Armed Services Pricing Manual (ASPM). Volume 2: Price Analysis
OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE (ACQUISITION AND LOGISTICS) WASHINGTON DC
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Price analysis is one of two ways for determining whether a sellers proposed price is acceptable. Cost analysis is the other, Both are part of the contract pricing function discussed and explained in the first volume of this Manual Nine of that volumes 10 chapters, as well as the coverage of contract pricing in the Federal Acquisition Regulation FAR and the Dot FAR Supplement OVA RSI, focus on costs and cost analysis. They do so despite the fact that cost analysis is used mostly in the relatively small number of noncompetitive procurements and contract modifications expected to exceed 100,000, while price analysis should be used in all procurements, competitive and noncompetitive, regardless of dollar value. This emphasis on cost analysis is probably the natural consequence of the number of dollars involved in large defense contracts. How can price analysis be used to price a nuclear-powered warship, a fixed-wing aircraft, a tank, or an airborne radar Who would dare use price analysis on such high-risk buys, and how could you do it We answer these questions in this second volume of the Armed Services Pricing Manual ASPM and show how you can use price analysis effectively in buying more commonplace products and services. This kind of buying is not, glamorous, but, it is essential and demanding and it usually takes something other than cost analysis to reach a fair and reasonable price. This volume is the first major Department of Defense effort to focus on how to i , price analysis, and it is the first major effort to list and describe sources of pricing information. For the most part, this volume addresses price analysis as it, can and should be done, even though not all organizations are set up in such a manner that their contract specialists will be able to operate in the ways described.
- Economics and Cost Analysis