Cost realism requires that proposed costs:

• A. Are realistic for the work to be performed
• B. All of the above
• C. Are consistent with the offeror's technical proposal
• D. Reflect a clear understanding of the requirements

Answer: (B)

Cost realism means the proposed costs must be believable in relation to the work and the plan to perform it. That means the price should be realistic for the work to be performed, align with how the offeror intends to accomplish the task as described in the technical proposal, and show a clear understanding of what the requirements actually require. When a bid meets all three aspects—realistic execution of the work, consistency with the technical approach, and a proper grasp of the requirements—the overall cost proposal is considered realistic. This ensures the price reflects the scope and plan, reducing the risk that proposed costs are underbid or misaligned with what will be needed to deliver the contract.