Tuesday, September 3, 2013

The Importance of Telling the Truth

The Truth in Negotiations Act (TINA) criminalizes the submission of incorrect cost or pricing data when selling to the U.S. Government. TINA requires contractors to submit cost and pricing data and certify that the data is current, accurate, and complete. Submission and certification is an ongoing obligation required until agreement is reached on the final price at completion of the contact (sometimes referred to as the ‘handshake’). The U.S. Government takes seriously any violation of TINA, known as “deceptive pricing,” and therefore compliance with this law by domestic companies is essential when doing business with the U.S. Government.

Violation of the law may result in an adjusted price, penalties and interest costs in addition to imprisonment if the violation was willful. At the most extreme for a company, willful violations can result in debarment from future government business! Every invoice submitted with a “deceptive price” is a unique violation, and therefore the penalties can mount up quickly.

Compliance with TINA requires attention to detail. Pricing and costing information must be accurately recorded and tracked. Whenever this information changes the contractor has a duty to notify the U.S. Government. To ensure this attention to detail, a company must implement a TINA policy and proper procedures to enforce the policy.

For U.S. and Foreign companies anticipating or recipient of a U.S. Government award for the supply of goods and services over $650,000 it is necessary to be aware of the requirements of TINA and to follow them precisely. If this is not your strong point, or if you prefer to focus on your business, do not hesitate to reach out to professionals with experience with these laws.