SpendLogic works with government primes and subs to unlock organizational savings and fix procurement compliance issues. Our software solves the top three CPSR findings: Price Analysis, Commercial Item Determinations, and Source Justifications. In this video, we will show you how to use SpendLogic to create a price analysis using parametric, or “yardstick” analysis techniques that will pass audit every time.


Hi, I’m Patrick Mathern, founder of SpendLogic. We work with government primes and subs to unlock organizational savings and fixed procurement compliance issues. In this short video tutorial, I’m going to show you how to use SpendLogic to create a FAR-compliant price analysis report that relies on yardstick or parametric estimating techniques. Let’s get started.

To start a new price analysis from any screen in SpendLogic, click the New Report button at the top of the screen and click Price Analysis. You’ll see that you have two tabs on this screen. You won’t be able to advance to the Parts tab until a Procurement tab has been completed. Work through each of the elements on this screen, making sure to answer each question.

And when you’ve reached the bottom, click Next. You’ve now arrived at the Parts screen. At this point, you can choose to either add parts or service. In this tutorial, we’ll cover parts. For services, also known as rates and factors, check out the services tutorial at spendlogic.com/help. Click the Add Part button to add your first part.

Start entering the part number you’re analyzing. You’ll notice that a list of matching part numbers appears. You can either choose from this list or scroll to the bottom and add a new part. Once you choose a part, the description is filled in for you. Enter the quantity of parts that you’re analyzing and click Add. Your Parts page, now shows a line item for the part that you just added. At this point, you have two actions available, edit and delete.

When you complete this line item, you’ll also have the ability to download and copy this report. If you need to add additional parts, follow the same process by clicking Add Parts again. Do this for each part you intend to include in this PO. You can always return to this tab and add additional parts later. Click the edit pencil on the line that you just created. This brings you to the next tab, which has been renamed to match the part you’re currently editing.

When you’re working on a PO with multiple parts, this is an easy way to keep track of which part it is that you’re working on. SpendLogic first checks to see if there are reports in the system available for you to repurpose. This screen shows all the available reports. Review the list and if you see one that can be updated and repurposed, copy it by choosing the select button. Doing this can save a lot of time since it reuses data that has already been entered.

In this case, we’re going to create a new report from scratch, so click Create a New Report. ♪ [music] ♪ The purpose of the proposed price detail screen is to enter details related to the proposed price. Clicking the input box for current delivery date allows you to type in a date using a month-day-year format.

The date you enter in this box should refer to the midpoint of deliveries. This is used for escalation purposes in a later step. Unit of measure relates to the type of yardstick that you’re using. Common yardsticks are dollars per pound, dollars per foot, or dollars per line of code. I’ll use dollars per foot in this particular example.

Proposed price per unit refers to the price proposed by the supplier. Be sure to enter only the recurring price per unit. Non-recurring is handled separately on the next line. When you’re done with this page, click Next. In order to use the parametric method, it’s required that we show that there’s a standard measure of price out in the marketplace. There are several ways to do this and it’s all done on this screen.

The first is to provide a commodity spot price. This is appropriate for commodities whose pricing is set by the open market. Yardstick prices is appropriate choice if there isn’t necessarily commodities market, but there’s an active commercial marketplace that provides information on dollars per unit. The third option is actuals from a similar internal project.

If your company has collected actuals that aligns with the current effort, then they can be used here. Note that this refers to projects that were completed internally, not projects that were outsourced. Past outsourced projects should be used in historical price analysis, not parametric. Lastly, if you have other methods by which you’ve determined the published price reasonable, you can choose other.

For example purposes, I’ll use the first option, commodity spot pricing. Regardless of which you choose, SpendLogic will require that you will provide a short description of the source used. In the next box, you’re asked to provide an explanation as to why that source can be relied upon. Your objective in answering these questions is to convince an auditor that this data source you’re using will result in an accurate analysis result.

Next, you’re required to upload documentation of the data source. Typically, this will be a screenshot. Towards the bottom of the page, SpendLogic asks some questions about the baseline pricing that’s being described above. In the dollar-per-unit box input what price your source data recommends. For example, if you use commodity spot pricing and the market price is 35 bucks a pound, you would enter $35. If there are non-recurring costs that should be taken into account, you can choose “Yes” in this box and provide the amount in a further explanation.

SpendLogic then asks the quantity for which the market pricing is valid. For example, if your spot price indicates that $35 per pound is valid for up to 5 pounds, you would enter 5. If the market price doesn’t have a limit, just input a number that is larger than the quantity you’re purchasing. The price validity date refers to the date through which the price is valid. For spot pricing, the date would be the date the price is observed.

If you used a catalog or website that shows annual or quarterly prices, enter the latest date in the period of the catalog or website. If there’s a difference in quantity between the prior and current purchases, the next screen you see will be quantity correction. If quantities are equal, this screen is not needed and therefore will not be available to you.

You’ll see in the header that SpendLogic notes whether a price increase or decrease is expected. The basic logic is that if you’re buying more items this time than last time, you should be receiving a discount. If fewer items are being purchased now, then a price increase would be expected. The first item asks whether an adjustment to price due to quantity differences is required. If you have a reason to believe that a price differential should not be required, choose “No” and explain it in the text box.

Typically, an adjustment is required and you’ll be choosing “Yes.” This screen allows you to make adjustments to price based on differences in complexity or market conditions. If the item you’re purchasing is the same as the item purchased previously, choose identical and click Next. Additional information on similar-to purchases can be found in the Historical Analysis tutorial video. This is our risk-check screen.

As with all methods, if you see a lot of red flags on this screen, it means your report is likely to be scrutinized. Try to minimize the number of risk checks that you see. For those that can’t be removed, make sure your explanations are complete. Clicking Next takes us to the final summary. You can either finalize your report or download a copy. Remember, until your report is finalized, it’s subject to changes in the BLS. BLS indices are updated monthly, so your final report values may change.

It’s a best practice to go ahead and finalize your report as soon as you can. This concludes our video. Thanks for watching. If you have any questions on this or any other feature in SpendLogic, visit spendlogic.com/help, or email us at [email protected].

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