The point of a cost realism analysis is to determine the most probable cost of contract performance, as well as to determine the vendor's understanding of the work, and the vendor's ability to perform.
Most probable cost determined by the cost realism analysis is used to make the selection decision.
The evaluators used the independent government cost estimate in those instances where the BAFO costs were determined to be insufficient or excessive. These analyses were combined to arrive at the MPC for each offer. The evaluators then involved the technical and management teams to evaluate the uncertainty of each CLIN based on knowledge, experience, and current data available for each technology proposed. As a result of shifting this risk, when offerors propose such caps, and no other issue calls into question the effectiveness of the cap, upward adjustments to capped costs are improper. Neither GAO nor an agency may assume that an offeror will propose a cap in order to obtain an award, and then, after award, pursue a bad faith attempt to shift incurred costs from a capped indirect cost account to some other cost account so as to circumvent the cap and increase recoverability.