The Truth in Negotiations Act
Kevin P. Shilley
Truth In Negotiations Act (TINA) was enacted in September 1962. As one might expect from a regulation that has been in existence from fifty years, major revisions have been made in order to reflect the changes in the marketplace as well as address the risk involved for all parties. TINA requires the submission of cost or pricing data for all offerors for a prime contract that is entered into using procedures other than sealed-bid if the contract amount exceeds $700,000. Not only does TINA require the submission of cost or pricing data, but it requires that contractors or subcontractor certify the data. When a contractor or subcontractor certifies the cost or pricing data they are asserting that to the best of their knowledge and belief that the cost or pricing data submitted is accurate and complete. Arguably the most contentious issue concerning TINA is the definition of “cost or pricing data”. The definition has been through many revisions and while it is has come a long way in defining cost or pricing data; it has created a standard that is too restrictive and often times unachievable given the marketplace. Additionally, while it has a provision that allows the Government to recoup the overpayment associated with overstated prices on the contractors behalf; it does not fairly give the contractor the same ability to recoup underpayments as a result of understated prices from the Government. If TINA addresses these issues in the future, it can become an even more powerful tool in “leveling the playing field” between the private sector and the Government. The History of TINA
Public Law 87-653, Truth In Negotiations Act (TINA), was enacted on September 10, 1962. The intent behind the act was to place the Government on equal footing with the contractor by requiring the contractor to provide the Government access to all cost or pricing data the contractor used in making its offer. It required that every prime and subcontractor submit cost or pricing data. They were also required to certify that all such data was current, complete and accurate prior to award of any negotiated contract or subcontract. The contract threshold that was established for adherence to TINA regulations was $100,000. Additionally, TINA stipulated that if relevant cost or pricing data was withheld resulting in overstated prices, that the Government would be able to recoup the excess prices from the overstated costs. A chief complaint from the private industry is that TINA did not deal with was the issue of understated costs. (Di Guiseppe 2011, p.2) Major Changes/Amendments
In the 1980’s the Government sought to strengthen TINA; during Fiscal Year (FY) 1986 the Defense Authorization Act added the requirement for the collection of interest on overpayments as well as doubling the amount paid to the Government for contractors knowingly not disclosing cost or pricing data. In FY 1987 the authors added that the contractor could not utilize the Government’s non-reliance on cost or pricing data as a legitimate defense to defective pricing. Additionally, the Defense Authorization Act made (1) sole source or superior bargaining, (2) Contracting Officer should have known date was defective, (3) agreement was reached on total cost basis and (4) certificate was not submitted unacceptable defenses for violation of TINA. Finally in FY1988/1989 the Defense Authorization Act provided a definition for cost or pricing data.
The 1990’s saw continual strengthening of TINA, particularly in 1994 with the introduction of the Federal Acquisition Streamlining Act (FASA) and the Clinger-Cohen Act. The significant changes to TINA with enactment of these Acts were (1) the creation of the “commercial item” exception, (2) addition of the prohibition on obtaining cost or pricing data when an exception applied, (3) creation a...
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