Sign In
  • Question

    Can the Contract Specialist justify the burdened hourly rate as being fair & reasonable using stamped paid invoices from the commercial marketplace as the subcontractor's commercial hourly rate in lieu of peforming a realism analysis for this element of the proposal?


    Answer

    DFARS Procedures, Guidance, and Information (PGI) at 215.404-1(a) states:  “Particular attention should be paid to sole source commercial supplies or services [in your case, the subcontractor is sole source].  While the order of preference at FAR 15.402 must be followed, if the contracting officer cannot determine price reasonableness without obtaining data other than cost or pricing data from the offeror, at a minimum, the contracting officer must obtain appropriate data on the prices at which the same or similar items have been sold previously (often previous sales data was the basis of the commercial item determination and must be requested during price analysis of the data provided by the offeror.”
     
    At PGI 215.404-1(b)(v) “In some cases, the contracting officer will have to obtain ‘data other than certified cost or pricing data’ from the offeror because there is not sufficient data from other sources to determine if prices are fair and reasonable.  The contracting officer must use business judgment to determine the level of data needed from the offeror, but must ensure that the data is sufficient for making a reasonableness determination.  For example, the offeror may have significant sales of the item in comparable quantities to non-Government entities, and that may be all the data needed, once the sales data is appropriately verified.” 
     
    If you as Contract Specialist and your Contracting Officer believe that after examining them, the stamped, paid invoices from the commercial marketplace are an adequate basis for making a fair and reasonable (or realistic) price determination, that should satisfy the requirement.  However if you don’t believe that the paid commercial invoices provide adequate support for a fair and reasonable (or realistic) price determination, then you will need to follow the procedures at PGI 215.404-1(a)(i)(A) through (F).  Because this is a subcontractor, you may have to work these issues with the support of the cognizant DCMA activity for that subcontractor. 

    Open full Question Details