Which statement best describes when certified cost and pricing data are required for subcontracts?

• A. The subcontract requires certified cost data if the subcontract value exceeds the cost or pricing threshold and more than 10% of the prime price, with a cap at the lower of $13,500,000.
• B. They are never required for subcontracts.
• C. They are required for all subcontracts regardless of value.
• D. They are required only for foreign subcontracts.

Answer: (A)

Certified cost or pricing data are required for subcontracts only when the subcontract is above the cost or pricing data threshold and is expected to exceed 10% of the prime contract price, with a cap at the lower of $13,500,000. This rule exists to ensure that for substantial subcontracts, the government has reliable cost information to support fair pricing, while avoiding the burden for small or relatively insignificant subcontracts. The threshold sets the minimum value that triggers the need for certified data, and the 10% rule ensures that only subcontracts that meaningfully impact the prime price require such data. The cap prevents the requirement from applying to extremely large subcontracts in a way that would be unwieldy.

The other statements are not correct because they either ignore the threshold and materiality test, claim data are never required, claim data are required for all subcontracts, or limit the requirement to foreign subcontracts.