CMO Procurement & Contract Administration 2 — Questions and Answers
Question 1: A municipality receives only one responsive bid on a formal solicitation. The procurement officer should MOST likely:
- Award the contract to the sole bidder immediately
- Cancel and re-bid with revised specifications or broader outreach (Correct answer)
- Negotiate price directly with the sole bidder without further process
- Waive the competitive requirement and sole-source the contract
Correct answer: Cancel and re-bid with revised specifications or broader outreach
A single responsive bid suggests the market was not adequately reached or specifications were too restrictive, so re-bidding with revisions is the appropriate first step.
Question 2: Which contract type 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-percentage-of-cost contract
Correct answer: Firm-fixed-price contract
A firm-fixed-price contract holds the contractor to a set price regardless of actual costs, so cost overruns are entirely the contractor's risk.
Question 3: Under the Uniform Guidance (2 CFR Part 200), the micro-purchase threshold for non-federal entities is generally:
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
The federal micro-purchase threshold under 2 CFR 200.320 is $10,000, below which competition requirements are minimal.
Question 4: A change order that increases a contract's total value by 25% is BEST described as a potential:
- Contract novation
- Cardinal change (Correct answer)
- Constructive change
- Bilateral modification
Correct answer: Cardinal change
A cardinal change is a modification so substantial that it fundamentally alters the contract's scope, potentially voiding competitive procurement requirements.
Question 5: Which evaluation method is MOST appropriate when the quality of the solution matters as much as price?
- Low-bid award
- Best value (qualitative factors plus price) (Correct answer)
- Lottery selection
- Rotation system
Correct answer: Best value (qualitative factors plus price)
Best value procurement weighs both technical/qualitative factors and price, allowing municipalities to select the proposal offering the greatest overall benefit.
Question 6: A vendor informs a city that it cannot deliver goods on time due to a natural disaster that destroyed its warehouse. This situation MOST likely invokes which contract clause?
- Liquidated damages clause
- Force majeure clause (Correct answer)
- Termination for convenience clause
- Escalation clause
Correct answer: Force majeure clause
A force majeure clause excuses non-performance caused by extraordinary events outside the party's control, such as natural disasters.
Question 7: When must a municipality generally conduct a cost or price analysis on a procurement?
- Only when using federal grant funds
- Whenever competition is absent or cannot be relied upon to ensure fair pricing (Correct answer)
- Only for contracts exceeding $1 million
- Only when the vendor requests it
Correct answer: Whenever competition is absent or cannot be relied upon to ensure fair pricing
Cost or price analysis is required whenever adequate competition is lacking, ensuring the government pays a fair and reasonable price regardless of funding source.
CMO Procurement & Contract Administration 2
A municipality receives only one responsive bid on a formal solicitation.
The procurement officer should MOST likely: