Price-to-win is your estimate of the price most likely to win while still earning an acceptable profit. It is a planning number you build, not a figure any regulation sets.
Past awards matter because the government compares prices too. Normally, competition establishes price reasonableness 1, and FAR 15.404-1 lists comparison of the proposed prices to historical prices paid, whether by the government or other than the government, for the same or similar items 2.
You can see some of the same history. The notice to unsuccessful offerors covers the items, quantities and any stated unit prices of each award 3, and a debriefing includes the overall evaluated cost or price, including unit prices, of the successful offeror and of the debriefed offeror 4.
Bids2Bank's Price Check builds a range from public USAspending awards. It ignores awards under $10,000 5, computes an annual run-rate from completed awards only, because an ongoing award's obligations are partial 6, and places your planned price below the range, low, typical, high or above the range 7.
Bound a price from comparable awards →
Normalize before you compare
Worked example. Contractor M finds eight similar completed awards with annual run-rates from $1.1 million to $1.6 million and a median of $1.3 million. Its own bottom-up cost is $1.25 million a year before profit. It prices at $1.34 million a year: inside the range and above its cost. Had the range topped out below its cost, it would have looked for a cheaper way to do the work or passed on the bid.
Do not buy in
Buying-in is not just a low price. FAR 3.501-1 defines it as submitting an offer below anticipated costs, expecting to 8 either increase the contract amount after award, for example through unnecessary or excessively priced change orders 9, or receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract 10.
FAR 3.501-2 warns that buying-in may decrease competition or result in poor contract performance 11, and says the contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through pricing 12.
A low price can also draw scrutiny on its own terms. Cost realism analyses may be used on fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts 1. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated 13.
Indented paragraphs are invented worked examples. Tool links open Bids2Bank and need a free account.