Protecting USG's Exposure to Defectively Priced Contracts
Defective pricing refers to a company's failure to disclose current, accurate, and complete cost or pricing data during negotiations, resulting in an increase to the contract price.
Most Department of Defense contracting officers will never work a defective pricing case, and those who do will likely only work one or two such cases in their entire careers. Accordingly, it is challenging for DoD to build a knowledge base in this area. As a result, OSD established the DCMA DP Team in 2019 to provide leadership for defective pricing, and specialized cost and pricing data in situations where the Department lacks certified cost and pricing data:
- Identifying – The Defective Pricing Team has extensive experience in reviewing contract award pricing information to confirm whether a pricing concern arises to the level of defective pricing
- Mitigating – The Defective Pricing Team has extensive experience in identifying risk areas during the course of sole source contract negotiations on identifying potential defectively priced contract actions, and false claims.
- Cost Recovery – The Defective Pricing Team has extensive experience in negotiating and recoupment of increased costs due to defectively priced contracts