§3506 Price Reductions for Defective Cost or Pricing Data

Summary

Require a contract that needs a cost-pricing certificate to include a rule letting the government lower the contract price, including profit or fee, by any significant amount the agency head finds was added because the contractor or a required subcontractor gave cost or pricing data that were wrong, incomplete, or not up to date as of the date the price was agreed (or another date the parties agree that is nearly the same). Call "defective cost or pricing data" data that were inaccurate, incomplete, or not current as of the agreed price date. It is a defense if the government did not rely on the bad data. But these are not defenses: the seller was the only source or had stronger bargaining power; the contracting officer should have noticed the bad data; only a total price was agreed without item costs; or the required certificate was not submitted. A contractor may ask to reduce the adjustment (an offset) if it certifies it is entitled and proves the missing data existed before the agreed price date and were not submitted as required. No offset is allowed if the contractor knew its certification was false when signed or the government shows the missing data would not have increased the price by the offset amount.