FAR Part 15 Questions Flashcards
Situations for Cost Realism Analysis (FAR 15.404-1(d)).
Cost-reimbursement contract, you must use cost realism analysis to determine the probable cost of performance for each offeror.
Fixed-price incentive contract or (in exceptional cases) other fixed-price contract, you may use cost realism analysis to assess offeror responsibility and contract performance risk when:
New requirements that may not be fully understood by competing offerors;
There are quality concerns; or
Past experience indicates that contractors proposed costs have resulted in quality or service shortfalls.
Cost Realism means that the costs in an offeror’s proposal
Are realistic for the work to be performed;
Reflect a clear understanding of the requirements; and
Are consistent with the various elements of the offeror’s technical proposal.
Price Analysis Techniques (FAR 15.404-1 (b)(2))
(i) Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price (see 15.403-1(c)(1)(i)).*
(ii) Comparison of proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications.*
(iii) Use of parametric estimating methods/application of rough yardsticks (such as dollars per pound or per horsepower, or other units) to highlight significant inconsistencies that warrant additional pricing inquiry.
(iv) Comparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements.
(v) Comparison of proposed prices with independent Government cost estimates.
(vi) Comparison of proposed prices with prices obtained through market research for the same or similar items.
(vii) Analysis of data other than certified cost or pricing data (as defined at 2.101) provided by the offeror.
***Preferred methods
Cost Analysis Techniques (FAR 15.404-1 (c)(2))
Verification of cost data or pricing data and evaluation of cost elements, including–
(A) The necessity for, and reasonableness of, proposed costs, including allowances for contingencies;
(B) Projection of the offeror’s cost trends, on the basis of current and historical cost or pricing data;
(C) Reasonableness of estimates generated by appropriately calibrated and validated parametric models or cost-estimating relationships; and
(D) The application of audited or negotiated indirect cost rates, labor rates, and cost of money or other factors.
(ii) Evaluating the effect of the offeror’s current practices on future costs. In conducting this evaluation, the contracting officer shall ensure that the effects of inefficient or uneconomical past practices are not projected into the future. In pricing production of recently developed complex equipment, the contracting officer should perform a trend analysis of basic labor and materials, even in periods of relative price stability.
(iii) Comparison of costs proposed by the offeror for individual cost elements with–
(A) Actual costs previously incurred by the same offeror;
(B) Previous cost estimates from the offeror or from other offerors for the same or similar items;
(C) Other cost estimates received in response to the Government’s request;
What factors would you consider in determining if price or cost analysis is appropriate for your acquisition?
Ask yourself:
Is certified cost and pricing data required?
Sole Source or Adequate Price Competition?
Commercial or Non-Commercial?
Will price analysis alone be sufficient to determine price fair and reasonable?
Price analysis should still be considered to determine overall price fair and reasonable even if cost analysis is required.
Explain what are the exceptions to Certified Cost and Pricing Data, and what is the entering arguments and threshold for requiring this data?
There are five exceptions listed in FAR 15.403:
(1) When the contracting officer determines that prices agreed upon are based on adequate price competition (see standards in paragraph (c)(1) of this subsection);
(2) When the contracting officer determines that prices agreed upon are based on prices set by law or regulation (see standards in paragraph (c)(2) of this subsection);
(3) When a commercial item is being acquired (see standards in paragraph (c)(3) of this subsection);
(4) When a waiver has been granted (see standards in paragraph (c)(4) of this subsection); or
(5) When modifying a contract or subcontract for commercial items (see standards in paragraph (c)(3) of this subsection).
Discuss what key elements make up cost and pricing data, and why does the Government need to ensure that there is a legitimate requirement for this data when asking the contractor to provide this information?
Finally, please provide any real life examples you have of when you had to require cost and pricing data, and how it helped you determine the price for that specific situation was able to be determined fair & reasonable.
The key elements of cost and pricing data: that the information is accurate, current and complete as of the date the data is submitted.
Another thing to consider is the cost of this data to the Government. Requesting certified cost and pricing data requires more contractor management review, and it cost more money to generate it. Therefore the Government should only be requesting it if there is no other recourse to determine price reasonableness or with meeting the requirements of FAR 15.403.
Some of the other things a CO could do is request “Other than Certified Cost and Pricing Data”, or potentially request previous audit and rate information from DCAA and DCMA.
As the Contracting Officer on an open-market source selection, you established your competitive range and recently sent out the notice to unsuccessful offerors. In response, you have received several requests for debriefings. The requests are for pre-award debriefings. What are the things you may/may not include in the debriefings?
Pre-Award Debriefings - Authority: FAR 15.505
At a minimum, Pre-Award debriefings shall include –
(1) The agency’s evaluation of significant elements in the offeror’s proposal;
(2) A summary of the rationale for eliminating the offeror from the competition; and
(3) Reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed in the process of eliminating the offeror from the competition.
Pre-award debriefings shall not disclose –
(1) The number of offerors;
(2) The identity of other offerors;
(3) The content of other offerors proposals;
(4) The ranking of other offerors;
(5) The evaluation of other offerors; or
(6) Any of the information prohibited in 15.506(e).
