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  • Question

    Does, whomever the someone is (other than a Contracting Officer), determine a price fair and reasonable for a cost-reimbursement CLIN?


    Answer

    Only the Contracting Officer can determine whether or not a price is fair and reasonable. FAR Part 15.402(a) states, "the Contracting Officer shall purchase supplies and services from responsible sources at fair and reasonable prices". Contract type or type of CLIN doesn't change this fact. There are various proposal analysis techniques (price analysis, cost analysis, or cost realism) that may be used to make a fair and reasonable price determination and making such a determination will depend upon such factors as whether certified cost or pricing data is required (FAR Part 15.403-1), type of contract contemplated, commercial item (FAR Part 12.209) vs. non-commercial item (FAR Part 15.404-1(b), etc. FAR Part 15.404-1(d)(2) specifically states that "cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror".

    Based on this and since the CLIN mentioned in the question is cost-reimbursement, the FAR compels the Contracting Officer to use cost realism analysis to determine that the price is fair and reasonable. Since we do not have all of the facts particular to your contract, program, and situation, we highly recommend that you consult with your Contracting Officer and Legal Office for further guidance. 
     

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