Fair and Reasonable Pricing Case Law

[mte5x]

I am a contract administrator, and I am looking for relevant case law pertaining to the FAR definition of "fair and reasonable price." I've tried searching GAO and Wifcon but it proved unsuccessful. The context is that I'm trying to write a price justification for a subcontractor, and I'd like to incorporate case law as well as FAR citations. In the technical justification I've cited FAR 13.106-3, 15.402, and 15.404-3. Any help is greatly appreciated!

[napolik]

I am a contract administrator, and I am looking for relevant case law pertaining to the FAR definition of "fair and reasonable price." I've tried searching GAO and Wifcon but it proved unsuccessful. The context is that I'm trying to write a price justification for a subcontractor, and I'd like to incorporate case law as well as FAR citations. In the technical justification I've cited FAR 13.106-3, 15.402, and 15.404-3. Any help is greatly appreciated!

Before responding, I believe we need a little more information. First, are you working for the government or for a contractor? Second, what is the dollar amount of the subcontract? Third, did you receive adequate price competition?

[Jacques]

If you're just looking for a primer, you may want to take a look at the Contract Pricing Reference Guides (referenced at FAR 15.404-1(a)(7)), esp. Vol. 1, Ch. 1, at Section I.2.1. This section is discussed in Nash & Cibinic, Contract Prices: What is a "Fair and Reasonable" Price?, 15 Nash & Cibinic Report P 22 (April 2001).

[Guest Vern Edwards]

I am a contract administrator, and I am looking for relevant case law pertaining to the FAR definition of "fair and reasonable price." I've tried searching GAO and Wifcon but it proved unsuccessful. The context is that I'm trying to write a price justification for a subcontractor, and I'd like to incorporate case law as well as FAR citations. In the technical justification I've cited FAR 13.106-3, 15.402, and 15.404-3. Any help is greatly appreciated!

You need case law to document the fairness and reasonableness of a price? Really?

What case law would there be? Ordinarily, the question of fair and reasonable price comes up during negotiations before there is a contract, so there would be nothing for a board or court to adjudicate. They can adjudicate only disputed contract claims. I don't know of any GAO protest decision setting a case law standard for fairness and reasonableness during contract negotiations, and I've never heard of parties going to a board or court for a decision about what would be a fair and reasonable price in a contract negotiation. After contract award the issue is usually equitable adjustment, which is a different concept than fair and reasonable price.

[mte5x]

First, thanks for all of your responses. I am working for a contractor and the total subcontract value is about 2 million over three years. I agree that its a little out of the ordinary to include case law in this justification, but it is something that someone much higher up has requested. I'll certainly check the Contract Pricing Reference Guides.

[Guest Vern Edwards]

First, thanks for all of your responses. I am working for a contractor and the total subcontract value is about 2 million over three years. I agree that its a little out of the ordinary to include case law in this justification, but it is something that someone much higher up has requested. I'll certainly check the Contract Pricing Reference Guides.

Is there a cost allowability or CAS compliance issue? Is that what you need case law for?

[Cajuncharlie]

FAR Subpart 15.4 is not that difficult to follow, and the reference guides basically expand and amplify what's in FAR.

The reference guides are good, but in my experience there has been nothing on this subject written more clearly than what they replaced: the old Armed Services Pricing Manuals I and II.

http://www.library.dau.mil/ASPM_v1_1986.pdf (edit 32.9 MB)

http://www.library.dau.mil/ASPM_v2_1987.pdf (edit 12 MB)

They may not be current on details, but for fundamental concepts and basic principles they are hard to beat, and may provide a good introduction for beginners.