How to Price a Government Contract Bid Using Past Awards

Step 1: Find the previous contract

Look in the solicitation for phrases such as "successor to contract" or a named incumbent, and read the Q&A, which often discloses the incumbent and sometimes the current price. Search that contract number or the incumbent's name on USASpending.gov to see total obligations, the period of performance and each option year.

Step 2: Compare similar awards

If there is no predecessor, search USASpending.gov for awards with the same NAICS code, a similar scope and the same agency or region. Cap the dollar range near the likely contract size; nationwide mega-contracts distort the picture for a small bid.

Step 3: Build your cost floor

For service contracts covered by the Service Contract Labor Standards, the solicitation includes a wage determination that sets minimum wage and health-and-welfare rates by labor category. Add payroll taxes and insurance, supplies, travel, overhead and a reasonable profit to get the lowest price you can live with.

Step 4: Reconcile and decide

If your floor is well below the historical anchor, you have room to price competitively without racing to the bottom. If your floor is above it, that is a real signal: the job may not be winnable at a sustainable margin, and it is better to know before you write the proposal.

Under lowest-price-technically-acceptable (LPTA) evaluation, price decides among acceptable offers, so small differences matter. Under best value, a slightly higher price can win with a stronger technical approach.

Step 5: Explain your price

Include a short price narrative: what the price covers, the assumptions, and how it compares to the work. It answers the evaluator's questions before they are asked.