Certified Contract Management Associate Practice Test

Which of the following is considered an indicator of reasonableness?

1. Comparative analysis

2. Marketplace analysis

3. Cost analysis

4. Price analysis

The correct answer is: Comparative analysis

Comparative analysis serves as an indicator of reasonableness because it allows for a systematic comparison of prices, costs, and terms against similarly positioned contracts or market offerings. By evaluating the proposed rates or terms against a benchmark of established data—such as previous contracts, industry standards, or competitor pricing—it helps determine whether the prices are fair and in line with market expectations. This approach provides insight into the reasonableness of costs by examining how they stack up against what others in the same industry are paying or charging for similar goods or services, thereby ensuring that pricing is justified and competitive. While marketplace analysis and price analysis are also valuable tools in assessing reasonableness, they each focus on different aspects. Marketplace analysis reviews the broader economic conditions and trends, and price analysis looks strictly at the pricing itself rather than contextual factors. Cost analysis focuses on the actual costs incurred, which can sometimes lead to a narrower understanding of the value proposition rather than a holistic comparison with industry norms or competitor offerings.