AFFARS MP5315.407-91

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Mandatory Procedure

MP5315.407-91
Formula Pricing Agreements

January 2004

MP5315.407-91 Formula Pricing Agreements

(a) Formula Pricing Agreements (FPAs), sometimes referred to as spare parts pricing agreements, may be used by Air Force Contracting Officers. FPAs are any pricing agreements with a contractor that:

FPAs are not Forward Pricing Rate Agreements (FPRAs). An FPRA is usually limited to an agreement on individual rates or factors (including Cost Estimating Relationships (CERs)), applies to items not specified in the agreement, and is required to be used by all buying activities.

(b) 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.

(c) Content and Structure of FPAs. All FPAs shall:

(d) Contracting Office Responsibilities as appropriate.

(e) Contracting Officer Responsibilities as appropriate:

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