CHAPTER 1

Basic Pricing Policy and Concepts

The government policy is to contract for its products and services at fair and reasonable prices. No matter how the problem is approached, the decision comes down to a matter of good personal judgment on whether or not a particular asking price is fair and reasonable. We have to consider a broad range of factors that exist when the purchase is made.

The problem faced by government contracting people in deciding whether or not a price is reasonable is in many ways like that of an individual making purchases for his or her own private purposes at the local department store or supermarket. We all know that we usually have to pay more for high quality articles than we do for ordinary articles. We realize ...

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