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Page 30 of 52 200.323 Contract cost and puce. (a) The non -Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non -Federal entity must make independent estimates before receiving bids or proposals. (b) The non -Federal entity must negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk home by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. (c) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for the non -Federal entity under Subpart E—Cost Principles of this part. The non -Federal entity may reference its own cost principles that comply with the Federal cost principles. (d) The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used. 200.324 Federal awarding agency or pass -through entity review. (a) The non -Federal entity must make available, upon request of the Federal awarding agency or pass -through entity, technical specifications on proposed procurements where the Federal awarding agency or pass -through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the non -Federal entity desires to have the review accomplished after a solicitation has been developed, the Federal awarding agency or pass -through entity may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. (b) The non -Federal entity must make available upon request, for the Federal awarding agency or pass -through entity pre -procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, when: (1) The non -Federal entity's procurement procedures or operation fails to comply with the procurement standards in this part; Agreement No. R18AP00081 Agreement Template 20 D-34 `03/2019)