When is a contractor required to submit certified cost and pricing data for subcontracts?

A contractor is required to submit certified cost and pricing data for subcontracts when the value exceeds 13.5 million dollars or is over 10% of the prime contractor's price. This requirement is rooted in the need for the government to ensure that it is getting fair and reasonable pricing, especially when the subcontract amount is substantial in relation to the prime contract.

The rationale behind this threshold is to control costs in federal contracts and ensure that taxpayers' money is used efficiently. When contracts reach higher values, the potential for price escalation becomes more significant, thus compelling the need for certified data to safeguard against inflated pricing.

In contrast, subcontracts valued below these thresholds do not require the same level of certification, as the risks associated with pricing tend to be lower. This approach balances the need for oversight with the practicalities of managing large numbers of contracts and subcontracts in government contracting.