Using cost realism to improve the source selection process

Abstract

The source selection decision in a competitively negotiated acquisition is very difficult. Cost realism is one evaluation factor that may be used to assist in making the source selection decision. In this study the concept of cost realism and feasible methodologies for achieving it are investigated. The role of cost realism in the source selection plan and the source selection process is identified and defined. Specific cost realism issues are reviewed and discussed. Cost realism utilization in the Department of the Navy is investigated. The study concludes that cost realism provides useful assistance in making the source selection decision.