1626 COST ANALYSIS

1626.1 The contracting officer shall be required to perform a cost analysis in either of the following circumstances:- (a) The award of any contract in excess of five hundred thousand dollars (\$500,000); or

- (b) The modification of any contract when the modification exceeds five hundred thousand dollars (\$500,000).1626.2 When cost analysis is required, the contracting officer shall perform cost analysis by using the techniques and procedures set forth in this section.1626.3 The contracting officer shall verify cost or pricing data and evaluate the cost elements, including the following:- (a) The necessity for and reasonableness of the proposed cost, including allowances for contingencies;

- (b) A projection of the offeror's cost trends on the basis of current and historical cost or pricing data;

- (c) A technical appraisal of the estimated labor, material, tooling, and facilities requirements and of the reasonableness of scrap and spoilage factors; and

- (d) The application of audited or negotiated indirect cost rates, labor rates, and other factors.1626.4 The contracting officer shall evaluate the effect of the offeror's current practices on future costs. In conducting this evaluation, the contracting officer shall ensure that the effects of inefficient or uneconomical past practices are not projected into the future.1626.5 The contracting officer shall compare the costs proposed by the offeror for individual cost elements with the following:- (a) Actual costs previously incurred by the same offeror;

- (b) Previous cost estimates from the offeror or from other offerors for the same or similar items;

- (c) Other cost estimates received in response to the District's request;

- (d) Independent District cost estimates by technical personnel; and

- (e) Forecasts or planned expenditures.1626.6 The contracting officer shall verify that the offeror's cost submissions are in accordance with the contract cost principles and procedures set forth in chapter 33 of this title.1626.7 The contracting officer shall review each proposal to determine whether any cost or pricing data necessary to make the contractor's proposal accurate, complete, and current have been submitted or identified in writing by the contractor.

SOURCE: Final Rulemaking published at 35 DCR 1462 (February 26, 1988).