Forward Pricing Rates Agreements Provide Negotiated Rates

(b) Contract agents shall use fpra tariffs as the basis for setting the prices of all contracts, amendments and other contractual measures to be implemented during the period covered by the agreement. Conditions that may affect the validity of the contract must be immediately imposed on the ACO. If the ACO finds that an amended condition invalidates the agreement, the ACO informs all interested parties of the extent of their effects and the status of efforts to implement a revised FPRA. So you can see that the ACO has a relatively short time frame to get the prices. As a result, many ACOs rely heavily on a comparison of previous interest rate forecasts with real rates and develop a reduction in interest rates for rates for which the expected rates were higher than the real rates. It is important to consider this eventuality and perform your own analysis of previous interest rate forecasts at actual rates. Be sure to point out any underestimates, as they are often overlooked by the government. Then provide a written statement on how you have dealt with previous overvaluations in your current interest rate forecasts. This forces the COA to look at your letter and not just apply decrement. FAR 15.403-5 (b) (3) simply requires that the format of the data that supports FPRA be submitted in a form acceptable to the contract manager. To determine what is acceptable to a contract manager, a contractor should contact DFARS 215.403-5 (b) (3). DFARS 215.403-5(b)(3) requires completing the contractor`s forward price proposal suitability checklist in Table 215.403-1 and submitting the checklist with your proposal. It also provides that the contractor must submit its FPRPs at least 90 days before the effective date of the tariffs.

The checklist provides contractors with a list of all the expected areas sought by the government and provides the government with a roadmap to find all these areas. The checklist includes 24 areas, some of the key areas of which: (c) The FPRA contains specific expiration, application and data requirements for systematic monitoring to ensure the validity of tariffs. The contract prevails over termination at the choice of one of the parties and obliges the contractor to submit to the ACO and the competent auditor any substantial changes to the cost or price data. . . .