Ordinance 3781-20 - Laserfiche WebLink

STANDARD PROCUREMENT POLICY & FEDERAL EMERGENCY CONTRACTING As part of evaluating reasonableness of costs,the City may consider the amount of profit that the contractor might receive from the engagement at issue based on consideration of such issues as the complexity of the work to be performed,the risk borne by the contractor,the contractor's investment, the amount of subcontracting, the quality of contractor's record of past performance, and industry profit rates in the surrounding geographical area for similar work. Price analysis—the examination and evaluation of a proposed price without evaluating its separate components (cost and profit). This analysis is usually used for acquisition of commercial items and procurement by sealed bidding. Examples of price analysis include: • Comparing offers with one another; • Comparing prior proposed prices and contract prices with current proposed prices for the same or similar goods or services; • Comparing offers with competitive published price lists, published market prices, or similar indexes; • Comparing proposed prices with independently developed estimates; • Comparing proposed prices with prices of the same or similar items obtained through market research. Cost analysis—the review and evaluation of the separate cost elements such as labor hours, overhead, materials, etc. and proposed profit in order to determine a fair and reasonable price for a contract and the application of judgment to determine how well the proposed costs represent what the costs of the contract should be, assuming reasonable economy and efficiency. This analysis is usually used to establish the basis for negotiating contract prices for procurement by request for proposal, contract modifications, and any other case where price analysis by itself does not ensure price reasonableness. Examples of cost analysis include: • Comparison of verified costs proposed for individual cost elements with previously incurred actual costs and independently developed estimates. • As part of evaluating reasonableness of costs,the City will consider the amount of profit that the contractor might receive from the engagement at issue based on consideration of such issues as the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of contractor's record of past performance, and industry profit rates in the surrounding geographical area for similar work. • In all cases where cost analysis is performed and where there is no price competition, the City must negotiate profit as a separate element of the price. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment,the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. Page 26 of 57