Basic Pricing Policy and Concepts
It is the government’s policy to obtain its products and services through contracting at fair and reasonable prices. What seems like a fairly easy undertaking is a bit more complex than the term implies. There are several factors to consider when a purchase is made. Regardless of the service or product being sought, what is fair and reasonable as it relates to price is a matter of good personal judgment. Because determining what is reasonable is determined by personal judgment, government contracting individuals may not agree on what is a reasonable price. On factor to consider when deciding on the reasonableness of the price is quality. It is expected that we will pay a little more for good quality product than we would for what would be considered “normal”. Other factors include the amount of time given to make the purchase and if there is a particular brand that is being sought. An emergency purchase is usually a bit more expensive than a purchase in which more time is available to research and negotiate price. Oftentimes, name brand items cost more than their generic or non-named counterparts.
Pricing Restraints in Government Contracting
The average consumer determines what they are willing to pay for a particular good/service using their own personal judgment; what is good to them. They are spending their own money and therefore don’t have to answer to anyone. They are free to purchase from whomever and where ever they choose. This is not the same with government contracting people who are faced with certain restraints when trying to decide on a reasonable price to pay.
When spending public funds, caution must be exercised and good judgment must be used. This is due in part to the fact that public funds are being used. The government depends on their contracting people to get the “best” price possible so that