Marketing Ch 14
Julia’s is using a ________________ pricing technique. The clause at fifty two.216-25, Contract Definitization, with its paragraph accomplished in a fashion according to 16.603-2. If the letter contract is being awarded on the premise of value competitors, the contracting officer shall use the clause with its Alternate I. A time-and-supplies contract supplies no optimistic profit incentive to the contractor for value control or labor efficiency. Therefore, applicable Government surveillance of contractor efficiency is required to provide cheap assurance that efficient strategies and effective cost controls are getting used. Individual orders shall clearly describe all providers to be performed or supplies to be delivered so the complete value or worth for the efficiency of the work could be established when the order is positioned.
If the contract is for nonpersonal providers and related provides and covers estimated necessities that exceed a specific Government activity’s inner capability to provide or perform, use the clause with its Alternate I. Except as supplied for in paragraphs and of this part, the ordering period of a task-order contract for advisory and help services, including all choices or modifications, usually might not exceed 5 years. If the contract didn’t establish the worth for the supply or service, the contracting officer must establish prices for every order using the policies and strategies in subpart 15.four.
406 Contract Clauses
The requirement is for semistandard provides for which the prices could be fairly related to the costs of practically equivalent commonplace supplies that have an established catalog or market value. These worth adjustments are based on will increase or decreases in labor or material cost standards or indexes which are particularly identified in the contract. These value changes are primarily based on will increase or decreases from an agreed-upon level in published or in any other case established prices of specific items or the contract finish items. Contractor danger often decreases because the requirement is repetitively acquired. Also, product descriptions or descriptions of providers to be carried out can be outlined more clearly. When a value-reimbursement contract is being thought-about and all current or previous experience with the contractor has been on a set-worth foundation.
503 Requirements Contracts
In these situations it is appropriate for a firm to use the penetration strategy to gain client consideration. Price changes based on established costs ought to usually be restricted to business-wide contingencies. Price changes primarily based on labor and material prices must be restricted to contingencies past the contractor’s management.
A model-name merchandise, even when out there on multiple contract, is an merchandise peculiar to at least one producer. Limitations on use of requirements contracts for advisory and assistance services. Requirements contracts might allow faster deliveries when production lead time is concerned, as a result of contractors are normally keen to take care of restricted shares when the Government will acquire all of its actual purchase requirements from the contractor. The contract could embody technical performance incentives when it’s extremely probable that the required development of a significant system is feasible and the Government has established its efficiency aims, a minimum of in general terms. This strategy also might apply to different acquisitions, if using both value and technical performance incentives is fascinating and administratively sensible.
In the course of an acquisition program, a collection of contracts, or a single lengthy-term contract, changing circumstances may make a special contract sort applicable in later periods than that used at the outset. In explicit, contracting officers should keep away from protracted use of a cost-reimbursement or time-and-supplies contract after experience provides a foundation for firmer pricing. A agency-fastened-value contract, which greatest utilizes the fundamental profit motive of business enterprise, shall be used when the danger involved is minimal or may be predicted with an acceptable diploma of certainty.