Signing a Contract

Cost and Price Realism

Course ID


Continuous Learning Points (CLPs)


Course Length

2 Days






"I enjoyed the course because I learned new things from the needed information being placed in an interactive way." – 2019 participant

To order this class, call or email us at:


This two-day, elective course dives into what is cost and price realism, who performs it, and why it is important. The contracting officer holds the responsibility of evaluating the reasonableness of the offered price. There are two basic approaches which may be used to determine whether the contract price is fair and reasonable for the work being performed: price analysis and cost analysis. In addition to these two approaches, there are other forms of analysis referred to as cost realism analysis and technical analysis, which may be used to determine which offeror will provide the best value to the government considering both quality and price. Participants will learn the steps for cost and price realism and how to apply them to their projects, as well as touch on negotiation techniques.

Learning Objectives

• Identify the fundamentals of cost analysis, cost analysis techniques, and factors to consider when conducting cost analysis
• Distinguish between price analysis, cost analysis, and cost realism analysis
• Apply the steps in cost realism analysis and what to do in cases of uncompensated overtime, flexibly priced contracts, and evaluating offers on other contracts
• Apply the steps to prepare for an audit
• Analyze direct labor, direct materials, and other direct and indirect costs
• Use cost analysis to apply successful negotiation techniques on behalf of the government