CGFO Procurement 3 — Questions and Answers
Question 1: What is the primary purpose of a performance bond in government contracting?
- To ensure the vendor pays their employees on time
- To guarantee the contractor will complete the project as specified (Correct answer)
- To protect against bid withdrawal after award
- To cover warranty claims after project completion
Correct answer: To guarantee the contractor will complete the project as specified
A performance bond guarantees that the contractor will fulfill all contract obligations; if the contractor defaults, the surety steps in to complete the project.
Question 2: Which type of contract places the greatest financial risk on the contractor?
- Cost-plus-fixed-fee contract
- Time-and-materials contract
- Firm fixed-price contract (Correct answer)
- Cost-plus-incentive-fee contract
Correct answer: Firm fixed-price contract
A firm fixed-price contract places maximum risk on the contractor because the price does not change regardless of actual costs incurred.
Question 3: An indefinite delivery/indefinite quantity (IDIQ) contract is best described as:
- A contract with no specified maximum quantity or price ceiling
- A contract that establishes unit prices and delivery terms for an indefinite quantity within stated minimum and maximum limits (Correct answer)
- A contract awarded without competitive bidding for emergency purchases
- A contract requiring the vendor to deliver goods on a set schedule
Correct answer: A contract that establishes unit prices and delivery terms for an indefinite quantity within stated minimum and maximum limits
IDIQ contracts establish unit prices and delivery terms for quantities that will be ordered within a minimum and maximum range over the contract period.
Question 4: What is 'best value' procurement?
- Always selecting the lowest-priced offer
- Evaluating offers based on price and non-price factors to achieve the greatest overall benefit (Correct answer)
- Awarding contracts only to local vendors
- Selecting vendors based solely on technical merit without price consideration
Correct answer: Evaluating offers based on price and non-price factors to achieve the greatest overall benefit
Best value procurement considers both price and non-price factors such as technical approach, past performance, and management capability to determine the most advantageous offer.
Question 5: Which of the following would constitute a conflict of interest in a procurement process?
- A procurement officer recuses herself from a bid evaluation because her brother owns one of the bidding firms (Correct answer)
- A vendor asking clarifying questions about the solicitation
- A department head approving a purchase within their delegated authority
- An evaluation committee using a scoring rubric to rate proposals
Correct answer: A procurement officer recuses herself from a bid evaluation because her brother owns one of the bidding firms
A procurement officer with a family member who owns a bidding firm has a conflict of interest and must disclose and recuse herself from the procurement.
Question 6: The Davis-Bacon Act requires that contractors on federally funded construction projects pay workers:
- At least the federal minimum wage
- Prevailing wages as determined by the Department of Labor for the locality (Correct answer)
- Union scale wages regardless of location
- Wages negotiated directly between the contractor and workers
Correct answer: Prevailing wages as determined by the Department of Labor for the locality
The Davis-Bacon Act requires payment of locally prevailing wages and fringe benefits to laborers and mechanics on federally funded construction projects over $2,000.
Question 7: A sealed bid procurement requires that all bids be:
- Submitted electronically only
- Publicly opened at the designated time and location (Correct answer)
- Evaluated by a committee before the bid opening date
- Accompanied by a technical proposal
Correct answer: Publicly opened at the designated time and location
Sealed bid procurements require public bid openings where all bids are read aloud at the designated time, ensuring transparency and preventing favoritism.
CGFO Procurement 3
What is the primary purpose of a performance bond in government contracting?