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  • Question

    When should a consolidated POM/PMN be used?


    Answer

    According to AFARS 5115.406-1, POM stands for pre-negotiation memorandum and PNM means price negotiation memorandum.  The POM documents the pre-negotiation objectives and provides the written justification to gain business clearance approval in order to begin negotiations.  The PNM documents what was negotiated and should provide "sufficient detail to reconstruct actions and decisions and to support the reasonableness of the final price."  AFARS 5115.406-1 simply states this about consolidating the POM/PNM: "In accordance with 5115.406-3, the contracting officer may consolidate the prenegotiation memorandum and price negotiation memorandum (POM/PNM) for competitive or non-competitive acquisitions. When intending to use a consolidated POM/PNM, the contracting officer must still comply with FAR 15.406-1 and DFARS PGI 215.406-1 and obtain written approval of the prenegotiation objectives before negotiation of any pricing action." 

    And AFAR 5115.406-3 states: "(a) When utilizing a consolidated POM/PNM, the contracting officer must ensure the POM/PNM contains all required content for both documents, in accordance with FAR 15.406 and DFARS PGI 205.406, and is stated in sufficient detail to reconstruct actions and decisions and to support the reasonableness of the final price.  (b) If the final negotiated price is within a range specifically approved as the prenegotiation objective, and if negotiations did not present information that calls into question the reasonableness of the previously-approved price range, the written approval obtained under 5115.406-1(1) may also serve as the approval for the consolidated POM/PNM. The approved POM/PNM may be used in determining the negotiated price to be fair and reasonable. Notwithstanding this subsection, the contracting officer still must obtain all other required pre-award approval."

    Bottom line: the AFARS does not provide much in the way of guidelines that help you determine when it's appropriate (or not) to consolidate the POM/PNM.  In fact, it kind of leaves the door wide open by simply stating "the contracting officer may consolidate the prenegotiation memorandum and price negotiation memorandum (POM/PNM) for competitive or non-competitive acquisitions."  To help you decide how to proceed, a question you might ask is this: how confident am I in the government's understanding of the costs (and our ability to estimate those costs) which will help you determine the likelihood of being able to negotiate the price within the range that was approved at business clearance.  The less confident you are, the less likely of benefiting from the advantages of a consolidated POM/PNM -- advantages such as less documentation, fewer clearance approvals required and a more streamlined fair and reasonable determination.  I don't have an Army background, but I assume this was intended to give contracting officers more flexibility with fewer limitations to help speed up the process if possible.  I recommend discussing your thoughts about it with your budget cost estimator and the contracting officer to get their perspective. 

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