c. Cost/Price Risk Factor
The Government will evaluate cost/price risk using the Cost/Price Risk ratings defined at AFFARS Mandatory Procedures (MP) 5315.305, paragraph 5.5.4, Table 4, excerpted below. The purpose of this risk rating is to provide information to the SSA that permits selection of an offeror who has proposed a rational and realistic cost or price for the work to be accomplished and to lessen the potential for cost growth due to overly optimistic or unrealistic cost or price proposals. The Cost/Price Risk evaluation assesses the degree to which an offeror's cost or price proposal for the following contract line items and evaluated options, which will be included in the awarded contract, compares with the Government's estimated Most Probable Cost (MPC) for the same items. An offeror submitting costs or prices based upon unrealistic or overly optimistic development outcomes may not be selected for award.
TABLE 4 - COST/PRICE RISK RATINGS | |
Rating | Description |
Low | Little difference exists between the offeror's proposed cost/price and the Government's best estimate of the offeror's most probable cost. Cost growth and/or other anomalies related to cost/price are unlikely to occur and any potential impact is manageable. |
Moderate | Some difference exists between the offeror's proposed cost/price and the Government's best estimate of the offeror's most probable cost. Cost growth and/or other anomalies related to cost/price may occur and the potential impact may require special attention. |
High | Significant difference exists between the offeror's proposed cost/price and the Government's best estimate of the offeror's most probable cost. Cost growth and/or other anomalies related to cost/price is likely to occur and the impact may be unmanageable. |