FAR 15.4 Contract Pricing Flashcards
What is Price Analysis?
Evaluate proposed price without evaluating separate cost elements and profit. Analyzing the “bottom line” proposed price.
How we shop every day. Example: Buying a car. We care about the bottom line pricing.
What is Cost Analysis?
Analyzing the Individual cost elements of a proposed price.
Shall be used to evaluate cost elements when Certified Cost or Pricing Data is required.
Can perform Cost analysis on “other than certified” cost or pricing data.
What is the Preferred Price Analysis Technique?
Adequate Price Competition
What are the less preferred methods for Price Analysis?
Comparison to Historical Pricing (Quantity Differences, size of production runs, extent of competition, market conditions).
Comparison w/ published price lists, market prices.
Comparison to independent Government Estimate (IGE)
Comparison to market research for same or similar items.
Parametric analysis (rough yardstick) Example: Price per foot, Price per yard.
Analysis of other than Certified Cost or Pricing data provided by the offeror.
What are the Elements of Cost? (5)
Labor (How many hours? What’s the price per hour?) (Fringe Benefits)
Material (Raw material, purchased parts, Subcontractor Costs) (Purchase history, quotes, proposal)
Other Direct Costs (ODCs) - Travel (FTR/JTR), Royalties, Preservation, Packaging, Packing, Special Tooling, Equipment)
Indirect Costs/Overheads - Labor Overhead and Material Overhead. (FPRRs/FPRAs help with this)
G&A
What are Labor Costs?
What are Material Costs?
What are Other Direct Costs (ODCs)?
What are some examples of Indirect Costs/Overheads?
What do we mean when we talk about G&A?
Management, financial, and other expenses related to the general management and administration of the business unit as a whole.
What is Profit or Fee used for?
Used to promote efficient performance.
How do we determine Profit (Fixed Price) or Fee (Cost Reimbursement)? (DFARS 215-404-70)
Weighted Guidelines
When is Certified Cost or Pricing Data required? (FAR 15.406-2)
Actions over TINA ($2 Million)
What are some exceptions to Certified Cost or Pricing Data?
Adequate Price Competition
Price set by law or regulation
Commercial Item (FAR 12)
Cost or Pricing data is Waived by the HCA
What is Other than Certified Cost or Pricing Data?
Pricing data, cost data, and judgmental information necessary for the CO to determine a fair and reasonable price,.
May include the identical types of data as CCPD but without the Certification.
Any information reasonable required to explain the offeror’s estimating process.
When must you reach out to PZCF for Pricing Support?
AFLCMC: $25 Million
AFSC and AFNWC: $10 Million
All Competitive Acquisitions: $100 Million
What is used to Document the story of how the PCO came to find the Price Fair and Reasonable?
Price Negotiation Memorandum
What is Defective Pricing referring to?
When CCPD was required, but the contractor did not submit or disclose to the Government current, accurate, or complete information.
Also known as a Post Award Audit.
What happens when defective pricing is found?
Provides for a reduction in the contract price whenever the CO determines that the contract price increased by a significant amount because the contractor furnished inaccurate, incomplete, or non-current cost or pricing data.
Who is performing a data sweep?
Contractor
What is a data sweep?
When the KTR audits themselves to see if they used current, accurate, and complete information to provide their CCPD.
