XL EaglePrice Realism
Price Realism. Price realism is a check on whether a price is too low to be believable. On fixed-price contracts, it helps the government spot bidders who misunderstood the work or cannot do it at that price.
Agencies can only use price realism if the solicitation says they will. A price found unrealistic can be marked as high risk or lead to rejection.
Why it matters to a small contractor
Cutting price to the bone can backfire when realism is in play. Make sure your numbers cover wage determination rates, fringe and the full scope.
Example
A security guard contract requires 8,760 hours at a wage rate of $22 plus fringe. One bidder offers $160,000 total, below the labor cost alone, and is rated high risk.
Price Realism: common questions
Is price realism the same as cost realism?
No. Price realism applies to fixed-price work and does not change your price. Cost realism applies to cost-type work and adjusts the evaluated cost.
How do I know if price realism applies?
Read the evaluation section of the solicitation. It must say so.
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