Difference between revisions of "Buying-In"
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− | “Buying-in,” as used in this section, means submitting an offer below anticipated costs, expecting to— | + | {{Regulations |
+ | |Subject=Improper Practices | ||
+ | |Source=FAR | ||
+ | |FAR Part=FAR 3 | ||
+ | }} | ||
+ | '''“Buying-in,”''' as used in this section, means submitting an offer below anticipated costs, expecting to— | ||
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− | *(2) Receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract.<ref>FAR 3.501-1 Definition</ref> | + | :*(1) Increase the contract amount after award (e.g., through unnecessary or excessively priced change orders); or |
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+ | :*(2) Receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract.<ref>FAR 3.501-1 Definition</ref> | ||
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==General<ref>3.501-2</ref>== | ==General<ref>3.501-2</ref>== | ||
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− | *(1) Change orders; or | + | '''(a)''' Buying-in may decrease competition or result in poor contract performance. The contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through the pricing of— |
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+ | :*(1) Change orders; or | ||
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+ | :*(2) Follow-on contracts subject to cost analysis. | ||
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+ | '''(b)''' The Government should minimize the opportunity for buying-in by seeking a price commitment covering as much of the entire program concerned as is practical by using— | ||
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− | *( | + | :*(1) Multiyear contracting, with a requirement in the solicitation that a price be submitted only for the total multiyear quantity; or |
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− | *( | + | :*(2) Priced options for additional quantities that, together with the firm contract quantity, equal the program requirements (see Subpart 17.2). |
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− | (c) Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A, column (2) under “Formats for Submission of Line Item Summaries”) and treatment of unreasonable price quotations (see 15.405). | + | '''(c)''' Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A, column (2) under “Formats for Submission of Line Item Summaries”) and treatment of unreasonable price quotations (see 15.405). |
==References and Notes== | ==References and Notes== | ||
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[[Category:Definitions]] | [[Category:Definitions]] | ||
− | [[Category: | + | [[Category: Regulations]] |
Latest revision as of 10:49, 31 March 2015
Subject: Improper Practices
Source: FAR
FAR Part: FAR 3
DFAR Part:
“Buying-in,” as used in this section, means submitting an offer below anticipated costs, expecting to—
- (1) Increase the contract amount after award (e.g., through unnecessary or excessively priced change orders); or
- (2) Receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract.[1]
General[2]
(a) Buying-in may decrease competition or result in poor contract performance. The contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through the pricing of—
- (1) Change orders; or
- (2) Follow-on contracts subject to cost analysis.
(b) The Government should minimize the opportunity for buying-in by seeking a price commitment covering as much of the entire program concerned as is practical by using—
- (1) Multiyear contracting, with a requirement in the solicitation that a price be submitted only for the total multiyear quantity; or
- (2) Priced options for additional quantities that, together with the firm contract quantity, equal the program requirements (see Subpart 17.2).
(c) Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A, column (2) under “Formats for Submission of Line Item Summaries”) and treatment of unreasonable price quotations (see 15.405).