FAC Risk Assessment & Underwriting 2

Question 1

Under FAR Part 16, which contract type places the MOST financial risk on the government when cost is uncertain?

Accepted Answer

Cost-Plus-Fixed-Fee (CPFF)

Answer

CPFF contracts reimburse all allowable costs plus a fixed fee, so the government bears essentially all cost risk if expenditures exceed estimates.

Question 2

A contracting officer is assessing risk for a sole-source award. Which factor MOST increases the risk that the award price will be unreasonable?

Accepted Answer

There is no competitive market to benchmark pricing

Answer

Without competition, there is no market pricing signal, making it difficult to establish that the negotiated price is fair and reasonable.

Question 3

Which risk mitigation tool allows the government to reduce schedule risk by requiring a contractor to identify critical path milestones in advance?

Accepted Answer

Integrated Baseline Review (IBR)

Answer

An IBR assesses whether the contractor's performance measurement baseline is realistic and whether critical path milestones are achievable.

Question 4

When performing price analysis on a proposed contract action, which technique compares the offered price to prices found in catalog or market data?

Accepted Answer

Comparison with commercial catalog prices

Answer

Comparing proposed prices to established catalog or market prices is a standard price analysis technique under FAR 15.404-1(b).

Question 5

A performance bond in federal contracting primarily protects the government against which risk?

Accepted Answer

Contractor failure to complete the work as specified

Answer

A performance bond guarantees that the surety will complete the project or pay damages if the contractor fails to fulfill contract requirements.

(FAC) Federal Acquisition Certification Practice Test