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Get Ready: The Truth in Negotiations Act Threshold is about to Jump to $2 Million!

June 15, 2018

As discussed in the blog on January 17, 2018, Section 811 of the 2018 National Defense Authorization Act will increase the Truth in Negotiations Act (“TINA”) threshold from $750,000 to $2 million effective as of July 1, 2018. This is great news for government contractors as now they are not required to submit and certify cost and pricing data on awards under this amount. If a Contracting Officer requests cost and pricing data to support proposals under the new threshold, the data provided will not be certified. In turn, it reduces the risk of any defective pricing for the contractor.

This increase directly impacts contractors who are not Cost Accounting Standards (“CAS”) covered and are monitoring their awards in the event they may trigger CAS coverage. Since the TINA threshold is used as a threshold for CAS-covered contracts, contracts under $2 million will not be used to help determine CAS status.

As of April 13, 2018, the Director, Defense Procurement and Acquisition Policy, Office of the Undersecretary of Defense, issued a class deviation, DARS Tracking No: 2018-O0012, raising the threshold for certified cost or pricing data to $2 million for contracts awarded after June 30, 2018. However, the threshold for the submission of certified cost or pricing data relating to modifications to contracts awarded prior to July 1, 2018, is $750,000. Also, by CAAC Letter 2018-03, dated May 3, 2018, the Civilian Agency Acquisition Council authorized civilian agencies to issue class deviations implementing the new thresholds.

The Department of Energy has taken advantage of this authority and others will certainly follow.  Please note this does not increase the Full CAS threshold of $50 million.

For questions regarding the TINA threshold change, feel free to contact one of our experienced GovCon professionals.