CGFO Procurement 5

Question 1

What is the primary purpose of an independent cost estimate (ICE) in government procurement?

Accepted Answer

To provide a government benchmark for evaluating whether bids or proposals are reasonable

Answer

An ICE is prepared by the government before solicitation to serve as a baseline for assessing the reasonableness of contractor proposals and identifying pricing anomalies.

Question 2

Which contract type is considered most risky for the government when scope is uncertain?

Accepted Answer

Cost-plus-percentage-of-cost

Answer

Cost-plus-percentage-of-cost contracts give contractors no incentive to control costs since their fee increases as costs rise; they are generally prohibited in federal contracting.

Question 3

What is 'price analysis' in the context of government contract pricing?

Accepted Answer

Evaluating the reasonableness of a proposed price without examining cost elements, using market comparisons or other benchmarks

Answer

Price analysis evaluates whether a proposed price is reasonable by comparing it to market prices, historical prices, or other benchmarks without examining the vendor's underlying cost structure.

Question 4

A government agency issues an emergency purchase for flood response supplies without competitive bidding. Which principle of public procurement is being applied?

Accepted Answer

Emergency or exigency exception to competition requirements

Answer

Most procurement laws allow an emergency or exigency exception to competition requirements when there is an immediate threat to public health, safety, or property requiring urgent action.

Question 5

Which of the following is NOT a characteristic of a valid contract under government procurement law?

Accepted Answer

Verbal agreement for purchases over $10,000

Answer

Government contracts above micro-purchase thresholds typically must be in writing and signed by an authorized contracting officer; verbal agreements are not enforceable.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Procurement 5