CFCM Contract Financing & Payments 4

Question 1

Under FAR 32.503, what is the maximum percentage of the contract price that can be paid as a customary progress payment for a large business?

Accepted Answer

80%

Answer

FAR 32.503 establishes 80% as the customary progress payment rate for large businesses and 85% for small businesses.

Question 2

Which of the following best describes 'loan guarantee' authority under FAR Part 32?

Accepted Answer

A government guarantee of a private loan to enable contractor performance

Answer

Loan guarantees under FAR 32.3 allow the government to guarantee private loans so contractors can obtain financing needed to perform federal contracts.

Question 3

When a contractor requests a reduction in the unliquidated progress payment balance, this process is known as:

Accepted Answer

Liquidation

Answer

Liquidation is the process by which progress payments are reduced (recovered) from contract payments as deliveries or services are accepted.

Question 4

Under FAR 32.112, what action must a contracting officer take if a contractor's progress payment financing becomes unsatisfactory?

Accepted Answer

Reduce or suspend progress payments after notifying the contractor

Answer

FAR 32.112 permits the contracting officer to reduce or suspend progress payments if the contractor's financial condition or performance is unsatisfactory, after providing notice.

Question 5

What is the primary purpose of a 'fast payment' procedure under FAR Subpart 13.4?

Accepted Answer

To allow payment prior to Government verification of receipt for small-value supplies

Answer

FAR Subpart 13.4 fast payment procedures allow payment for small-value supply contracts before the government verifies receipt, relying on the contractor's certificate.

(CFCM) Certified Federal Contracts Manager Practice Test

(CFCM) Certified Federal Contracts Manager Practice Test

CFCM Contract Financing & Payments 4