.
    (b)(1) The Contractor shall submit cost or pricing data on 
Standard Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost 
or Pricing Data Required), with supporting attachments prepared in 
the following format:
    Alternate II (Oct. 1995). As prescribed in 15.804-8(i), add the 
following paragraph (c) to the basic clause:
    (c) When the proposal is submitted, also submit one copy each, 
including the SF 1411 and supporting attachments, to: (1) The 
Administrative Contracting Officer, and (2) the Contract Auditor.
    Alternate III (Oct. 1995). As prescribed in 15.804-8(i), add the 
following paragraph (c) to the basic clause (if Alternate II is also 
used, redesignate as paragraph (d)):
    (c) Submit the cost portion of the proposal via the following 
electronic media: (Insert media format).
    Alternate IV (Oct. 1995). As prescribed in 15.804-8(i), replace 
the text of the basic clause with the following:
    (a) Submission of cost or pricing data is not required.
    (b) Provide information described below: (Insert description of 
the information and the format that are required, including access 
to records necessary to permit an adequate evaluation of the 
proposed price in accordance with 15.804-6(a)(5). Standard Form 
1448, Proposal Cover Sheet (Cost or Pricing Data Not Required), may 
be used for information other than cost or pricing data.) 

[[Page 48221]]



52.215-43  Audit--Commercial Items.

    As prescribed at 15.106-2, insert the following clause:

Audit--Commercial Items (Oct. 1995)

    (a) As used in this clause, records include books, documents, 
accounting procedures and practices, and other data, regardless of 
type and regardless of whether such items are in written form, in 
the form of computer data, or any other form.
    (b) This paragraph applies to solicitations and contracts or 
subcontracts for commercial items that may be or have been granted 
an exception from submittal of cost or pricing data only under FAR 
15.804-1(a)(2). In order to determine the accuracy of the 
information on prices at which the same or similar items have been 
sold in the commercial market, the Contracting Officer and 
authorized representatives have a right to examine such information 
provided by the offeror, Contractor, or subcontractor, and all 
records that directly relate to such information. Access does not 
extend to cost or profit information or other data relevant solely 
to the offeror's determination of the prices to be offered in the 
marketplace. This right shall expire two years after the date of 
award of the contract, or two years after the date of any 
modification to the contract, with respect to which this information 
is provided.
    (c) If the prime Contractor and each higher-tier subcontractor 
were required to submit cost or pricing data, the Contractor and 
each subcontractor shall insert the substance of this clause, 
including this paragraph (c), in each subcontract for which 
submission of cost or pricing data was required or for which an 
exception was granted under FAR 15.804-1(a)(2).
(End of clause.)


52.216-2  [Amended]

    44. Section 52.216-2 is amended in the clause heading by revising 
the date to read ``(Oct. 1995)''; in paragraph (a)(2) by removing 
``15.804-3'' and inserting ``15.804-1'' in its place; and removing the 
parenthetical following ``(End of clause)''.


52.216-3  [Amended]

    45. Section 52.216-3 is amended in the clause heading by removing 
``(APR 1984)'' and inserting ``(Oct. 1995)''; in paragraph (a)(2) by 
removing the reference ``15.804-3'' and inserting ``15.804-1''; and by 
removing the parenthetical following ``(End of clause)''.
    46. Section 52.216-5 is amended by revising the clause date and 
paragraph (d)(1)(i)(A); and by removing the parenthetical following 
``(End of clause)'' to read as follows:


52.216-5  Price Redetermination--Prospective.

* * * * *

Price Redetermination--Prospective (Oct. 1995)

* * * * *
    (d) * * *
    (1) * * *
    (i) * * *
    (A) An estimate and breakdown of the costs of these supplies or 
services on Standard Form 1411, Contract Pricing Proposal Cover 
Sheet (Cost or Pricing Data Required), or in any other form on which 
the parties may agree;
* * * * *
    47. Section 52.216-6 is amended by revising the introductory text, 
the clause date, and paragraph (c)(1)(ii) to read as follows:


52.216-6  Price Redetermination--Retroactive.

    As prescribed in 16.206-4, insert the following clause:

Price Redetermination--Retroactive (Oct. 1995)

* * * * *
    (c) * * *
    (1) * * *
    (ii) A statement on Standard Form 1411, Contract Pricing 
Proposal Cover Sheet (Cost or Pricing Data Required), or in any 
other form on which the parties may agree, of all costs incurred in 
performing the contract; and
* * * * *
    48. Section 52.216-25 is amended by revising the introductory 
paragraph; and the parentheticals following the end of the main clause 
and the end of Alternate I are removed to read as follows:


52.216-25  Contract Definitization.

    As prescribed in 16.603-4(b)(3), insert the following clause:
* * * * *
    49. Section 52.222-48 is amended by revising the clause date, 
redesignating paragraphs (a) (i), (ii), and (iii) as (a) (1), (2), and 
(3), and revising newly redesignated paragraph (a)(2) to read as 
follows:


52.222-48  Exemption from Application of Service Contract Act 
Provisions for Contracts for Maintenance, Calibration, and/or Repair of 
Certain ADP, Scientific and Medical and/or Office and Business 
Equipment--Contractor Certification.

* * * * *

Exemption From Application of Service Contract Act Provisions for 
Contracts for Maintenance, Calibration, and/or Repair of Certain ADP, 
Scientific and Medical and/or Office and Business Equipment--Contractor 
Certification (Oct. 1995)

    (a) * * * (2) The contract services are furnished at prices 
which are, or are based on, established catalog or market prices for 
the maintenance, calibration, and/or repair of certain ADP, 
scientific and medical and/or office and business equipment. An 
``established catalog price'' is a price (including discount price) 
recorded in a catalog, price list, schedule, or other verifiable and 
established record that is regularly maintained by the manufacturer 
or the Contractor and is either published or otherwise available for 
inspection by customers. An ``established market price'' is a 
current price, established in the course of ordinary and usual trade 
between buyers and sellers free to bargain, which can be 
substantiated by data from sources independent of the manufacturer 
or Contractor; and * * *
* * * * *

PART 53--FORMS

    50. Section 53.215-2 is revised to read as follows:
53.215-2  Price negotiation (SF's 1411 and 1448).

    The following standard forms are prescribed for use in connection 
with requirements for obtaining cost or pricing data or information 
other than cost or pricing data from offerors or contractors, as 
specified in 15.804:
    (a) SF 1411 (REV. OCT./95), Contract Pricing Proposal Cover Sheet 
(Cost or Pricing Data Required). (See 15.804-6(b)(1).) SF 1411 is 
authorized for local reproduction and a copy is furnished for this 
purpose in Part 53 of the loose-leaf edition of the FAR.
    (b) SF 1448 (OCT/95), Proposal Cover Sheet (Cost or Pricing Data 
Not Required). (See 15.804-6(b)(2).) SF 1448 is authorized for local 
reproduction and a copy is furnished for this purpose in Part 53 of the 
loose-leaf edition of the FAR.
    51. Section 53.301-1411 is revised and 53.301-1448 is added to read 
as follows:

BILLING CODE 6820-EP-P

[[Page 48222]]



53.301-1411  Contract Pricing Proposal Cover Sheet.

[GRAPHIC][TIFF OMITTED]TR18SE95.000

BILLING CODE 6820-EP-C

[[Page 48223]]



53.301  Proposal Cover Sheet

BILLING CODE 6820-EP-P

[GRAPHIC][TIFF OMITTED]TR18SE95.001


[[Page 48224]]

[FR Doc. 95-22776 Filed 9-15-95; 8:45 am]
BILLING CODE 6820-EP-C