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  • Question

    How do I determine if the price for the license fee is fair and reasonable?


    Answer

    Price analysis can sometimes be more art than a science, and that's especially true when dealing with intangible items such as licensing fees. Ideally, there would be another data management vendor that offers (or has offered) a competing capability. That vendor's past or current fees could be used for price analysis and subsequently for negotiating with the current vendor.  However, since this does not appear to be a commercial item, your bases for comparison may be limited. Sometimes simply informing the vendor you are exploring other options (short-term or long-term) can motivate the vendor to do better on the proposed price...even if there isn't actually a feasible replacement. All that said, keep in mind you can still require certified cost or pricing data under the current $2 million threshold for DoD (ref. FAR 15.403-1(a)), or simply request the vendor provide data other than certified cost or pricing data in order to perform some reasonable type of price analysis. Finally, DoD ESI has an Ask an Expert  capability on its website. You may be able to tap into software-related expertise there for additional insight.

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