(a) The contracting officer must use the results of market research (see 10.001(a)(2)(93)) to determine the comparability of the FPI product, considering all three areas of price, quality, and time of delivery. In other than automated acquisitions, the contracting officer shall document in writing the basis for the comparability determination, to include the significance of each factor under the circumstances of the acquisition. The comparability determination must be retained in the contract file. The contracting officer is strongly encouraged to consult with counsel on acquisitions stemming from such comparability determinations.
(i)(90) Use the provision at 52.208-9001, Acquisition of Federal Prison Industries Items, for acquisitions valued below the simplified acquisition threshold that involve items listed on the FPI Schedule when the solicitation will also serve as a market research tool. FPI will receive an order if its items are found comparable to items from private sources.
(91) If, despite the comparability of the FPI product, the contracting officer nevertheless concludes that purchase of the item from a private-sector source is in the best interests of the Government (e.g., for readiness or industrial-base reasons), a clearance may be pursued from FPI in accordance with FAR 8.605.
(ii)(90) Competitive buys are subject to set-aside requirements, except that FPI will be solicited and permitted to compete, and could still receive the award, in acquisitions of these items that are otherwise set aside for small business participation. Small business concerns must be notified of this possibility when set-asides are used under these circumstances. See 19.502-1(b)(90).
(a)(90) In no event shall a unit price higher than the highest award price, adjusted for any significant differences between the buys, be considered to be the current market price. Exclude a high price if resulting from a distressed bid, or bidder's mistake, or if the award price was inflated because of additional requirements.
(a)(91) In addition to assuring that the award price to FPI does not exceed the current market price, the contracting officer shall:
(i) Request FPI to furnish its cost estimate (FPI Form 73, Unit Cost Estimate) with supporting documentation (material quotes, etc) for all first time buys and whenever current actual market prices are unavailable or when there is basis for concern regarding an FPI quote;
(ii) Consider requesting FPI to furnish its cost history (FPI Form 9, Production Order and Cost Sheet) for the most recently completed contract(s) for the item (if none, for the most comparable item), along with identification of any apparent errors;
(iii) Obtain an independent cost/price analysis of purchases estimated to exceed $200,000 and other actions as deemed appropriate ( but see 15.404-1(a)(90)(1)(ii) and 15.404-1(a)(90)(2)). Coordinate price or cost/price analyses (FAR/DFARS/DLAD 15.404-1(b) and (c))-3) performed on other large purchases with the cost and price analysis element;
(iv) Establish prenegotiation objectives as appropriate considering whether the objective is based on pricing data or on cost data plus a weighted guideline profit analysis (see DFARS 215.404-72 for non profit organizations);
(v) Negotiate with FPI to assure price reasonableness (see FAR 15.405(d)(90), and that the price does not exceed the current market price. Elevate negotiation to higher levels of management as necessary;
(vi) Document the price reasonableness determination in the contract file; and
(vii) Refer instances of unreasonable price which cannot be corrected to a higher authority in accordance with FAR/DLAD 15.405(d)(90). Include a price survey of other potential suppliers and a recommendation concerning whether a clearance request to purchase the item competitively is warranted and needed (FAR 8.605 and 8.606).
(a)(92) When the price comparison involves Government-furnished material or property (GFM or GFP), differences in transportation costs for the GFM or GFP shall be considered. Also consider differences in Government transportation costs of end items to the same destination points and any variations in the percentages of GFM usage and/or operating and maintenance costs of GFP.
