Under noncompetitive contract awards exceeding $100,000 and totaling $50 million or more per year, agencies shall use a structured approach for determining the profit objective, may prescribe exemptions, and may also use another agency's structured approach.

Under noncompetitive contract awards exceeding $100,000 and totaling $50 million or more per year, agencies shall use a structured approach for determining the profit objective, may prescribe exemptions, and may also use another agency's structured approach.

• A. Shall use a structured approach for determining the profit objective in those cost analysis acquisitions, may prescribe exemptions, and agencies may also use another agency's structured approach
• B. Must always rely on the lowest possible price
• C. Cannot use another agency's structured approach
• D. Is optional for noncompetitive awards

Answer: (A)

For noncompetitive awards above $100,000 and totaling $50 million or more per year, the contracting agency must apply a structured approach to determine the profit objective during cost analyses. This ensures profit is set using a standardized, defensible method rather than an ad hoc negotiation. The rule also allows agencies to prescribe exemptions in appropriate cases where the structured approach may not fit, and it permits using another agency’s structured approach if it’s suitable for the procurement. This combination ensures consistency, flexibility, and efficiency in establishing profit objectives across large, noncompetitive acquisitions.