TINA Requirements Under FAR: Exceptions, Data, and Defective Pricing

TINA requirements under the FAR obligate a contractor on a negotiated federal contract to submit certified cost or pricing data, along with a signed Certificate of Current Cost or Pricing Data, before the government agrees on price — unless a listed exception applies. The trigger is dollar value: for new Department of Defense prime contracts entered after June 30, 2026, the threshold is $10 million; for civilian agency contracts and for older defense contracts, it stays at $2 million.¹² Getting the submission wrong exposes you to price reductions, interest, and False Claims Act liability that can dwarf the contract itself.

When TINA Applies

The statute at 10 U.S.C. 3702 governs defense procurement and 41 U.S.C. 3502 governs civilian agency procurement. The 2026 National Defense Authorization Act raised the defense threshold fivefold, but only prospectively and only for defense. Contractors working across both sides of the government need to track which threshold attaches to which contract.

New defense prime contracts entered after June 30, 2026: certified data required above $10 million.¹
Existing defense prime contracts entered on or before June 30, 2026: $2 million threshold still applies.
Defense prime contract modifications: $10 million.
Subcontracts under new defense primes: $10 million.
Subcontracts under existing defense primes: $2 million.
Subcontract modifications: $2 million regardless of when the prime was awarded.
Civilian prime contracts, subcontracts, and modifications: $2 million.²

As of early 2026, the FAR itself had not yet been updated to reflect the $10 million defense threshold and continued to reference $2 million in its modification examples.³ The statute controls until a FAR revision catches up.

How Modifications Are Measured

Modifications trip up contractors more often than initial awards. The threshold looks at the absolute value of the price change, not the net. Add all cost increases and all cost decreases without offsetting them. A modification that adds $1.5 million in new work and removes $1 million of existing work totals $2.5 million in absolute value even though the net increase is $500,000, and $2.5 million clears the $2 million threshold.³ The contracting officer measures volume of change, not direction.

Exceptions That Remove the Requirement

Crossing the dollar threshold does not automatically mean you must submit certified data. Four exceptions under FAR 15.403-1 remove the requirement, and when one applies the contracting officer is prohibited from demanding certified data.⁴

Adequate Price Competition

The most commonly used exception. A price is competitively established when two or more responsible offerors independently submit priced proposals meeting the government’s requirements, and the award goes to the best-value offeror with price a substantial factor. The contracting officer must also find that the winning price is not unreasonable; if it is, the exception falls away. For civilian agencies (not DoD, NASA, or Coast Guard), the exception can apply even to a single offer, provided market research supported a reasonable expectation of competition and the lone offeror believed others would bid.

Prices Set by Law or Regulation

If a government entity fixes the price for a service or commodity by statute or regulation, there is nothing to negotiate and no cost data to disclose.

Commercial Products and Services

Items that qualify as commercial products or commercial services under FAR 2.101 are exempt because the commercial marketplace already establishes pricing. The exemption carries through to modifications that do not change a commercial item into something non-commercial.

Waivers

The head of the contracting activity can waive the TINA requirement in exceptional circumstances. In practice, waivers are reserved for cases where the government cannot obtain the item any other way — typically a sole-source supplier that refuses to disclose proprietary cost data with no alternative available.⁵ They are not a general escape hatch for routine government contractors.

An Exception Does Not Necessarily End the Disclosure

Removing the certification requirement does not always remove every information obligation. The contracting officer can still request uncertified data — pricing history, sales information, cost estimates — to confirm the price is fair. Uncertified data does not carry the same legal exposure as a signed certification, but it still must be accurate. The contracting officer follows a preference order: rely on competition where possible, then on market data, catalog prices, and prior contract prices, and only then request data from the contractor. Any data request must include at minimum the prices at which the same or similar items previously sold.

What Counts as Cost or Pricing Data

The FAR defines cost or pricing data as all facts a reasonable buyer and seller would expect to significantly affect price negotiations.⁶ Two qualities set it apart: it must be factual rather than judgmental, and it must be verifiable. A contractor’s opinion about future labor costs is not cost or pricing data. The payroll records and union agreements underlying that opinion are.

In practice this means vendor quotes, recent invoices for materials, labor rates from payroll records, historical costs on similar production runs, overhead rates drawn from accounting records, and projections of indirect costs based on verifiable spending patterns. It also includes any fact that would influence a buyer’s willingness to pay. A volume discount your purchasing team just secured on key materials is a fact the government is entitled to know before agreeing on price.

Organizing the Package

Documentation must be organized so a government auditor can trace each cost element to its source records. Hourly labor rates tie to payroll data. Material costs tie to supplier invoices or binding quotes. Overhead rates connect to the accounting system and recent indirect cost experience. The paper trail should stand on its own, without a contractor representative present to interpret it.

Before finalizing, verify that every data point is current. A vendor quote that expired two weeks before submission is precisely the kind of gap that becomes a defective pricing finding years later. If any cost element changes between proposal preparation and price agreement, the updated figure replaces the old one.

The Certificate and the “As Of” Date

The Certificate of Current Cost or Pricing Data tops the package. It identifies the proposal, the contract or solicitation number, and the “as of” date that marks the cutoff for data accuracy.⁷ That date is typically the date the parties reached a price agreement, or an earlier date the parties agreed on that is as close as possible to the final agreement date. Every fact in the package must be accurate, complete, and current as of that specific date.

Certification happens after the handshake on price but before formal contract award. Data that was accurate at proposal time but outdated at agreement time violates the requirement. The FAR encourages both parties to agree early on closing or cutoff dates for updates so the process does not stall. Any information significant to contractor management and readily available inside the organization is treated as reasonably available and must be included. If your purchasing department received a lower supplier quote the day before agreement, it belongs in the package even if the estimating team never saw it.

Prime Responsibility for Subcontractor Data

Prime contractors do not get to treat subcontractor pricing as a black box. When a subcontract exceeds the applicable threshold and no exception applies, the subcontractor must submit certified cost or pricing data to the prime, and the prime must evaluate it as part of its own cost analysis before submitting the overall proposal.⁸

The government’s right to a price adjustment for defective data applies whether the bad data came from the prime or from a subcontractor at any tier.⁹ If a subcontractor submits an inflated labor rate and the prime passes it through, the government reduces the prime’s price. Recovery from the subcontractor becomes the prime’s problem. The liability applies even where the contractor or subcontractor was sole-source and even where the contracting officer arguably should have caught the error during negotiations.

Consequences of Defective Pricing

After award, the Defense Contract Audit Agency or another audit body can examine whether the certified data was actually accurate as of the certification date. The audit compares what the contractor knew against what it disclosed, establishes a baseline, identifies inaccurate or missing data, calculates how much the price rose as a result, and recommends an adjustment.¹⁰ Offsets — cost elements the contractor underestimated that partially cancel overstatements — are evaluated case-by-case and do not automatically wipe out a finding.

The price reduction clause in every TINA-covered contract, FAR 52.215-10, requires the price to be reduced by whatever amount it was inflated due to defective data, including associated profit or fee.¹¹ The government also charges interest from the date of overpayment to the date of repayment, using the IRS underpayment rate under 26 U.S.C. 6621(a)(2).⁹ On a large contract with a defective pricing issue that goes undetected for several years, the interest alone can be substantial.

False Claims Act and Criminal Exposure

Beyond the contractual price reduction, knowingly false cost data can trigger False Claims Act liability. The statute imposes a civil penalty per false claim, with the base range of $5,000 to $10,000 per violation adjusted periodically for inflation, plus three times the government’s damages.¹² After inflation adjustments, per-violation penalties in recent years have ranged from roughly $13,000 to $28,000. When one contract generates dozens of invoices or progress payments built on defective data, the per-violation figures compound quickly.

A contractor that discovers the violation and cooperates with investigators within 30 days, before any prosecution or investigation has begun, may see damages reduced to two times rather than three times the loss. The window is narrow and the conditions are strict. Intentional fraud can also draw criminal charges under general federal fraud statutes, and companies engaged in serious misconduct face debarment from future federal contracting.¹³

Record Retention

Records supporting cost or pricing data must be kept for at least three years after final payment on the contract.¹⁴ The clock starts at the end of the contractor’s fiscal year in which the final cost entry was made. If a company retains records longer for its own business purposes, the government can access those records for the full retention period.

Three years sounds workable until you consider that defective pricing audits often begin well into performance and can extend past the minimum retention window. Destroying records at the three-year mark is technically permitted but risky if any audit activity is pending or foreseeable. Many contract professionals hold TINA documentation for at least six years as a practical safeguard.

1
Office of the Law Revision Counsel. 10 USC 3702 – Required Cost or Pricing Data and Certification
2
Office of the Law Revision Counsel. 41 USC 3502 – Required Cost or Pricing Data and Certification
3
Acquisition.GOV. Federal Acquisition Regulation 15.403-4 – Requiring Certified Cost or Pricing Data
4
Acquisition.GOV. 48 CFR 15.403-1 – Prohibition on Obtaining Certified Cost or Pricing Data
5
Acquisition.GOV. DFARS PGI 215.403-1 – Prohibition on Obtaining Certified Cost or Pricing Data
6
Acquisition.GOV. FAR 2.101 – Definitions
7
Acquisition.GOV. 48 CFR 15.406-2 – Certificate of Current Cost or Pricing Data
8
Acquisition.GOV. Subpart 15.4 – Contract Pricing
9
Acquisition.GOV. 15.407-1 Defective Certified Cost or Pricing Data
10
Defense Contract Audit Agency. DCAA Contract Audit Manual Chapter 14
11
Acquisition.GOV. 52.215-10 Price Reduction for Defective Certified Cost or Pricing Data
12
Office of the Law Revision Counsel. 31 USC 3729 – False Claims
13
Acquisition.GOV. Subpart 9.4 – Debarment, Suspension, and Ineligibility
14
Acquisition.GOV. Subpart 4.7 – Contractor Records Retention