Editing Cost accounting (section)

==Government procurement==
The United States' [[Government procurement in the United States|federal procurement]] rules (the [[Federal Acquisition Regulation]], FAR) require government [[Contracting Officer]]s [[Negotiation|negotiating]] contract prices to verify that suppliers' cost submissions are in accordance with the government's contract cost principles and procedures and, in certain cases, the requirements and procedures of the federal [[Cost Accounting Standards]].<ref name=fed15.4>Federal Acquisition Regulation, [https://www.acquisition.gov/far/subpart-15.4 Subpart 15.4 - Contract Pricing], accessed 30 March 2023</ref> Relevant cost data or pricing data may be required from the supplier, in order to undertake a "cost realism analysis", also known as a "price realism analysis".<ref name=gao>Government Accountability Office, [https://www.gao.gov/assets/b-411853.2%2Cb-411853.3%2Cb-411853.4.pdf Decision: Matter of DKW Communications, Inc.], file B-411853.2; B-411853.3; B-411853.4, published 8 January 2016, accessed 30 March 2023</ref> FAR defines a cost realism analysis as {{quote|The process of independently reviewing and evaluating specific elements of each offeror's proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror's technical proposal.<ref name=fed15.4 />}} Similarly, where a government agency requests a fixed price submission, provision may be made for a cost or price realism analysis to take place during the evaluation process.<ref name=gao />