10-Step Estimation Process Checklist
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The new TINA threshold removes the requirement for certified cost data on a growing share of defense contracts. That does not mean the need for cost rigor disappears with it.
Section 1804 of the FY2026 National Defense Authorization Act raised the Truthful Cost or Pricing Data Act (TINA) threshold from $2.5 million to $10 million for defense contracts entered after June 30, 2026. The rationale is practical: reduce compliance burden, accelerate awards, and attract nontraditional vendors into the defense industrial base. These are reasonable goals. The risk is in what gets lost when the compliance floor drops away.
What the threshold changes
Certified cost or pricing data has served as the government’s primary mechanism for verifying that proposed prices reflect actual, current, and complete cost information. Thousands of contract modifications and new awards fall in the $2.5M-$10M band annually. For those actions, contracting officers will now rely on price analysis, market research, or historical comparisons rather than auditable cost submissions. That approach works when competition is real and comparable commercial pricing exists. It weakens when the work is specialized, the vendor pool is thin, or the deliverable has no true commercial equivalent—conditions that describe a large share of defense services and subsystem work.
The cost confidence gap
The concern is not fraud; it is drift. Without a structured requirement to substantiate cost positions, organizations default to whatever estimation practices they already had. For some, that means calibrated parametric models, structured work breakdown development, and traceable assumptions. For many others, it means spreadsheets, prior-year actuals adjusted by inflation, and judgment unmoored from documented rationale.
The NDAA does not eliminate the need for defensible cost positions. It eliminates the mandate that forces contractors to produce them. As The National Law Review noted, the policy shift is intended to align defense procurement with commercial practices, but commercial pricing assumptions break down in sole-source and limited-competition environments. When DCAA reviews a proposal at $8 million and finds no certified data behind it, the question will not be whether the contractor broke the law. The question will be whether the price reflects reality—and whether anyone can prove it.
What this means for the estimating community
Cost professionals should read Section 1804 not as permission to do less, but as a signal that independent estimation discipline now carries more weight. Organizations that maintain governed, auditable estimation workflows below the $10 million line will hold a structural advantage in source selections, not because the FAR requires it, but because evaluators still need confidence in pricing, and a documented cost position provides it.
Bottom line: The TINA threshold went up. The expectation of cost credibility did not.
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