10 U.S.C. § 3704 — Cost or pricing data on below-threshold

Page 2531 TITLE 10—ARMED FORCES § 3704 Pub. L. 116–283, § 1831(d), was based on Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 103–355, title I, § 1202(a), Oct. 13, 1994, 108 Stat. 3274, as amended by Pub. L. 104–106, div. D, title XLIII, § 4321(a)(2), Feb. 10, 1996, 110 Stat. 671; Pub. L. 104–106, div. D, title XLII, § 4201(a)(1), Feb. 10, 1996, 110 Stat. 649; Pub. L. 108–375, div. A, title VIII, § 818(a), Oct. 28, 2004, 118 Stat. 2015; Pub. L. 110–181, div. A, title VIII, § 814, Jan. 28, 2008, 122 Stat. 222; Pub. L. 113–291, div. A, title X, § 1071(a)(3), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, §§ 812, 851(b), 853, Nov. 25, 2015, 129 Stat. 891, 916, 919; Pub. L. 114–328, div. A, title VIII, § 822(2), Dec. 23, 2016, 130 Stat. 2276; Pub. L. 115–232, div. A, title VIII, § 836(c)(5)(A), Aug. 13, 2018, 132 Stat. 1865. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sec- tions. Pub. L. 99–591 is a corrected version of Pub. L. 99–500. AMENDMENTS 2021—Pub. L. 116–283, § 1831(d)(1), transferred subsec. (b) of section 2306a of this title to this section, struck out subsec. (b) designation and heading ‘‘Exceptions’’ at beginning, and redesignated pars. (1) to (6) as sub- secs. (a) to (f), respectively, and realigned margins. Subsec. (a). Pub. L. 116–283, § 1831(d)(2)(A), (B), (C), (E), after redesignation of section 2306a(b)(1) of this title as subsec. (a) of this section, substituted ‘‘under section 3702 of this title’’ for ‘‘under subsection (a)’’ in introductory provisions, redesignated subpar. (A) and its cls. (i) and (ii) as par. (1) and subpars. (A) and (B), respectively, redesignated subpars. (B) and (C) as pars. (2) and (3), respectively, and redesignated subpar. (D) and its cls. (i) and (ii) as par. (4) and subpars. (A) and (B), respectively. Subsec. (a)(3). Pub. L. 116–283, § 1831(d)(2)(D), sub- stituted ‘‘this chapter’’ for ‘‘this section’’. Subsec. (b). Pub. L. 116–283, § 1831(d)(3)(A), (B), after redesignation of section 2306a(b)(2) of this title as sub- sec. (b) of this section, in introductory provisions, sub- stituted ‘‘paragraph (1) or (2) of subsection (a)’’ for ‘‘paragraph (1)(A) or (1)(B)’’ and ‘‘under section 3702 of this title’’ for ‘‘under subsection (a)’’ and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively. Subsec. (b)(1). Pub. L. 116–283, § 1831(d)(3)(C), sub- stituted ‘‘paragraph (1) or (2) of subsection (a)’’ for ‘‘paragraph (1)(A) or (1)(B)’’. Subsec. (c). Pub. L. 116–283, § 1831(d)(4)(A), (D)(i), after redesignation of section 2306a(b)(3) of this title as sub- sec. (c) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively. Subsec. (c)(1). Pub. L. 116–283, § 1831(d)(4)(B), sub- stituted ‘‘subsection (a)(2)’’ for ‘‘paragraph (1)(B)’’, ‘‘section 3702(a)(1)(A) of this title’’ for ‘‘subsection (a)(1)(A)(i)’’, and ‘‘section 3702(g) of this title’’ for ‘‘sub- section (a)(7)’’. Subsec. (c)(2). Pub. L. 116–283, § 1831(d)(4)(C), sub- stituted ‘‘this subsection’’ for ‘‘this paragraph’’. Subsec. (c)(3). Pub. L. 116–283, § 1831(d)(4)(D)(ii), (ii) [(iii)], substituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’ in introductory provisions and ‘‘paragraph (1) or (3) of subsection (a)’’ for ‘‘subparagraph (A) or (C) of paragraph (1)’’ in subpar. (A). Subsec. (d). Pub. L. 116–283, § 1831(d)(5)(A), (D)(i), after redesignation of section 2306a(b)(4) of this title as sub- sec. (d) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively. Subsec. (d)(1). Pub. L. 116–283, § 1831(d)(5)(B), sub- stituted ‘‘subsection (a)(2)’’ for ‘‘paragraph (1)(B)’’. Subsec. (d)(2). Pub. L. 116–283, § 1831(d)(5)(C), sub- stituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’. Subsec. (d)(3). Pub. L. 116–283, § 1831(d)(5)(D)(ii), sub- stituted ‘‘paragraph (2)’’ for ‘‘subparagraph (B)’’ in in- troductory provisions. Subsec. (f). Pub. L. 116–283, § 1831(d)(6), after redesig- nation of section 2306a(b)(6) of this title as subsec. (f) of this section, substituted ‘‘section 3702 of this title’’ for ‘‘subsection (a)’’ and ‘‘subsection (a)(1)’’ for ‘‘paragraph (1)(A)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed im- plementation and applicability of existing law, see sec- tion 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title. § 3704. Cost or pricing data on below-threshold contracts (a) AUTHORITY TO REQUIRE SUBMISSION.—Sub- ject to subsection (b), when certified cost or pricing data are not required to be submitted by section 3702 of this title for a contract, sub- contract, or modification of a contract or sub- contract, such data may nevertheless be re- quired to be submitted by the head of the pro- curing activity, but only if the head of the pro- curing activity determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract. In any case in which the head of the procuring activity requires such data to be submitted under this section, the head of the procuring activity shall justify in writing the reason for such requirement. (b) EXCEPTION.—The head of the procuring ac- tivity may not require certified cost or pricing data to be submitted under this subsection for any contract or subcontract, or modification of a contract or subcontract, covered by the excep- tions in paragraph (1) or (2) of section 3703(a) of this title. (c) DELEGATION OF AUTHORITY PROHIBITED.— The head of a procuring activity may not dele- gate functions under this subsection. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1831(a), (e), Jan. 1, 2021, 134 Stat. 4209, 4213.) Editorial Notes CODIFICATION The text of subsec. (c) of section 2306a of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1831(e), was based on Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 101–510, div. A, title VIII, § 803(d), Nov. 5, 1990, 104 Stat. 1590; Pub. L. 103–355, title I, § 1203, Oct. 13, 1994, 108 Stat. 3274; Pub. L. 104–106, div. D, title XLII, § 4201(a)(1), Feb. 10, 1996, 110 Stat. 650. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sections. Pub. L. 99–591 is a corrected version of Pub. L. 99–500. AMENDMENTS 2021—Pub. L. 116–283, § 1831(e)(1)(A), transferred sub- sec. (c) of section 2306a of this title to this section and struck out subsec. (c) designation and heading ‘‘Cost or Pricing Data on Below-Threshold Contracts’’ at begin- ning. Page 2532 TITLE 10—ARMED FORCES § 3705 Subsec. (a). Pub. L. 116–283, § 1831(e)(1)(B), (2), redesig- nated par. (1) of section 2306a(c) of this title as subsec. (a) of this section, realigned margin, and substituted ‘‘subsection (b)’’ for ‘‘paragraph (2)’’, ‘‘section 3702 of this title’’ for ‘‘subsection (a)’’, and ‘‘under this sec- tion’’ for ‘‘under this subsection’’. Subsec. (b). Pub. L. 116–283, § 1831(e)(1)(B), (3), redesig- nated par. (2) of section 2306a(c) of this title as subsec. (b) of this section, realigned margin, and substituted ‘‘under this subsection’’ for ‘‘under this paragraph’’ and ‘‘paragraph (1) or (2) of section 3703(a) of this title’’ for ‘‘subparagraph (A) or (B) of subsection (b)(1)’’. Subsec. (c). Pub. L. 116–283, § 1831(e)(1)(B), (4), redesig- nated par. (3) of section 2306a(c) of this title as subsec. (c) of this section, realigned margin, and substituted ‘‘under this subsection’’ for ‘‘under this paragraph’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed im- plementation and applicability of existing law, see sec- tion 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title. § 3705. Submission of other information (a) AUTHORITY TO REQUIRE SUBMISSION.—When certified cost or pricing data are not required to be submitted under this chapter for a contract, subcontract, or modification of a contract or subcontract, the offeror shall be required to sub- mit to the contracting officer data other than certified cost or pricing data (if requested by the contracting officer), to the extent necessary to determine the reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract. Except in the case of a contract or subcontract covered by the excep- tions in section 3703(a)(1) of this title, the con- tracting officer shall require that the data sub- mitted include, at a minimum, appropriate in- formation on the prices at which the same item or similar items have previously been sold that is adequate for evaluating the reasonableness of the price for the procurement. If the contracting officer determines that the offeror does not have access to and cannot provide sufficient informa- tion on prices for the same or similar items to determine the reasonableness of price, the con- tracting officer shall require the submission of information on prices for similar levels of work or effort on related products or services, prices for alternative solutions or approaches, and other information that is relevant to the deter- mination of a fair and reasonable price. Con- tracting officers shall not determine the price of a contract or subcontract to be fair and reason- able based solely on historical prices paid by the Government. (b) INELIGIBILITY FOR AWARD.—(1) In the event the contracting officer is unable to determine proposed prices are fair and reasonable by any other means, an offeror who fails to make a good faith effort to comply with a reasonable re- quest to submit data in accordance with sub- section (a) is ineligible for award unless the head of the contracting activity, or the designee of the head of contracting activity, determines that it is in the best interest of the Government to make the award to that offeror, based on con- sideration of pertinent factors, including the fol- lowing: (A) The effort to obtain the data. (B) Availability of other sources of supply of the item or service. (C) The urgency or criticality of the Govern- ment’s need for the item or service. (D) Reasonableness of the price of the con- tract, subcontract, or modification of the con- tract or subcontract based on information available to the contracting officer. (E) Rationale or justification made by the offeror for not providing the requested data. (F) Risk to the Government if award is not made. (2)(A) Any new determination made by the head of the contracting activity under para- graph (1) shall be reported to the Principal Di- rector, Defense Pricing and Contracting on a quarterly basis. (B) The Under Secretary of Defense for Acqui- sition and Sustainment, or a designee, shall produce an annual report identifying offerors that have denied multiple requests for submis- sion of uncertified cost or pricing data over the preceding three-year period, but nevertheless re- ceived an award. The report shall identify prod- ucts or services offered by such offerors that should undergo should-cost analysis. The Sec- retary of Defense may include a notation on such offerors in the system used by the Federal Government to monitor or record contractor past performance. The Under Secretary shall as- sess the extent to which these offerors are sole source providers within the defense industrial base and shall develop strategies to incentivize new entrants into the industrial base to increase the availability of other sources of supply for the product or service. The Under Secretary shall make appropriate portions of the report available to the leadership of the offerors named in such report. (C) The Under Secretary of Defense for Acqui- sition and Sustainment shall develop a frame- work for revising what constitutes a denial of uncertified cost or pricing data, including— (i) identifying situations under which such denials occur to exclude situations outside the control of the offeror or Federal Government; (ii) identifying whether such denial is from the prime contractor or subcontractor; and (iii) developing an appropriate timeframe for requiring submission of uncertified cost or pricing data before a request for such data is considered a denial, including a standardized determination of a starting point and conclu- sion for such requests. (c) LIMITATIONS ON AUTHORITY.—The Federal Acquisition Regulation shall include the fol- lowing provisions regarding the types of infor- mation that contracting officers may require under subsection (a): (1) Reasonable limitations on requests for sales data relating to commercial products or commercial services. (2) A requirement that a contracting officer limit, to the maximum extent practicable, the scope of any request for information relating to commercial products or commercial serv- ices from an offeror to only that information that is in the form regularly maintained by the offeror in commercial operations.