TRUTH IN NEGOTIATIONS ACT (TINA)

Truth in Negotiations Act (TINA)

Truth in Negotiations Act (TINA)

Introduction

Compliance with TINA is an essential part of doing business with the U.S. Government. Northrop Grumman is fully committed to meeting its requirements, whether as a prime contractor, a team member or a subcontractor. It is the responsibility of every employee who participates in the proposal, bid preparation and contract negotiation processes to be aware of the requirements of TINA and to follow them precisely (www.library.findlaw.com).

Cost or pricing information or data includes all facts that prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are factual, not judgmental, and are verifiable.

Factual information or data includes such things as cost breakdowns on materials, subcontracted items, standard commercial items, direct labor hours and dollars and indirect expenses. It can also include:

Vendor quotations

Nonrecurring costs

Information on changes in production methods and in production or purchasing volume

Data supporting projections of business prospects and objectives and related operations costs (www.law.cornell.edu)

Unit cost trends such as those associated with labor efficiency

Make or buy decisions

Estimated resources to attain business goals

Information on management decisions that could have significant bearing on costs

Historical data upon which estimates are based.

If there is a question as to whether or not information should be disclosed, provide the information to the company's lead negotiator to make a determination. If the lead negotiator is unsure, it is best for the company to make the disclosure.

Application

TINA applies to all U.S. Government contracts or contract modifications over $650,000. There are exceptions to the requirement to submit certified cost or pricing data. The key exceptions are:

Adequate price competition exists

The price is set by law or regulation

The acquisition is for a commercial item

The head of the contracting activity for the government agency grants a waiver.

Certification

There are two parts or phases to the process of certifying the data:

Internal Sweeps - In this phase, functional representatives must verify all cost or pricing data to assure that it is current, accurate and complete as of the final date of agreement in price. If additional cost or pricing data is identified and is considered relevant to the price negotiation, the data must be summarized and provided to the company negotiator or negotiating team. This data is then disclosed to the government.

Certificate - In this phase, the cost or pricing data is updated as appropriate and the certificate documenting that the cost or pricing data is current, accurate and complete as of the date the price was agreed upon is executed and submitted to the customer (www.abanet.org). It is submitted after the internal sweeps phase.

Noncompliance

Violations of TINA are typically referred to as "defective pricing." In such cases, the government will require a reduction in the price of the contract along with the payment of penalties and interest costs. Compliance with this law requires precise attention to detail. If a contract is defectively priced, each invoice submitted under that contract can be considered a civil or criminal false ...