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  • Question

    As a Cost/Price Analyst for DCMA, how would I justify taking a decrement on a bill of material supported by only quotes and use it in my case write up? As a pricer am I allowed to take a decrement without supporting data for the decrement and include the impact in my case write up? My expectation is that there will be realized negotiated price reductions from the quoted values, but any decrement without justification is looked upon as arbitrary. I have actual negotiation experience and understand that the proposal/quote is only a sticker price and think that a decrement is warranted. I have been told that unsupported decrements cannot be assigned to costs, any adjustments made to costs must be supported by some sort of analysis. I have been told that if quotes are all we have, we have no basis for taking any exception but can advise a PCO/Prime contractor of the situation. If making a decrement is allowed, and a certain percentage is appropriate, what is the justifiable language to use?


    Answer

    Decrements in a DCMA analysis would more properly be within the perview of that agency and is not directly addressed within the FAR/DFARs insofar as its allowability, percentage, or language of justification. Your policy and agency guidance would prevail. The actual proposal analysis guidance would be from FAR 15.404, DFARS part 15, and DFARS PGI 215.404-3. If these quotes are from a subcontractor then those FAR parts specify that the prime also has a responsibility to perform analysis to determine the cost are fair and reasonable and provide that substantiation to the PCO.

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