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ktr1999

When is "cost or pricing data" not "cost or pricing data"?

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I work for a contractor bidding on an RFP for a fixed-price contract. This is a competitive bid. The RFP requires a detailed budget providing itemized costs for direct labor, indirect costs, other direct costs, fringe benefits, etc. It also includes the following FAR clause:

FAR 52.215-20 Alternate IV Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data - Alternate IV (Oct 1997)

As prescribed in 15.408(l), replace the text of the basic provision with the following:

(a) Submission of cost or pricing data is not required.

(B) Provide information described below: For each cost element, provide adequate documentation that supports each proposed cost as being fair and reasonable (payroll records, vendor quotes, catalog pages, indirect rate agreements, etc.).

I've reviewed the definition of cost or pricing data at FAR 2.101 and the first item it includes is "vendor quotations" (also on the list above) ? most of the others are irrelevant for this procurement.

My question is, if vendor quotations are considered "cost or pricing data" (and therefore not required), how can they also be "information other than cost or pricing data" (and therefore required)? Also, how do you reconcile paragraph (B) above with FAR 15.403-3(B) which states, "When adequate price competition exists... generally no additional information is necessary to determine the reasonableness of price [emphasis added]."?

This is not the first time I have seen this type of requirement, but it seems contradictory that the FAR would specifically prohibit Contracting Officers from requiring cost or pricing data where there is a reasonable expectation of adequate competition (15.403-1), and still allow them to require detailed budgets with vendor quotes and other supporting documentation and label these "information other than cost or pricing data."

Does anyone have any suggestions on how to respond to this requirement? It's a small but complicated budget and really not worth the hours of research it would take to track down vendor quotes, payroll records, catalog pages, etc.

Thanks!

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I work for a contractor bidding on an RFP for a fixed-price contract. This is a competitive bid. The RFP requires a detailed budget providing itemized costs for direct labor, indirect costs, other direct costs, fringe benefits, etc. It also includes the following FAR clause:

FAR 52.215-20 Alternate IV Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data - Alternate IV (Oct 1997)

As prescribed in 15.408(l), replace the text of the basic provision with the following:

(a) Submission of cost or pricing data is not required.

(B) Provide information described below: For each cost element, provide adequate documentation that supports each proposed cost as being fair and reasonable (payroll records, vendor quotes, catalog pages, indirect rate agreements, etc.).

I've reviewed the definition of cost or pricing data at FAR 2.101 and the first item it includes is "vendor quotations" (also on the list above) ? most of the others are irrelevant for this procurement.

My question is, if vendor quotations are considered "cost or pricing data" (and therefore not required), how can they also be "information other than cost or pricing data" (and therefore required)? Also, how do you reconcile paragraph (B) above with FAR 15.403-3(B) which states, "When adequate price competition exists... generally no additional information is necessary to determine the reasonableness of price [emphasis added]."?

This is not the first time I have seen this type of requirement, but it seems contradictory that the FAR would specifically prohibit Contracting Officers from requiring cost or pricing data where there is a reasonable expectation of adequate competition (15.403-1), and still allow them to require detailed budgets with vendor quotes and other supporting documentation and label these "information other than cost or pricing data."

Does anyone have any suggestions on how to respond to this requirement? It's a small but complicated budget and really not worth the hours of research it would take to track down vendor quotes, payroll records, catalog pages, etc.

Thanks!

Have you asked these questions of the contracting office?

They apparently want a price breakdown to evaluate for some purpose or purposes. It also looks like they have gone overboard in the level of detail required if the purpose is to evaluate your understanding of the requirements, to evaluate the reasonableness and/or to help conduct price discussions if such will be necessary.

Does the RFP describe anything about the price evaluation process?

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I've reviewed the definition of cost or pricing data at FAR 2.101 and the first item it includes is "vendor quotations" (also on the list above) ? most of the others are irrelevant for this procurement.

My question is, if vendor quotations are considered "cost or pricing data" (and therefore not required), how can they also be "information other than cost or pricing data" (and therefore required)? Also, how do you reconcile paragraph (B) above with FAR 15.403-3(B) which states, "When adequate price competition exists... generally no additional information is necessary to determine the reasonableness of price [emphasis added]."?

Thanks!

Hi ktr1999,

Consider this point of view: cost or pricing data includes all facts that would reasonably be expected to significantly affect price negotiations. "All facts" includes factual information such as vendor quotes, but is not limited to only vendor quotes. Cost or pricing data is certified and penalties exist for defective certifications. "Information other than cost or pricing data" includes "any type of information" that the Contracting Officer believes is necessary to determine price reasonableness or cost realism. "Any type of information" includes factual information such as vendor quotes, but is not limited to only vendor quotes. So there is obviously going to be some overlap. The critical distinction is that "information other than cost or pricing data" is not certified and therefore you cannot be penalized for a defective certification. (But note that the False Statements Act may apply ....)

Basically, the C.O. is prohibited from requiring submission of cost or pricing data where there is adequate competition, but is encouraged to obtain sufficient information in order to determine price reasonableness. Just because there is competition does not automatically mean that the C.O. can conclude an offeror's price is reasonable. Note that FAR 15.305(a)(1) says "Normally, competition establishes price reasonableness [but] in limited situations, a cost analysis ... may be appropriate to establish reasonableness of the otherwise successful offeror?s price."

From my point of view, you need to give the Contracting Officer whatever he/she says is necessary. So long as you're not certifying, your downside risk is limited. Moreover, you want the contract award, don't you?

Hope this helps.

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Have you asked these questions of the contracting office?

They apparently want a price breakdown to evaluate for some purpose or purposes. It also looks like they have gone overboard in the level of detail required if the purpose is to evaluate your understanding of the requirements, to evaluate the reasonableness and/or to help conduct price discussions if such will be necessary.

Does the RFP describe anything about the price evaluation process?

Hi Joel,

Thanks for your response. One of the other bidders asked this question but the CO's response was that what he is requiring is not "certified cost or pricing data" (which would be prohibited under 15.402(a)(1)); rather it is "information other than cost or pricing data," which is allowed under FAR 15.403-3(a). I take it he understands the objection and chooses to ignore it, but to me it seems he is taking advantage of the ambiguity of the definition.

In terms of price evaluation, all the RFP says is:

"Price/Cost will be evaluated on the basis of cost realism, which means that the costs in an offeror?s proposal:

(1) Are realistic for the work to be performed;

(2) Reflect a clear understanding of the requirements; and

(3) Are consistent with the various elements of the offeror?s technical proposal."

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I've reviewed the definition of cost or pricing data at FAR 2.101 and the first item it includes is "vendor quotations" (also on the list above) ? most of the others are irrelevant for this procurement.

My question is, if vendor quotations are considered "cost or pricing data" (and therefore not required), how can they also be "information other than cost or pricing data" (and therefore required)? Also, how do you reconcile paragraph (B) above with FAR 15.403-3(B) which states, "When adequate price competition exists... generally no additional information is necessary to determine the reasonableness of price [emphasis added]."?

Thanks!

There is a simple answer to that question. Go to FAR Part 2 and look up the definitions of cost or pricing data and information other than cost or pricing data. The only distinction is that cost or pricing data must be certified pursuant to FAR 15.406-2, while information other than cost or pricing data is "any type of information" for which certification is not required by the CO. Aside from that distinction there is no difference.

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I agree with Here and Vern. And what the KO is intending to evaluate is familiar.

But the means and methods don't make sense to me. We used to ask for a breakdown with construction and design-build contact proposals but the information we got was mostly gobblygook until I spoke with one of the proposers once. We weren't asking for subs quotes but we asked them to show basic subcontract amounts or direct cost estimates for material equipment and labor, plus total markup for the major WBS items for evaluation purposes similar to what was mentioned above.

My proposer indicated that he had no problem showing us the basis of the proposal but he asked for three working days after the proposal due date in order to be able to break down his actual proposal. He said that most construction contractors were receiving final price input from subs, the estimators and senior management up until a few minutes before our closing time for proposals. Therefore the breakdown was meaningless to anyone a( that point in time because the proposer didnt have time to breakdown the information.

After that, I changed the proposal submission requirements to allow three working days to submit the breakdown info. So, then we usually ended up with really meaningful information.

However, we didn't always have to use it to evaluate prices or to use for price discussions. So we were often wasting the industry's money and our time and cost to evaluate.

The next iteration was to move away from automatically asking for price breakdown details.. Instead, we reserved the right to ask for it in the event that we really needed it for evaluation and/or to prepare for price discussions.

This made contractors happier plus we got the info only when we really needed it.

Otherwise, we usually had enough detail in the CLIN structure, had multiple proposals plus the Government Estimate to make initial comparisons with.

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