Friday, August 25, 2017

What is a Certificate of Independent Price Determination?

The Government requires that offerors bidding on firm-fixed-price contracts to submit a Certificate of Independent Price Determination (see FAR 3.103-1). If you're a Government contractor or have bid on a Government contract, you've no doubt had to submit them.

In submitting the certificate, bidders are certifying that the prices in their offer have been arrived at independently, without, or the purpsoe of restricting competition, any consultation, communication, or agreement with any other offeror or competitor relating to:

  1. those prices
  2. the intention to submit an offer, or
  3. the methods or factors used to calculate the prices offered

Offerors are also certifying that the offered prices have not been and will not be knowingly disclosed by the offeror, directly or indirectly, to any other offeror or competitor before bid opening or contract award and no attempt was made or will be made to induce any other concern to submit or not to submit an offer for the purpose of restricting competition.

The purpose of this certification is, of course, to prevent collusion, bid rigging, or other violations of antitrust laws. This is the first step in assuring that Government contracts are not awarded to firms violating antitrust laws.

An offer where the certification has been deleted or modified will be eliminated from competition. These certifications do not apply to commercial items.

The Government estimates that 721,200 of these are prepared and submitted each year taking 15 minutes each or 180,300 hours or about 100 staff years. That's a lot of time.

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