Truthful Cost or Pricing Data Act: Disclosure and Defective Pricing

The Truthful Cost or Pricing Data Act, commonly called TINA, requires contractors on large non-competitive federal contracts to give the government the same factual cost information they used to build their price, and to certify in writing that the data is accurate, complete, and current as of the date the parties agree on a price. For most federal contracts, the disclosure obligation kicks in at $2.5 million. For Department of Defense prime contracts entered into on or after July 1, 2026, the threshold rises to $10 million.¹ If the certified data later turns out to be defective, the government can claw back the overpayment with interest, and knowing misrepresentation can trigger False Claims Act liability on top of that.

When TINA Applies

The disclosure obligation attaches to prime contracts, subcontracts at any tier, and contract modifications that independently cross the dollar threshold. The general threshold for civilian agency contracts under 41 U.S.C. § 3502 sits at $2.5 million after the inflation adjustment effective October 1, 2025.² Contracts awarded before July 1, 2018 are measured against the older $950,000 threshold.³

Section 1804 of the FY2026 National Defense Authorization Act rewrote 10 U.S.C. § 3702 to raise the DoD threshold from $2.5 million to $10 million for prime contracts entered into after July 1, 2026.¹ Civilian contracts stay at the FAR-adjusted $2.5 million figure.⁴

Prime contractors are responsible for flowing the certification requirement down the supply chain. If you were required to certify, any subcontractor whose subcontract exceeds the applicable threshold owes the same certification, and any priced change order that meets the threshold on its own triggers a fresh disclosure.

The Four Exceptions

Crossing the dollar threshold does not automatically mean certified cost or pricing data is required. Four exceptions in 10 U.S.C. § 3703 and 41 U.S.C. § 3503 remove the obligation when the government has other pricing protection:

Adequate price competition. Two or more responsible offerors submit independent bids and the award is based on price.⁵
Prices set by law or regulation. A statute or regulation fixes the price, so there is nothing to negotiate.⁶
Commercial products and services. Items sold in substantial quantities to the general public at established market prices are exempt. For services that are only “of a type” commercially sold, the contracting officer must document a written determination that enough information exists to evaluate the price. For DoD, NASA, and Coast Guard acquisitions, minor modifications to a commercial product stay exempt only if the total price of the modifications does not exceed the greater of the threshold or 5 percent of the total contract price at award.⁷
Exceptional-case waiver. The head of the contracting activity can waive the requirement in writing. The authority cannot be delegated.⁵

An exception from certified data does not always mean the government asks for nothing. Contracting officers regularly request “data other than certified cost or pricing data,” including historical sales prices, catalog pricing, market surveys, and cost breakdowns, to support a fair-and-reasonable price determination.⁸ The difference is that no certificate is signed, so the defective pricing remedy does not apply. False statements in that data can still create False Claims Act exposure.

What You Have to Disclose

The FAR defines cost or pricing data as all facts that a reasonable buyer and seller would expect to significantly affect price negotiations.⁹ The word doing the work is “facts.” Estimates, projections, and professional judgments are not themselves cost or pricing data, but the factual inputs underneath them are. A labor rate is a fact. A vendor quote is a fact. A management decision to change a production method is a fact.

A typical disclosure package pulls together:

Recent vendor quotes for materials and components, and prices actually paid on prior orders for similar items.
Current and projected labor rates, staffing plans, and any negotiated wage increases.
Overhead, general and administrative, and fringe benefit rates, including known changes in how those rates are computed.
Non-recurring costs such as tooling, setup, and engineering tied to the specific contract.
Make-or-buy decisions and the cost consequences of each choice.
Costs of components or services obtained from affiliated divisions, which the government examines for hidden markups.

The data must reflect the most current information available right up to the moment the parties agree on price. This is where contractors most often stumble. A supplier sends a lower quote during negotiations, the estimating team doesn’t route it to the negotiators in time, and that missed update becomes defective data the moment the certificate is signed.

The Certificate and Its Cutoff Date

Once price negotiations close, the contractor signs a Certificate of Current Cost or Pricing Data in the format prescribed by FAR 15.406-2.¹⁰ The certificate states that the submitted data were accurate, complete, and current as of a specific date, usually as close as possible to the date of price agreement.

The regulation does not restrict who inside the company can sign. It requires a signature, printed name, and title, but does not name a particular officer or level of authority. Most contractors designate someone senior enough to have real knowledge of the data or oversight of the team that compiled it, because the signature carries personal and corporate legal weight. The signer is representing that no known facts affecting the price were withheld.

The cutoff date matters. Anything factual the contractor knew before that date but failed to disclose becomes the basis for a defective pricing claim. The government relied on the certified data to agree that the price was fair, and the certificate is the mechanism that makes that reliance enforceable.

Defective Pricing: What the Government Can Recover

Every contract requiring certified cost or pricing data must include a clause allowing the government to reduce the price when the certified data turns out to be inaccurate, incomplete, or not current as of the certificate date. This clause is mandatory under 10 U.S.C. § 3706.¹¹ The price reduction equals the amount by which the contract price was inflated because of the defective data, including any profit or fee calculated on top of the overstated costs.¹²

On top of the price reduction, the contractor owes interest on the overpayment running from the date the government paid the inflated amount until repayment.¹³ The rate tracks the IRS underpayment rate under IRC § 6621, which stands at 7 percent for the first quarter of 2026.¹⁴ On a multi-year contract, that interest alone can be significant. If the defective data was submitted knowingly, the government also gets a penalty equal to the full overpayment amount, effectively doubling the recovery.¹²

Defective pricing runs in both directions. If some costs were overstated but others were understated in the same pricing action, the contractor can offset the understated amounts against the government’s claim, even across cost categories. The contractor must certify entitlement and prove the understated data existed before the certificate date but was not submitted. The offset is disallowed if the contractor knew about the understatement at the time, or if the government proves the price would not have gone up even with the missing data.¹⁵

Contractors must retain the books, accounting procedures, and supporting records for three years after final payment, and audits can be launched well after performance is complete.¹⁶ Auditors reconstruct the pricing model using the certified data and compare it against actual costs and any data the contractor had but did not disclose.

When Defective Pricing Becomes a Fraud Case

Defective pricing that crosses from negligence to knowing misrepresentation opens the door to False Claims Act liability. The FCA imposes damages of three times the government’s loss, plus per-claim civil penalties adjusted annually for inflation.¹⁷ “Knowingly” does not require specific intent to defraud. It covers deliberate ignorance and reckless disregard for whether the data was accurate.

The FCA also allows whistleblower suits, and the employees most likely to know about defective pricing are the same estimators and cost analysts who assembled the data. That built-in incentive means internal compliance failures rarely stay internal.

The practical distinction matters. The price adjustment under 10 U.S.C. § 3706 is a contractual remedy that corrects the price regardless of intent. The FCA is a fraud statute that multiplies the stakes. A contractor that self-identifies an error and discloses it early usually resolves the issue through a price reduction. One that conceals the problem or ignores red flags risks treble damages and per-claim penalties that dwarf the original overpayment.

Building an Estimating System That Holds Up

For contractors doing regular DoD business, the Defense Contract Audit Agency audits the estimating system itself, not just individual proposals. DFARS 252.215-7002 sets out what an adequate system looks like: clear assignment of responsibility for preparing and reviewing estimates, documentation of sources and methods, and procedures to catch errors before they are certified.

Systems tend to fail on the less obvious pieces. The estimating system must account for historical cost experience and flag significant departures from past trends. It must integrate information from accounting, payroll, and other management systems so estimators are not working from stale numbers. And it needs periodic internal monitoring to confirm that the controls still work as conditions change.¹⁸

The single most effective compliance practice is the sweep conducted immediately before signing the certificate. Pull in updated vendor quotes, check whether any subcontractor pricing has moved since the proposal, and verify that labor rates and indirect rates still match the latest actuals. Companies that treat this step as a formality are the ones who end up in defective pricing audits, because in a large proposal the data can go stale surprisingly fast between submission and price agreement.

1
Office of the Law Revision Counsel. 10 USC 3702 – Required Cost or Pricing Data and Certification
2
Acquisition.GOV. FAR 15.403-4 Requiring Certified Cost or Pricing Data
3
Federal Register. Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds
4
Office of the Law Revision Counsel. 41 USC 3502 – Required Cost or Pricing Data and Certification
5
Office of the Law Revision Counsel. 10 USC 3703 – Exceptions
6
Office of the Law Revision Counsel. 41 USC 3503 – Exceptions
7
eCFR. 48 CFR 15.403-1 – Prohibition on Obtaining Certified Cost or Pricing Data
8
Acquisition.GOV. FAR 15.403-3 Requiring Data Other Than Certified Cost or Pricing Data
9
Acquisition.GOV. FAR 2.101 – Definitions
10
eCFR. 48 CFR 15.406-2 – Certificate of Current Cost or Pricing Data
11
Office of the Law Revision Counsel. 10 USC 3706 – Price Adjustment for Defective Cost or Pricing Data
12
Acquisition.GOV. FAR 15.407-1 Defective Certified Cost or Pricing Data
13
Office of the Law Revision Counsel. 10 USC 3707 – Interest and Penalties for Certain Overpayments
14
Internal Revenue Service. Revenue Ruling 25-22 – Determination of Rate of Interest
15
eCFR. 48 CFR 15.407-1 – Defective Certified Cost or Pricing Data
16
Acquisition.GOV. FAR Subpart 4.7 – Contractor Records Retention
17
U.S. Department of Justice. The False Claims Act
18
Defense Contract Audit Agency. Audit Program for Estimating System