The process of examining and evaluating a prospective price without performing cost analysis is called?

• A. Price Analysis
• B. Cost Analysis
• C. Bid Tabulation
• D. Addenda

Answer: (A)

Price analysis is the process of examining a prospective price without performing a cost analysis. In procurement, you look at the offered price and compare it to market data, catalog prices, or historical prices to judge whether it’s reasonable, without digging into the seller’s internal cost structure. This approach relies on market-based information to assess value and support decisions when detailed cost data isn’t necessary.

Cost analysis, on the other hand, would require breaking down and evaluating cost elements like materials, labor, and overhead to determine reasonableness from the cost side. Bid tabulation is simply a summary used to compare bids, not the evaluation of price reasonableness itself. Addenda are changes to bidding documents issued after the initial solicitation.