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June 07, 2013

Comparison To Historical Prices Paid For The Same Or Substantially Similar Services And/Or Items. Couple Of Catches On This Technique.

First, don't use prices you paid for these items or services. If you use past POs as the basis of comparison, you're "opening the door" and allowing DCMA to review those files for the basis upon which those prices were found to be fair and reasonable. If that file harkens back to older files, or worse doesn't have a price analysis in it, you've opened a bad door.

Second, make sure that the prices paid on the previous order were made under substantially similar circumstances. This is why use of GSA Schedule rates for comparison to noncommercial service rates isn't a 15.404-1(b)(2)(ii) analysis - commercial terms are WAY different from FAR 15 terms, and those differences affect the similar nature of the basis of comparison. That, and GSA Schedules are not evidence that anyone ever paid that rate.

Your best bet for effective and documentable use of this technique is for commercial item parts, components and/or services. In those situations you have P/N or LCATs you can do a straight line comparison to, and the terms/conditions/circumstances surrounding the past procurement are close enough to pass muster for use of the technique without DCMA poking holes in the matrix.

Back-up required, other than the price analysis, is either invoices for the items/rates or an ordering document (PO, etc.) with those line items and prices visible. Other info (customer information, etc) can be redacted. Be careful - a proposal isn't satisfactory objective evidence, because it's not proof of payment for services proposed. If proposal submission equalled payment we'd all be a lot richer :)