CFCM Contract Financing & Payments 5

Question 1

Under FAR 32.202-1, performance-based payments must be structured so that the total amount of these payments at any time does NOT exceed:

Accepted Answer

The value of the contract work completed

Answer

Performance-based payments must not exceed the value of completed contract work, ensuring the government does not overpay relative to actual progress.

Question 2

What is the contractor's obligation regarding 'title' to property when progress payments are made under FAR 32.503-15?

Accepted Answer

Title to property allocable to the contract vests in the government upon progress payment

Answer

FAR 32.503-15 provides that the government acquires title to all property allocable or applicable to the contract upon making progress payments.

Question 3

A contractor requests an advance payment for a cost-type research contract. Under FAR 32.4, which condition would MOST likely justify approval?

Accepted Answer

The contractor lacks sufficient working capital and other financing is not available at reasonable terms

Answer

Advance payments are justified when contractors lack adequate working capital and cannot obtain private financing on reasonable terms, per FAR 32.402.

Question 4

Which clause is required in contracts that include customary progress payments to address the contractor's financial management responsibilities?

Accepted Answer

FAR 52.232-16 (Progress Payments)

Answer

FAR 52.232-16 is the mandatory clause for contracts with customary progress payments, establishing the terms and conditions including financial management requirements.

Question 5

Under the Prompt Payment Act, if the government makes a late payment, the interest penalty begins accruing:

Accepted Answer

On the day after the payment due date

Answer

Interest penalties under the Prompt Payment Act begin accruing automatically on the day after the required payment due date, without requiring contractor notice.

(CFCM) Certified Federal Contracts Manager Practice Test

(CFCM) Certified Federal Contracts Manager Practice Test

CFCM Contract Financing & Payments 5