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You are here: Home / Government Contracting News / DoD’s new proposed guidance on commercial item pricing no longer includes ‘market based pricing’

August 26, 2016 By AMK

DoD’s new proposed guidance on commercial item pricing no longer includes ‘market based pricing’

The Department of Defense (DoD) has reversed course on its proposed preference for “market-based pricing” and is instead now proposing rules under which it would use “market pricing” to determine whether prices are fair and reasonable. 

US DoD logoWhile the terminology is similar, the legal difference is significant.

Last year, we reported on DoD’s proposed guidance on commercial item pricing.  The August 2015 proposed guidance implemented section 831 of the NDAA for FY 2013, which required DoD to establish standards for determining the adequacy of pricing information and when uncertified cost data is required.  Among other things, this 2015 proposed rule introduced “market-based pricing” as the preferred method for determining a fair and reasonable price for commercial items in the absence of adequate competition.  It defined market-based pricing as the pricing that non-governmental buyers in the commercial marketplace pay for an item.  Contracting officers could presume that an offeror’s price for a particular item was “market‑based” if non-government buyers purchased 50% or more of the item’s sales volume.

The proposed rule proved controversial, however.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=520638

Filed Under: Government Contracting News Tagged With: acquisition workforce, certified cost, commercial item, commercial products, contracting officers, DoD, fair and reasonable, fair and reasonable price, market analysis, market research, market-based pricing, NDAA

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