Basic Pricing Policies and Concepts

Basic Pricing Policies and Concepts -...

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Click to edit Master subtitle style  6/5/11 Basic Pricing Policies and  Concepts Adina B. Peyton
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 6/5/11 The government policy is to contract for its  products and services at fair and reasonable  prices Matter of judgment Many factors used to determine what is “fair and  reasonable” Government price analysts encounter restraints  not faced by private individuals Government’s Pricing Policy
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 6/5/11 Full and open competition, when referring to a  contract action, means that all responsible  sources are allowed an opportunity to compete FAR also encourages the use of commercial and  non-developmental items to encourage maximum  competition Promoting Full and Open 
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 6/5/11 The Government is the only buyer High volume purchases The Government pays its Debts Prompt payment of bills Most Favored Customer Treatment Pricing Advantages in 
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 6/5/11 Under some conditions (covered in a later  chapter), the government may receive cost and  pricing data from offerors prior to selecting them  for contract award This information gives the government detailed  information on how the contractor arrived at their  proposed price Cost and Pricing Data
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 6/5/11 FAR talks about “fair and reasonable” but does not  define it Means different things to different people Government prefers market based pricing over  cost-based pricing Cost based pricing is only appropriate when the  forces of the marketplace cannot judge fair and  reasonable price What is a Fair and Reasonable 
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 6/5/11 Competitive Offers Established catalog prices Established Market Price Established by Law or Regulation Five Ways to Establish a Fair 
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 6/5/11 Prices arrived at through this means are: In response to solicitations encouraging competitive  offers Prepared with no effort by the buyer to suppress a known  source Submitted by multiple responsible offerors who can  satisfy the buyer’s requirements with priced offers  responsive to the solicitation’s expressed requirements Submitted by independent offerors Competitive Offers
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