Jump to content
The Wifcon Forums and Blogs

Recommended Posts

I'm trying to show where price analysis are required for the cumulative value of a contract vs the value of the contract action. I have always been taught that a price analysis needs to be completed for anything over $3500 for the cumulative value of the contract. However, I'm having a hard time finding that information in the FAR.

For example my original award is $3,000

I purchase additional quantity for $1,000

Is a price analysis needed because the procurement is $4,000. If so where does FAR state that.

 

Thank you in advance!

Share this post


Link to post
Share on other sites

The FAR doesn't require a price analysis of the cumulative value of the contract as a result of a proposed modification.

Share this post


Link to post
Share on other sites

If you work for a contractor rather than the government, check your procurement policies and procedures. May be there rather than the FAR. 

Share this post


Link to post
Share on other sites

Shot in the dark. Perhaps the concept you are searching for was derived from FAR 2.101 which states as follows:

“Micro-purchase” means an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold (emphasis added).

“Micro-purchase threshold” means $3,500..."

I do not read the above as requiring a price analysis for a $4,000 purchase when you already did one for a $3,000 purchase and there is only a $1,000 change notice value. I only point this definition out because it includes the $3500 threshold you were taught and "aggregate amount" may be where your taught "cumulative value" came from. In my mind, the above definition only serves to state that in your example you may have had a micro-purchase, and now you don't.

Share this post


Link to post
Share on other sites

Ok thank you. Our procedures do not state one way or another and we typically follow FAR in that case. Plus in a previous company we were dinged from an auditor on this but I can't find any guidance. 

I guess my next question would be, If I have reached the threshold for a written price analysis to be needed (one was done already on the original award) and the scope changes so that I'm adding an additional amount of money under the micro purchase threshold (for the change only) would I need to do a price analysis for that change order? 

Share this post


Link to post
Share on other sites

Providing the following for information only AND NOT to imply there is a dollar threshold for doing price analysis.….I have just heard of folks applying the following FAR guidelines in the manner you have stated for a commercial item.  The references to other parts of FAR Part 15 are important to look at as well to get a full view of  the specific paragraphs I have quoted.

FAR 15.400 states - This subpart prescribes the cost and price negotiation policies and procedures for pricing negotiated prime contracts (including subcontracts) and contract modifications, including modifications to contracts awarded by sealed bidding.

FAR 15.403-3 (c) Commercial Item states - At a minimum, the contracting officer must use price analysis to determine whether the price is fair and reasonable whenever the contracting officer acquires a commercial item (see 15.404-1(b)). The fact that a price is included in a catalog does not, in and of itself, make it fair and reasonable. If the contracting officer cannot determine whether an offered price is fair and reasonable, even after obtaining additional data from sources other than the offeror, then the contracting officer shall require the offeror to submit data other than certified cost or pricing data to support further analysis (see 15.404-1). This data may include history of sales to non-governmental and governmental entities, cost data, or any other information the contracting officer requires to determine the price is fair and reasonable. Unless an exception under 15.403-1(b)(1) or (2) applies, the contracting officer shall require that the data submitted by the offeror include, at a minimum, appropriate data on the prices at which the same item or similar items have previously been sold, adequate for determining the reasonableness of the price.

(2) Limitations relating to commercial items (10 U.S.C. 2306a(d)(2) and 41 U.S.C. 3505(b)).

(i) The contracting officer shall limit requests for sales data relating to commercial items to data for the same or similar items during a relevant time period.

(ii) The contracting officer shall, to the maximum extent practicable, limit the scope of the request for data relating to commercial items to include only data that are in the form regularly maintained by the offeror as part of its commercial operations.

(iii) The Government shall not disclose outside the Government data obtained relating to commercial items that is exempt from disclosure under 24.202(a) or the Freedom of Information Act (5 U.S.C. 552(b)).

(3) For services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, see 15.403-1(c)(3)(ii).

 

 (ii) Purchasing a supply or service for which no comparable pricing information is readily available (e.g., a supply or service that is not the same as, or is not similar to, other supplies or services that have recently been purchased on a competitive basis).

 

Again providing this only because I have heard of its application in the manner you have noted.

Share this post


Link to post
Share on other sites

The micro-purchase threshold is irrelevant to your situation.

You made a contract or other award where you did a written price analysis.  Now, you are modifying that award for an amount less than $3,500.  However, you are not making a micro-purchase.  Since you are not making a micro-purchase, you are not covered by FAR Subpart 13.2.  You might be thinking that something in FAR Subpart 13.2 exempts you from price analysis.  Well, you're not covered because you're a contractor, but still, the text in FAR Subpart 13.2 about not always having to verify price reasonableness doesn't apply because you aren't making a micro-purchase.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×