CFCM Subcontract Management 2 — Questions and Answers
Question 1: Under FAR 44.201, which type of contractor is required to maintain an approved purchasing system?
- All small business contractors
- Contractors with cost-reimbursement contracts over $25 million
- Contractors with significant purchasing functions under negotiated prime contracts (Correct answer)
- Any contractor with subcontracts exceeding $150,000
Correct answer: Contractors with significant purchasing functions under negotiated prime contracts
FAR 44.201 requires contractors with significant purchasing functions under negotiated prime contracts to maintain an approved purchasing system reviewed by the contracting officer.
Question 2: What is the primary purpose of a consent to subcontract under FAR 44.202?
- To transfer contract liability from the prime to the subcontractor
- To allow the government to establish privity of contract with the subcontractor
- To protect the government's interest by reviewing proposed subcontract terms before award (Correct answer)
- To authorize the subcontractor to submit invoices directly to the government
Correct answer: To protect the government's interest by reviewing proposed subcontract terms before award
Consent to subcontract allows the contracting officer to review and approve the proposed subcontract terms to ensure the government's interests are protected before award.
Question 3: A prime contractor on a cost-reimbursement contract proposes to subcontract 70% of the work. Which FAR clause is most directly applicable to this situation?
- FAR 52.244-2, Subcontracts (Correct answer)
- FAR 52.219-14, Limitations on Subcontracting
- FAR 52.209-6, Protecting the Government's Interest When Subcontracting
- FAR 52.244-6, Subcontracts for Commercial Products
Correct answer: FAR 52.244-2, Subcontracts
FAR 52.244-2 requires consent to subcontract on cost-reimbursement contracts and governs the prime contractor's subcontracting obligations.
Question 4: When must a prime contractor flow down FAR 52.222-26 (Equal Opportunity) to subcontractors?
- Only when the subcontract exceeds $10,000
- Only when the subcontract exceeds $150,000
- When the subcontract exceeds $10,000 and is not exempt (Correct answer)
- Always, regardless of subcontract dollar value
Correct answer: When the subcontract exceeds $10,000 and is not exempt
FAR 52.222-26 must be flowed down to subcontracts over $10,000 that are not otherwise exempt from equal opportunity requirements.
Question 5: Which document establishes the prime contractor's purchasing system requirements and is reviewed during a contractor purchasing system review (CPSR)?
- The contractor's master subcontracting plan
- The contractor's written purchasing system policies and procedures (Correct answer)
- The prime contract's statement of work
- The subcontractor's certified cost or pricing data
Correct answer: The contractor's written purchasing system policies and procedures
During a CPSR, the government reviews the contractor's written purchasing policies and procedures to assess whether the purchasing system meets FAR 44 requirements.
Question 6: Under the Truth in Negotiations Act (TINA), when must a prime contractor obtain certified cost or pricing data from a subcontractor?
- For all subcontracts regardless of value
- When the subcontract exceeds the TINA threshold and no exception applies (Correct answer)
- Only for sole-source subcontracts under cost-reimbursement primes
- When the subcontract is sole-source and exceeds $150,000
Correct answer: When the subcontract exceeds the TINA threshold and no exception applies
TINA requires certified cost or pricing data from subcontractors when the subcontract exceeds the applicable threshold and no statutory exception applies.
Question 7: What is the key distinction between a 'subcontract' and a 'purchase order' in the context of FAR Part 44?
- Purchase orders are only used for services while subcontracts are used for supplies
- Purchase orders are firm-fixed-price only while subcontracts may use any contract type
- The terms are interchangeable under FAR Part 44
- Subcontracts require consent while simplified purchase orders below certain thresholds do not (Correct answer)
Correct answer: Subcontracts require consent while simplified purchase orders below certain thresholds do not
FAR Part 44 distinguishes subcontracts that require consent from simplified purchase orders that fall below consent thresholds and meet certain conditions.
CFCM Subcontract Management 2
Under FAR 44.201, which type of contractor is required to maintain an approved purchasing system?