Advertising Ch 14
Julia’s is utilizing a ________________ pricing strategy. The clause at fifty two.216-25, Contract Definitization, with its paragraph accomplished in a way in keeping with 16.603-2. If the letter contract is being awarded on the basis of price competition, the contracting officer shall use the clause with its Alternate I. A time-and-supplies contract provides no optimistic revenue incentive to the contractor for value control or labor efficiency. Therefore, appropriate Government surveillance of contractor performance is required to offer affordable assurance that efficient methods and efficient price controls are getting used. Individual orders shall clearly describe all providers to be performed or provides to be delivered so the total price or worth for the performance of the work can be established when the order is placed.
Accordingly, the incentives on individual technical characteristics have to be balanced in order that no one of them is exaggerated to the detriment of the general efficiency of the top merchandise. Any additional administrative effort and cost required to watch and evaluate performance are justified by the expected benefits as documented by a threat and price profit analysis to be included in the Determination and Findings referenced in 16.401. A value-plus-fixed-charge contract might take certainly one of two primary forms-completion or time period. The contract is for improvement and take a look at, and utilizing a cost-plus-incentive-fee contract just isn’t sensible.
Advertising Ch 14
The requirement is for semistandard provides for which the prices may be moderately related to the costs of nearly equal commonplace provides that have an established catalog or market value. These price changes are based on increases or decreases in labor or materials value standards or indexes that are particularly recognized in the contract. These value changes are based mostly on increases or decreases from an agreed-upon degree in published or otherwise established prices of particular objects or the contract end objects. Contractor threat normally decreases as the requirement is repetitively acquired. Also, product descriptions or descriptions of services to be carried out may be defined more clearly. When a price-reimbursement contract is being thought of and all current or past expertise with the contractor has been on a fixed-worth foundation.
503 Requirements Contracts
In these conditions it is appropriate for a firm to make use of the penetration strategy to achieve shopper consideration. Price adjustments primarily based on established costs ought to usually be restricted to trade-wide contingencies. Price changes based mostly on labor and material prices should be restricted to contingencies beyond the contractor’s management.
A model-name merchandise, even if available on more than one contract, is an item peculiar to at least one manufacturer. Limitations on use of necessities contracts for advisory and help providers. Requirements contracts could permit quicker deliveries when manufacturing lead time is concerned, as a result of contractors are normally prepared to keep up limited shares when the Government will obtain all of its precise purchase necessities from the contractor. The contract may include technical performance incentives when it is extremely possible that the required growth of a serious system is possible and the Government has established its efficiency goals, no less than in general phrases. This method additionally might apply to other acquisitions, if using both price and technical performance incentives is desirable and administratively sensible.
In the course of an acquisition program, a sequence of contracts, or a single long-term contract, altering circumstances may make a different contract sort acceptable in later durations than that used on the outset. In explicit, contracting officers ought to keep away from protracted use of a cost-reimbursement or time-and-supplies contract after experience provides a basis for firmer pricing. A agency-fastened-price contract, which finest makes use of the basic profit motive of business enterprise, shall be used when the risk involved is minimal or may be predicted with an acceptable diploma of certainty.