CPCM Cost and Price Analysis

Question 1

When is certified cost or pricing data required under the Truth in Negotiations Act (TINA)?

Accepted Answer

For negotiated contracts above the threshold (currently $2 million) unless an exception applies

Answer

TINA (codified at 10 U.S.C. 2306a and 41 U.S.C. 3502) requires certified cost or pricing data for negotiated procurements exceeding the current threshold unless an exception such as adequate price competition applies.

Question 2

Price analysis differs from cost analysis in that price analysis:

Accepted Answer

Compares offered prices to market benchmarks without examining underlying cost elements

Answer

Price analysis examines the total price against market prices, historical awards, or catalog prices without decomposing individual cost elements.

Question 3

Which of the following costs is generally unallowable under FAR Part 31?

Accepted Answer

Interest and financing charges on contractor borrowing

Answer

FAR 31.205-20 specifically lists interest and financing costs as unallowable because the government should not subsidize a contractor's capital structure decisions.

Question 4

The term 'allocable cost' under FAR 31.201-4 means the cost:

Accepted Answer

Is assignable to one or more cost objectives in accordance with the relative benefits received

Answer

Allocability requires a logical or causal relationship between the cost and the cost objective — the cost must benefit the contract to be charged to it.

Question 5

A should-cost analysis is performed by the government to:

Accepted Answer

Identify opportunities for the contractor to reduce costs through improved efficiency and management

Answer

Should-cost analysis is a government review of the contractor's work and management practices to identify inefficiencies and estimate what the work should cost with proper performance.

CPCM Exam Practice Test

CPCM Exam Practice Test

CPCM Cost and Price Analysis