Whynot

Would it be unreasonable for a contracting officer to make a determination that a ?price [for an item] is based on adequate competition? if the price of that item is at or below the price of a similar item on a GSA Schedule Contract? My question concerns 15.403-1©(1)(iii) where price can be determined to have been based on adequate competition if ?price analysis clearly demonstrates that the proposed price is reasonable in comparison with current or recent prices for the same or similar items, adjusted to reflect changes in market conditions, economic conditions, quantities, or terms and conditions under contracts that resulted from adequate price competition.? Does a current GSA Schedule contract meet the definition of a ?contract that resulted from adequate price competition? for this purpose? Is this unreasonable?

I assume that you do not have an established practice to price inter/intra-organizational transfers, and that before this contract the affiliate did not contribute costs to your indirect base. You may not have a problem. I believe that the affiliate?s billings to you become part of your actual indirect base, just as a subcontractor billing would do. I would look at 31.102 for the applicability of 31.205-26(e). If the conditions at 31.102 are met (the affiliate?s FFP is not based on cost analysis or requires the determination or negotiation of costs), then 31.205-26(e) is not applicable. You could get an advance agreement that clarifies this understanding ? probably not necessary.