Common use of Cost Realism Clause in Contracts

Cost Realism. The Government will conduct a cost realism analysis to determine whether the proposed costs for sample task orders (0001, 0002, and 0004) and ceiling rates included at base level are realistic for the work to be performed and reflect a clear understanding of contract requirements. Analysis will also determine whether the capability of the proposed compensation structure are realistic to obtain and keep suitably qualified personnel and are consistent with the unique methods of performance described in the Offeror’s technical proposal. The base contract(s) and task orders shall contain the Clause FAR 52.217-8 Option to Extend Services, or an equivalent clause. The Government will be evaluating the Clause FAR 52.217-8 Option to Extend Services using the rates for the final period prorated 6 months and this option is being considered with proposal amounts. By submitting a proposal for this requirement, the contractor agrees to this inclusion in the base contract and any/all task orders issued. The Government may determine that an offer is unacceptable if the option costs are significantly unbalanced. Evaluation of options shall not obligate the Government to exercise the option(s).