Avoiding Cost and Price Analysis Pitfalls in Source Selection

Thursday, September 15, 2016 12:00pm - 1:30pm EDT  
Host: NCMA

In recent years, a significant number of sustained bid protests have concerned cost or price realism analysis problems. We’ll discuss key lessons learned from these protests, and how procurement officers and contractors can avoid these same pitfalls. Topics will include:

  • What magic words in a fixed-price RFP require/permit the agency to conduct a price realism analysis,
  • When it’s inappropriate to use government estimates and other proposals to conduct a price/cost realism analysis,
  • When cost realism adjustments are appropriate and inappropriate,
  • Pitfalls in establishing the realism of proposed exempt labor wage rates, and
  • Limits on using the results of a price/cost realism analysis in the source selection decision.

Learning Objectives:

  • The language in a fixed-price RFP requires/permits the agency to conduct a price realism analysis.
  • When it’s appropriate and inappropriate for an agency to make upward and downward cost realism adjustments to cost proposals.
  • The limits on using the government estimate and other cost/price proposals to conduct a cost/price realism analysis.
  • Special rules applicable to cost/price realism analysis on labor.  

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