Centered upon the Federal Acquisition Regulation, the Public Sector Model
is designed to conform to the Federal
Acquisition Institute’s (FAI) Contract
Specialist Training Blueprint for Unit 28
Price Analysis (Sealed Bidding) 36 Price
Analysis (Negotiated Acquisitions) plus a good
look at the process and procedures of Cost
Analysis, Unit 37. The training demonstrates and tests the students
understanding of the impact of competition,
market conditions, contract type, and the type
of specification or purchase description on
price evaluation and the importance of source
selection criteria and offeror qualifications,
including past performance, on determinations
of best value.
Given acquisition planning, and offers to evaluate using price and price
related factors (e.g. Buy American Act,
transportation costs, administrative costs of
multiple awards, f.o.b. delivery terms,
assumed economic price adjustments, options,
small disadvantaged business price evaluation
adjustments, and HubZone price evaluation
preferences, etc.), the student is required to
accurately evaluate prices.
The student is taught the types and
importance of price adjustment techniques,
including the use of estimated quantities,
assumed change, price indices, and ratio
analysis.
In performing a price evaluation, the
student identifies all comparative data,
selects the best price evaluation comparison
and analysis techniques for the procurement,
accurately adjusts the data for equitable
comparison of offers, and correctly determines
the lowest evaluated offer and offers that are
reasonably priced.
The student performs the tasks outlined
in the FAI Contract Specialist Training
Blueprint to the standards outlined.
Regarding Unit 37, Cost Analysis, the student is taught the language of
cost analysis by being provided a description
of costs concepts as they are used in actual
application.
Given an audit report providing
questionable costs, the student is guided
through the establishment of a price
negotiation objective by quantifying and
disallowing questionable costs.
This analysis includes looking into
overhead and general and administrative
(G&A) pools for an assessment of the
reasonableness of costs and the establishment
of overhead and G&A rates. The student is
directed through the listing and explanation
of the factors that should be considered in
establishing a reasonable profit.
Finally the student is taught the
process and need for documenting the planning
and execution of price discussions and the
final pricing agreement.
The Price Evaluation Course – Private Sector Model is the classroom
version of the United States Postal
Service’s Price Evaluation Course put on CD
and made interactive by FAM&TS.
The Postal Service is an independent,
non-appropriated entity within the Executive
Branch of the Federal Government of the United
States that is not subject to the Federal
Acquisition Regulation (FAR); and developed
its Purchasing Manual based upon best
practices in the commercial market place.
There are no requirements for full and
open competition, no set asides for small,
women-owned, or disadvantaged businesses, and
there are less stringent requirements for
publication of requirements and purchases, and
fewer restraints on noncompetitive purchasing
that the Public Sector FAR Model.
The Postal Service Supply Management organization is comprised of more
than six hundred persons who are responsible
for cumulative purchases in excess of $9
billion annually. This approved course was
taught by FAM&TS repetitively each year to
hundreds of Postal Service purchasing
professionals across the United States from
its inception in 1992. The classroom version
was updated twice by FAM&TS and includes
exercises from the last Federal Acquisition
Institute’s version of its Price Evaluation
Course. The
training discusses and tests the students
understanding of the impact of competition,
market conditions, contract type, and the type
of specification or purchase description on
price evaluation and the importance of the
source selection criteria and offeror
qualifications, including past performance on
determinations of best value.
Given acquisition planning, and offers to evaluate using price and price
related factors, the student is required to
accurately evaluate prices.
The student is taught the types and
importance of price adjustment techniques,
including the use of estimated quantities,
assumed change, price indices, and ratio
analysis. In performing a price evaluation, the student identifies all
comparative data, selects the best price
evaluation comparison and analysis techniques
for the procurement, accurately adjusts the
data for equitable comparison of offers, and
correctly determines the lowest evaluated
offer and offers that are reasonable.
Regarding Cost Analysis, the student is taught
the language of cost analysis by being
provided a description of costs concepts as
they are used in actual application.
Given an audit report providing
questionable costs, the student is guided
through the establishment of a price
negotiation objective by quantifying and
disallowing questionable costs. This analysis includes looking into overhead and general and
administrative (G&A) pools for an
assessment of the reasonableness of costs and
the establishment of overhead and G&A
rates. The student is directed through the
factors that should be considered in
establishing a reasonable profit.
Finally the student is taught the
process and need for documenting the planning
and execution of price discussions and the
final pricing agreement.
Course
Content.
The
most import components of the Price Evaluation
Course are the same whether ‘Private Sector
Model’ or ‘Federal Government –FAR
Model.’
Both Models:
1) focus on the fundamentals of price
evaluation, including the language of price
evaluation; 2) the significance of market
activity on pricing; and 3) the application of
price evaluation techniques through the many
self-paced practical exercises.
During the Price Evaluation Course, the
student will learn price evaluation and gain
price evaluation experience while gaining the
following proficiencies with both models:
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·
Price
Evaluation.
Evaluate offers both where the basis
of source selection is the lowest
price from qualified and capable
offerors, and where the basis of
source selection is ‘best
value,’ where technical evaluation
criteria carry more weight during
the evaluation process.
·
Best
Value.
Evaluate offers by applying
objective quantifiable best value
criteria and subjective best value
criteria where specified quality
features or capabilities are
identified in the solicitation.
·
Unbalanced
Pricing.
Apply the concept “Unbalanced
Pricing” in the evaluation of
indefinite quantity requirements.
·
Sources
of Pricing Data.
Examine data sources for
value and utility in price
evaluation; including historical
data, offeror data, market data, and
government data; then evaluate the
comparability of such data by
considering the likely impact of the
passage of time, inflation, special
terms and conditions, quantity or
magnitude differences, and extent of
competition.
·
Indices.
Adjust
prices by constructing indices and
using existing Department of
Commerce indices to determine market
based and offeror price trends.
·
Price
Escalation.
Evaluate offered prices by adjusting
an agreed upon base with an agreed
upon pricing escalation factor for a
specific period of time in arriving
at the proper evaluated price.
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·
Contract
Types.
Adjust risks to performance by use
of proper type of contract which
include fixed price contracts, cost
reimbursement contracts, indefinite
delivery contracts, and special
contracts of labor hour, time and
materials and letter contracts.
·
Cost
& Pricing Data.
Identify the circumstances where
price evaluation must include a
review of offeror cost and pricing
data, and estimating systems.
·
Cost
Analysis.
Examine the elements of price,
including direct labor and direct
materials, the indirect costs of
overhead and G&A; the types of
accounting systems that are the
source of cost and pricing data; and
factors considered in determining a
reasonable profit.
·
Audit
Report. Using
an audit report, evaluate price by
disallowing cost that are
unsupported; including those that
result in overhead and G&A
rates.
·
Price
Discussions.
Review the preliminary steps to
pricing discussions, including;
planning, presenting plan to
superiors, conducting discussions;
and documenting the results of
discussions and final pricing.
Note:
The solitary experience of
computer-based training is
particularly suited for the Price
Evaluation Course.
To do well, the student must
take notes, observe examples, use
‘MS Excel” or a calculator, and
perform the exercises at a
comfortable pace.
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Below
are some differences in coverage between the
two download alternatives of the respective
Price Evaluation Courses.
The differences, that follow, deal
primarily with procedures regarding
competition, socioeconomic and publication
requirements:
