The Truth in Negotiations Act also referred to as TINA. What is it and how does it affect the contracting world when it comes to negotiating contract prices? TINA is known as a contracting statue that was put into place in order to protect the DoD funds by mandating that contractors provide certified cost or pricing data. We know that the job of a contracting officer is to ensure that any negotiations done are under fair and reasonable pricing terms in regards to the US government. In the 1950s, many members of Congress became convinced that defense contractors were overcharging the government for goods and services obtained through negotiations. Therefore, legislators passed the Truth in Negotiations Act (TINA) in 1962. (Greene, 2018, pg. 4).
The Truth in Negotiations Act was designed to implement regulations that would require contractors to reveal certain pricing data as well as confirm that data to be current. In the beginning stages when Tina was created it was only designed to apply to certain government agencies. Since 1985 the Truth in Negotiations Act has expanded as a whole to many forms of government procurement. The Truth in Negotiations Act is designed to protect the government when an offeror’s cost is a significant factor in contract price negotiations. In any instance that the government has question’s regarding reasonable cost from an offeror TINA guideline are set into place to ensure payment for fair and reasonable prices. Per TINA there are four known fair pricing and reasonable approaches that contracts specialist should follow when beginning negotiation of contracts. The four fair and reasonable pricing approaches that TINA refers to are the adequate pricing comparisons, commercial prices, prices that have already been set by laws and/or regulations, and obtaining certified cost and pricing data (TINA). (FAR 15.403, 2014).
In order to obtain fair and somewhat reasonable prices based on the fair and reasonable pricing approaches one has to follow these four steps in order for the Department of Defense to continue protecting the dollars of taxpayers. Having the capacity to acquire reasonable and sensible estimating dependent on any of these four methodologies enable the DOD to secure the citizen’s dollar and guarantee that we are getting a reasonable and sensible cost. TINA permits the contracting officer to arrange reasonable and sensible costs with the contractual worker when costs aren’t accessible by the other three methodologies. Having the capacity to acquire confirmed expense and estimating information is urgent to the accomplishment of the securing in light of the fact that it not just permits arrangements of reasonable and sensible evaluating, however it additionally gives a cover of assurance to the U.S. government also. Another advantage of getting guaranteed cost and estimating information is that toward the finish of the securing, the Defense Contract Audit Agency can review the temporary workers’ real costs and decide whether imperfect valuing exists. (Williams,1970, pg. 3).
The Truth in Negotiations Act has shown to have many pros and cons in regards to the protection of the government in relation to cost and pricing. TINA is known as a protective barrier for not only the US government agencies but also to protect contract officers in the bidding world. The fundamental reasoning behind TINA is to shield the government from price and cost inflation submitted by contractors. One pro is that contracting officers often times are able to get information regarding pricing on some non-commercialized items. This in turn limits the contracting officer in being able to decide what is fair and reasonable regarding pricing they receive.
TINA has proven to be good at protecting the government while doing an exceptional job when faced with the main task of handling the determination issue and for sure decreases data rents from generally substantially more educated and informed contractors. TINA accomplishes this goal because it allows contracting officers to negotiate fair and reasonable prices associated with the procurement by having contractors certify their costs and pricing data when the contracting officer has no other means for negotiating fair and reasonable prices. In addition, TINA helps to prevent fraud, financial loss, and in some cases risk for chance of being persecuted. TINA successfully makes a disincentive for the government contract officers to take part in misrepresentation and deficient estimating practice. All in all, it is fair to say that TINA helps policy makers achieve their policy goals.
While TINA has its perks and positive side there is also a downside to the Truth in Negotiations Act. From the standpoint of contracting personnel, it is fair to say that contracting personnel is at a disadvantage because they must rely on elective controls and observation to guarantee contractors work performance. This is due to the fact that TINA just expects contractors to give cost or valuing data and not really perceivability of exertion. When it comes to evaluating a contract, estimating cost is dependent on a contractor’s base expenses. This is turn helps to factor in whether or not the contractor is able to deliver quality products and ventures which factor in benefit and hazard. It tends to be expected that expense is variable dependent on various offerors’ proposing costs and rivalry inside the business.
The goal contract cost is dictated by how the offeror gauges target high and low cost. The government would not realize that the contractor could set aside extra cash and how huge the profit cost gap was on the grounds that guaranteed cost or valuing information would not have been required. On account of getting the most minimal value, the administration may experience the ill effects of data leases that compass past the present acquisition; data leases likewise adversely influence future contracts if past contract costs are utilized as a reason for value reasonable and sensibility in restricted competition. Under cost repayment compose gets, the temporary worker is repaid for expenses and are not boosted to diminish costs or even to control any high or over the top consumptions. In light of circumstances like these, TINA isn’t just expected to lessen moral danger yet in addition adverse choices.
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