DoD Needs Pricing Improvement

A number of recent DoDIG reports indicate that DoD did not make an accurate determination of fair and reasonable pricing, could have purchased items at a lower price, or could have purchased fewer items. While excess inventory does not necessarily mean the prices were not fair and reasonable, it does mean that DoD spent more money than necessary – something that could have been avoided with a better requirement.

Husky Mounted Detection System Spare Parts

U.S. Army Engineering and Support Center

C-130J Excess Inventory

Billions Spent on F17 Engine Without Knowing Fair Price

I constantly remind students and clients that FAR 15.402(a) clearly states that “contracting officers shall purchase supplies and services from responsible sources at fair and reasonable prices.” This requirement also applies to primes and subs at every level. While commercial items, sole source procurements, and single responses to solicitations present obstacles, they are not barriers and do not negate that primary directive. When you are responsible for awarding contracts or subcontracts, be sure to perform market research (FAR 10) and document how you determined fair and reasonable pricing.

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