To determine whether the price of a commercial item is fair and reasonable, what must a contracting officer use?

The correct approach for a contracting officer to determine whether the price of a commercial item is fair and reasonable is through price analysis. Price analysis involves the evaluation of price data without dissecting the individual cost elements of the offeror's proposal. It utilizes a variety of techniques and data sources, such as historical prices, market conditions, competitive offers, and other benchmarks to assess the reasonableness of the proposed price.

Price analysis is particularly valuable in the context of commercial item acquisitions because it allows for a quick assessment, aligning with the streamlined approach often preferred for these types of purchases. This method is effective in ensuring that the price paid is consistent with what is generally available in the market for similar commercial goods and services.

While cost analysis delves into the actual costs incurred by the contractor, which may not always be necessary for commercial items, price negotiation focuses more on the discussion and bargaining process between the contracting parties. Market comparison could be part of the price analysis but does not encompass the full range of techniques utilized by contracting officers when assessing price fairness and reasonableness. Thus, price analysis is the most appropriate and efficient method for determining price reasonableness in this context.