CFCM Standards & Best Practices 5 — Questions and Answers
Question 1: Which standard practice should a CO follow when a contractor submits a Request for Equitable Adjustment (REA) for a government-caused delay?
- Deny it immediately if the contract is FFP
- Review the REA, conduct fact-finding, and negotiate a fair settlement before issuing a final decision (Correct answer)
- Issue a final decision within 10 days without negotiation
- Forward the REA directly to the GAO for adjudication
Correct answer: Review the REA, conduct fact-finding, and negotiate a fair settlement before issuing a final decision
Best practice requires the CO to analyze the REA, conduct fact-finding with the contractor, and attempt to negotiate a fair settlement before issuing a unilateral final decision.
Question 2: Under FAR 42.302, which contract administration function is specifically reserved for the Contracting Officer and CANNOT be delegated to a COR?
- Monitoring contractor performance schedules
- Reviewing and approving invoices for payment
- Executing contract modifications and exercising contract options (Correct answer)
- Conducting site visits and inspections
Correct answer: Executing contract modifications and exercising contract options
Only warranted Contracting Officers have authority to execute modifications and exercise options; CORs are explicitly prohibited from taking actions that obligate government funds or change contract terms.
Question 3: According to OMB Circular A-123, what is the federal government's standard for internal controls in contracting?
- Controls must prevent all fraud regardless of cost
- Reasonable assurance that objectives are achieved and risks are managed through documented, monitored processes (Correct answer)
- External audits replace the need for internal controls
- Internal controls apply only to grants, not contracts
Correct answer: Reasonable assurance that objectives are achieved and risks are managed through documented, monitored processes
OMB Circular A-123 requires agencies to maintain internal controls providing reasonable assurance—not absolute certainty—that program objectives are met and risks are adequately managed.
Question 4: What is the significance of the 'four corners' doctrine in federal contract interpretation?
- It requires four government officials to sign every contract
- Courts first look within the contract document itself to resolve ambiguities before considering extrinsic evidence (Correct answer)
- It limits contract value to the four-quarter fiscal year cycle
- It mandates four levels of review before contract award
Correct answer: Courts first look within the contract document itself to resolve ambiguities before considering extrinsic evidence
The 'four corners' doctrine means courts and boards of contract appeals first examine the contract's own language to resolve disputes before admitting outside evidence of intent.
Question 5: Which best practice does FAR 15.403-1 establish for determining when certified cost or pricing data is NOT required?
- When the contract is below $2 million and is cost-type
- When prices are based on adequate price competition, catalog prices, or established market prices (Correct answer)
- When the contractor is a small business or nonprofit
- When the acquisition is conducted using simplified procedures
Correct answer: When prices are based on adequate price competition, catalog prices, or established market prices
FAR 15.403-1 establishes exceptions to the certified cost or pricing data requirement, including adequate price competition, catalog prices, and established market prices as conditions where submission is not required.
Question 6: What standard does the Federal Acquisition Streamlining Act (FASA) establish regarding past performance evaluation in source selections?
- Past performance may only be evaluated for contracts over $50 million
- Past performance must be evaluated as a factor in competitively awarded contracts above the simplified acquisition threshold (Correct answer)
- Past performance evaluations are optional and left to agency discretion
- Only CPARS data may be used; no other references are permitted
Correct answer: Past performance must be evaluated as a factor in competitively awarded contracts above the simplified acquisition threshold
FASA and implementing FAR 15.304 require that past performance be evaluated as a source selection factor for competitively awarded contracts exceeding the simplified acquisition threshold.
Question 7: Under best practices for undefinitized contract actions (UCAs) governed by DFARS 217.74, what is the maximum percentage of the not-to-exceed price that may be obligated before definitization?
- 25%
- 40%
- 50% (Correct answer)
- 75%
Correct answer: 50%
DFARS 217.7404-4 generally limits government obligations on UCAs to 50% of the not-to-exceed price until the action is definitized, to preserve negotiating leverage.
CFCM Standards & Best Practices 5
Which standard practice should a CO follow when a contractor submits a Request for Equitable Adjustment (REA) for a government-caused delay?