CFCM Contract Administration & Performance Management 4 — Questions and Answers
Question 1: Which FAR clause requires contractors to maintain adequate accounting systems capable of segregating direct and indirect costs?
- FAR 52.215-2 Audit and Records — Negotiation
- FAR 52.242-1 Notice of Intent to Disallow Costs
- FAR 52.216-7 Allowable Cost and Payment (Correct answer)
- FAR 52.244-2 Subcontracts
Correct answer: FAR 52.216-7 Allowable Cost and Payment
FAR 52.216-7 (Allowable Cost and Payment) requires contractors to maintain an accounting system that properly segregates costs by contract for cost-reimbursement contracts.
Question 2: A contractor claims a constructive change occurred because the government inspector required a higher standard than the contract specified. Which element does NOT need to be proven for a constructive change claim?
- The government directed a change in contract requirements
- The change caused additional cost or time
- The contracting officer issued a written change order (Correct answer)
- The contractor performed the additional work
Correct answer: The contracting officer issued a written change order
A constructive change claim does not require a written change order — it arises from informal government actions that effectively change contract requirements without formal direction.
Question 3: Under FAR 42.1502, what is the minimum dollar threshold for which agencies are required to prepare past performance evaluations?
- $150,000
- $250,000 (Correct answer)
- $750,000
- $1,000,000
Correct answer: $250,000
FAR 42.1502 requires agencies to prepare past performance evaluations for contracts exceeding $250,000 in value.
Question 4: What is the key distinction between a 'claim' and a 'Request for Equitable Adjustment (REA)' under the Contract Disputes Act?
- Claims require certification above $100,000; REAs never require certification
- REAs are only for delay damages; claims cover all contract disputes
- Claims are formal written demands for final decision; REAs are informal requests to negotiate (Correct answer)
- REAs must be filed within 6 months; claims have no time limit
Correct answer: Claims are formal written demands for final decision; REAs are informal requests to negotiate
An REA is an informal negotiation request, while a claim is a formal written demand requiring a Contracting Officer's Final Decision and triggering CDA rights.
Question 5: Under Earned Value Management (EVM), what does a negative Schedule Variance (SV) indicate?
- The project is under budget
- The project is ahead of schedule
- The project is behind schedule (Correct answer)
- The project has exceeded its cost ceiling
Correct answer: The project is behind schedule
Schedule Variance (SV) = Earned Value − Planned Value; a negative SV means less work was accomplished than planned, indicating the project is behind schedule.
Question 6: Which FAR provision governs the government's right to inspect and test contractor work during performance, not just at delivery?
- FAR 52.246-5 Inspection of Services — Cost-Reimbursement (Correct answer)
- FAR 52.249-2 Termination for Convenience of the Government
- FAR 52.243-4 Changes
- FAR 52.233-1 Disputes
Correct answer: FAR 52.246-5 Inspection of Services — Cost-Reimbursement
FAR 52.246-5 grants the government the right to inspect and test contractor work at any time during performance of cost-reimbursement service contracts.
Question 7: When the government terminates a fixed-price contract for convenience, which cost is NOT allowable in the contractor's settlement proposal?
- Costs incurred prior to the termination notice
- Subcontractor termination settlement costs
- Lost anticipated profits on the terminated portion (Correct answer)
- Reasonable settlement administrative costs
Correct answer: Lost anticipated profits on the terminated portion
Under FAR 49.202, the government does not pay anticipated profits on work not performed when terminating a fixed-price contract for convenience.
CFCM Contract Administration & Performance Management 4
Which FAR clause requires contractors to maintain adequate accounting systems capable of segregating direct and indirect costs?