FAR 15.407-2 – Make-or-Buy Plans - Made Simple

FAR 15.407-2 is a rule that explains when the government can ask to check a company's records to make sure prices are fair. It helps keep buying costs honest and right.

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FAR 15.407-2 Explained: What It Means for Pricing Rules

FAR 15.407-2 is about fixing mistakes in cost or pricing data. It says if a company gives wrong numbers before a contract is signed, the government can get money back. This keeps deals honest and fair. Think of it like showing your homework—if the math is wrong on purpose, you may have to fix it and lose points. It helps protect taxpayer money in government contracts.

Why FAR 15.407-2 Stops Costly Contract Mistakes

FAR 15.407-2 talks about “make-or-buy” plans. It means a company tells the government if it plans to make parts itself or buy them from others. This helps the government see if the plan saves money, uses time well, and meets contract goals. It’s like choosing between cooking at home or ordering food—you pick what works best. The government wants to know your plan before approving the contract.

Common Mistakes Within the Topic: far-15-407-2

Many people make mistakes with FAR 15.407-2 by not following proper audit steps or forgetting to review the pricing data. One common error is skipping the cost analysis when dealing with defective pricing. Another mistake is not documenting changes when cost data changes after award. These slips can lead to overpayment or contract issues. Always check pricing facts and keep clear records to avoid problems later. Following these steps helps ensure fair pricing and protects both sides in a contract.

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