Materials, supplies, and services that are sold or transferred between any divisions, subdivisions, subsidiaries, or affiliates under common control must be made on the basis of cost incurred with one exception; transfers may be made at price when it is the established practice when it is the established practice of the transferring organization to price inter-organizational transfers at other than cost for commercial work and the price of the item being transferred is based on adequate price competition, is set by law or regulation, is a commercial item, or a waiver has been granted. Additionally, the contracting officer cannot have already determined the price to be unreasonable (see FAR 31.205-26(e)).
Source: PNWC’s Government Contracting Update: Inter-divisional Transfers at Price
