How do I know whether a supplier’s proposed profit is fair and reasonable?

A supplier can propose whatever profit they like. However, it is your responsibility as the buyer to determine whether that profit is fair and reasonable. Utilization of the Weighted Guidelines System is recommended and is what the U.S. Government uses to establish its profit objective.

You can use the following link to calculate what is a reasonable profit Profit Analysis. You can also watch the Weighted Guidelines video for additional information.