PGI 204.7603: Procedures.

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-The contracting officer shall consider price risk and supplier risk, if available in SPRS, as a part of the award decision. For procurement of an end product identified by a material identifier that is available as described at 204.7603, the contracting officer shall also consider assessments of item risk, if available, as a part of the award decision. Offerors or quoters without a risk assessment in SPRS shall not be considered favorably or unfavorably. Contracting officers shall use their discretion in considering the information available in SPRS on item risk, price risk, and supplier risk as follows:
+The Supplier Performance Risk System (SPRS) provides item risk, price risk, and supplier risk assessment on end products and price risk and supplier risk assessment on services. SPRS provides item and price risk for end products using the material identifiers listed in paragraphs (a)(1)(i) through (v). SPRS also provides a supplier risk score for the contractor that provided the product or services. The contracting officer may consider item risk, price risk, and supplier risk assessments to determine the performance risk of the offeror or product and to assess the risk of ongoing contractor performance.
 (a) Item risk.
-(1) Consider item risk to determine whether the procurement of products represents a high performance risk to the Government. If an item has a high risk rating, then the SPRS item risk report will display the reason(s) an item is identified as high risk.
-(2) Before issuing a solicitation for the procurement of an end product identified by a material identifier that is available as described at 204.7603, the contracting officer shall ensure a SPRS item risk search has been performed and shall consider any item risk warnings provided. When evaluating quotations or offers for an end product identified by a material identifier, a SPRS item risk search is required for any end product that did not have an item risk search performed prior to solicitation. If there are item risk warnings, the contracting officer shall consider strategies to mitigate risk, such as the following:
-(i) Consulting with the program office.
-(ii) Including mitigating requirements in the statement of work, as provided by the requiring activity.
-(iii) Including FAR and DFARS clauses identified in the SPRS application, as appropriate.
-(b) Price risk.
-(1) When procuring a service or an end product identified by a material identifier that is available as described at 204.7603, the contracting officer shall consider price risk assessment in determining if a proposed price is consistent with historical prices paid for an item or otherwise creates a risk to the Government. Contracting officers shall not rely solely on the price risk assessment when determining prices to be fair and reasonable.
-(2) The contracting officer shall consider strategies to mitigate price risk, such as the following:
-(i) Not awarding to offerors or quoters with high risk price ratings unless there is a way to justify the price through additional price or cost analysis.
-(ii) Utilizing appropriate price negotiation techniques and procedures.
-(iii) Using price reasonableness or price realism techniques at FAR 13.106 or 15.4. See also 215.403-3 when making award decisions.
-(c) Supplier risk. The contracting officer shall consider supplier risk, to assess the risk of unsuccessful performance and supply chain risk, in award decisions. Supplier risk assessments in SPRS include quality, delivery, and other contractor performance information.+
+(1) SPRS provides the contracting officer warnings and mitigation strategies for end products identified by military departments or defense agencies as high risk (due to diminishing manufacturing sources and material shortages, history of counterfeiting, etc.). End products are identified by one or more of the following material identifiers:
+(i) National Stock Number (NSN).
+(ii) Internet Blog Serial Number (IBSN).
+(iii) Universal Product Code (UPC).
+(iv) Global Standards 1 (GS1).
+(v) Manufacturer Commercial and Government Entity (CAGE) and part number.
+(2) Presolicitation. For items identified as high risk in SPRS or by the requiring activity in purchase requests, the contracting officer shall mitigate this risk by including a clause that addresses first article approval or certificate of conformance in the solicitation or by applying other risk mitigation strategies.
+(b) Price risk. SPRS provides the contracting officer warning of possible over- or under-payment risks based on historical purchase data.
+(c) Supplier risk. SPRS provides the contracting officer a score for the assessment of the contractor's performance. The supplier risk score includes data associated with the contractor's quality and delivery data.
+(d) Evaluation of quotations or offers for supplies. During the evaluation of the offers received for supplies or services that contain supplies, the contracting officer shall consider the risk assessments available in SPRS.
+(e) Award and documentation.
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+(1) In determining a price fair and reasonable, the contracting officer shall review the price risk data provided in SPRS and follow the procedures at FAR 13.106 or 15.4 to make an award decision. In the event that price risk has been identified, the contracting officer shall perform further price analysis.
+(2) In assessing offeror performance capabilities, the contracting officer shall review the supplier risk data provided in SPRS and tailor the contract oversight for risk. Mitigate supplier risk by--
+(i) Including clauses to strengthen oversight (e.g., a clause that addresses first article testing or certificate of conformance); and
+(ii) Removing discretionary clauses to recognize successful performance (e.g., a clause that addresses first article testing).
+(3) The contracting officer shall document the contract file on any action taken as a result of information obtained from SPRS.