FAR FAR Defective Pricing & Penalties 1

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

Defective pricing occurs when certified cost or pricing data submitted was inaccurate, incomplete, or not current, resulting in an increased contract price that favored the contractor.

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

FAR 15.407-1(b) provides for a price reduction equal to the amount of overstatement attributable to defective cost or pricing data, plus applicable interest charges.

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 52.215-10 (Price Reduction for Defective Cost or Pricing Data) is the mandatory clause that creates the contractual right to price reduction when defective pricing is found.

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

The statute of limitations for defective pricing claims is generally 6 years from the date of final payment, consistent with the Contract Disputes Act limitations period.

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

Contractors who discover defective cost or pricing data after award should promptly notify the contracting officer, as voluntary disclosure may positively affect penalty and interest determinations.

FAR - Certified Cost or Pricing Data Specialist Practice Test

FAR - Certified Cost or Pricing Data Specialist Practice Test

FAR FAR Defective Pricing & Penalties 1