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  • Question

    Can you use the new surplus quote and the new manufacture item as competition to justify the price?


    Answer

    FAR Part 13 gives the contracting officer a great deal of discretion when determining price reasonableness. The bar for proving price reasonableness for Part 13 purchases is not as high as for Part 15 purchases. Note FAR 13.106-3(a)(2)(vii): "Any other reasonable basis." That conveys a lot of latitude for the determination. While not always appropriate, there is no specific prohibition on comparing a manufacturer's price and a distributor's price, e.g., by imputing some customary "markup" to the distributor's price and evaluating them in that way. At the very least, the contracting officer can compare the surplus supplier's price to the manufacturer and/or distributor's price and use his/her business judgment to make a determination.

    Just be sure that the thought process is not arbitrary, and is well-documented in the contract file.

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