MP5315.407-91 Formula Pricing Agreements

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Mandatory Procedure

Formula Pricing Agreements

[2013 Edition ]

1. A Formula Pricing Agreement (FPA) is any pricing agreement with a contractor that identifies the categories of purchases to be covered (e.g., F-l00 replenishment spares) and:

2. A Contracting Officer (CO) may consider establishing FPAs in order to reduce administrative costs and lead times associated with negotiation of large numbers of contract actions for items that can be identified or described in the agreement. FPAs typically are established only with contractors under Government in-plant contract administration cognizance and having a resident DCAA auditor. Contracting offices contemplating an FPA with a contractor without in-plant administration and/or DCAA representation, shall do so only if they have the staffing/capability to administer the FPA themselves. Use of an FPA does not exempt proposals from the Truth in Negotiations Act (TINA) or other applicable laws or regulations.

3. Content and Structure of FPAs. All FPAs shall:

4. Contracting Office Responsibilities as appropriate.

5. Contracting Officer Responsibilities, as appropriate:

Note: Contractors could have FPAs, or similar agreements, with other Air Force activities and/or non-Air Force activities. Contracting officers may consider using these agreements, but should take care to ensure that the FPA to be used addresses all aspects of their acquisition situation.

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