When is contractor submission of cost data required?

The requirement for contractor submission of cost data is particularly relevant when modifications involve significant price adjustments, specifically over two million dollars. This threshold is established to ensure that the contracting officer can adequately assess and validate the rationale behind the cost adjustments, promoting transparency and accountability in government contracting.

In instances where modifications exceed this financial threshold, the contracting officer needs detailed cost data to determine whether the proposed costs are fair and reasonable. This practice not only protects the government's financial interests but also helps maintain a consistent standard in pricing across contracts, especially for large modifications. Such a requirement promotes prudent stewardship of taxpayer dollars by ensuring that modifications are justified through complete and accurate financial information.

Other scenarios mentioned, such as all contract modifications or only for fixed-price contracts, do not universally mandate the submission of cost data, as the need for cost data can vary based on the nature and specifics of the contract and modification in question. Therefore, the relevance of the two million dollars threshold is critical in understanding when contractor cost data submissions are required.