Price Negotiation Memorandum Checklist

PNM CONTENTS

PRE

POST

NA

SEE
NOTES

5.  NEGOTIATION SUMMARY

a.  Discussion/explanation of price analysis performed by the contractor and/or the government's price analysis in the following areas or a statement why it was not performed

(1)  Price element summary for proposed, objective, and considered negotiated amount

(2)  Basis or estimating technique used to determine price reasonableness (attach exemption/waiver if in lieu of cost and pricing data)

(3)  Identify submission of other than cost or pricing data necessary to determine a reasonable price.  Include discussion on rationale and required updates (attach sales data, catalogues, competitive price list, independent market prices, other data, etc.)

(4)  Identify subcontractors required to provide cost and pricing data where the prime's requirement has been waived

(5)  Requirement changes and how the price analysis and objective were adjusted

(6)  Significant differences between the objective and negotiated amounts

(7)  Use of advisory information/report to establish the objective, including significant differences between them, the objective, and the final negotiated agreement

b.  Identify proposal of record used to establish objective

c.  When cost and pricing data is obtained, a statement that full reliance was placed on contractor provided data except where specifically identified (including agreed to cut-off dates)

d.  Major cost element summary with sub-paragraph index for proposed, objective and considered negotiated amounts (including direct and indirect costs for labor, materials, etc.)

e.  Discussions/explanations of cost analysis performed for each major cost element for contractor proposed, government objective and negotiated positions in the following areas

(1)  Summary breakout of the components which make up the major cost element amount

(a)  Labor hours by rate category

(b)  Identify and discuss indirect rate

(c)  Materials and other costs by category

(d)  Subcontractor cost or pricing data

1.  Requirement, availability, adequacy, reliance, of subcontractor cost/pricing data

2.  Sole source or competitive

3.  Extent and adequacy of the prime's review

4.  Why certified cost or pricing data not obtained when required (attach - waiver/exemption)

5.  Why certified cost or pricing data obtained when not required

(e)  Basis or estimating method used

(f)  Explanation of contractor data not relied upon and reason for using other than contractor's data, identify data used to develop the government's position (see 5.c)

(g)  Rationale, sources, and currency of the data used to establish the objective (include modification change determined to be non-commercial where originally commercial)

(h)  Requirement changes and how costs were adjusted

(i)  Significant differences between the objective and negotiated amounts

(j)  Actual costs to date, % of completion, trends and, if significant, the contractor's estimate to complete

(2)  With incentive arrangements, describe how the share ratio(s) and ceiling price(s) were established

(3)  When establishing a final price of an incentive contract

(a)  Compare contractor stated costs incurred and acceptable actuals reflected in the objective and explain differences.  Show the calculations of the incentive arrangement to adjust the final profit/fee and compare to ceiling price

(b)  Identify significant differences between objective and negotiated position

(c)  Identify supplemental agreements that adjusted targets and state respective amounts

(d)  Identify any firm fixed price and cost reimbursement amounts not subject to the incentive settlement, but which were in the total settlement amount

(4)  Profit.  Explain how the objective was developed

(a)  If WGM was used, state assigned weights and provide rationale when weights are below or above normal.  (DD 1547 Attach to the PNM)

(b)  If WGM not used, explain why not and how profit objective was developed