FAC Procurement & Negotiation Strategies 3 — Questions and Answers
Question 1: When using a Request for Quotation (RFQ) instead of a Request for Proposal (RFP), what is the key legal distinction regarding vendor responses?
- Quotations are not offers and cannot be accepted to form a binding contract (Correct answer)
- Quotations are legally binding offers upon submission
- RFQs are only permitted for services, not supplies
- Quotations must include certified cost or pricing data
Correct answer: Quotations are not offers and cannot be accepted to form a binding contract
A quotation is not an offer; only the government's subsequent purchase order or contract constitutes an offer that the vendor may accept.
Question 2: Which of the following best describes 'price analysis' as defined in FAR 15.404-1(b)?
- Examination of individual cost elements and profit to verify reasonableness
- Evaluation of a price without analyzing the individual cost elements (Correct answer)
- Comparison of proposed profit against industry standards
- Review of the offeror's accounting system for adequacy
Correct answer: Evaluation of a price without analyzing the individual cost elements
Price analysis evaluates the overall price without breaking it down into cost elements, relying instead on market comparisons and other external benchmarks.
Question 3: Under the Truth in Negotiations Act (TINA), at what dollar threshold must contractors certify that cost or pricing data submitted is current, accurate, and complete?
- $100,000
- $750,000 (Correct answer)
- $2 million
- $10 million
Correct answer: $750,000
TINA (10 U.S.C. 3702) requires certified cost or pricing data for negotiated contracts exceeding $2 million, though the threshold has changed; as of current FAR the threshold is $2 million.
Question 4: A contracting officer is negotiating a cost-reimbursement contract. The offeror proposes a profit of 15%. Which FAR provision governs the structured approach to profit/fee analysis?
- FAR 15.404-3
- FAR 15.404-4 (Correct answer)
- FAR 15.405
- FAR 15.406-3
Correct answer: FAR 15.404-4
FAR 15.404-4 prescribes the structured approach contracting officers must use to analyze and negotiate profit or fee on cost-reimbursement contracts.
Question 5: In a sole-source negotiation, what is the purpose of issuing a 'should-cost' review before negotiations begin?
- To determine the offeror's certified cost or pricing data accuracy
- To establish what it should cost to perform the work using efficient methods (Correct answer)
- To obtain an independent government estimate for budget purposes only
- To verify the offeror's accounting system complies with CAS
Correct answer: To establish what it should cost to perform the work using efficient methods
A should-cost review assesses what efficient performance should cost, helping the government identify and challenge inefficiencies in the contractor's proposed costs.
Question 6: Which of the following is NOT a permitted form of exchange with offerors during a pre-solicitation phase under FAR 15.201?
- Industry days
- Request for Information (RFI)
- One-on-one meetings with potential offerors
- Disclosure of the competitive range determination (Correct answer)
Correct answer: Disclosure of the competitive range determination
The competitive range determination is made after receipt of proposals and cannot be disclosed during pre-solicitation exchanges.
Question 7: When a contractor claims that changed government requirements constitute a constructive change, what is the first step the contracting officer should take?
- Issue a unilateral contract modification reflecting the change
- Deny the claim immediately and proceed with original terms
- Investigate whether a government action informally directed work beyond the contract scope (Correct answer)
- Refer the claim directly to the agency Board of Contract Appeals
Correct answer: Investigate whether a government action informally directed work beyond the contract scope
The contracting officer must first determine whether a government action — directive, act, or omission — informally changed the contractor's work scope before deciding on appropriate relief.
FAC Procurement & Negotiation Strategies 3
When using a Request for Quotation (RFQ) instead of a Request for Proposal (RFP), what is the key legal distinction regarding vendor responses?