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June 07, 2013

One Last Comment On Competitive Price Analysis: Target Rates

Make Sure Your ID/IQ Teams Are TRULY Evaluated Competitively To Get Credit In Your CPSR Metrics!

If you're sending out target rates, or using target rates as your negotiation basis, you're actually performing a price analysis using an Independent Contractor Estimate (ICE). That's a 15.404-1(b)(2)(v) type analysis, and all subcontracts analyzed using this technique will NOT count towards competitive percentages.

This is not a "scare" post - this is what will happen. DCMA is VERY critical in their evaluation of ID/IQ teams during a CPSR. Review tactics including using a target rate as your sole basis of comparison and accepting all contractor rates as proposed without competitive analysis or downward negotiation will NOT get the resulting subcontracts counted as competitive during your CPSR. 

You can still use target rates in a competitive analysis - but there are some tricks to it. Of course :)