Cost Realism & Price Analysis Flashcards
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Read the first 7 Cost Realism & Price Analysis flashcards as text
Under FAR 15.404-1(d), when is a cost realism analysis REQUIRED?
Answer: For cost-reimbursement contracts to evaluate the realism of proposed costs
FAR 15.404-1(d) mandates cost realism analysis for cost-reimbursement contracts to determine whether proposed costs are realistic for the work to be performed.
What does 'cost realism' specifically evaluate in a proposal?
Answer: Whether proposed costs are realistic, reasonable, and reflect a clear understanding of the requirements
Cost realism analysis evaluates whether proposed costs are realistic for the work, reflect a clear understanding of requirements, and are consistent with the offeror's technical approach.
A contracting officer may adjust an offeror's proposed costs upward during cost realism analysis for what purpose?
Answer: To establish the probable cost for evaluation ranking purposes
Upward adjustments during cost realism create a 'most probable cost' used solely for evaluation ranking, not as the actual contract price.
Which price analysis technique involves comparing proposed prices to previously established prices for the same or similar items?
Answer: Comparison with prior purchase prices
Comparing proposed prices to prior purchase prices is a primary price analysis technique under FAR 15.404-1(b)(2), used when historical pricing is available.
When a contracting officer uses 'most probable cost' for cost-reimbursement contract evaluation, what happens to the offeror's original proposed price?
Answer: The original proposed price remains the basis for the contract, while most probable cost is used only for evaluation ranking
The most probable cost is an evaluation tool only; the actual contract is based on the offeror's proposed costs, subject to negotiation.
What is a 'should-cost' review in the context of price and cost analysis?
Answer: A government team analysis of what a product or service should cost using industrial engineering and accounting principles
A should-cost review uses government teams with engineering, accounting, and other expertise to independently determine what the work should cost, identifying potential savings.
Under FAR 15.403-1, which of the following is a condition that allows a contracting officer to waive the requirement for certified cost or pricing data?
Answer: When adequate price competition exists
Adequate price competition is one of the exceptions under FAR 15.403-1(b) that allows a contracting officer to waive the requirement for certified cost or pricing data.