Price Analysis

Course Description

This FAI-compliant course is part of the Principals of Contract Pricing curriculum required for all contracting professionals. It addresses all facets of price analysis and provides the student with the knowledge, skills, and abilities needed to conduct price analysis.

The course employs a combination of lecture-discussion, case study, and practical exercise techniques to provide training to cover the comprehensive set of learning objectives established by FAI.

The target audience for this course consists of members of the contract specialist (GS-1102) career path. Other personnel involved in contract pricing decisions would find the course helpful.

ACE Credit Recommendation

In the lower division baccalaureate degree category, 2 semester hours in Business Administration, Federal Acquisition, Public Administration, Procurement Management, or Purchasing.

Prerequisites

To ensure success, we recommend that students have completed the following courses:
Acquisition Planning I, Contract Formation I, and Contract Administration I.

Course Objectives

Upon successful completion of this course, the student will be able to:

• Perform price related market research
• Conduct price analysis
• Make price related decisions in simplified acquisitions, sealed bidding, and negotiated procurements in accordance with the Federal Acquisition Regulation

Course Content

Lesson 1: Market Research for Price Analysis

Given a purchase request containing the Independent Government Cost Estimate (IGCE), excerpts from relevant acquisition histories, and sample market data:

• Determine whether the IGCE is reasonable.
• Identify internal and external sources of market data for estimating and analyzing prices.
• Develop an estimate of the proper price level.

Lesson 2: Maximizing Price Competition

Given sample requirements documents, excerpts from relevant acquisition histories, and sample market data:

• Identify actions that would increase price competition, including potential changes to the solicitation terms and conditions.

Lesson 3: Price-Related Information from Offerors

Given sample requirements documents, excerpts from relevant acquisition histories, and sample market data:

• Determine the need to obtain additional price-related information from offerors
• Identify requirements for cost or pricing data.
• Recognize the applicability of one or more exceptions to the requirement for such data.
• Determine the need for information from offerors other than cost or pricing data.

Lesson 4&5: Price-Related Factors

Given the solicitation:

• Develop price-related factors for award.
• Given offers:
• Calculate the evaluated price of each offer.

Lesson 6: Price Comparisons

Given evaluated prices, information from offerors and market research, and quantitative techniques:
Select prices for comparison (i.e., commercial, historical, ICE).

• Identify factors that affect price comparisons.
• Determine the effect of the factors on the price comparisons.
• Apply quantitative techniques to compare prices.
• Develop an estimate of the “should pay” price.

Lesson 7: Accounting For Differences

Given evaluated prices, information from offerors and market research and the should pay price:

• Investigate the reasons and consequences of differences (if significant) between offered prices and the “should pay” price.

Lesson 8: Price-Related Decisions in Sealed Bidding

Given bids, the evaluated prices bid, information from bidders and market research, the should pay price, and analyses of significant differences between the should pay price and evaluated prices bid:

• Identify possible mistakes in bids.
  Determine whether to reject a bid that is unreasonably low or materially unbalanced.
  Determine the applicability of price-related reasons for canceling the IFB.

Lesson 9: Price-Related Decisions in Negotiations

Given proposals, evaluated prices, information from offerors and market research, the should pay price, and the findings of the analysis of significant differences between the should pay price and evaluated prices:

• Identify the need to request additional pricing information from offerors.
• Recognize the role of price-related information in establishing the competitive range.
• Plan factfinding related to proposed prices.
• Establish prenegotiation positions on price.
• Consider potential trade-offs between price and other terms and conditions of the contract.
• Identify the conditions that may require cancellation of the solicitation and/or resolicitation.

Lesson 10: Documentation

• Identify documentation requirements for sealed bidding and negotiated procurements.