Content
Pricing - NAPNOC
This page is an extract from the full topic guidance on Pricing – No Acceptable Price, No Contract (NAPNOC) [44KB PDF]. It details any Constraints associated with Pricing - NAPNOC, provides a summary of the Authoritative Guidance and lists any essential reading, further reading or associated documents.
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None.
The policy of 'No Acceptable Price, No Contract' (NAPNOC) seeks to
replicate in the non-competitive environment some of the competitive pressures of the
market place, where prices are agreed before contracts are placed.
NAPNOC is to be applied in all non-competitive procurements,
including requirements valued at less than 1M (one million pounds sterling). Any exceptions must be fully justified in
the submission seeking approval.
An acceptable price in the context of the NAPNOC initiative means
a FIRM, FIXED or Maximum Price (the latter employed as part of a Target Cost Incentive Fee
arrangement) that is agreed before the contract is placed.
The rate of profit in NAPNOC contracts should be based upon the
Government Profit Formula unless contractors are able to substantiate a case for a higher
rate of profit.
The Invitation to Tender (ITT) for NAPNOC contracts must
include the following DEFCONs:
- DEFCON 648/648A (Availability of Information)
- DEFCON 650/650A (Reference To The Review Board Of Questions Arising Under The Contract)
- DEFCON 651/651A (Reference To The Review Board of Questions Arising In Relation To Relevant Subcontracts Including Those With A Subsidiary Company Or Firm) and
- DEFCON 643 (Price Fixing)
NAPNOC prices should be agreed by reference to the principles
incorporated in the Government Profit Formula Agreement (1968) including Equality of
Information (E of I) - now carried forward in the 2003 Profit Formula Agreement. This is achieved by agreement and signature of the E of I Pricing
Statement before contract award.
Essential Reading
Pricing - Equality Of Information topic
Pricing - Price Fixing DEFCON 643 topic
Pricing - Team Approach topic
Pricing - Government Profit Formula topic
Pricing - Post Costing topic
Further Reading
Pricing - CAAS Estimates topic
Pricing - Target Cost Incentive Fee (TCIF) topic
Overseas Procurement topic
National Audit Report into Non-competitive Procurement in the MOD
Public Accounts Committee report (29th Report of Sessions 2001-02, HC 370)
