FAR 15.403-2—Other circumstances where certified cost or pricing data are not required.
Plain-English Summary
FAR 15.403-2 identifies two specific situations in which certified cost or pricing data are not required even though the contracting action involves pricing: exercising an option at the price already established at contract award or initial negotiation, and using proposals solely for overrun funding or interim billing price adjustments. The purpose of the section is to prevent unnecessary submission of certified data when the price has already been fixed by contract terms or when the pricing action is limited to funding or billing mechanics rather than a new price negotiation. In practice, this means contractors do not have to prepare a Truthful Cost or Pricing Data submission for these limited actions, and contracting officers should not request one unless another rule independently requires it. The section is narrow, however, and it does not eliminate the need to review the underlying contract terms, the nature of the action, or whether the proposal is truly limited to the stated purpose. It is especially important in option exercises and cost-type or incrementally funded situations, where parties may mistakenly treat a funding or billing adjustment as if it were a new pricing action.
Key Rules
Option at established price
If the Government exercises an option at the price already established at contract award or initial negotiation, certified cost or pricing data are not required. The key condition is that the option price must already be fixed by the contract; this exception does not apply if the option price must be reopened or renegotiated.
Overrun funding proposals
Certified cost or pricing data are not required for proposals used solely to obtain overrun funding. These proposals are limited to securing additional funds for costs already incurred or expected under the existing arrangement, not to establishing a new contract price.
Interim billing price adjustments
Certified cost or pricing data are not required for proposals used solely for interim billing price adjustments. The proposal must be limited to billing mechanics or provisional payment adjustments, not to a broader price change for the contract.
Scope must be limited
The exception applies only when the proposal is used solely for the stated purpose. If the action includes any broader pricing change, scope change, or renegotiation of contract terms, the normal certified cost or pricing data rules may apply.
Responsibilities
Contracting Officer
Determine whether the action fits one of the two exceptions before requesting certified cost or pricing data. Confirm that an option is being exercised at a price already established in the contract, or that the proposal is solely for overrun funding or interim billing price adjustments.
Contractor
Provide the requested proposal or pricing information for the limited purpose involved, but do not prepare certified cost or pricing data when the action falls within this section. Ensure the submission is narrowly tailored to the option exercise, overrun funding, or interim billing adjustment.
Agency
Apply the rule consistently and avoid requiring certified cost or pricing data for actions that are expressly exempt under this section. Maintain acquisition file support showing why the exception applies.
Practical Implications
This section saves time and administrative burden by avoiding unnecessary certified cost or pricing data submissions for routine option exercises and limited funding or billing adjustments.
A common pitfall is treating any price-related action as if it requires certified data; the real question is whether the price is already established or whether the proposal is only for funding/billing purposes.
Contracting officers should verify the contract language carefully, especially option clauses and pricing terms, before deciding that the exception applies.
Contractors should be careful not to bundle other changes into an overrun funding or interim billing proposal, because adding broader pricing issues can remove the exception.
Documentation matters: even when certified cost or pricing data are not required, the file should clearly show why the action qualifies for the exception.
Official Regulatory Text
(a) The exercise of an option at the price established at contract award or initial negotiation does not require submission of certified cost or pricing data. (b) Certified cost or pricing data are not required for proposals used solely for overrun funding or interim billing price adjustments.