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Cost-Based Pricing by Darrell J. Oyer

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CHAPTER 13

The Truth-in-Negotiations Act (Public Law 87-653)

Congress passed the Truth-in-Negotiations Act (TINA) on December 2, 1962, as Public Law 87-653. TINA requires that contractors disclose to the government details about costs they expect to incur during the performance of a contract awarded through negotiated procurement. This disclosure is intended to enable the government to negotiate a price based on a realistic and fully knowledgeable assessment of a contractor’s cost expectations.

The focus of the law is not on the ultimate accuracy of an estimate. If an estimate is “bad” and a contractor benefits with increased profits, this is not a violation of TINA. An “excessive” profit is not evidence of defective pricing, and a contract with ...

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