CFCM Contract Formation 4 — Questions and Answers
Question 1: Under the Truth in Negotiations Act (TINA), now codified at 41 U.S.C. 2306a, when must a contractor submit certified cost or pricing data?
- For all negotiated contracts regardless of dollar value
- When the contract is expected to exceed the TINA threshold and no exception applies (Correct answer)
- Only for cost-reimbursement contracts over $2 million
- Whenever the contracting officer requests it
Correct answer: When the contract is expected to exceed the TINA threshold and no exception applies
Certified cost or pricing data is required when a negotiated contract exceeds the threshold (currently $2 million) and no exception (adequate price competition, commercial items, etc.) applies.
Question 2: Which of the following is NOT one of the six statutory exceptions to full and open competition under 41 U.S.C. 3304?
- Only one responsible source exists
- Urgent and compelling circumstances
- Industrial mobilization or research and development
- Price exceeds the simplified acquisition threshold (Correct answer)
Correct answer: Price exceeds the simplified acquisition threshold
Exceeding the simplified acquisition threshold is not an exception to competition; it triggers more rigorous competition requirements, not less.
Question 3: A contracting officer receives a bid that appears to be the lowest but is nonresponsive. What is the correct action?
- Award to the bidder and note the nonresponsiveness in the file
- Request the bidder cure the deficiency within 24 hours
- Reject the bid as nonresponsive and award to the next lowest responsive bidder (Correct answer)
- Seek clarification from the bidder to make the bid responsive
Correct answer: Reject the bid as nonresponsive and award to the next lowest responsive bidder
A nonresponsive bid in sealed bidding must be rejected; responsiveness cannot be cured after bid opening because doing so would give the bidder an unfair advantage.
Question 4: What is a 'Letter Contract' under FAR Subpart 16.6, and when is it used?
- A preliminary agreement used when it is necessary to begin work immediately before a definitive contract can be negotiated (Correct answer)
- A contract formed by exchanging letters rather than standard forms
- A simplified contract for purchases under the micro-purchase threshold
- A type of blanket purchase agreement used for recurring services
Correct answer: A preliminary agreement used when it is necessary to begin work immediately before a definitive contract can be negotiated
A letter contract (undefinitized contract action) is a preliminary contractual instrument authorizing immediate work when there is insufficient time to negotiate a definitive contract.
Question 5: Under FAR 9.103, which party bears the burden of proving responsibility before a contract can be awarded?
- The government must prove the contractor is irresponsible to deny award
- The contractor must affirmatively demonstrate it meets all responsibility standards (Correct answer)
- Both parties share equal burden of proving/disproving responsibility
- Responsibility is presumed unless the contracting officer has specific evidence of irresponsibility
Correct answer: The contractor must affirmatively demonstrate it meets all responsibility standards
FAR 9.103 states the prospective contractor must affirmatively demonstrate its responsibility, and the contracting officer must be satisfied that the contractor meets all standards.
Question 6: A solicitation requires a 'bid bond.' What is the purpose of a bid bond in federal acquisitions?
- It guarantees the contractor will complete the work on time
- It ensures the contractor will enter into a contract and provide required bonds if selected (Correct answer)
- It protects subcontractors from nonpayment by the prime contractor
- It covers the government's costs if the contractor files for bankruptcy
Correct answer: It ensures the contractor will enter into a contract and provide required bonds if selected
A bid bond guarantees that if the bidder is selected, it will enter into the contract and furnish any required performance and payment bonds.
Question 7: What is the key difference between a 'modification' and a 'change' to a federal contract?
- A modification is unilateral while a change is always bilateral
- A modification is any written alteration to contract terms; a change specifically invokes the Changes clause (Correct answer)
- A modification requires re-competition while a change does not
- A modification exceeds the scope of the contract while a change remains within scope
Correct answer: A modification is any written alteration to contract terms; a change specifically invokes the Changes clause
Any written alteration is a modification (bilateral or unilateral), while a 'change' specifically refers to a unilateral change order issued by the government under the Changes clause.
CFCM Contract Formation 4
Under the Truth in Negotiations Act (TINA), now codified at 41 U.S.C. 2306a, when must a contractor submit certified cost or pricing data?