[Code of Federal Regulations]
[Title 48, Volume 7]
[Revised as of October 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR5215.402]

[Page 209]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
       CHAPTER 52--DEPARTMENT OF THE NAVY ACQUISITION REGULATIONS
 
PART 5215--CONTRACTING BY NEGOTIATION--Table of Contents
 
  Subpart 5215.4--Solicitation and Receipt of Proposals and Quotations
 
Sec. 5215.402  General.


    (a) Competition is the cornerstone of Navy acquisition policy. As 
such, the preferred and predominant method of pricing in the Navy is 
through the use of competition, without the need for cost or pricing 
data and cost analysis. The Navy has found that not only does 
competition generate more favorable prices, but significant time and 
effort can be saved by relying on the forces of competition to establish 
prices, as opposed to the use of detailed cost analysis. This approach 
is not only consistent with the Competition in Contracting Act (CICA), 
but it affords the opportunity for significant efficiencies and 
reduction of procurement leadtime as a result of minimizing the 
requirement for cost or pricing data and associated audit reports. As 
competition is increasingly relied upon and the need for cost or pricing 
data is reduced, there may be a corresponding requirement for performing 
a cost realism evaluation for many competitive procurements to guard 
against unrealistically low prices which can lead to quality 
deficiencies, late deliveries, performance shortfalls, and cost 
overruns. In performing cost realism evaluation, only the minimum 
selected data to perform the cost realism evaluation is to be obtained, 
as opposed to full cost or pricing data which would be required when it 
is necessary to perform cost-based negotiations, such as in the case of 
sole source negotiations.