Price realism—the evaluation of whether a proposed price is too low—is a method the government may use to evaluate fixed price offers to ensure that offerors are proposing pricing that reflects an understanding of the work required by the solicitation.

Prices that are unrealistically low can result in proposal elimination. This means price realism is an important consideration when preparing a bid. But what if an agency decides after proposal submission that a price realism evaluation will not be performed? In a recent decision, GAO confirmed that offerors must be given the opportunity to revise their proposals.