Clauses · FAR · Pricing and audit
FAR 52.214-27 Price Reduction for Defective Certified Cost or Pricing Data-Modifications-Sealed Bidding
Does the regulation require it to flow down?
No
The clause contains no subcontracts paragraph and imposes nothing on a sub directly. It reaches the sub through economics: because the prime's price is reduced for the SUB's defective data, the prime pushes a back-to-back defective-pricing clause onto the sub, and separately uses 52.215-12 and 52.215-13 (both already in the base) to compel the sub to submit certified cost or pricing data in the first place. Three corpus documents carry it — AAR, BAE, RTX — all of them general FAR/DFARS flow-down tables rather than negotiated subcontracts, which is template mirroring of the prime's Section I list
A clause can reach your subcontract without a mandate. Once it is in your document, it is a contract term all the same. The missing mandate is a fact about the regulation. It is not a ruling on your order.
Checked against acquisition.gov on 2026-08-05 · edition JUN 2020 · base v0.9.3 Read the text ↗
What it makes you produce
One item for your checklist.
Nothing to send now
It does not hold the order. It decides what money moves later — what you can claim, what can be claimed from you, and what can be held back — and none of that changes after signature.
A dated, retained snapshot of the vendor quotes, labor rates and factors behind each certified submission, plus the record of the sweep for newer data made on the day price was agreed
FAR 52.214-27(b)
When it is used
FAR 14.201-7(b): inserted in sealed-bidding solicitations and contracts when the contract amount is expected to exceed the certified cost or pricing data threshold at FAR 15.403-4(a)(1) — $2.5 million as of 2026-08-05. The head of the contracting activity may waive it for contracts with foreign governments, in writing, with the reasons stated. Once in the contract it operates only on MODIFICATIONS: paragraph (a) limits it to modifications whose aggregate increases and decreases in cost exceed the 15.403-4(a)(1) threshold, and excludes any modification for which an exception under FAR 15.403-1(b) applies (adequate price competition, price set by law or regulation, commercial products or services, a waiver). It is the sealed-bidding analog of 52.215-11, Price Reduction for Defective Certified Cost or Pricing Data-Modifications (already in the base); the original sealed bid itself is not covered because there is no certified data behind a competitive bid.
Read closely
Data that was not accurate, complete and current as of the price agreement date comes back as a price reduction, with daily compounded interest under 26 U.S.C. 6622 and a penalty equal to the overpayment where the defect was knowing. Paragraph (d)(1) removes the four defenses reached for first — sole source, that the buyer's people should have known, a lump-sum price, and no executed certificate. Paragraph (c) caps the reduction attributable to a prospective supplier at the difference between the subcontract cost actually incurred and the estimate used, plus overhead and profit.
The 3 templates that name it, with the line
Source: acquisition.gov, FAR 52.214-27, FAR 14.201-7(b), FAR 15.403-4(a)(1), FAR 15.403-1(b), plus the FAR Overhaul part 14 deviation guide 14.208(b)(1) (verified 2026-08-05)
This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.