FAR 15.404-2—Data to support proposal analysis.
Plain-English Summary
FAR 15.404-2 explains how contracting officers obtain and use data to support proposal analysis when deciding whether a proposed price is fair and reasonable. It covers field pricing assistance, including technical, audit, and special reports; information on pricing practices, sales history, discounts, catalog or price list verification, commerciality determinations, market conditions, and offeror capabilities; and how contracting officers should coordinate early with field experts during the acquisition and negotiation process. It also addresses how field pricing results are reported, how audit assistance is handled for prime contracts and subcontracts, limits on access to books and financial records, protection of proprietary and source selection information, and what to do when proposals or records are deficient or access is denied. In practice, this section is about making sure the government has enough reliable support to evaluate proposed costs and prices without asking for more data than necessary. It also establishes clear lines between contracting officer responsibilities and auditor responsibilities, and it protects the integrity of the review process and the official contract file.
Key Rules
Request field pricing help when needed
If the buying activity does not have enough information to determine a fair and reasonable price, the contracting officer should request field pricing assistance. Requests must be limited to the minimum essential information needed for the technical or cost or pricing analysis.
Tailor the scope of the request
The contracting officer must tailor both the type and level of detail of requested information to the resources available and to the size and complexity of the analysis. The rule is to ask for only what is necessary for the specific pricing issue at hand.
Use field pricing for key pricing issues
Field pricing assistance may include technical, audit, and special reports on cost elements and subcontracts, pricing history and practices, commerciality support, market conditions, and information about the offeror’s business, technical, production, or other capabilities. This support can help verify sales history, discounts, catalog pricing, and historical data for items being proposed as commercial.
Coordinate early with field experts
When field pricing assistance is requested, contracting officers are encouraged to work with field experts throughout the acquisition process, including negotiations. Early coordination helps define the needed assistance, identify the specific issues, set a realistic review schedule, and determine what information the experts need.
Protect sensitive information
Field pricing information and related reports may contain proprietary or source selection information and must be properly identified and protected. This means the information must be handled according to applicable disclosure and safeguarding rules.
Report results appropriately and file them
Field pricing results may be reported orally, in writing, or by another method acceptable to the contracting officer, depending on complexity. Telephonic or electronic transmission is encouraged when practical, and all audit and field pricing information must be placed in the official contract file.
Use audit assistance correctly
For prime contracts or subcontracts, the contracting officer should contact the cognizant audit office directly when audit support is needed, especially if audit is the only field pricing support required. The auditor sends the report or recommendations directly to the contracting officer, and the auditor may discuss facts with the contractor but not conclusions or recommendations without contracting officer concurrence.
Limit repeat preaward indirect cost audits
A separate preaward audit of indirect costs should not be requested if an existing audit completed within the prior 12 months is adequate to evaluate the proposed indirect costs. This rule prevents unnecessary duplication and reflects statutory limits.
Keep auditors informed of new information
The auditor controls the scope and depth of the audit, but the contracting officer must provide updated information that could significantly affect the audit. If new information comes in after submission of a report, the contracting officer must be notified immediately and a supplemental audit may be needed.
Act on deficient proposals or denied access
If the data is so deficient that review or audit cannot be performed, or if access to essential records is denied, the ACO or auditor must notify the contracting officer immediately and confirm oral notice in writing. The contracting officer must then take prompt action to obtain the needed data, and continued refusal can lead to withholding award or a price adjustment and referral of the action.
Responsibilities
Contracting Officer
Determine when field pricing assistance is needed; tailor requests to the minimum essential information; coordinate early with field experts; request and manage audit assistance; ensure sensitive information is protected; ensure field pricing and audit results are placed in the official contract file; provide updated information to auditors that may affect the review; act promptly when data is deficient or access is denied; and withhold award or price adjustment if the offeror or contractor still refuses to provide adequate data or access.
Field Pricing Experts
Provide technical, audit, special, pricing-history, commerciality, market, and capability information as requested; support the contracting officer during the acquisition and negotiation process; report results in the form appropriate to the review; and handle proprietary or source selection information properly.
Audit Office / Auditor
Receive direct requests for audit support when appropriate; determine the scope and depth of the audit; send audit reports or recommendations directly to the contracting officer; avoid disclosing audit conclusions or recommendations to the offeror or contractor without contracting officer concurrence; notify the contracting officer of any post-submission information that could affect findings; and issue supplemental reports when needed.
Administrative Contracting Officer (ACO)
Receive concurrent copies of written audit reports when required; be informed of deficient data or denied access; and support the contracting officer in obtaining necessary information and maintaining the contract file.
Offeror / Contractor
Provide adequate data and access to records necessary for proposal review or audit; allow auditors access to books and financial records as required; and promptly disclose information that may materially affect an ongoing audit or pricing review.
Agency / Buying Activity
Maintain the specialized resources needed to support pricing analysis; ensure field pricing and audit information is properly protected and filed; and support timely coordination between contracting, audit, and technical personnel.
Practical Implications
This section is a roadmap for building a defensible price analysis record. If the contracting officer asks for too little, the analysis may be unsupported; if the request is too broad, it can create delay and unnecessary burden on the contractor.
Contractors should expect targeted requests for supporting data, especially when commerciality, discounts, sales history, or indirect costs are in question. They should be prepared to substantiate claims with source documents and should not assume that a claimed commercial status will be accepted without verification.
A common pitfall is failing to coordinate early with auditors or technical experts, which can lead to late surprises, missed schedules, or incomplete reviews. Early engagement helps define exactly what information is needed and avoids repeated requests.
Another frequent issue is mishandling sensitive information. Field pricing and audit materials may include proprietary or source selection information, so both government personnel and contractors must treat them carefully and limit disclosure.
If a proposal is deficient or records are withheld, the government is not required to proceed blindly. The contracting officer must act quickly to obtain the missing data, and continued refusal can stop the award or price adjustment process and trigger referral of the matter.
Official Regulatory Text
(a) Field pricing assistance. (1) The contracting officer should request field pricing assistance when the information available at the buying activity is inadequate to determine a fair and reasonable price. The contracting officer shall tailor requests to reflect the minimum essential supplementary information needed to conduct a technical or cost or pricing analysis. (2) The contracting officer shall tailor the type of information and level of detail requested in accordance with the specialized resources available at the buying activity and the magnitude and complexity of the required analysis. Field pricing assistance is generally available to provide- (i) Technical, audit, and special reports associated with the cost elements of a proposal, including subcontracts; (ii) Information on related pricing practices and history; (iii) Information to help contracting officers determine commerciality and a fair and reasonable price, including- (A) Verifying sales history to source documents; (B) Identifying special terms and conditions; (C) Identifying customarily granted or offered discounts for the item; (D) Verifying the item to an existing catalog or price list; (E) Verifying historical data for a product or service previously not determined commercial that the offeror is now trying to qualify as a commercial product or commercial service; and (F) Identifying general market conditions affecting determinations of commerciality and a fair and reasonable price. (iv) Information relative to the business, technical, production, or other capabilities and practices of an offeror. (3) When field pricing assistance is requested, contracting officers are encouraged to team with appropriate field experts throughout the acquisition process, including negotiations. Early communication with these experts will assist in determining the extent of assistance required, the specific areas for which assistance is needed, a realistic review schedule, and the information necessary to perform the review. (4) When requesting field pricing assistance on a contractor’s request for equitable adjustment, the contracting officer shall provide the information listed in 43.204 (b)(5). (5) Field pricing information and other reports may include proprietary or source selection information (see 2.101 ). This information must be appropriately identified and protected accordingly. (b) Reporting field pricing information. (1) Depending upon the extent and complexity of the field pricing review, results, including supporting rationale, may be reported directly to the contracting officer orally, in writing, or by any other method acceptable to the contracting officer. (i) Whenever circumstances permit, the contracting officer and field pricing experts are encouraged to use telephonic and/or electronic means to request and transmit pricing information. (ii) When it is necessary to have written technical and audit reports, the contracting officer shall request that the audit agency concurrently forward the audit report to the requesting contracting officer and the administrative contracting officer (ACO). The completed field pricing assistance results may reference audit information, but need not reconcile the audit recommendations and technical recommendations. A copy of the information submitted to the contracting officer by field pricing personnel shall be provided to the audit agency. (2) Audit and field pricing information, whether written or reported telephonically or electronically, shall be made a part of the official contract file (see 4.803 (a)(19)). (c) Audit assistance for prime contracts or subcontracts. (1) The contracting officer should contact the cognizant audit office directly, particularly when an audit is the only field pricing support required. The audit office shall send the audit report, or otherwise transmit the audit recommendations, directly to the contracting officer. (i) The auditor shall not reveal the audit conclusions or recommendations to the offeror/contractor without obtaining the concurrence of the contracting officer. However, the auditor may discuss statements of facts with the contractor. (ii) The contracting officer should be notified immediately of any information disclosed to the auditor after submission of a report that may significantly affect the audit findings and, if necessary, a supplemental audit report shall be issued. (2) The contracting officer shall not request a separate preaward audit of indirect costs unless the information already available from an existing audit, completed within the preceding 12 months, is considered inadequate for determining the reasonableness of the proposed indirect costs ( 41 U.S.C.4706 and 10 U.S.C. 3841 ). (3) The auditor is responsible for the scope and depth of the audit. Copies of updated information that will significantly affect the audit should be provided to the auditor by the contracting officer. (4) General access to the offeror’s books and financial records is limited to the auditor. This limitation does not preclude the contracting officer or the ACO, or their representatives, from requesting that the offeror provide or make available any data or records necessary to analyze the offeror’s proposal. (d) Deficient proposals . The ACO or the auditor, as appropriate, shall notify the contracting officer immediately if the data provided for review is so deficient as to preclude review or audit, or if the contractor or offeror has denied access to any records considered essential to conduct a satisfactory review or audit. Oral notifications shall be confirmed promptly in writing, including a description of deficient or denied data or records. The contracting officer immediately shall take appropriate action to obtain the required data. Should the offeror/contractor again refuse to provide adequate data, or provide access to necessary data, the contracting officer shall withhold the award or price adjustment and refer the contract action to a higher authority, providing details of the attempts made to resolve the matter and a statement of the practicability of obtaining the supplies or services from another source.