The Federal Government negotiates formal contractual agreements each year with its major suppliers. These GSA agreements list terms and conditions of sale and current sales prices for direct purchase by the government. Prices Set by Law or Regulation. When a subcontractor's price is set by law or regulation, the University need only obtain a memo from the subcontractor identifying the regulatory authority and stating that the price quoted is not in excess of that permitted by law or regulation. Government Assist Audit.
Subcontractors sometimes prefer to keep cost and pricing data confidential.
When an assist audit is requested, the DCAA will review the vendor's labor rates, overhead, etc. to determine acceptability. It remains the University's responsibility to evaluate and justify the reasonableness of the vendor's proposal or negotiate a subcontract that the University considers to be fair and reasonable. For example, if the University agrees the number of labor hours proposed are reasonable and the DCAA advises that the hourly rates are acceptable, the fairness and reasonableness of vendor's proposed labor charges is substantiated. Emphasis is on the need and reasonableness of the charge.