Pentagon issues final rule for cost and pricing data requirements for single offers

July 3, 2019

By Marjorie Censer

The Pentagon last week issued the final version of a rule meant to implement legislation seeking enhanced competition.

The rule partly implements a provision in the Fiscal Year 2017 National Defense Authorization Act, according to a Federal Register notice published last week, and affects cases in which a solicitation used competitive procedures, but only one bid was received.

For those situations, the new rule mandates that if a contracting officer doesn't need additional cost or pricing data, he or she would still require the contractor to certify cost or pricing data. Otherwise, the contracting officer would obtain additional cost or pricing data to determine a reasonable price.

However, if the contracting officer is still unable to determine whether the offered price is fair and reasonable, he or she would enter negotiations with the offeror. The negotiated price, the rule states, should not exceed the offered price.

According to the Federal Register notice, in FY-16 the Defense Department awarded 918 noncommercial competitive new awards worth more than $750,000 that received only one offer. Of those 918, 549 went to small businesses and 369 to other than small businesses.

Alan Chvotkin of the Professional Services Council told Inside Defense that the requirement to certify cost or pricing data is burdensome.

He said the new regulation contradicts the Pentagon’s efforts to attract more non-traditional contractors to the market and bolster competition.

"The vendor has no control over who bids; they can only control their own bid," he said. "You create a situation where, notwithstanding your good faith effort at bidding, the agency only gets one offer . . . [and] you've got to go through this certification. And you may choose not to do that."