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The PNM

The PNM. Objectives. What is it? Why do it? Who reads it? How do you do it?. What Is It?. It explains and justifies why the negotiated price is fair and reasonable. It’s the record of the entire negotiation process for your acquisition.

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The PNM

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  1. The PNM

  2. Objectives • What is it? • Why do it? • Who reads it? • How do you do it?

  3. What Is It? • It explains and justifies why the negotiated price is fair and reasonable. • It’s the record of the entire negotiation process for your acquisition. • It’s the document in the contract file that describes the principal elements of the negotiation agreement as required by FAR 15.406-3(a).

  4. Types of Documentation • Price Negotiation Memorandum (PNM). • Sole source or single source competition that is not considered competition i.e. becomes sole source • Preliminary PNM • Final PNM • Price Competition Memorandum (PCM). • Adequate price competition • Specialized PNM Format. • Use between micro-purchase and simplified acquisition procedures thresholds • May be used between simplified acquisition procedures and the TINA thresholds and for commercial acquisitions less than $5M

  5. Why Do It? • It’s required by FAR 15.406-3 • It’s the record of the entire negotiation process for your acquisition which other people will read to find out what you did. • It identifies contractor data that were or were not relied upon by the Government. • It is a permanent file record.

  6. Who Reads It? • Contracting Officer/Management • Administrative Contracting Officer • DCAA • IG/GAO/AF Audit • Attorneys (Government & Contractor) • Follow-on Contract Negotiators, PCOs, Price Analysts • Terminating Contracting Officer • Congressional Staffers

  7. How Do You Do It? • You use the “HQ AFMC Price Negotiation Memorandum Checklist” to determine what is applicable to your acquisition.

  8. PNM Tips • Don’t have a page with signatures and nothing else • Be concise – just say what happened • Use the AFMC PNM Guide • Get a pricer (>$10M - they write the PNM) • Write a Pre-PNM if you have the time • Write the PNM as you go • Use a good sample (like the handout)

  9. PNM Tips • Cut & Paste/ Overwrite a good sample/ previous PNM, BUT be careful when you do this (don’t leave in wrong names, data, etc.) • Separate options from basic in your write up • Separate debits and credits in your write up • Prepare separate WGLs for basic and each option • Attachments can reduce clutter in PNM • Use boilerplate where applicable/appropriate

  10. References • FAR 15.406-3 PNM Documentation • FAR 15.406-2 Certification • FAR 15.407-1 Defective Cost/Price Data • AFMC Guide to Writing a Good PNM • Go to Pricing Community of Practice • https://afkm.wpafb.af.mil/ASPs/CoP/OpenCoP.asp?Filter=OO-PK-MC-11 • Open Documentation Folder • Open PNM/PCM Guide - AFMC

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