---
kind: "section"
citation: "10 U.S.C. § 3703"
title: "10"
title_heading: "Armed Forces"
number: "3703"
heading: "Exceptions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/10/3703"
units:
  - "Subtitle A — General Military Law"
  - "Part V — Acquisition"
  - "Subpart D — General Contracting Provisions"
  - "Chapter 271 — Truthful Cost or Pricing Data (truth in Negotiations)"
---

# §3703. Exceptions

- (a) **In general.—** Submission of certified [cost or pricing data](/usc/10/3701.md?p=1) shall not be required under [section 3702 of this title](/usc/10/3702.md) in the case of a contract, a [subcontract](/usc/10/3701.md?p=2), or modification of a contract or [subcontract](/usc/10/3701.md?p=2)—
  - (1) for which the price agreed upon is based on—
    - (A) adequate price competition; or
    - (B) prices set by law or regulation;
  - (2) for the acquisition of a [commercial product](/usc/10/3011.md?p=9) or a [commercial service](/usc/10/3011.md?p=10);
  - (3) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this chapter may be waived and justifies in writing the reasons for such determination; or
  - (4) to the extent such data—
    - (A) relates to an offset agreement in connection with a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm; and
    - (B) does not relate to a contract or [subcontract](/usc/10/3701.md?p=2) under the offset agreement for work performed in such foreign country or by such foreign firm that is directly related to the weapon system or defense-related item being purchased under the contract.
- (b) **Modifications of contracts and subcontracts for commercial products or commercial services.—** In the case of a modification of a contract or [subcontract](/usc/10/3701.md?p=2) for a [commercial product](/usc/10/3011.md?p=9) or [commercial services](/usc/10/3011.md?p=10) that is not covered by the exception to the submission of certified [cost or pricing data](/usc/10/3701.md?p=1) in paragraph [(1)](#a-1) or [(2)](#a-2) of subsection (a), submission of certified [cost or pricing data](/usc/10/3701.md?p=1) shall not be required under [section 3702 of this title](/usc/10/3702.md) if—
  - (1) the contract or [subcontract](/usc/10/3701.md?p=2) being modified is a contract or [subcontract](/usc/10/3701.md?p=2) for which submission of certified [cost or pricing data](/usc/10/3701.md?p=1) may not be required by reason of paragraph [(1)](#a-1) or [(2)](#a-2) of subsection (a); and
  - (2) the modification would not change the contract or [subcontract](/usc/10/3701.md?p=2), as the case may be, from a contract or [subcontract](/usc/10/3701.md?p=2) for the acquisition of a [commercial product](/usc/10/3011.md?p=9) or [commercial services](/usc/10/3011.md?p=10) to a contract or [subcontract](/usc/10/3701.md?p=2) for the acquisition of an item other than a [commercial product](/usc/10/3011.md?p=9) or [commercial services](/usc/10/3011.md?p=10).
- (c) **Noncommercial modifications of commercial products.—**
  - (1) The exception in [subsection (a)(2)](#a-2) does not apply to [cost or pricing data](/usc/10/3701.md?p=1) on noncommercial modifications of a [commercial product](/usc/10/3011.md?p=9) that are expected to cost, in the aggregate, more than the amount specified in [section 3702(a)(1)(A) of this title](/usc/10/3702.md?p=a-1-A), as adjusted from time to time under [section 3702(g) of this title](/usc/10/3702.md?p=g), or 5 percent of the total price of the contract (at the time of contract award), whichever is greater.
  - (2) In this subsection, the term “noncommercial modification”, with respect to a [commercial product](/usc/10/3011.md?p=9), means a modification of such product that is not a modification described in [section 103(3)(A) of title 41](/usc/41/103.md?p=3-A).
  - (3) Nothing in [paragraph (1)](#c-1) shall be construed—
    - (A) to limit the applicability of the exception in paragraph [(1)](#a-1) or [(3)](#a-3) of subsection (a) to [cost or pricing data](/usc/10/3701.md?p=1) on a noncommercial modification of a [commercial product](/usc/10/3011.md?p=9); or
    - (B) to require the submission of [cost or pricing data](/usc/10/3701.md?p=1) on any aspect of an acquisition of a [commercial product](/usc/10/3011.md?p=9) other than the cost and pricing of noncommercial modifications of such product.
- (d) **Commercial product or commercial service determination.—**
  - (1) For purposes of applying the exception under [subsection (a)(2)](#a-2) to the required submission of certified [cost or pricing data](/usc/10/3701.md?p=1), the contracting [officer](/usc/10/101.md?p=b-1) may presume that a prior [commercial product](/usc/10/3011.md?p=9) or [commercial service](/usc/10/3011.md?p=10) determination made by a [military](/usc/10/801.md?p=8) [department](/usc/10/101.md?p=a-6), a [Defense Agency](/usc/10/101.md?p=a-11), or another [component](/usc/10/3011.md?p=13) of the [Department](/usc/10/101.md?p=a-6) of Defense shall serve as a determination for subsequent [procurements](/usc/10/3011.md?p=1) of such product or service.
  - (2) If the contracting [officer](/usc/10/101.md?p=b-1) does not make the presumption described in [paragraph (1)](#d-1) and instead chooses to proceed with a [procurement](/usc/10/3011.md?p=1) of a product or service previously determined to be a [commercial product](/usc/10/3011.md?p=9) or a [commercial service](/usc/10/3011.md?p=10) using procedures other than the procedures authorized for the [procurement](/usc/10/3011.md?p=1) of a [commercial product](/usc/10/3011.md?p=9) or a [commercial service](/usc/10/3011.md?p=10), as the case may be, the contracting [officer](/usc/10/101.md?p=b-1) shall request a review of the [commercial product](/usc/10/3011.md?p=9) or [commercial service](/usc/10/3011.md?p=10) determination by the head of the contracting activity.
  - (3) Not later than 30 days after receiving a request for review of a determination under [paragraph (2)](#d-2), the head of a contracting activity shall—
    - (A) confirm that the prior determination was appropriate and still applicable; or
    - (B) issue a revised determination with a written explanation of the basis for the revision.
- (e) A contracting [officer](/usc/10/101.md?p=b-1) shall consider evidence provided by an offeror of recent purchase prices paid by the Government for the same or similar [commercial products](/usc/10/3011.md?p=9) or [commercial services](/usc/10/3011.md?p=10) in establishing price reasonableness on a subsequent purchase if the contracting [officer](/usc/10/101.md?p=b-1) is satisfied that the prices previously paid remain a valid reference for comparison after considering the totality of other relevant factors such as the time elapsed since the prior purchase and any differences in the quantities purchased or applicable terms and conditions.
- (f) **Determination by prime contractor.—** A prime contractor required to submit certified [cost or pricing data](/usc/10/3701.md?p=1) under [section 3702 of this title](/usc/10/3702.md) with respect to a prime contract shall be responsible for determining whether a [subcontract](/usc/10/3701.md?p=2) under such contract qualifies for an exception under [subsection (a)(1)](#a-1) from such requirement.

## Source credit

(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1831(a), (d), Jan. 1, 2021, 134 Stat. 4209, 4211; Pub. L. 119–60, div. A, title VIII, § 812(a)(7), Dec. 18, 2025, 139 Stat. 952.)

## Notes

### Editorial Notes

### Codification

The text of subsec. (b) of section 2306a of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1831(d), was based on Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 103–355, title I, § 1202(a), Oct. 13, 1994, 108 Stat. 3274, as amended by Pub. L. 104–106, div. D, title XLIII, § 4321(a)(2), Feb. 10, 1996, 110 Stat. 671; Pub. L. 104–106, div. D, title XLII, § 4201(a)(1), Feb. 10, 1996, 110 Stat. 649; Pub. L. 108–375, div. A, title VIII, § 818(a), Oct. 28, 2004, 118 Stat. 2015; Pub. L. 110–181, div. A, title VIII, § 814, Jan. 28, 2008, 122 Stat. 222; Pub. L. 113–291, div. A, title X, § 1071(a)(3), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, §§ 812, 851(b), 853, Nov. 25, 2015, 129 Stat. 891, 916, 919; Pub. L. 114–328, div. A, title VIII, § 822(2), Dec. 23, 2016, 130 Stat. 2276; Pub. L. 115–232, div. A, title VIII, § 836(c)(5)(A), Aug. 13, 2018, 132 Stat. 1865. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sections. Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

### Amendments

2025—Subsec. (a)(1)(A). Pub. L. 119–60 substituted “price competition” for “competition that results in at least two or more responsive and viable competing bids”.

2021—Pub. L. 116–283, § 1831(d)(1), transferred subsec. (b) of section 2306a of this title to this section, struck out subsec. (b) designation and heading “Exceptions” at beginning, and redesignated pars. (1) to (6) as subsecs. (a) to (f), respectively, and realigned margins.

Subsec. (a). Pub. L. 116–283, § 1831(d)(2)(A), (B), (C), (E), after redesignation of section 2306a(b)(1) of this title as subsec. (a) of this section, substituted “under section 3702 of this title” for “under subsection (a)” in introductory provisions, redesignated subpar. (A) and its cls. (i) and (ii) as par. (1) and subpars. (A) and (B), respectively, redesignated subpars. (B) and (C) as pars. (2) and (3), respectively, and redesignated subpar. (D) and its cls. (i) and (ii) as par. (4) and subpars. (A) and (B), respectively.

Subsec. (a)(3). Pub. L. 116–283, § 1831(d)(2)(D), substituted “this chapter” for “this section”.

Subsec. (b). Pub. L. 116–283, § 1831(d)(3)(A), (B), after redesignation of section 2306a(b)(2) of this title as subsec. (b) of this section, in introductory provisions, substituted “paragraph (1) or (2) of subsection (a)” for “paragraph (1)(A) or (1)(B)” and “under section 3702 of this title” for “under subsection (a)” and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively.

Subsec. (b)(1). Pub. L. 116–283, § 1831(d)(3)(C), substituted “paragraph (1) or (2) of subsection (a)” for “paragraph (1)(A) or (1)(B)”.

Subsec. (c). Pub. L. 116–283, § 1831(d)(4)(A), (D)(i), after redesignation of section 2306a(b)(3) of this title as subsec. (c) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively.

Subsec. (c)(1). Pub. L. 116–283, § 1831(d)(4)(B), substituted “subsection (a)(2)” for “paragraph (1)(B)”, “section 3702(a)(1)(A) of this title” for “subsection (a)(1)(A)(i)”, and “section 3702(g) of this title” for “subsection (a)(7)”.

Subsec. (c)(2). Pub. L. 116–283, § 1831(d)(4)(C), substituted “this subsection” for “this paragraph”.

Subsec. (c)(3). Pub. L. 116–283, § 1831(d)(4)(D)(ii), (ii) [(iii)], substituted “paragraph (1)” for “subparagraph (A)” in introductory provisions and “paragraph (1) or (3) of subsection (a)” for “subparagraph (A) or (C) of paragraph (1)” in subpar. (A).

Subsec. (d). Pub. L. 116–283, § 1831(d)(5)(A), (D)(i), after redesignation of section 2306a(b)(4) of this title as subsec. (d) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively.

Subsec. (d)(1). Pub. L. 116–283, § 1831(d)(5)(B), substituted “subsection (a)(2)” for “paragraph (1)(B)”.

Subsec. (d)(2). Pub. L. 116–283, § 1831(d)(5)(C), substituted “paragraph (1)” for “subparagraph (A)”.

Subsec. (d)(3). Pub. L. 116–283, § 1831(d)(5)(D)(ii), substituted “paragraph (2)” for “subparagraph (B)” in introductory provisions.

Subsec. (f). Pub. L. 116–283, § 1831(d)(6), after redesignation of section 2306a(b)(6) of this title as subsec. (f) of this section, substituted “section 3702 of this title” for “subsection (a)” and “subsection (a)(1)” for “paragraph (1)(A)”.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title.