Distressed pricing, or pricing otherwise designed to undercut normal market conditions, is not considered by FPI when looking at comparable prices that may be available to determine a current market price. GSA Federal Supply Schedule prices are often used in this regard. When an Acknowledged Private Sector Price, or Range of Prices Exists. Then, the determination as to current market price is based on prices paid to private vendors for the same product. Prices can vary by supplier based on the volume and actual cost to produce.
Price is negotiated if the contracting officer believes the price is too high.
Thus the process of arriving at current market prices is undertaken jointly with the customer. When a previous buy was made for the same or comparable product, the previous price, adjusted for inflation, may be used to establish a current market price. This situation occurs most often with national stock number specification items such as many of the cables and wire harnesses manufactured for the Department of Defense for which FPI has been the only producer in recent years. Cost-based pricing for FPI products must include the recovery of risks associated with the nature of the specific product or service. In services, such as in printing, FPI may bid competitively to secure work.