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definition of price ( FAR 15.401 ) emphasizes its components: Cost plus any fee or profit applicable to the contract type. Both definitions of price are important.
Definition. Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements or the proposed profit. General Information. FAR 15.404-1 (a) (1) requires the contracting officer determine that the price to be paid is fair and reasonable.
Whilst principles can vary across price types, often in the Private Sector the terminology GMP (Guaranteed Maximum Price) is used, which is where the Supplier is compensated for actual costs, and the fee mechanism can vary from Fixed Fee, Incentive Fee or a Gain-Share mechanism.
Most contract types fall into two general categories: fixed-price contracts and cost-reimbursement contracts. Fixed-price contracts place full responsibility on the contractor for performance costs and resulting profit (or loss).
19 mar 2016 · Price Analysis. FAR 15-401 - “Price” means cost plus any fee or profit applicable to the contract type. FAR 15-404-1(b)(1) Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit.
Summary of General Pricing • Definition of price • Two perspectives on price mean two interpretations of fair and reasonable pricing • Industry pricing strategies vary widely but are generally designed to cover costs and/or attain corporate objectives • Industry pricing strategies may be market based or cost based © 2023 FORVIS, LLP. 32
Price analysis —The “process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit.” [2] This is the required method when certified cost and pricing data are not required.
