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Cost & Price Realism: Practical Price and Cost Analysis
October 25, 2017 @ 9:00 am - October 26, 2017 @ 4:00 pm$995
Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether 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
Cost realism analysis is performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror. Cost (price) realism may also be performed on competitive fixed-price incentive contracts or other competitive fixed-price-type contracts. As a US Government acquisition official, it is important that your cost realism be performed and properly documented to demonstrate that the analysis is reasonably based and not arbitrary. Failure to do so can result in higher than expected costs, increased performance risk, and successful bid protest by an offeror not receiving the award. As an offeror, it is important that your technical proposals reflect a clear understanding of requirements, your cost proposal reflects the resources and methodology described in your proposed solution, and any realism issues expressed by proposal evaluators be appropriately addressed. This course melds cost and price analysis approaches with cost realism requirements, addressing both the differences and similarities of tools, method, and techniques along with numerous examples from actual GAO bid protest cases to understand “the Do’s and the Don’ts” for demonstrating that the determination of realistic probable cost is reasonably based and not arbitrary.
Regulatory environment and background
- Cost analysis, price analysis, and cost realism requirements, definitions, and comparisons
- Basic GAO-established cost realism axioms
- Requesting technical evaluations and reviewing technical reports
- Cost realism “Dos and Don’t’s” per GAO case examplesCost and price analysis quantitative methods
Direct material and subcontract costs
- Analyzing proposed material types, quantities, and prices
- Cost realism “Dos and Don’t’s” per GAO case examplesDirect labor costs
- Analyzing proposed labor categories, hours, and salary and wage rates
- Cost realism “Dos and Don’t’s” per GAO case examplesOther direct costs
- Analyzing other direct costs
- Cost realism “Dos and Don’t’s” per GAO case examplesIndirect rates and factors
- Analyzing indirect rates and factors
- Cost realism “Dos and Don’t’s” per GAO case examplesFixed price contracts
- Price analysis requirements
- Price analysis techniques
- Price realism “Dos and Don’t’s” per GAO case examples
Continuing Education Credits
11 CLE/ 13 CPE (Finance) credits may be earned for this course. This course is recommended for 16 CLP credits.
This course has been approved for CLE in CA, PA, VA and TX. Because this activity has been approved in another CLE jurisdiction, you may also receive credit for participation in AK, AZ, AR, CO, FL, HI, IL, ME, MT, NJ, NY, ND, and WI (additional state requirements may apply). If you are seeking CLE credits for a jurisdiction other than the ones listed above, please contact us for additional information.
This course can be submitted to Project Management Institute (PMI) for PDU. Upon their approval, it may be worth 11 PDU credits.
The Public Contracting Institute is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.