Contractors engaging in defective pricing can be held liable for Government overpayments, penalties, and, sometimes, interest on Government overpayments. Under FAR 52.215-10(a), defective pricing is defined as:

"any price, including profit or fee, negotiated in connection with a contract, or any cost reimbursable under a contract, increased by any significant amount because-

(1) The Contractor or a subcontractor furnished cost or pricing data that were not complete, accurate, and current as certified in its Certificate of Current Cost or Pricing Data;

(2) A subcontractor or prospective subcontractor furnished the Contractor cost or pricing data that were not complete, accurate, and current as certified in the Contractor's Certificate of Current Cost or Pricing Data; or

(3) Any of these parties furnished data of any description that were not accurate."

If a contractor submits defective pricing data, the government typically takes a price reduction to correct the previous overpayment. The government contract attorneys at Eckland & Blando LLP assist clients in defending defective pricing claims. For qualified legal advice, please contact our government contract attorneys today.