Contract Management & Procurement Flashcards
7 cards from real CCC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contract Management & Procurement flashcards as text
In cost-reimbursable contracts, 'indirect costs' are typically recovered through which mechanism?
Answer: Predetermined overhead rates applied to direct costs
Indirect costs such as overhead and G&A are recovered by applying government-approved or negotiated indirect cost rates to direct cost bases.
A 'should-pay' analysis differs from a 'should-cost' analysis in that should-pay analysis:
Answer: Evaluates whether the actual invoice reflects what was contractually agreed
Should-pay analysis compares an invoice against the contract terms to determine what amount is legitimately owed, rather than estimating from first principles.
Which contract modification type does NOT require consideration (something of value exchanged by both parties)?
Answer: Unilateral modification
A unilateral modification is issued by the buyer alone under authority granted in the contract (such as a Change Order or Administrative Change) and does not require contractor agreement.
When a contractor submits a Request for Equitable Adjustment (REA), the cost controller's role is to:
Answer: Analyze the claimed costs for reasonableness, allowability, and allocability
The cost controller reviews REAs by assessing whether claimed costs are reasonable (market-rate), allowable (permitted by contract/regulation), and allocable (directly caused by the change).
In competitive procurement, 'price reasonableness' is best established by:
Answer: Comparing the offered price to multiple competitive bids or market data
Price reasonableness is determined by comparing offers against each other, historical prices, independent government estimates, or published market prices.
A 'retainage' clause in a construction contract requires the owner to:
Answer: Withhold a percentage of each payment until substantial completion is verified
Retainage withholds 5–10% of each progress payment, creating an incentive for contractors to complete all punch-list items before final payment is released.
When a cost controller performs a 'purchase price variance' (PPV) analysis, the goal is to identify:
Answer: The difference between the actual price paid and the standard or budgeted price for materials
Purchase price variance measures the difference between what was budgeted for materials and what was actually paid, highlighting procurement efficiency or market price changes.