Historical Prices

Historical Prices

 

Price analysis may be conducted by comparing a proposed price with historical quotes or prices for the same or a similar item. It is essential to determine that the base price was fair and reasonable and is still a valid standard against which to measure the offered price. The fact that a historical price exists does not automatically make it a valid basis for comparison. Several issues must be considered:

 

  • ·        How have conditions changed?
  • ·        Were there one-time engineering, setup, or tooling charges in the original price?
  • ·        What should be the effect of inflation or deflation on the price?
  • ·        Will the new procurement create a situation in which the supplier should enjoy the benefits of learning?