CFCM Contract Financing & Payments 2

Question 1

Under FAR 32.6, what is the primary purpose of assignment of claims in government contracting?

Accepted Answer

To permit contractors to assign their right to payment to a financing institution

Answer

To allow contractors to transfer contract performance to a successor company

Answer

To enable the government to redirect payments to subcontractors directly

Answer

To facilitate novation agreements between contractors

Question 2

The liquidation rate applied to progress payments refers to:

Accepted Answer

The percentage withheld from delivery payments to recoup progress payments

Answer

The penalty rate charged for late repayment of advance payments

Answer

The interest rate charged on outstanding financing balances

Answer

The rate at which unallowable costs are removed from invoices

Question 3

Which FAR part governs the interest penalties the government must pay to contractors for late payments?

Accepted Answer

FAR Part 32

Answer

FAR Part 31

Answer

FAR Part 33

Answer

FAR Part 52

Question 4

Under FAR 32.503-5, the contracting officer may reduce or suspend progress payments if:

Accepted Answer

The contractor is found to be in a loss position on the contract

Answer

The contractor requests a contract modification

Answer

The prime contractor hires a new subcontractor

Answer

Inflation causes the contract price to increase

Question 5

A 'proper invoice' under the Prompt Payment Act must include which of the following?

Accepted Answer

Name, invoice date, contract number, description of goods/services, and payment terms

Answer

The contractor's DUNS number and CAGE code only

Answer

A certified cost breakdown and auditor signature

Answer

The contracting officer's technical representative approval

Question 6

Performance-based payments must not exceed what percentage of the contract price?

Accepted Answer

90%

Answer

80%

Answer

85%

Answer

95%

Question 7

Under the Assignment of Claims Act, which type of contract is NOT eligible for assignment of claims?

Accepted Answer

Contracts for less than $1,000

Answer

Fixed-price supply contracts

Answer

Cost-reimbursement service contracts

Answer

Time-and-materials contracts