Commercial Item Pricing

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Commercial Item Pricing
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What is a commercial item?

• Any item, other than real property, that is of a
  type customarily used for nongovernmental
  purposes and that--
• Has been sold, leased, or licensed to the general
  public or
• Has been offered for sale, lease, or license to
  the general public

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Of a type?

• An item that is sufficiently like, but not
  identical to, a commercial item that is or could
  be used to meet the government requirement.
• Not intended to be used to acquire sole-source,
  military unique items that are not closely
  related to items already in the marketplace.

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Can we modify a commercial item to meet
Government unique requirements and it still be
commercial?

• Yes as long as the modifications are minor and
  the item retains its predominately
  nongovernmental characteristics.

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If the Government paid for the development of the
item, does that make it noncommercial?

• No who paid development costs is not a part of
  the commercial item determination.

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What is a commercial service?

• Installation services, maintenance services,
  repair services, training services, and other
  services procured for support of a commercial
  item if --
• Services of a type offered sold competitively
  in substantial quantities in the commercial
  marketplace based upon established catalog or
  market prices for specific tasks.

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What techniques can you use to determine if a
price is fair reasonable?

• Competition
• Commercial prices (market/catalog prices)
• Previously proposed/purchased prices
• Parametric or rough yardsticks
• Independent government estimate

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Non-Competitive Pricing

• Commercial Pricing lacks clear formula basis
• Pantheon of Conflicting Forces
• General Inflation vs.specific deflation
  Increasing productivity
• Proprietary products vs. quickening obsolesces
• Foreign manufacturing vs. value of dollar
• Direct Competition and substitutions
• Willingness of customers to pay

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FSS Schedule Pricing Practices

• Equal to or better than Most Favored Customer
  (MFC)
• Info. Other then Cost or Pricing Data
• Commercial Sales Information
• Explanation of Differences
• Limited Cost Information

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Commercial Sales Practices Format

• Value of sales to the general public
• Projected annual Government sales
• Written discounting policies or standard
  commercial sales practices
• Customers pricing better than the offered terms

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Exceptions

• Deviations from your written policies or standard
  commercial sales practices
• If you are a dealer/reseller without significant
  sales to the general public, you should provide
  manufacturers information

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How does sales information lead you to determine
a price is reasonable?

• Identify Most Favored Customer
• Compare overall sales volume
• Compare terms and conditions
• Compare types of customers

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Schedule Services

• Contractor defined labor categories
• Qualifications
• Hourly pricing
• Fully loaded hourly rates
• Comparisons with current sales pricing
• Acceptance of regional differences
• Other differences
• Material Commercial items

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Commercial Pricing Information

• Federal Supply Schedule, http//www.gsaelibrary.gs
  a.gov/elib/eLibrary.jsp
• GSA Advantage, https//www.gsaadvantage.gov/cgi-bi
  n/advwel
• ITEC, http//www.itec-direct.navy.mil/
• EMALL, https//emall.prod.dodonline.net/scripts/em
  Logon.asp

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Generic market research information

• Manufacturing Industry Information,
  http//www.competia.com/express/manufacturing.html
  
• NewsReals Industry Watch, http//beta.newsreal.co
  m/pages/beta/Headlines.nsp?
• TechnoGate, http//www.technogate.com
• Thomas Register, http//www.thomasregister.com

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Industry specific market research sites

• Aircraft Parts
• Internet Parts Locator System,
  http//www.ipls.com
• Spec2000, http//www.spec2000.com
•   Textiles clothing
• Garment Industry Development Corporation,
  http//www.gidc.org/
• SourcingMall, http//www.sourcingmall.com
• Electronics
• Electronic Industries Association,
  http//www.eia.org
• Price Watch, http//www.pricewatch.com

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Solicitation Award Information

• Federal Business Opportunities -
  http//www.fedbizopps.gov/
• Federal Procurement Data System -
  http//www.fpdc.gov/fpdc/fpdc_home.htm
• DoD Procurement Statistics - http//web1.whs.osd.m
  il/peidhome/peidhome.htm
• Bidnet http//www.bidnet.com/
• Bidline - http//www.bidline.com/

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Other Government Contract Information

• Governmentwide Acquisition Contracts/Multi-Agency
  Contracts - http//www.arnet.gov/gwac/govwide.html
  http//www.prc.com/contracts/gwac.html
• http//www.statebuy.gov/gwacs.htm
• DOJ Multi Agency Contracts http//www.usdoj.gov/jm
  d/pss/multiagency.html
• DOE National Purchasing Agreements
  http//www1.pr.doe.gov/leverage/
• NIH Multi Agency Contracts http//nitaac.nih.gov/

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References

• DoD Commercial Documents
• http//www.acq.osd.mil/ar/initiati.htmcommercial
  
• Commercial Item Handbook
• Evaluating the Price of Commercial Items in a
  Sole-Source Environment
• Commercial Pricing Information Guide
• Commercial Item Acquisition Considerations
  Lessons Learned

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References

• Commercial Advocates Forum http//www.acq.osd.mi
  l/ar/cadv.htm
• Contract Pricing Reference Guides -
  http//www.acq.osd.mil/dp/cpf/pgv1_0/index.html
• DoD Strategic Supplier Alliance
  http//www.acq.osd.mil/ar/csi/ssap/default_ssap_ex
  ec_overview.htm

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References

• USN Innovative Commercial Contracting Strategies
  http//www.abm.rda.hq.navy.mil/abm2000_15a.pdf
• DoD Pilot Authority for Commercial Services
  http//www.acq.osd.mil/ar/doc/pilot2.pdf
• DoD Obtaining Information for Pricing Sole-Source
  Commercial Items http//www.acq.osd.mil/dp/sspri
  cing.pdf