Sec. 306. Alternative capability based pricing
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The head of an agency (as that term is defined in section 3004 of title 10, United States Code) may use alternative capability-based analysis to determine whether the proposed price or fee for a commercial product or commercial service offered by a nontraditional defense contractor (as that term is defined in section 3014 of such title) is fair and reasonable. In this section, the term alternative capability-based analysis means an analysis of the value to the Federal Government of a commercial product or commercial service that considers one or more of the following elements:
The fitness of the product or service for the particular purpose such product or service is being procured. The unique nature of technical expertise required to produce or provide and the non-Federal resources expended to develop such product or service. The business model or financial projections of the nontraditional defense contractor, commensurate with the scale of the potential investment by the Secretary of Defense, which may include cost information, self-funded risk, financial projections, expenditure rates, estimates of total sales market, and other financial, technical, or management data.
The estimated total cost avoidance or increased capacity afforded by the offered product or service in relation to current and future costs of programs and operations that provide the same or similar capabilities. Input from the military user on the potential value added by the improved capabilities or production processes. An analysis of competitive capabilities offered within a fixed budget or price set by the government in a solicitation.