On February 6, 2025, Lockheed Martin paid $29.74 million to settle federal allegations that it submitted defective cost data on five F-35 production contracts from 2013 to 2015. Four months earlier, Raytheon paid $428 million, its share of a $950 million combined settlement, for knowingly failing to provide truthful certified cost and pricing data across dozens of contracts spanning 2009 to 2020. Both companies operated under the same statute that governs every sole-source contract your firm submits above the threshold.
The Truthful Cost or Pricing Data Statute, commonly called TINA, requires contractors to submit certified cost or pricing data on prime contracts and modifications above $2.5 million (effective October 1, 2025, per 90 FR 41872). For contracts entered after June 30, 2026, FY2026 NDAA Section 1804(c) is reported to raise that threshold to $10 million; FAR has not yet been updated to reflect this change as of the date of this publication. Certified data must be accurate, complete, and current as of the price-agreement date. Defective submission triggers price reduction under [FAR 52.215-10] plus False Claims Act exposure.
Understanding the TINA compliance threshold 2026 requires tracking three distinct numbers simultaneously. The threshold moved twice in the past eight years and moves again in eight months. A contractor with three active sole-source vehicles awarded at different points in that window faces three different certification obligations. The Raytheon and Lockheed settlements are not cautionary tales about defense primes. They are the documented consequence architecture for any contractor who certifies stale or incomplete cost data, regardless of revenue size.
Amerifusion Bookkeeping built this TINA compliance threshold 2026 reference for CPA-supervised contractors managing cost proposals under the $2.5M obligation, preparing for the June 30, 2026 transition to $10M, or carrying legacy contracts at the pre-July 2018 $950K threshold. The sections below map each threshold, identify every exception, and deliver the seven-step pre-certification sweep.
The Three TINA Thresholds: What Applies to Your Portfolio
The most common source of contractor confusion is threshold stacking: which number applies to which contract depends entirely on when that contract was entered. As of today, three distinct thresholds are simultaneously in effect across the federal contractor population. [FAR 15.403-4] governs the current prime contract threshold. [10 USC ch. 271] and [41 USC ch. 35] govern DoD and civilian agencies, respectively.
| Period | Prime Contract Threshold | Modification Threshold | Authority |
|---|---|---|---|
| Before July 1, 2018 | $950,000 (raised from $750K effective Oct 1, 2025) | $950,000 | [FAR 15.403-4]; [90 FR 41872] |
| July 1, 2018 through June 30, 2026 | $2,500,000 (raised from $2M effective Oct 1, 2025) | $2,500,000 | [FAR 15.403-4]; [90 FR 41872] |
| After June 30, 2026 | $10,000,000 (per FY2026 NDAA Sec. 1804(c), if enacted as reported; FAR not yet updated) | TBD (FAR case pending) | [FY2026 NDAA Sec. 1804(c)] |
The October 1, 2025 inflation adjustment under [41 USC 1908] (Federal Register: 90 FR 41872) raised the pre-July 2018 threshold from $750,000 to $950,000 and the current threshold from $2,000,000 to $2,500,000. Both changes apply to contract actions on or after October 1, 2025. Legacy contracts carry the threshold in effect at their award date, not the current one.
FY2026 NDAA Section 1804(c) is reported to apply the $10M threshold only to contracts entered after June 30, 2026. The FAR has not yet been updated to incorporate this change; acquisition.gov continues to show $2.5M as the operative threshold as of this publication date. Until FAR is amended, the $2.5M threshold governs. The FAR Council has not finalized the conforming modification rule; watch DFARS Case 2024-D002 for DoD guidance (status as of this publication: pending). DFARS Case 2022-D004 (proposed September 2024) would apply the current prime threshold to all modifications regardless of original award date, eliminating the legacy $950K modification trap for pre-July 2018 contracts. Monitor the Federal Register; it had not been finalized as of this publication.
What TINA Compliance Threshold 2026 Requires: The Certification Standard
When a contract or modification crosses the applicable threshold and none of the five exceptions applies, the contractor must submit certified cost or pricing data and sign the Certificate of Current Cost or Pricing Data under [FAR 15.406-2]. That certificate carries legal weight. It attests that the data is accurate, complete, and current as of the date of price agreement.
Cost or pricing data, per [FAR 15.401], consists of facts, not judgments. Vendor quotes are facts. Actual historical labor rates are facts. Internal estimates and projections are not cost or pricing data, even when accurate. The Armed Services Board of Contract Appeals confirmed this in Alloy Surfaces Co. (ASBCA No. 59625): work-in-progress projections do not constitute cost or pricing data.
This distinction operates in both directions. A contractor cannot satisfy its certification obligation by substituting internal estimates for actual vendor quotes it holds. A contractor facing a defective pricing claim argues that the disputed item was a judgment, not a fact, and therefore falls outside the statute’s reach.
Certified data is submitted in the [FAR 15.408 / Table 15-2] format, the same structure underlying any government contract cost proposal. The certified version adds a signed certificate on top. DCAA auditors use Table 15-2 to trace from proposal summary to cost-element detail to supporting documentation, so a clean build-up is the first line of audit defense.
The Five Exceptions: When Certified Data Is Not Required
The TINA compliance threshold 2026 triggers a certification obligation only when none of the five statutory exceptions applies. Each exception is defined in [FAR 15.403-1(b)]. Most misapplications involve the first exception, adequate price competition, where contractors overestimate how often their procurement qualifies.
| Exception | FAR Reference | Key Requirement | Common Misapplication |
|---|---|---|---|
| Adequate price competition | [FAR 15.403-1(b)(1)] | Two or more responsible offerors compete independently; price is a substantial factor in source selection | Two quotes received does not equal adequate competition if price was not a substantial evaluation factor |
| Prices set by law or regulation | [FAR 15.403-1(b)(2)] | Contract price established by statute, regulation, or tariff | GSA Schedule prices are set by regulation; off-schedule work is not |
| Commercial products or services | [FAR 15.403-1(b)(3)] | Item meets the FAR 2.101 definition of a commercial product or service | Customized or modified items may lose commercial status and the exception with it (but see exception 5 below) |
| HCA waiver | [FAR 15.403-1(b)(4)] | Head of contracting activity grants written waiver | Waivers are rare and require documented exceptional circumstances |
| Modifications of commercial products or services | [FAR 15.403-1(b)(5)] | Modification of a contract or subcontract for commercial products or commercial services | Contractors overlook this exception when modifying existing commercial-item contracts above the threshold |
The adequate price competition exception is the most frequently misread. A contracting officer who receives two proposals does not automatically have adequate competition. [FAR 15.403-1(c)(1)] requires two or more responsible offerors competing independently with price as a substantial factor in source selection. A procurement where technical factors heavily outweigh price may not satisfy this standard, but the determination is fact-specific and made by the contracting officer. No regulation specifies a percentage split at which competition becomes inadequate.
When no exception applies below the threshold, [FAR 15.403-3] provides an alternative: data other than certified cost or pricing data. This lighter-touch path carries no certification obligation and covers cost realism assessments on competitive awards. The government’s cost analyst still scrutinizes the numbers.
One scenario deserves a direct warning: breaking a $3M sole-source requirement into two $1.5M task orders to stay below the TINA threshold is contract splitting and violates [FAR 13.003(c)(2)]. The prohibition on fragmenting requirements to avoid applicable thresholds is explicit. The defective pricing risk does not disappear.
Defective Pricing: What DCAA Proves and What Contractors Defend
The enforcement consequence of failing the TINA compliance threshold 2026 certification standard is a defective pricing audit. Governed by DCAM Chapter 14, these audits are triggered post-award when DCAA identifies a significant price-to-cost variance on a negotiated contract. Whistleblower tips, follow-on contract pricing reviews, and routine forward pricing audit findings are all common triggers. The audit objective: determine whether the negotiated price was increased because the contractor submitted inaccurate, incomplete, or non-current data.
DCAA tests five elements per questioned cost (per DCAM Chapter 14): (1) the information qualifies as cost or pricing data (fact, not judgment); (2) the data existed before the price-agreement date; (3) the contractor failed to disclose it; (4) the government negotiator relied on the inadequate data; (5) the contract price increased as a result. All five must be proven. Contractors defend by attacking any element. The Alloy Surfaces precedent attacks element one. Proving the negotiator had independent knowledge attacks element four.
The penalty architecture: civil price reduction under [FAR 52.215-10] recovers the overstatement plus interest. A knowing violation adds a penalty equal to the overstatement per [FAR 15.407-1(b)(7)(iii)], an effective doubling before False Claims Act treble damages. DOJ recovered $6.8 billion in FCA cases in FY2025, the highest in FCA history, with approximately $634 million tied to DoD contracts [DOJ FCA Statistics FY2025]. DCAA’s FY2024 systems and CAS audit category produced one of the highest returns in the agency’s portfolio, per the [DCAA Report to Congress FY2024]. Defective pricing reviews share the same investigative infrastructure.
Subcontractor flowdown creates a second exposure point. Under [FAR 52.215-12], prime contractors must obtain certified cost or pricing data from subcontractors expected to exceed the threshold. A sub that submits defective data creates a defective pricing claim against the prime. If DCAA opens a post-award audit, see the DCAA audit preparation playbook for the engagement sequence.
The Seven-Step TINA Sweep
A sweep is the pre-certification scrub run before signing the Certificate of Current Cost or Pricing Data [FAR 15.406-2]. The purpose: identify updates to proposal data between initial submission and the price-agreement date so those updates are disclosed before the certificate is signed. A documented sweep is a defective pricing defense. A missing sweep is a finding.
- Lock the price-agreement date. Identify the exact date the contracting officer and contractor agreed to price. All cost or pricing data updates before this date require disclosure. Updates after this date go into the files for future follow-ons.
- Refresh every vendor quote. For each quoted item, confirm whether a newer quote exists as of the price-agreement date. A quote obtained six months before price agreement that has since changed is stale data. Disclose the updated quote, not an internal estimate of what it should be.
- Audit labor rates against payroll actuals. Compare proposed estimated rates against actual rates for the same employees or labor categories. Rate changes exceeding 3% are material for most DCAA auditors. Document the comparison with a signed reconciliation.
- Review subcontractor certifications. For every subcontract above the applicable threshold, confirm the sub’s certification date predates or equals the prime price-agreement date. Any sub data update after the sub’s original submission must be disclosed as part of the prime’s package. See subcontractor management requirements for the full flowdown protocol.
- Check indirect rate actuals against proposed rates. Forward pricing rates that moved materially since submission are a common finding. Document the comparison. This is also where unallowable costs coded to indirect pools create double exposure: inflated certified rates plus FAR 31.205 questioned cost findings.
- Verify Table 15-2 format compliance. DCAA uses [FAR 15.408 / Table 15-2] as the audit roadmap. A proposal that does not trace from summary to cost-element detail to supporting documentation creates friction regardless of underlying data quality.
- Document the sweep and sign it. Produce a one-page memorandum: who ran the sweep, what data points were reviewed, what updates were found, what disclosures were added. Attach it to the certification. If a defective pricing audit opens, this document is the first thing your attorney reaches for.
The FY2026 NDAA $10M threshold, if enacted as reported, does not retroactively cure a defective certification signed today. TINA applies at the time of award. Between now and June 30, 2026, every sole-source contract above $2.5M still requires full certification and a documented sweep. For a broader look at how the FY2026 NDAA reshapes threshold obligations across cost accounting frameworks, see the NDAA 2026 CAS threshold analysis.
Frequently Asked Questions
What is the TINA compliance threshold in 2026?
The current TINA compliance threshold for prime contracts is $2.5 million, raised from $2 million effective October 1, 2025 under [90 FR 41872]. FY2026 NDAA Section 1804(c) is reported to raise the threshold to $10 million for contracts entered after June 30, 2026; the FAR has not yet been updated to reflect this change. The applicable threshold is determined by the contract award date, not the audit or invoice date.
Does a $2 million sole-source contract require certified cost or pricing data in 2026?
No, not for contracts awarded on or after October 1, 2025. The threshold is now $2.5 million. Below that amount, the contracting officer will often request data other than certified cost or pricing data under [FAR 15.403-3] to support cost realism, but no signed certification is required. Contracts awarded before October 1, 2025 use the prior $2 million threshold.
What are the exceptions to TINA certification?
Five exceptions exempt a contract from the certified cost or pricing data requirement under [FAR 15.403-1(b)]: (1) adequate price competition, meaning two or more responsible offerors compete independently with price as a substantial factor in source selection; (2) prices set by law or regulation; (3) acquisition of a commercial product or service under [FAR 2.101]; (4) a written waiver granted by the head of the contracting activity; or (5) modification of a contract or subcontract for commercial products or commercial services [FAR 15.403-1(b)(5)]. All exceptions require contracting officer documentation.
What is defective pricing and what is the penalty?
Defective pricing occurs when certified cost or pricing data was inaccurate, incomplete, or non-current as of the price-agreement date and the government relied on it to negotiate a higher price. Under [FAR 52.215-10], the remedy is a price reduction plus interest. A knowing violation adds a penalty equal to the overstatement amount per [FAR 15.407-1(b)(7)(iii)]. False Claims Act treble damages apply when intent is proven.
Does TINA apply to subcontracts?
Yes. Under [FAR 52.215-12], prime contractors must obtain certified cost or pricing data from subcontractors when the subcontract or modification is expected to exceed the applicable threshold ($2.5M for actions through June 30, 2026; the reported $10M threshold applies to post-June 30, 2026 actions if the NDAA change is implemented in FAR). The prime’s certification relies on the subcontractor’s data, so a defective sub submission creates defective pricing exposure for the prime.
What is a TINA sweep and when should it be run?
A sweep is the pre-certification review of all cost and pricing data in the proposal to identify any updates between initial submission and the price-agreement date. The sweep must be completed before signing the Certificate of Current Cost or Pricing Data under [FAR 15.406-2]. A documented sweep is a defective pricing defense. Run it every time, on contracts of all sizes.
Key Takeaways
- Three thresholds are active simultaneously: $950K (pre-July 2018 contracts), $2.5M (July 2018 through June 30, 2026), and a reported $10M (post-June 30, 2026 per FY2026 NDAA Sec. 1804(c); FAR not yet updated). The threshold is fixed at award date, not at audit date.
- The October 1, 2025 inflation adjustment [90 FR 41872] raised both active thresholds. Legacy contracts carry the threshold from their original award date.
- Five exceptions exist under [FAR 15.403-1(b)], not four. The fifth covers modifications of commercial products or commercial services. Contractors frequently overlook it when modifying existing commercial-item contracts above the threshold.
- Adequate price competition under [FAR 15.403-1(c)(1)] requires two responsible offerors competing independently with price as a substantial factor in source selection. The determination is fact-specific; no regulation sets a percentage threshold for price weight.
- Defective pricing exposure attaches when the certificate is signed, not when DCAA opens an audit. The Lockheed Martin settlement in 2025 covered contract conduct from 2013 to 2015. FCA claims run six to ten years.
- The seven-step sweep is the primary defense: lock the price-agreement date, refresh quotes and labor rates, confirm sub certifications, check indirect rate actuals, verify Table 15-2 compliance, and produce a signed sweep memorandum before executing the certificate.
Amerifusion Bookkeeping provides CPA-managed cost proposal support, certified cost or pricing data preparation, and pre-certification sweep services for GovCon contractors managing the current $2.5M threshold and the June 2026 transition. Run your Compliance Readiness Check to identify where your current cost proposal documentation stands, or book a discovery call with our CPA-managed team to discuss your specific contract portfolio before your next sole-source certification.
