Summary: This report discusses whether procurement officials consistently and uniformly interpret the dollar threshold at which prime contractors are required to submit analyses of cost or pricing data for prospective subcontracts--subcontract proposals that are not negotiated before prime contract negotiations with the government are completed. GAO found that, in the Defense Department (DOD), procurement officials identify two different dollar thresholds applicable to the federal acquisition requirement that prime contractors analyze cost or pricing data from prospective subcontractors before an agreement is reached on the prime contract price. These different interpretations could result either in the government not receiving analyses needed to establish fair and reasonable contract prices or in contractors being burdened with analyses of subcontract proposals not required by the government. In the short term, clarifying the federal acquisition regulation section on analyses could eliminate confusion about the threshold. For the long term, determining the effects of potential thresholds for analysis of such data could be done in conjunction with the congressional mandated DOD Inspector General review of the effect of the threshold change in the Truth in Negotiations Act.
