CMP Contract Negotiation & Compliance 2 — Questions and Answers
Question 1: During a contract negotiation, the government contracting officer insists on adding an unlimited liability clause. What is the BEST capture team response?
- Accept the clause to avoid losing the contract
- Propose a liability cap tied to contract value or insurance limits (Correct answer)
- Refuse to negotiate and escalate to legal immediately
- Sign the contract and address liability concerns post-award
Correct answer: Propose a liability cap tied to contract value or insurance limits
Proposing a liability cap tied to contract value or insurance limits is standard practice that protects the contractor while remaining commercially reasonable.
Question 2: Which FAR clause requires contractors to disclose cost or pricing data when a contract exceeds the Truth in Negotiations Act (TINA) threshold?
- FAR 52.215-10 (Correct answer)
- FAR 52.232-25
- FAR 52.244-6
- FAR 52.203-13
Correct answer: FAR 52.215-10
FAR 52.215-10 (Price Reduction for Defective Cost or Pricing Data) implements TINA requirements for certified cost or pricing data disclosure.
Question 3: A contractor discovers a compliance violation three months after contract award. Under FAR 52.203-13, the contractor is required to:
- Wait for the next audit to disclose the violation
- Self-report the violation to the contracting officer within a reasonable time (Correct answer)
- Correct the violation internally without disclosure
- Notify only the inspector general, not the contracting officer
Correct answer: Self-report the violation to the contracting officer within a reasonable time
FAR 52.203-13 (Contractor Code of Business Ethics and Conduct) requires timely self-disclosure of violations to the contracting officer.
Question 4: In a best-and-final-offer (BAFO) scenario, a competitor submits a price 20% below your best estimate. The MOST appropriate capture team action is to:
- Match the competitor's price regardless of cost realism
- Protest the competitor's price as unrealistically low
- Analyze whether the competitor has a legitimate cost advantage before adjusting your price (Correct answer)
- Withdraw from the competition to avoid a loss
Correct answer: Analyze whether the competitor has a legitimate cost advantage before adjusting your price
Analyzing the competitor's potential cost advantage ensures any price adjustment is defensible and does not create performance risk.
Question 5: Which contract type places the MOST financial risk on the contractor?
- Cost-Plus-Fixed-Fee (CPFF)
- Firm-Fixed-Price (FFP) (Correct answer)
- Cost-Plus-Incentive-Fee (CPIF)
- Time-and-Materials (T&M)
Correct answer: Firm-Fixed-Price (FFP)
Under a Firm-Fixed-Price contract, the contractor bears all cost overrun risk because the price does not change regardless of actual costs incurred.
Question 6: A subcontractor proposes terms that conflict with the prime contract's flow-down clauses. The capture manager should FIRST:
- Accept the subcontractor's terms to secure the teaming agreement
- Identify which prime contract clauses must flow down and negotiate accordingly (Correct answer)
- Remove the subcontractor from the team and find an alternate
- Ask the government customer to waive the conflicting clauses
Correct answer: Identify which prime contract clauses must flow down and negotiate accordingly
Identifying mandatory flow-down clauses establishes the baseline for subcontract negotiations and ensures prime contract compliance.
Question 7: The Organizational Conflicts of Interest (OCI) mitigation plan submitted with a proposal must address which key element?
- The contractor's revenue projections for the new contract
- How the contractor will prevent impaired objectivity or unfair competitive advantage (Correct answer)
- The resumes of key personnel assigned to the contract
- The contractor's past performance ratings on similar work
Correct answer: How the contractor will prevent impaired objectivity or unfair competitive advantage
An OCI mitigation plan must demonstrate how the contractor will eliminate, neutralize, or mitigate impaired objectivity or unfair competitive advantage.
CMP Contract Negotiation & Compliance 2
During a contract negotiation, the government contracting officer insists on adding an unlimited liability clause.
What is the BEST capture team response?