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    When negotiating the AE firm's rate, can we use the other firm's rate to justify fair and reasonableness? or AE rates are ALWAYS in a sole source environment? If so, is cost analysis required since there is no exception applies? Additionally, DFARS 236-602-70 only applies if the agency uses MILCON funds only?


    The selection authority can use any reasonable bases of comparison he/she considers relevant for negotiating the contract price. A-E negotiations essentially become "sole source" once they commence with the best-qualified firm from the final selection list. However, that does not preclude using available information (including other firms' rates) as a data point for analysis of the best-qualified firm's proposal. Cost analysis is required if there is not an adequate basis to make a fair and reasonable determination based on price analysis (using the bottom line price) alone.

    DFARS 236.602-70 specifically refers to "...architect-engineer contracts funded by military construction appropriations [emphasis added] that are estimated to exceed $500,000..." 

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