TINA Threshold (Truth in Negotiations Act / TINA)

How It Works

The Truth in Negotiations Act (TINA), renamed the Truthful Cost or Pricing Data Act in 2018, requires contractors to submit certified cost or pricing data for sole-source procurement actions above the TINA threshold, currently $2 million (raised from $750,000 by the NDAA for FY2018). Certified cost or pricing data means all facts that, as of the date of price agreement, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. The contractor certifies the data is accurate, complete, and current. If the government later discovers that certified data was defective (inaccurate or incomplete), the resulting contract price can be reduced by the amount of the overpricing, with interest and potentially False Claims Act treble damages. TINA applies only to non-competitive actions, sole-source contracts, single-offer competitions, and modifications to existing contracts that meet the threshold. Competitive awards with two or more offers are exempt because competition is presumed to discipline pricing. Commercial item acquisitions (FAR Part 12) are also exempt from TINA certification if the contracting officer makes a commercial-item determination. Exceptions include prices set by law or regulation, commercial products and services at catalog prices, and waivers by the contracting officer for exceptional cases. The Defense Contract Audit Agency (DCAA) is the primary auditor of TINA compliance for DoD contracts and conducts roughly 3,000 defective pricing and cost-data audits per year. Defective pricing settlements have reached into the hundreds of millions for individual contractors. TINA certification does not apply to competitive awards with adequate price competition, commercial items and commercial services under FAR Part 12, or prices set by regulation, exceptions that capture the majority of federal spending but leave sole-source high-dollar actions (which are disproportionately large defense procurements) as the core TINA enforcement zone.

Related Terms

• Federal Acquisition Regulation (FAR), The comprehensive rule book governing how federal agencies buy goods and services, covering everything from how to write a solicitation to when to use competitive bidding.
• Sole-Source Contract (No-Bid Contract), A contract awarded to a specific company without competitive bidding, used when only one vendor can meet the requirement or in urgent situations.
• Firm-Fixed-Price Contract (FFP), A contract with a set price that doesn't change regardless of the contractor's actual costs, placing the financial risk on the contractor, not the government.
• Cost-Plus Contract, A contract where the government reimburses the contractor for allowable costs plus a fee (profit), used for complex projects where total costs are hard to predict upfront.