Certified Cost or Pricing Data

Certified cost or pricing data is all facts that, as of the date of price agreement, a prudent buyer or seller would reasonably expect to affect price negotiations, vendor quotes, labor rates, make-or-buy decisions, historical cost experience, technical estimates, submitted with a formal certification (FAR 15.406-2) that the data is current, accurate, and complete.

What is Certified Cost or Pricing Data?

FAR 2.101 defines cost or pricing data as all facts that can reasonably be expected to contribute to the soundness of estimates and the validity of cost representations. This deliberately broad definition encompasses nearly everything with a bearing on how costs were estimated: actual purchase orders received for materials, vendor quotes obtained but not yet accepted, historical costs of performing similar work, manufacturing and engineering estimates, actuarial data used in benefit cost estimates, and make-or-buy alternatives considered.

The certification itself is a formal statement on Form SF 1411 or its equivalent, signed by a contractor official with authority to bind the company, stating: "This is to certify that, to the best of my knowledge and belief, the cost or pricing data... are accurate, complete, and current as of [date]." This certification creates a legal warranty. If post-award audit reveals the certified data was not accurate, complete, or current at the time of certification, the government has a claim for defective pricing under FAR 15.407-1.

Importantly, cost or pricing data is limited to verifiable facts, not judgments. A contractor's estimate of future productivity is a judgment, not cost or pricing data. But the historical productivity rates on which that estimate was based are cost or pricing data. A contractor's proposed labor rate is a judgment; the current actual salaries of employees who will perform the work are cost or pricing data. The line between fact and judgment matters because TINA applies only to the factual data, not to the analytical judgments built on top of it.

Why Certified Cost or Pricing Data Matters

The certification obligation forces contractors to build data collection discipline into their proposal process: systematically gathering, documenting, and disclosing all material factual information before price agreement. Companies with poor data collection processes discover too late that vendor quotes received after proposal submission but before price agreement were never disclosed, a silent defective pricing liability sitting in the contract. Internal TINA compliance reviews before certification can identify and remediate disclosure gaps before they become audit findings.

Example

A defense IT firm negotiates a $9M software development contract. Its certified cost or pricing data package includes: current salary statements for all proposed key personnel (verifiable fact), three vendor quotes for cloud hosting services with the lowest accepted (all three disclosed, not just the accepted one), the firm's DCAA-approved provisional billing rates (verifiable fact), historical software productivity data from two prior similar contracts (verifiable fact), and the make-or-buy analysis documenting the decision to self-perform versus subcontract the testing function. The package is assembled by the contracts manager, reviewed by finance, and certified by the CFO as current, accurate, and complete as of the date the price agreement letter is signed.

Frequently Asked Questions

What makes data "complete" for TINA certification purposes?

Completeness means all material facts have been disclosed, including facts that would reduce the proposed price if known to the government. Completeness violations, omitting a favorable vendor quote, not disclosing a productivity improvement discovered after proposal submission but before price agreement, failing to disclose a lower-than-proposed actual labor rate, are the most common source of defective pricing claims. "Material" means the information would have a meaningful effect on negotiations; minor immaterial omissions do not trigger defective pricing liability, but defining the materiality threshold is inherently contested.

Are all subcontractor costs subject to certification?

Prime contractors must obtain certified cost or pricing data from subcontractors at or above the TINA threshold ($2M) if the prime is relying on that subcontractor's cost data as a basis for the proposed subcontract price. The prime then submits the subcontractor's certified data as part of its own TINA package. If the prime uses competition to select the subcontractor (price competition exception), the prime does not need certified cost data from the subcontractor, the competitive price constitutes adequate price competition for that element.

What is the Certificate of Current Cost or Pricing Data form?

FAR 15.406-2 prescribes the exact language of the certificate. It must be signed by a contractor official who can bind the company and must state that the data is accurate, complete, and current as of the agreed price date. Some agencies use SF 1411; others accept contractor-format certifications that include the FAR-prescribed language verbatim. The certification date (which must equal the date of price agreement) is a critical element, a certificate dated before price agreement is premature and may not cover data that became available between the certificate date and the actual price agreement date.

Can a contractor revise its certification after award if it discovers omitted data?

Once the contract is awarded, the original certification is final. A contractor that discovers post-award that it failed to disclose relevant data should consult counsel about its options. Voluntary disclosure of the omission (before DCAA identifies it in audit) is generally treated more favorably than an audit finding of defective pricing. In some cases, the contractor may negotiate a proactive contract price reduction in exchange for a release of defective pricing claims, avoiding the additional interest that accrues on unresolved defective pricing determinations.