Hello and thank you for joining us for Episode 9 of Fun with the FAR Season 11! In our next session, we will cover FAR Part 15.4 (Special focus on contract pricing). As we prepare for our 10th episode of Season 11, here are a few Episode 10 FAR Facts for us to think about:
- FAR 15.4 price negotiations and procedures should be used by contracting officers to determine the price reasonableness of modifications offered under a sealed bid contract. FAR 15.400.
- The fact that a price is included in a commercial product or commercial service “price list” or catalog does not, in and of itself, make that particular price “fair and reasonable.” FAR 15.403-3(c).
- Cost analysis is the review and evaluation of any separate cost elements and profit or fee in a contractor’s proposal, as needed to determine a fair and reasonable price or to determine cost realism, and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency. FAR 15.404-1(c).
- Examples of price analysis techniques can be found at FAR 15.404-1(b)(2).
- Examples of cost analysis techniques can be found at FAR 15.404-1(c)(2).
- A prime contractor is required to conduct appropriate cost or price analysis to establish the reasonableness of proposed subcontractor pricing. FAR 15.404-3(b).
- The contracting officer’s overall objective during a FAR Part 15 negotiation is to negotiate a contract of a type and with a price that provides the contractor the greatest incentive for efficient and economical performance. FAR 15.405(b).
- Contracting officers are required to document in the contract file the principal elements of the negotiated agreement. The required elements that must be documented in a Price Negotiation Memorandum are set forth at FAR 15.406-3.
- The current and prior versions of the FAR can be found online at acquisition.gov
- We look forward to you joining us for our Episode 10 FAR Facts, Included here is the link to our Fun with the FAR program:
