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Price Narrative / Basis of Estimate
Justify labor mix and hours so realism review doesn't kill you
What wins points
Clear, FAR‑compliant price justification shows realistic labor mix and rates, satisfying FAR 52.212‑1 (f) and supporting reasonableness under FAR 15.305.
What gets bids disqualified
Missing or incomplete labor‑hour breakdown can violate FAR 52.212‑1 (f), exceed page limits, or trigger rejection for non‑compliant pricing.
Evaluator's view
Provide a concise table of work elements, hours, rates and totals; reference FAR 52.212‑1 (f) and FAR 15.305 so evaluators can quickly verify price reasonableness.
Price Narrative / Basis of Estimate
What this is
A brief description explaining that the price narrative justifies the labor mix and hours used in the estimate to satisfy realism review.
When you need it
Required for negotiated procurements, simplified acquisitions, commercial purchases, and any solicitation where a realistic cost/price justification is evaluated (Section L compliance).
How to fill it in
- List each major work element or CLIN.
- Provide the estimated labor hours for each role.
- Multiply hours by the applicable hourly rates (from your pricing schedule) to get labor cost.
- Add materials, travel, and other direct costs.
- Include any fee or profit as allowed by the contract type.
- Reference the solicitation’s price analysis requirements (e.g., FAR 52.212-1 (f), FAR 15.305).
Template
[WORK ELEMENT] – [ROLE]: [HOURS] hrs @ $[RATE]/hr = $[COST] Materials: $[MATERIAL_COST] Travel: $[TRAVEL_COST] Other Direct Costs: $[OTHER_COST] Subtotal: $[SUBTOTAL] Fee/Profit (if allowed): $[FEE] Total Price: $[TOTAL]
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