FAR FAR Defective Pricing & Penalties

Question 1

What constitutes 'defective pricing' under the Truthful Cost or Pricing Data Act?

Accepted Answer

Certified cost or pricing data that was inaccurate, incomplete, or not current as of the date of price agreement

Answer

Contract prices that exceed published market rates

Answer

Failure to submit cost or pricing data within the required timeframe

Answer

Incorrect allocation of overhead rates to contract cost pools

Question 2

What is the government's primary contractual remedy for defective pricing under FAR 15.407-1?

Accepted Answer

A downward price reduction equal to the overstatement attributable to the defective data, plus interest

Answer

Immediate contract termination for default

Answer

Criminal prosecution of the responsible contractor employees

Answer

Suspension and debarment of the contractor for two years

Question 3

Which FAR clause must be included in contracts requiring certified cost or pricing data to establish the basis for defective pricing price reductions?

Accepted Answer

FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data

Answer

FAR 52.215-2, Audit and Records—Negotiation

Answer

FAR 52.215-14, Integrity of Unit Prices

Answer

FAR 52.215-20, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data

Question 4

What is the general statute of limitations for the government to assert a defective pricing claim?

Accepted Answer

6 years from the date of final payment under the contract

Answer

1 year from contract award

Answer

3 years from final payment under the contract

Answer

10 years from contract execution

Question 5

When a contractor discovers after award that its certified cost or pricing data was defective, what is the contractor's obligation under FAR 52.215-10?

Accepted Answer

Promptly notify the contracting officer of the defect

Answer

Correct the data in the contract file without notifying the government

Answer

Wait until the next scheduled DCAA audit to disclose

Answer

Seek legal counsel before taking any action

Question 6

For certified cost or pricing data purposes, what standard determines whether data was 'current'?

Accepted Answer

Data must be accurate as of the date of price agreement, or a later date agreed upon by the parties

Answer

Data must be no more than 30 calendar days old at time of submission

Answer

Data must reflect figures from the contractor's most recently completed fiscal year

Answer

Data must be independently verified by an external auditor