The Government Accountability Office (GAO) found in a new report that a 2018 change in the law determining whether the Federal government pays fair or reasonable prices for goods and services has not resulted in much of a difference in contract evaluations for two Federal agencies with considerable buying power.
GAO explained that it conducted a review of the impact of Section 811 of the National Defense Authorization Act (NDAA) for fiscal year (FY) 2018 on the Department of Defense (DoD) and NASA.
Section 811, among other things, works to increase the dollar threshold above which offerors must submit certified cost or pricing data – from $750,000 to $2 million for certain awards. It also requires DoD offerors – when certified cost or pricing data are not required – to submit data other than certified cost or pricing data if requested to determine prices are fair and reasonable.
DoD and NASA were selected by GAO for the review because the agencies had awards with the highest and fifth highest total contract values, respectively, in fiscal year 2020. Both agencies implemented the threshold increase for obtaining certified cost or pricing data by July 1, 2020.
Using data from the Federal Procurement Data System, GAO estimated that “less than one percent of DoD’s and NASA’s total number of awards may require submitting certified cost or pricing data depending on the dollar threshold applied.”
And of that one percent, almost half of the awards were estimated by GAO to not require contractors to submit certified cost or pricing data because of the threshold changes.
“DoD and NASA contracting officers we interviewed did not perceive the change in the threshold as having significant effect on their ability to obtain cost or pricing data, such as helping address the challenges in obtaining the data or affecting how they used the information to determine if a proposed price was fair and reasonable,” wrote GAO.
“DoD and NASA contracting officers also noted that the challenges they experienced in obtaining cost or pricing data generally remained the same regardless of the increase in threshold,” GAO said.