Your cost or price analysis; Exchanges with the contractor; or Another type of Government analysis. The issue may also be related to a contractor challenge of Government requirements as stated in the solicitation, contract, or contract modification. Issues are the bases for the differences between the Government and contractor negotiation positions. For example, the positions on labor rates might differ because the Government challenges the contractor's use of a particular labor index to estimate future direct labor rates.
Fair and Reasonable not defined by FAR Reflects fair market value or total allowable cost of performance by a well-managed, responsible contractor plus reasonable profit Realistic in contractors ability to satisfy terms Price that a prudent buyer would pay considering market conditions, requirements alternatives, and non-price factors Requires a great deal of judgment of the data or resources obtained by the CO FAR A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of a competitive business Slide 5 5 Introduction Contd How Do We Do It?
The documentation shall include the following: When determination of price reasonableness is based on price analysis, the summary shall include the source and type of data used to support the determination 11 Documentation of fair and reasonable pricing Slide 7 Introduction Contd Its the record of the entire negotiation process for your acquisition which other people will read to find out what you did It afmc guide to writing a good pnm contractor data that were or were not relied upon by the Government It is a permanent file record See FAR 4.
Contract Pricing Reference Guide, Vol 3, Chap 12 The process of examining and evaluating a proposed price to determine if it is fair and reasonable, without evaluating its separate cost elements and profit CO shall use price analysis when cost or pricing data is not required The CO must be satisfied that the price is fair and reasonable The file must be documented with rationale used in the pricing decision Slide 12 12 Price Analysis contd Evaluating Price Reasonableness with Price Analysis Price analysis always involves the CO who selects the method of comparison for determining fair and reasonable price, such as: Prices received in response to a solicitation Commercial prices such as published price lists or rebates Previously proposed prices and contract prices for the same or similar end items and comparison and the reasonableness of the proposed prices Parametric estimates or estimates developed using rough yardsticks Independent Government Estimates Market research for same or similar items Slide 13 13 Price Reasonableness Decision Price analysis is a subjective evaluation.
For any given procurement, different bases for price analysis may give you a different view of price reasonableness. It is the contracting officer who must be satisfied that the price is fair and reasonable This is one reason that documentation is so important Slide 14 14 Cost Analysis Contract Pricing Reference Guide Vol 3, Chap 12 What is Cost Analysis?
An offerors or contractors cost or pricing data or information other than cost or pricing data Judgmental factors applied in projecting from the data to the estimated costs Use cost analysis When you require a contractor to submit cost or pricing data When you require a contractor to submit cost information other than cost or pricing data to support price reasonableness or cost realism Slide 15 15 What is Cost Realism?
Contract Pricing Reference Guide, Vol 3, Chap 12 The process of independently reviewing and evaluating specific elements of each offerors proposed cost estimate to determine whether the estimated proposed cost elements: Yes, it can exist with only one offer IF: There is reasonable expectation that two or more responsible offerors would submit offers The CO can reasonably conclude that the offer was submitted with the expectation of competition That there was at least one other offeror that was capable of submitting a meaningful offer Has no other reason to believe that other potential offerors did not intend to submit an offer Market Research is also performed Notes provide more info Documentation must support that circumstances support that competition really exists.
One offeror situations may be subject to oversight by IG and others. Validating the basis of a prior determination of fair and reasonable price Competitive, sole source, commercial? What is the basis for price reasonableness? In this case, the proposed price was reasonable Be sure to document the basis for price reasonableness Slide 25 25 Compare to Previous Prices Contd Be Aware of: TINA requires that a contract price be "adjusted to exclude any significant sums by which it may be determined In other words, the government will be awarded a contract price adjustment when the government proves that a contractor furnished defective cost or pricing data and "the [Government] relied on the overstated costs to its detriment.
When cost or pricing data is required, it is ideal to employ both cost and price analysis techniques in conjunction, thereby obtaining an authentication of the overall price as stated above.
When both a price and cost analysis was performed, the PNM failed to describe how the price analysis results were used in determining that the price was fair and reasonable Slide 38 Compare to Previous Prices contd For example: Escalation used Time, rate, etc What was the basis and currency of previous price?
The PNM did not adequately justify why the negotiated price was fair and reasonable or indicate that the significant differences had been elevated to higher management What was the clearance process?
What do I do? Slide 44 44 Price Analysis - Applications Contd Or the better question, would you consider all of the proposed prices fair and reasonable? Build Pricing Model Price Analyst 6.
Final Price Analysis Price Analyst A consolidated priced summary of individual material quantities Bill of Material identifying the item, source, quantity, and price.
This where the contractor tells us how and why they bid the hours they did. Show trends and budgetary data to provide a basis for evaluating the reasonableness of proposed rates.A Guide to Writing a Good Price Negotiation Memorandum (PNM) and millions of other books are available for Amazon Kindle.
Learn more Enter your mobile number or email address below and we'll send you a link to download the free Kindle App.4/4(1).
Guide: A Guide to Writing a Good Price Negotiation Memorandum (PNM) – Oct Price-Negotiation Memorandum (PNM): The PNM is the required formal document that reflects the price agreement for all negotiated awards not based on adequate price competition. 2 AECA AES AETC AFAA AFAO AFIF AFIT AFM AFMC AFR AFRICOM AFSAC AFSAT AFSF AIA AIAP AID AIF AIG AIK AIPAC AIS AKSS ALC ALCPT ALESA ALP AMARC AMC AMCOM AMDF AMEMB AMRAAM ANA ANZUS Arms Export Control Act Automated Export System Air Education and Training Command (USAF).
AFMC – Guide to Writing a Good Price Negotiation Memorandum PNM) or Price Competition memorandum (PCM) SAMPLE: SUCCESSFUL BIDDER LETTER - Maine. AFMC – Guide to Writing a Good Price Negotiation Memorandum PNM) or Price Competition memorandum (PCM) SAMPLE: SUCCESSFUL BIDDER LETTER - Maine.
Answer to TABULAR SUMMARY The contractor's proposal price is $49,, The government objective is _____ with an optimistic of $_____ and Find Study Resources. Main Menu; run the checklist to make sure you have addressed all the areas and look at the AFMC Guide to Writing a Good PNM to help you as you build the PNM.
|CURE RECORDS - 第43回目きゅあらじ||If waived, the contracting officer shall consider allowing additional proposal preparation and submission time. Solicit industry input on source selection evaluation factors and subfactors.|