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Price Reasonableness Analysis

Price Reasonableness Analysis: A Bid Evaluation Stage in Public and Project Procurement

Aaron K.D. Cholopray 2 Comments

Price analysis can be considered a stage of bid evaluation depending on the provisions of a legal and regulatory framework. It is an assessment of the evaluated price of a responsive bid to ascertain that it is not unreasonably high nor unreasonably low, but fair enough to the procuring entity and the supplier. In the Millennium Challenge Corporation (MCC) Program Procurement Guidelines (PPG) and the accompanying MCC Procurement Guidance Note: Price-Reasonableness Analysis (MCC-PGN-PRA) used by Millennium Challenge Accounts (MCAs) around the world, price analysis is a mandatory requirement during bid evaluation. After bid evaluation, the Procurement Agent does a price reasonableness analysis to determine if the price is reasonable. The price reasonableness analysis may be included in the evaluation report or documented separately and referenced in the evaluation report. The unreasonableness of an evaluated bid price could be described as unreasonably high or unreasonably low. If the price reasonableness analysis proves that the price of the lowest evaluated bid is unreasonable, the bid is rejected.

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Filed Under: Bid Evaluation, Price Reasonableness Analysis

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