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  • Question

    What regulation or requirement mandates that cost realism be preformed on offerors who are not inline for award. It seems to be a lot of unecessary work.


    Answer

    The governing regulation is FAR 15.404-1(d)(2). It states "Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror." (There is no such mandate for fixed-price contracts.)

    Company A may have the lowest price and highest technically-rated proposal, but that low price may not provide sufficient funding for the offeror to actually perform the work as they described in their proposal.

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