Section 217.7505 - Limitations on price increasesThis section provides implementing guidance for section 1215 of Public Law 98-94 (10 U.S.C. 2452 note).
(a) The contracting officer shall not award, on a sole source basis, a contract for any centrally managed replenishment part when the price of the part has increased by 25 percent or more over the most recent 12-month period.(1) Before computing the percentage difference between the current price and the prior price, adjust for quantity, escalation, and other factors necessary to achieve comparability.(2) Departments and agencies may specify an alternate percentage or percentages for contracts at or below the simplified acquisition threshold.(b) The contracting officer may award a contract for a part, the price of which exceeds the limitation in paragraph (a) of this section, if the contracting officer certifies in writing to the head of the contracting activity before award that- (1) The contracting officer has evaluated the price of the part and concluded that the price increase is fair and reasonable; or(2) The national security interests of the United States require purchase of the part despite the price increase.(c) The fact that a particular price has not exceeded the limitation in paragraph (a) of this section does not relieve the contracting officer of the responsibility for obtaining a fair and reasonable price.(d) Contracting officers may include a provision in sole source solicitations requiring that the offeror supply with its proposal, price and quantity data on any government orders for the replenishment part issued within the most recent 12 months.56 FR 36345, July 31, 1991, as amended at 64 FR 2598, Jan. 15, 1999. Redesignated at 71 FR 27643 , May 12, 2006