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   <concept id="DFARS_PGI_PGI_215.404-1"
            outputclass="4"
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            class="- topic/topic concept/concept ">
      <title class="- topic/title ">
         <ph props="autonumber" class="- topic/ph ">PGI 215.404-1</ph> Proposal analysis
techniques.</title>
      <conbody class="- topic/body  concept/conbody ">
         <p outputclass="List1" class="- topic/p ">(a) <i class="+ topic/ph hi-d/i ">General</i>.</p>
         <p outputclass="List3" class="- topic/p ">(i) The objective of proposal analysis
is to ensure that the final agreed-to price is fair and reasonable.</p>
         <p outputclass="List4" class="- topic/p ">(A) When the contracting officer needs
data to determine price reasonableness and the offeror will not
furnish that data, use the following sequence of steps to resolve
the issue:</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">i</i>) The contracting officer should
make it clear what data is required and why it is needed to determine
fair and reasonable prices, and should be flexible in requesting
data in existing formats with appropriate explanations from the offeror.</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">ii</i>) If the offeror refuses to provide
the data, the contracting officer should elevate the issue within
the contracting activity.</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">iii</i>) Contracting activity management
shall, with support from the contracting officer, discuss the issue
with appropriate levels of the offeror’s management.</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">iv</i>) If the offeror continues to
refuse to provide the data, contracting activity management shall
elevate the issue to the head of the contracting activity for a
decision in accordance with FAR
15.403-3(a)(4).</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">v</i>) The contracting officer shall
document the contract file to describe—</p>
         <p outputclass="List5" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">a</i>) The data requested and the contracting
officer’s need for that data;</p>
         <p outputclass="List5" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">b</i>) Why there is currently no other
alternative but to procure the item from this particular source;
and</p>
         <p outputclass="List5" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">c</i>) A written plan for avoiding
this situation in the future (e.g., develop a second source by...;
bring the procurement in house to the Government by...).</p>
         <p outputclass="List3" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">vi</i>) Consistent with the requirements
at FAR 15.304 and
42.1502 and the DoD Guide to Collection and Use of Past Performance
Information, Version 3, dated May 2003, the contracting officer
shall provide input into the past performance system, noting the
offeror’s refusal to provide the requested information.</p>
         <p outputclass="List4" class="- topic/p ">(B) In some cases, supplies or services
that are not subject to TINA may require a cost analysis (see paragraph
(b)(iv) of this section). This will occur when a price analysis
is not sufficient for determining prices to be fair and reasonable.
In such cases, the contracting officer should consider the need
for a Defense Contract Audit Agency audit of the cost data.</p>
         <p outputclass="List4" class="- topic/p ">(C) Particular attention should be paid
to sole source commercial supplies or services. While the order
of preference at FAR
15.402 must be followed, if the contracting officer cannot
determine price reasonableness without obtaining data other than
cost or pricing data from the offeror, at a minimum, the contracting
officer must obtain appropriate data on the prices at which the
same or similar items have been sold previously (often previous
sales data was the basis of the commercial item determination and
must be requested during price analysis of the data provided by
the offeror). If previous sales data is not sufficient to determine
price reasonableness, the contracting officer must obtain “data
other than certified cost or pricing data” and, if necessary, perform
a cost analysis.</p>
         <p outputclass="List4" class="- topic/p ">(D) Analysis of termination proposals,
including termination of any contract scope, should not rely solely
on earned value management budgets or estimates for estimating the
costs of all work deleted, or the cost of deleted work already performed
(reference FAR Subpart 15.4,
Table 15-2—Instructions for Submitting Cost/Price Proposals When
Certified Cost or Pricing Data are Required, columns (2) and (3)
of section III.B., Change Orders, Modifications, and Claims).</p>
         <p outputclass="List1" class="- topic/p ">(b) <i class="+ topic/ph hi-d/i ">Price analysis for commercial and
noncommercial items</i>.</p>
         <p outputclass="List3" class="- topic/p ">(i) See the Department of Defense Guidebook
for Acquiring Commercial Items, Part B: Pricing Commercial Items, for
detailed guidance about techniques and approaches to pricing commercial
products and services.</p>
         <p outputclass="List3" class="- topic/p ">(v) Contracting officers must obtain and
document sufficient data to confirm that previous prices paid by
the Government were based on a thorough price and/or cost analysis.
For example, it would not be sufficient to use price(s) from a database
paid by another contracting officer without understanding the type
of analysis that was performed to determine the price(s), and without
verifying that the quantities were similar for pricing purposes.
This does not necessarily need to be another analysis, but there
should be coordination with the other office that acknowledges an analysis
was performed previously.</p>
         <p outputclass="List3" class="- topic/p ">(vii) See the Department of Defense Guidebook
for Acquiring Commercial Items, Part B: Pricing Commercial Items, for
information about how to obtain advisory assistance from the DoD
cadre of experts in the Defense Contract Management Agency (DCMA)
Commercial Item Group (CIG) via email at commercial@dcma.mil or
at http://www.dcma.mil/commercial-item-group/.</p>
         <p outputclass="List1" class="- topic/p ">(c) <i class="+ topic/ph hi-d/i ">Cost analysis</i>.</p>
         <p outputclass="List3" class="- topic/p ">(i) When the contracting officer cannot
obtain sufficient data to perform a price analysis in accordance
with the pricing steps in FAR
15.404-1(b), a cost analysis is required.</p>
         <p outputclass="List3" class="- topic/p ">(ii) When a solicitation is not subject
to TINA and a cost analysis is required, the contracting officer
must clearly communicate to the offeror the cost data that will
be needed to determine if the proposed price is fair and reasonable.</p>
         <p outputclass="List3" class="- topic/p ">(iii) To the extent possible, when cost
or pricing data are not required to be submitted in accordance with
Table 15-2 of FAR 15.408,
the contracting officer should accept the cost data in a format
consistent with the offeror’s records.</p>
         <p outputclass="List3" class="- topic/p ">(iv) The contracting officer must always
consider the need for field pricing support from the Defense Contract
Management Agency, the Defense Contract Audit Agency, and/or other
agencies.</p>
         <p outputclass="List1" class="- topic/p ">(e) <i class="+ topic/ph hi-d/i ">Technical analysis</i>.</p>
         <p class="- topic/p ">Requesting technical assistance is particularly important when
evaluating pricing related to items that are “similar to” items being
purchased or commercial items that are “of a type” or require “minor
modifications.” Technical analysis can assist in pricing these types
of items by identifying any differences between the item being acquired
and the “similar to” item. In particular, the technical review can
assist in evaluating the changes that are required to get from the
“similar to” item, to the item being solicited, so the contracting
officer can determine sufficient price/cost analysis techniques
when evaluating that the price for the item being solicited is fair
and reasonable. See the Department of Defense Guidebook for Acquiring
Commercial Items, Part B: Pricing Commercial Items, for information
about how to obtain advisory assistance from the DoD cadre of experts
in the Defense Contract Management Agency (DCMA) Commercial Item
Group (CIG) via email at commercial@dcma.mil or at http://www.dcma.mil/commercial-item-group/.</p>
         <p outputclass="List1" class="- topic/p ">(h) <i class="+ topic/ph hi-d/i ">Review and justification of pass-through
contracts</i>.</p>
         <p outputclass="List2" class="- topic/p ">(2)(A) This requirement applies to acquisitions
that include the clause at FAR
52.215-23, Limitations on Pass-Through Charges, as prescribed
at FAR 15.408(n)(2)(i)(B).
When considering alternative approaches or making the determination
that the contracting approach selected is in the best interest of
the Government as required by FAR 15.404-1(h)(2), consider the
following elements:</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">1</i>) The requirement, proposed prime
contractor, and overall proposed contract value.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">2</i>) The information provided in
response to the provision at FAR
52.215-22, Limitations on Pass-Through Charges—Identification
of Subcontract Effort, regarding the subcontracts, and the estimated
value of the proposed subcontracts.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">3</i>) The availability of alternative
existing contracts that would allow direct access to the subcontractor,
such as existing indefinite delivery/indefinite quantity contracts,
Federal Supply Schedule contracts, or Governmentwide agency contracts.
Perform market research as appropriate.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">4</i>) Potential cost savings of directly
contracting with the subcontractor.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">5</i>) Feasibility of competition for
the subcontracted effort or justification for single source procurement.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">6</i>) Potential impacts to the contracting
and program schedule for implementing a direct contract with the
subcontractors or conducting a competition for the subcontracted
effort.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">7</i>) Changes in performance risk
as result of eliminating prime contractor oversight and substituting
direct government oversight. Risks may include loss of prime contractor
knowledge of integration and program requirements, availability
of government contracting and contract administration personnel,
reduced system or program accountability of the prime contractor
who is no longer responsible for the entire effort, impact on warranties.</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">8</i>) Subcontractor past performance
and experience directly managing programs of this size.</p>
         <p outputclass="List4" class="- topic/p ">(B) DoD components shall include reviews
of compliance in routine procurement management reviews or other inspections.</p>
      </conbody>
   </concept>
</dita>
