Signing a Contract

Cost Realism

Course ID


Continuous Learning Points (CLPs)


Course Length

1 Day






"This is a very informative course. Great refresher! Turned a boring topic interesting." – 2019 participant

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This one-day, elective course explains why conducting cost realism analysis is needed and describes the differences between cost and price. This course looks at the elements of a vendor’s price and teaches participants to evaluate those elements to determine whether the costs are appropriate and realistic. This course also addresses the red flags and pitfalls of unrealistically low offers and how to use cost realism to defend against the scrutiny of a protest. Participants will learn the objectives through a combination of facilitated lecture, engaging exercises, and a cost realism review tool. At the conclusion of this course participants will understand the issues and factors to be considered when performing a cost realism analysis.

Learning Objectives

• Understand what is meant by cost realism analysis
• Explain the purpose for conducting a cost realism analysis
• Recognize the circumstances that warrant cost realism analysis
• Understand the role of cost realism in the phases of acquisition
• Given a proposal evaluation scenario, describe techniques of cost realism analysis
• Identify the impact of labor charges such as uncompensated overtime, capped indirect rates, and employee professional compensation norms
• Understand the role of cost realism analysis in source selection decisions
• Access and apply guidance from protest cases based on cost realism analysis