Price Challenge Process

These days, everyone is looking at prices. “Cost-effective,” “cost-cutting,” and “cost-avoidance” are everyday buzzwords. Questions periodically arise concerning the FAA Logistics Center’s prices. Known as “price challenges,” these inquiries are handled as a normal Customer Service Action (CSA) through our Customer Care Center.

Concerned customers call customer care representatives whenever there is a question about the price of a NAS asset. A price is questioned when the item has significantly gone up in price since the last purchase, a perceived lack of value exists, or the customer has found a similar item for less cost somewhere else—like on the Internet.

Once a customer contacts the Customer Care Center (CCC):

A Customer Service Action (CSA) is completed.

A Process Deficiency Report (PDR) is completed to record customer information, the NSN in question, and details concerning the price challenge.

This price challenge is then forwarded to the Business Systems Group (BSG) to begin researching and responding to the customer concern.

The BSG representative contacts the Inventory Manager in the respective product division to research the nature of the concern. In a situation where a pricing error is discovered, it is corrected as quickly as possible.

Form, fit, and configuration issues are often more complex than they first appear. Many times a proposed less-expensive alternative part or pricing discrepancy issue has larger ramifications for the NAS than may be apparent by a mere form, fit, and function comparison.

One example of a recent pricing discrepancy issue worked by the Logistics Center involved a part typically installed at the end of the runway. The FAA-approved part used in this particular application had been stress tested, wind tested, and vibration tested for jet blast and use in the NAS. A less-expensive substitute part that appeared to be identical in form, fit, and function proved, upon further analysis, to have a strong possibility of experiencing substantially more outages and maintenance problems than the FAA-approved part if used in the same application. Additionally, when looking at the overall use of the devices, the cost of performing the extensive testing to prove-in the less-expensive part far outweighed any possible cost advantages.

There are many aspects of the overall financial business case taken into consideration when evaluating and getting approval for use of alternate parts in the NAS. The overall historical use, replacement quantities, price paid, contract terms and conditions, and quantity of devices already on-hand all factor into the decisions. Sometimes the last procurement price paid is higher than the currently available industry price, so price reductions cannot be assigned until existing stock is depleted. Additionally, if a low-use rate of an asset exists, NAS-required testing, such as stress testing, wind testing, and vibration testing, might not be cost effective, impacting the overall financial considerations as well.

The Logistics Center appreciates all pricing inquiries and recommendations to look at less-expensive alternatives. There is substantial knowledge through the field technicians and others in the FAA of alternative parts that may result in a cost savings after proper evaluation is conducted. We encourage anyone who might have a question or suggestion to use our on-line pricing discrepancy database to report these items as described in the above process.

The FAA Logistics Center point of contact for customer service actions is the Customer Care Center at 405-954-3793, or 1-888-322-9824, e-mail 9-AMC-PRICE-CHALLENGE@faa.gov. You may also call Leola Rhodes, Operations Support Branch, AML-23, at 405-954-5617, or e-mail leola.r.rhodes@faa.gov if the action is in reference to an outstanding price challenge. A new Web site has been developed specifically for price challenges. The Web site address is http://aml000d14.amc.faa.gov/impart/priceform.jsp.