What are the general rules for setting contract prices?

Contract prices are the prices that are set and agreed upon when two or more parties (the government and a contractor) enter into an agreement. Generally, the rules for setting contract prices in Washington are the same as in other jurisdictions. First, the two parties must agree on the scope of the contract and the services or goods to be provided. This sets the foundation for the terms of the agreement and the price of the contract. Then, consideration must be given to the cost of the labor, materials, and other resources that the contractor will need to fulfill the contract. If a cost is too low, the contractor will not make a profit from the contract and may not be willing to accept it. Next, the government will typically determine a fair-market value or fair-price for the goods or services to be provided. This will become the foundation of the contract price. The contractor may negotiate the price and conditions with the government if they believe the price is too high. Finally, all contracts must be authorized and signed by both parties. This is to ensure that the terms of the agreement are legally binding and that the contractor will be paid what they are owed. In summary, the general rules for setting contract prices involve both parties agreeing on a scope of work, a consideration of costs, setting the fair-market value, and then signing and authorizing the contract.

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What are the general rules for setting contract prices?

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