CFCM Pricing and Negotiation 5

Question 1

Under FAR 31.205-6, which of the following compensation elements is generally UNALLOWABLE?

Accepted Answer

Golden parachute payments contingent on a change in control of the company

Answer

FAR 31.205-6(l) specifically makes golden parachute and similar change-in-control compensation unallowable as government contract costs.

Question 2

The government negotiating team uses 'BATNA' in preparation. What does BATNA stand for and why is it important?

Accepted Answer

Best Alternative To a Negotiated Agreement—it defines the negotiator's walk-away point and strengthens their position

Answer

BATNA (Best Alternative To a Negotiated Agreement) defines what happens if negotiations fail, and knowing it prevents accepting a worse deal than the alternative.

Question 3

A contractor's final indirect cost rates are audited post-award and found to be lower than the rates used in billing. What happens under FAR 42.705?

Accepted Answer

The government issues a final indirect cost rate agreement and the contractor refunds the overbilling plus interest

Answer

FAR 42.705 requires settlement of final indirect cost rates, and if billing rates exceeded actual rates, the contractor must refund the excess with interest.

Question 4

Which of the following best describes 'most favored customer' (MFC) pricing in federal contracting?

Accepted Answer

A requirement that the contractor offer the government prices no less favorable than those offered to the contractor's best commercial customer

Answer

MFC pricing requires the contractor to extend to the government pricing at least as good as what its most favored commercial customer receives for similar quantities.

Question 5

Under FAR 15.403-3, when certified cost or pricing data are not required, what information may the contracting officer still require?

Accepted Answer

Data other than certified cost or pricing data, such as information on prices at which the same or similar items have been sold

Answer

Even when certified cost or pricing data are not required, FAR 15.403-3 allows the CO to require data other than certified—such as sales data, catalog prices, or market information—to support price reasonableness.

(CFCM) Certified Federal Contracts Manager Practice Test

(CFCM) Certified Federal Contracts Manager Practice Test

CFCM Pricing and Negotiation 5