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About CharterParty

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  1. FAR 13 fair and reasonable

    I agree with Vern please don’t assume either the best or the worst. This is an intellectual question, not a questions of particular facts. Here is language from the NAVSUP 4200.85D: “FAIR AND REASONABLE PRICE DETERMINATION Ref: Purchase Request/Solicitation Number_____________________ 1. I am recommending award to XXXXXXX. I used one or more of the following price analysis techniques compared to the quoted price of $____________. The quoted price was similar enough to the comparative price(s) to conclude that the quoted price is determined fair and reasonable. a. Adequate Price Competition. XX vendors were solicited and XX quotes were received. After comparing the quoted prices, I consider the quotes to be competitive. See the Simplified Acquisition Worksheet or other record of price quotes received.” Page 6-12. I have seen similar templates before in several offices. These are template documents that have check boxes. The contracting officer makes an assertion (Box check or otherwise like above) that the price is fair and reasonable based on competitive quotes and then two or more quotes are in the file to review. I don’t like this template’s use of the term “Adequate Price Competition”. As far as I can tell “Adequate Price Competition” is a term of art to describing procedures laid out in FAR 15. I have seen these templates in several offices and this question is one that always comes up. FAR 13.106-3(a) has only three options for price fair and reasonableness (1), (2), or (3). (1) leads with “ (1) Whenever possible, base price reasonableness on competitive quotations or offers. “ then (2) states “ (2) If only one response is received, include a statement of price reasonableness in the contract file. The contracting officer may base the statement on— (i) Market research; (ii) Comparison of the proposed price with prices found reasonable on previous purchases; (iii) Current price lists, catalogs, or advertisements. However, inclusion of a price in a price list, catalog, or advertisement does not, in and of itself, establish fairness and reasonableness of the price; (iv) A comparison with similar items in a related industry; (v) The contracting officer’s personal knowledge of the item being purchased; (vi) Comparison to an independent Government estimate; or (vii) Any other reasonable basis.” Competitive is not defined in FAR 2 or FAR 13 and I don’t know how you would apply the definition of adequate price competition to a FAR 13 procurement. Do two tractor suppliers who sell you a computer for your tractor count as competition? These tractor suppliers are stuck buying the computer from tractor manufacturer who normally does not sell direct (even to the federal Government). Don’t use the term tractor to confuse this question, it could equally be cell phone maker, engine manufacturer, software supplier. I also suspect this will become more of an issue in the future as software makes more items unique and necessary to keep the whole package working.
  2. While conducting reviews of SAP purchases a colleague and I had an discussion about what is necessary to award at a fair and reasonable price, in a particular situation. While price reasonableness is always a function of all the facts in a given procurement, absent any clear evidence of collusion or improper business relationships. Would two quotes from authorized distributors be sufficient fair and reasonable pricing? Assume that the determination necessary to support a single source BN/OEM has been properly executed for a part/item. Award is made to low price quoter of the same part/item. Would quotes from two different authorized distributors for the same BN/OEM item be sufficient price analysis to meet the threshold of FAR 13.106-3(a)(1)?