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Code of Federal Regulations (Last Updated: July 5, 2024) |
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Title 48 - Federal Acquisition Regulations System |
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Chapter 29 - Department of Labor |
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Part 5315 - CONTRACTING BY NEGOTIATION |
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Subpart 5315.8 - Price NegotiationI875315.890Formula pricing agreements (FPA). |
§ 5315.890-3 - Responsibilities.
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(a) Major commands shall—
(1) Establish appropriate approval level for FPAs;
(2) Maintain a list of FPAs which identifies the company and group of items to be purchased;
(3) Conduct periodic reviews of FPAs and contract actions priced using FPAs; and
(4) Establish agreements with other DOD agency contract administration offices to provide field pricing support, negotiation support, and administrative support of Air Force negotiated FPAs.
(b) Air Force contract administration offices shall—
(1) Comply with the requirements of 5315.890-3(c) for those FPAs negotiated by the administrative contracting officer (ACO) for their own use;
(2) Make any FPA negotiated by the ACO available to any other buying activity for their use;
(3) Provide field pricing support to contracting officers in the evaluation of FPAs;
(4) Participate in the negotiation of FPAs;
(5) Notify the contracting officer, who negotiated the FPA, when conditions arise that may affect the FPA's validity; for example, changes to an FPRA, disapproval of a contractor's purchasing system, and so forth. When appropriate, recommend the FPA be cancelled and renegotiated;
(6) Periodically validate the contractor's compliance with the FPA; and
(7) Monitor rates and factors incorporated into each FPA.
(c) Contracting officers shall—
(1) Be responsible for the negotiation of the FPA and ensure that it complies with the requirements contained in 5315.890-2 (this responsibility may be delegated to the ACO);
(2) Obtain field pricing support, including contract audit and technical reviews, in the evaluation of FPAs;
(3) Prepare a price negotiation memorandum covering the pricing factors used in the FPA;
(4) Request CAO participation in negotiations;
(5) Semi-annually, through the ACO, request the DCAA resident auditor to determine if the contractor is complying with the FPA procedures;
(6) Annually, review the FPA to determine its validity by evaluating recorded cost data, and renegotiate the FPA if appropriate;
(7) Determine the effect of changed conditions that may affect an FPA's validity, cancel FPAs when appropriate, and notify all interested parties upon cancellation of the FPA;
(8) Not use an FPA that has been cancelled;
(9) At a minimum, conduct the following evaluation of each proposal generated under an FPA;
(i) Determine the applicability of the FPA to the items proposed.
(ii) Determine the reasonableness of direct cost inputs to the formula.
(iii) Determine the reasonableness of any non-covered cost proposed, such as nonrecurring costs.
(iv) Compare prices generated by the FPA to prior prices, government estimates, PR estimates, to ensure reasonableness. The existence of an FPA does not relieve the contracting officer from the responsibility of assuring that a price is fair and reasonable;
(10) Conduct detailed cost analysis on random samples of proposed items and/or those items that have unit prices which are significantly higher than previous buys;
(11) Ensure that individual contract actions priced using the FPA comply with the terms of the FPA; and
(12) Comply with 5315.905-1(b)(7)(C) when pricing an undefinitized contractual action using an FPA.