FAR 19.202-6—Determination of fair market price.
Plain-English Summary
FAR 19.202-6 explains how contracting officers determine the fair market price for certain small business programs and set-asides. It covers the use of the reasonable price guidelines in FAR 15.404-1(b) for total and partial small business set-asides and reserves, HUBZone set-asides, HUBZone price evaluation preference contracts, SDVOSB set-asides, and WOSB/EDWOSB set-asides. It also gives a special rule for 8(a) contracts: contracting officers must use the procedures in FAR 19.807 both to satisfy the requirement in FAR 19.806(b) and to estimate the current fair market price accurately. In practice, this section ties price analysis directly to socioeconomic contracting programs and ensures the government has a defensible basis for deciding whether a price is fair and reasonable before award. It matters because these program-specific awards often rely on a fair market price determination rather than a generic price reasonableness review alone.
Key Rules
Use price analysis guidelines
For the listed small business program actions, the fair market price must be determined using the reasonable price guidelines in FAR 15.404-1(b). This means the contracting officer should rely on accepted price analysis techniques rather than ad hoc judgment.
Applies to set-asides and reserves
The rule applies to total and partial small business set-asides and reserves under subpart 19.5. The fair market price determination is part of the award decision for these restricted competitions.
Applies to HUBZone actions
The same fair market price standard applies to HUBZone set-asides and to contracts using the HUBZone price evaluation preference under subpart 19.13. The contracting officer must evaluate price in a way that supports the program’s award rules.
Applies to SDVOSB awards
For SDVOSB set-asides under subpart 19.14, the contracting officer must determine fair market price using the FAR 15.404-1(b) reasonable price framework. This helps ensure the award price is supportable before contract award.
Applies to WOSB and EDWOSB awards
For set-asides for EDWOSB and WOSB concerns eligible under the WOSB Program, the fair market price must also be based on the reasonable price guidelines in FAR 15.404-1(b). The rule keeps the pricing review consistent across these socioeconomic programs.
Special 8(a) procedure
For 8(a) contracts, contracting officers must follow FAR 19.807 both to meet the requirement in FAR 19.806(b) and to estimate the current fair market price accurately. This is a separate, program-specific procedure rather than a general price analysis only.
Responsibilities
Contracting Officer
Determine fair market price for the covered set-asides and preferences using FAR 15.404-1(b) reasonable price guidelines, and for 8(a) contracts follow FAR 19.807 procedures to satisfy the fair market price requirement and estimate current fair market price accurately.
Agency
Support contracting officers in applying the correct socioeconomic program rules and ensure acquisition planning and pricing documentation align with the applicable subpart and fair market price requirements.
Small Business Offerors
Submit pricing that can be evaluated under the applicable fair market price standard and, for program-specific awards, be prepared for the contracting officer to assess whether the price is supportable under the relevant FAR procedures.
Practical Implications
This section makes price analysis a required part of several small business program awards, not just a general best practice.
A common pitfall is using the wrong pricing framework—for example, treating an 8(a) fair market price determination like a standard price reasonableness review instead of following FAR 19.807.
Contracting officers should document the basis for the fair market price determination carefully, especially when using comparison data, market research, or other price analysis techniques.
Program eligibility and pricing analysis are linked: even if an offeror qualifies for a set-aside or preference, the award still must meet the fair market price requirement.
For 8(a) acquisitions, failing to follow the specific procedures in FAR 19.807 can create compliance risk and undermine the award decision.
Official Regulatory Text
(a) The fair market price shall be the price achieved in accordance with the reasonable price guidelines in 15.404-1 (b) for- (1) Total and partial small business set-asides, and reserves (see subpart 19.5 ); (2) HUBZone set-asides (see subpart 19.13 ); (3) Contracts utilizing the price evaluation preference for HUBZone small business concerns (see subpart 19.13 ); (4) Set-asides for SDVOSB concerns eligible under the SDVOSB Program (see subpart 19.14 ); (5) Set-asides for EDWOSB concerns and WOSB concerns eligible under the WOSB Program (see subpart 19.15 ). (b) For 8(a) contracts, both with respect to meeting the requirement at 19.806 (b) and in order to accurately estimate the current fair market price, contracting officers shall follow the procedures at 19.807 .