The Truth in Negotiations Act

1100 Words5 Pages
The Truth in Negotiations Act was passed on December 1, 1962 requiring government contractors to submit cost or pricing data if the procurement met specific requirements in order to establish that the offer is fair and reasonable. The history of The Truth in Negotiations Act will set the stage for its significance in the twenty-first century. Prior to World War II, the United States government conducted its bidding process for procurement in an open bid environment. What was required for a bid was a complete description of the requirement, two or more suppliers capable and willing to complete the requirement, a selection based on price competition and sufficient time to prepare a complete statement of the government’s needs and terms.…show more content…
It was contended by GAO that the government’s negotiator would be in a better position to establish an equitable price if contractor cost data were made available.” (Maddox, 2013) In 1959, the United States Air Force took the beginning steps of implementing a process that was based on the Government Accountability Office’s recommendation. This process required certification of contractor cost data, as recommended. The Department of Defense followed the example set by the Air Force by issuing a revision to the Armed Services Procurement Regulations to require certification of cost data. The Truth in Negotiations Act has the purpose of insuring that the government is receiving a fair and reasonable pricing, essentially helping to prevent defective pricing and allowing the government to be able to get set retributions for defective pricing. This is something that is solely found in the world of government contracting, as there is nothing similar to it in a commercial environment. A potential supplier will have to supply the government with a certificate of current cost or pricing data.
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