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

Assignment of claims under FAR 32.6 allows contractors to assign their right to receive payments under a contract to a bank or other financing institution as collateral for a loan.

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 liquidation rate is the percentage deducted from each delivery payment to recover (liquidate) previously made progress payments.

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 32 implements the Prompt Payment Act and governs interest penalties owed to contractors when the government makes late payments.

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

FAR 32.503-5 requires the contracting officer to take action including reducing progress payments when the contractor is in a loss position to protect the government's financial interest.

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

A proper invoice must contain specific information including the contractor's name, invoice date, contract number, description, quantity, unit price, and payment terms to start the payment clock.

(CFCM) Certified Federal Contracts Manager Practice Test

(CFCM) Certified Federal Contracts Manager Practice Test

CFCM Contract Financing & Payments 2