Chart A: Major Changes to Obtaining Fair and Reasonable Cost Information
Policy Change
Federal Acquisition Streamlining Act of
1994 (FASA) (Pub. Law 103-355)

Clinger-Cohen Act (Federal Acquisition
Reform Act of 1996) (Pub. Law 104-106)

Sec. 831, FY 2013 National Defense
Authorization Act (NDAA) (Pub. Law
112-239)

Sec. 815, FY 2015 NDAA (Pub. Law 113291)
Sec. 851, FY 2016 NDAA (Pub. Law 11492)

Sec. 852, FY 2016 NDAA (Pub. Law 114-

Impact
Reduced oversight on a large number of
government purchases, in part by
undermining the Truth in Negotiations
Act (TINA), later renamed the Truthful
Cost or Pricing Data statute,
requirements to submit accurate cost or
pricing data. The law created an
exception to supplying cost or pricing
data for “commercial items that are
sold in substantial quantities to the
general public.”
Further relaxed acquisition oversight
and expanded the definition of, and
exemptions available to, so-called
"commercial items."1 Specifically, the
law exempted all commercial items, not
only those sold in substantial
quantities.
Required the Department of Defense
(DoD) to issue guidance on commercial
items, which included looking at
previous prices, policies for requesting
uncertified cost information, and
banning a request for additional cost
information if there are “sufficient nonGovernment sales to establish
reasonableness of price.”
Allowed DoD to use simplified
acquisition procedures for “commercial
items.” The simplified acquisition
threshold at the time was $150,000.2
Required DoD to create a publicly
available database to oversee the
making of commercial item
determinations. The law also promoted
using prior commercial item
determinations and placed burdens on
contracting officers who did not abide
by a prior commercial item
determination.
Significantly restricted a contracting

1 For more analysis see Project On Government Oversight, Pick Pocketing The Taxpayer: The
Insidious Effects of Acquisition Reform, March 11, 2002.
https://www.pogo.org/report/2002/03/pick-pocketing-taxpayer-insidious-effects-ofacquisition-reform/
2 Federal Acquisition Regulation, Subpart 2.101 (defining “Simplified acquisition threshold”),
December 26, 2014. https://www.acquisition.gov/sites/default/files/archives/pdf/FAR_22.pdf

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 92)
Sec. 853, FY 2016 NDAA (Pub. Law 11492)

Sec. 855, FY 2016 NDAA (Pub. Law 11492)

Sec. 856, FY 2016 NDAA (Pub. Law 11492)

Sec. 857, FY 2016 NDAA (Pub. Law 11492)

Sec. 872, FY 2017 NDAA (Pub. Law 114328)

officer’s ability to obtain actual cost or
pricing information on major weapon
systems.3
Locked the DoD into paying past prices
regardless of whether they are fair and
reasonable, and made it burdensome
for contracting officers to challenge
price reasonableness.
Reconfirmed the need for market
research for commercial items. It also
mandated that officials could not enter
into “a contract in excess of the
simplified acquisition threshold for
information technology products or
services that are not commercial items
unless the head of the agency
determines in writing that no
commercial items are suitable to meet
the agency’s needs,” establishing a
strong preference for commercial items
and adding burdens on government
officials.
Limited the ability of contracting
officers to increase protections for
taxpayers by converting commercial
item contracts to Federal Acquisition
Regulation (FAR) Part 15
(noncommercial) contracts. For
procurements above $100 million, the
head of contracting has to provide
approval.
Commercial items and services
provided by nontraditional defense
contractors may be treated as
commercial, opening up DoD to
additional awards without cost or
pricing information.
Allowed contractors to provide
“information or analysis” of the value of
a commercial item for determining
price reasonableness, rather than cost
and pricing data.4

3 The DoD’s former pricing czar wrote of the change, “Obtaining cost data is a last resort,”
and a contracting officer can only request it after exhausting information on similar items,
prices for alternatives, or any other information other than certified pricing information from
the company performing work for the DoD. Department of Defense Inspector General,
Review of Parts Purchased From TransDigm Group, Inc., February 25, 2019, p. 93.
https://media.defense.gov/2019/Feb/27/2002093922/-1/-1/1/DODIG-2019-060.PDF
4 “The so-called ‘value based pricing’ concepts are no more than an industrial code word for
unfettered price gouging….We found no evidence in any of the visits with those companies

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 Sec. 873, FY 2017 NDAA (Pub. Law 114328)
Sec. 874, FY 2017 NDAA (Pub. Law 114328)

Sec. 875, FY 2017 NDAA (Pub. Law 114328)

Sec. 876, FY 2017 NDAA (Pub. Law 114328)

Sec. 877, FY 2017 NDAA (Pub. Law 114328)

Sec. 878, FY 2017 NDAA (Pub. Law 114328)

Sec. 805, FY 2018 NDAA (Pub. Law 11591)
Sec. 811, FY 2018 NDAA (Pub. Law 11591)

Removed public access to commercial
item determination information.
Provided express language that certain
laws, including “defense-unique” laws
and contract clauses, are not applicable
to commercial items, promoting a
hands-off position on commercial
buying. The term “defense-unique”
wasn’t defined in the law, increasing
the risk of buying products and services
that have no commercial market
without knowing if the price is fair or
reasonable.
Promoted so-called commercial buying
by requiring the DoD to use commercial
or non-governmental standards in lieu
of military standards and specifications.
Military specifications can only be used
when the commercial standard isn’t
“cost effective.”
Established a preference for
commercial services, which is now
codified at 10 U.S.C. § 2377 and 41
U.S.C. § 3307, and has been enforced
by a federal court.5
Exempted contractors from providing
information on price reasonableness for
items valued at less than $10,000 that
will be used in the performance of
multiple DoD contracts.
Prevented contracting officers from
assessing whether services are offered
at a fair and reasonable price if the
contractor is a nontraditional defense
contractor.
Increased the simplified acquisition
threshold to $250,000, which restricted
DoD’s access to certain cost or pricing
data.
Prohibited contracting officers from
obtaining certified cost and pricing data
to prevent price gouging for purchases
under $2,000,000. Before this change
was implemented, the DoD said

that they rely on ‘value based’ pricing.” Department of Defense Inspector General, Review
of Parts Purchased From TransDigm Group, Inc., February 25, 2019, p. 91.
https://media.defense.gov/2019/Feb/27/2002093922/-1/-1/1/DODIG-2019-060.PDF
5 Palantir USG, Inc. v. U.S., No. 17-1465, USCA Fed. Cir. (September 13, 2018).
http://www.cafc.uscourts.gov/sites/default/files/Palantir_17-1465.Opinion.9-13-18.pdf

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 Sec. 812, FY 2018 NDAA (Pub. Law 11591)

Sec. 846, FY 2018 NDAA (Pub. Law 11591)
Sec. 847, FY 2018 NDAA (Pub. Law 11591)

Sec. 848, FY 2018 NDAA (Pub. Law 11591)

Sec. 836, FY 2019 NDAA (Pub. Law 115232)
Sec. 837, FY 2019 NDAA (Pub. Law 115232)

increasing the thresholds was “unlikely
to provide cost savings.”6 Additionally,
the law permitted contractors to supply
uncertified cost or pricing data rather
than certified data.
Eliminated the requirement to provide
cost and pricing information to show
the government is paying a fair and
reasonable price if the product is
“similar” to another item deemed
commercial, regardless of whether that
item is the same. The provision also
added a waiver of cost or pricing
certification requirements.
Created an e-commerce portal for
parts, which may have created a false
impression of fair and reasonable
prices.
Revised the definition of commercial to
include nondevelopmental items
developed exclusively at private
expense and sold in substantial
quantities on a competitive basis to
multiple foreign governments. The
expanding definition of commercial
items inhibits contracting officers from
obtaining information to determine if
prices are fair and reasonable.
Locked the DoD into previous
commercial item determinations
regardless of whether that item is
actually sold to the general public in
like quantities, which increases the
likelihood DoD will continue to buy, and
be overcharged for, items that aren’t
actually commercial.
Separated commercial items into
commercial products and commercial
services.
Backdated laws, expanding the list of
contract clauses that do not apply to
commercial products and services to
October 13, 1994. This provision
promoted a hands-off approach to
commercial product and service
contracts. This provision also amended

6 Office of the Under Secretary of Defense, Acquisition, Technology, and Logistics,
Eliminating Requirements Imposed on Industry Where Costs Exceed Benefits, 2015, p. 96.
http://www.acq.osd.mil/fo/docs/Eliminating-Requirements-Imposed-on-Industry-Study-Report2015.pdf

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 Sec. 838, FY 2019 NDAA (Pub. Law 115232)

Sec. 839, FY 2019 NDAA (Pub. Law 115232)

laws to mention “commercial products.”
Waived competition requirements to
determine price reasonableness if an
item is purchased through an ecommerce portal and there is more
than one supplier, even if it’s actually a
false market because there is only one
company that manufactures the item.
Mandated a review of why contractor
compliance laws and contract clauses
do not exempt commercial products or
services. This is an effort to further
make commercial items free of pricing,
labor, environmental, and transparency
requirements that protect DoD and the
public.

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