Subpart 15.4
Contract Pricing
FAR Subpart 15.4 sets the foundation for fair and reasonable pricing in negotiated government contracts, requiring thorough analysis, documentation, and compliance with data submission rules.
Overview
FAR Subpart 15.4, "Contract Pricing," establishes the policies, procedures, and requirements for determining fair and reasonable prices in negotiated government contracts. This subpart covers the full spectrum of pricing activities, including the need for certified cost or pricing data, proposal analysis, price negotiation, and required documentation. It also addresses special cost or pricing areas and prescribes solicitation provisions and contract clauses related to pricing. The subpart is designed to ensure that government agencies obtain supplies and services at fair and reasonable prices while maintaining transparency and accountability throughout the acquisition process.
Key Rules
- Scope and Definitions
- Outlines the applicability of contract pricing rules and defines key terms used throughout the subpart.
- Pricing Policy
- Establishes the requirement to purchase supplies and services at fair and reasonable prices, using price analysis and, when necessary, cost analysis.
- Certified Cost or Pricing Data
- Specifies when contractors must submit certified cost or pricing data and the exceptions to this requirement.
- Proposal Analysis and Price Negotiation
- Details the procedures for analyzing proposals and negotiating prices to ensure reasonableness.
- Documentation and Special Areas
- Requires thorough documentation of pricing decisions and addresses unique pricing situations.
- Solicitation Provisions and Clauses
- Lists required contract clauses and solicitation provisions related to pricing.
Responsibilities
- Contracting Officers: Must ensure prices are fair and reasonable, obtain and analyze cost or pricing data, negotiate effectively, and document decisions.
- Contractors: Must provide accurate cost or pricing data when required and support proposal analysis and negotiation processes.
- Agencies: Oversee compliance with pricing policies and maintain records for audit and review.
Practical Implications
- Ensures transparency and fairness in government contract pricing.
- Impacts how contractors prepare proposals and support price negotiations.
- Common pitfalls include inadequate documentation, failure to provide required data, or insufficient price analysis.