2-34.3 Comparison with Historical Prices This price analysis technique involves comparing previously proposed and contract prices with current proposed prices for the same⁄similar items in comparable quantities. The pricing analyst should ensure that historical prices are still reasonable in the marketplace and serve as a valid basis for comparison. Just because a historical price exists does not mean that it is valid for comparison purposes. The following considerations apply to comparison with historical prices: How has the state of the market and competition changed? What are the fixed costs of the original prices that may no longer apply to the current purchase? How has inflation and⁄or deflation affected the price? Have the supplier’s sources, quantities, production, start-up costs, or terms of purchase changed? What was the market demand⁄supply for the item⁄service at the time of previous purchase? Is the commercial item used for comparison similar? Was the historic purchase conducted as noncompetitive or competitive? Did the price include additional services? The pricing analyst must adjust the historical price accordingly so that a direct comparison can be made with the proposed price.