10 U.S.C. § 3703 — Exceptions

**(a) In general.—** Submission of certified cost or pricing data shall not be required under [section 3702 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3702&num=0&edition=prelim) in the case of a contract, a subcontract, or modification of a contract or subcontract— (1) for which the price agreed upon is based on— (A) adequate price competition; or (B) prices set by law or regulation; (2) for the acquisition of a commercial product or a commercial service; (3) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this chapter may be waived and justifies in writing the reasons for such determination; or (4) to the extent such data— (A) relates to an offset agreement in connection with a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm; and (B) does not relate to a contract or subcontract under the offset agreement for work performed in such foreign country or by such foreign firm that is directly related to the weapon system or defense-related item being purchased under the contract. **(b) Modifications of contracts and subcontracts for commercial products or commercial services.—** In the case of a modification of a contract or subcontract for a commercial product or commercial services that is not covered by the exception to the submission of certified cost or pricing data in paragraph (1) or (2) of subsection (a), submission of certified cost or pricing data shall not be required under [section 3702 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3702&num=0&edition=prelim) if— (1) the contract or subcontract being modified is a contract or subcontract for which submission of certified cost or pricing data may not be required by reason of paragraph (1) or (2) of subsection (a); and (2) the modification would not change the contract or subcontract, as the case may be, from a contract or subcontract for the acquisition of a commercial product or commercial services to a contract or subcontract for the acquisition of an item other than a commercial product or commercial services. **(c) Noncommercial modifications of commercial products.—** (1) The exception in subsection (a)(2) does not apply to cost or pricing data on noncommercial modifications of a commercial product that are expected to cost, in the aggregate, more than the amount specified in [section 3702(a)(1)(A) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3702/a/1/A&num=0&edition=prelim), as adjusted from time to time under [section 3702(g) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3702/g&num=0&edition=prelim), or 5 percent of the total price of the contract (at the time of contract award), whichever is greater. (2) In this subsection, the term “noncommercial modification”, with respect to a commercial product, means a modification of such product that is not a modification described in [section 103(3)(A) of title 41](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section103/3/A&num=0&edition=prelim). (3) Nothing in paragraph (1) shall be construed— (A) to limit the applicability of the exception in paragraph (1) or (3) of subsection (a) to cost or pricing data on a noncommercial modification of a commercial product; or (B) to require the submission of cost or pricing data on any aspect of an acquisition of a commercial product other than the cost and pricing of noncommercial modifications of such product. **(d) Commercial product or commercial service determination.—** (1) For purposes of applying the exception under subsection (a)(2) to the required submission of certified cost or pricing data, the contracting officer may presume that a prior commercial product or commercial service determination made by a military department, a Defense Agency, or another component of the Department of Defense shall serve as a determination for subsequent procurements of such product or service. (2) If the contracting officer does not make the presumption described in paragraph (1) and instead chooses to proceed with a procurement of a product or service previously determined to be a commercial product or a commercial service using procedures other than the procedures authorized for the procurement of a commercial product or a commercial service, as the case may be, the contracting officer shall request a review of the commercial product or commercial service determination by the head of the contracting activity. (3) Not later than 30 days after receiving a request for review of a determination under paragraph (2), the head of a contracting activity shall— (A) confirm that the prior determination was appropriate and still applicable; or (B) issue a revised determination with a written explanation of the basis for the revision. **(e)** A contracting officer shall consider evidence provided by an offeror of recent purchase prices paid by the Government for the same or similar commercial products or commercial services in establishing price reasonableness on a subsequent purchase if the contracting officer is satisfied that the prices previously paid remain a valid reference for comparison after considering the totality of other relevant factors such as the time elapsed since the prior purchase and any differences in the quantities purchased or applicable terms and conditions. **(f) Determination by prime contractor.—** A prime contractor required to submit certified cost or pricing data under [section 3702 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3702&num=0&edition=prelim) with respect to a prime contract shall be responsible for determining whether a subcontract under such contract qualifies for an exception under subsection (a)(1) from such requirement.