Cost Realism & Price Analysis Flashcards
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What document does an offeror submit to certify that cost or pricing data are accurate, complete, and current as of the date of price agreement?
Answer: A Certificate of Current Cost or Pricing Data (SF 1411)
SF 1411 (or equivalent) is the Certificate of Current Cost or Pricing Data required under TINA, certifying data accuracy as of the date of price agreement.
Which method of cost analysis involves a step-by-step evaluation of each direct labor category, material type, overhead pool, and profit?
Answer: Detailed cost element-by-element analysis
Element-by-element (or cost-by-cost) analysis examines each component of a cost proposal individually to assess realism, reasonableness, and allowability.
Under FAR 15.404-4, which factor is NOT typically considered when determining profit or fee objectives?
Answer: The offeror's tax rate
FAR 15.404-4 profit analysis factors include contractor risk, capital investment, performance, and contract type — tax rate is not a recognized factor in structured profit analysis.
A time-and-materials contract is proposed for a software development effort. Which cost element is MOST critical to evaluate for realism?
Answer: Labor categories and hourly rates
On T&M contracts, labor categories and hourly rates are the primary cost drivers, making their realism assessment the most critical element of cost analysis.
What is 'defective pricing' in the context of federal contracting?
Answer: The submission of cost or pricing data that were inaccurate, incomplete, or not current as of the date of price agreement
Defective pricing occurs when an offeror submits cost or pricing data that were not accurate, complete, or current as of the agreement date, entitling the government to a price reduction.
Which of the following scenarios would most likely trigger a cost realism analysis on a fixed-price type contract?
Answer: When a fixed-price incentive contract is competitively awarded for a complex, high-risk requirement
FAR 15.404-1(d)(3) allows cost realism analysis on fixed-price contracts when the requirement is complex and performance risk is high, particularly for FPIF contracts.
What is the government's remedy when defective pricing is discovered after contract award?
Answer: A downward price adjustment equal to the overstatement plus interest
When defective pricing is proven, the government is entitled to a price reduction equal to the amount of the overstatement, plus simple interest from the date of overpayment.