4.8 Price Analysis

Last Revised Date
Thursday, December 1, 2011 - 12:00 am

Policy Information

Policy Number: 4.8 Effective Date: February 1996
Responsible Unit: Financial Services - Purchasing Last Revised Date: December 2011
Phone: 520-621-1747 Email: contactpacs@fso.arizona.edu

Purpose and Summary

The purpose of this policy is to explain the requirement and process for Price Analysis.


48 CFR § 15.403 Obtaining Certified Cost or Pricing Data


This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.


  1. Price Analysis: Price analysis is the examination and evaluation of bid or proposal for a specific product or service without consideration of separate cost elements


  1. Examination and evaluation of a price must consist of, but is not limited to, one or a combination of the following techniques:
    1. Comparison of price quotations from two or more qualified vendors.
    2. Comparison with established catalog or market prices.
    3. Comparison with the price(s) of a recent purchase of a comparable quality of the same functionally similar products.
    4. Comparison with target price developed independently of the Procurement and Contracting Services Department staff.
    5. Comparison with the G.S.A. price schedule.
  2. If none of the above techniques are applicable, the Buyer must request pricing data from the Vendor. Information submitted by the Vendor shall include, at a minimum, appropriate information on the price(s) at which the same or similar items have been sold previously. Vendor must certify that its prices bid, quoted or charged to any customer do not exceed those billed to any of its favored customers, whether they be governmental agencies, institutions, or the general public for the same items in like or comparable quantity, quality or specifications, within the same time frame.
  3. In the University setting, where competition is secured, the determination of price reasonableness is made predominantly by comparison of quotations from two or more responsible and responsive bidders inasmuch as the majority of actions initiated are for off-the-shelf goods regularly marketed to the general public. Normally, in an action in which competition has been secured, the low offer may be considered reasonable unless the Buyer finds that:
    1. The solicitation did not include a sufficient number of qualified vendors commensurate with the size and complexity of the requirement.
    2. The vendor/subcontractor offering the lowest price has failed to pass on to the University the advantage it has over other competitors as a result of start-up or other nonrecurring expenses previously absorbed by prior sales.
    3. On the basis of price analysis, the lowest price is not reasonable.
  4. Public Law 87-653 mandates that Purchase Orders exceeding an aggregate dollar amount of $750,000 issued under Federal Government Prime Contracts (not Federal Grants) require cost or pricing data analysis. Exceptions and requirements to obtaining cost or pricing data fall under Federal Acquisition Regulation (FAR) Part 15.403.

48 CFR § 15.403 Obtaining Certified Cost or Pricing Data

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.