Editor’s note: This is the fourth post in a series focused on protest allegations related to cost and price analyses. The first post explained the basic principles of price and cost realism. The second post focused on the adjustments an agency may make during a cost realism analysis. The third post concentrated on the role of comparisons to benchmarks in price analyses. Planned future posts will discuss price reasonableness and recent protest decisions involving cost/price analysis issues.
If you have read the prior posts in this series, you are aware that agencies conduct realism analyses as part of proposal evaluation for cost-reimbursement contracts to ensure that “the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal.” FAR 15.404-1(d). The last element―consistency with an offeror’s proposed technical approach―provides a basis for a protest when a disappointed offeror learns or suspects that an agency failed to consider its technical approach when assessing its proposal for realism. This post describes the facts and rulings in three cases that illustrate the protest issues that can develop from such analyses.