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Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts for Department of Defense (DOD)

DOD issued a new Deviation to FAR 8.404(d) effective March 13, 2014 . DOD contracting officers must now make a fair and reasonable price determination on any FSS orders IAW FAR 15.404-1. However, provided that there is adequate competition at the order level,  utilizing FAR 15.404-1(b)(2)(i) "...Normally, adequate price competition establishes a fair and reasonable price..." should help facilitate price analysis (depending on the circumstances). Since this is a brand new Deviation, we do not yet have any examples of best practices for determining fair and reasonable pricing on hourly rates themselves at the order level. We are hopeful this new requirement for DOD Contracting Officers will generally have a minimal effect on the usual streamlined procurement processes the FSS program enables. We are very interested in hearing how this new deviation is affecting DOD contracting officers and what they are doing to streamline compliance.



Now that we have your attention, please remember that what you are reading here is a blog post on a social media site managed by GSA.  This is NOT a GSA policy site, nor is it intended to be.  If you don't see us citing a specific statute, regulation or policy in this post, you should assume all you are getting is our opinion as experienced contracting officers.  We are trying to share what we believe are best practices and generate discussion with other contracting professionals about their best practices.  You may feel like something you read on our site is a terrible idea or is inconsistent with your organization's policies, practices or even general approach to contract management.  That's good!  Let's talk about it.  Did we miss something?  Are we flat out wrong?  Alright, we don't claim to be all knowing or perfect.  Share your thoughts with us.  And, as always, we strongly encourage you to consult with your own policy staff and legal counsel before using our methods and practices. Finally, and most importantly, have fun with your procurement, use your creativity and make smart business decisions!


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