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Chip14

Cost Realism Approach

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For a cost type Level of Effort contract, where best value tradeoff without discussions is anticipated, my command has come up with an approach to perform a cost realism analysis as directed in FAR 15.305(a)(1). In our approach each offeror shall submit a self-assessment that it's generatic internal labor category resources being proposed meet the Government established minimum labor category requirement. The self-assessment consists of the offeror checking a box next to education, technical, and experience requirements of each government labor category asserting that the internal resource category they are proposing meets each requirement.The Government cost and technical evaluators will be required to confirm that the offeror's self assessment for meeting labor category minimum requirements was performed. To conclude its cost realism analysis the Government shall then perform a verification of the associated rates for each offeror's self-assessed labor resource offered and derive the Government evaluated Probable Cost position on the results of these cost realism findings per FAR 15.404-1(d)(2). That Probable Cost position shall then be used for the Best Value tradeoff determination per FAR 15.404-1(d)(2)(i). With the swing to procuring more Services via the LOE methodology I was wondering if others are using this approach or your thoughts about its usage.

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Technical Question: How are you going to verify their rates (e.g. ask for employee pay stubs)?

I believe your question refers to the direct labor rates. They will be verified via DCMA, DCAA, payroll data, or using salary survey data.

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