Several actions identified in Table 2-2 can be performed with greater accuracy by utilizing cost models. Automated cost models help verify that proposal calculations are correct because the traceability and computation of costs from back-up data to summary levels are quickly and easily verified. Once the proposal is validated, significant analysis can begin. Proposals should be analyzed in accordance with the Cost Evaluation Plan and Section M of the screening information request. Further, in a competitive procurement, proposal analysis may include determining the cost drivers and cost discriminators.
Cost analysis includes reviewing and evaluating each cost element and proposed profit.
Cost analysis is the more detailed method of evaluation, whereas price analysis consists of a higher level of analysis, examining the proposed price without specific focus on the separate cost elements and proposed profit. Methods of conducting price analysis are discussed in Part II of this handbook, and methods of analyzing specific cost elements are discussed in Part III of this handbook. If found to be unreasonable or unrealistic, the analyst determines what adjustments should be made to arrive at a reasonable and realistic price. The second scenario is an unbalanced offer. If the offer is materially unbalanced, then the analyst should review it .