FCC Contract Types: FFP, T&M, CPFF 3

Question 1

A contracting officer wants to use a T&M contract. What special approval is required under FAR 16.601(d)?

Accepted Answer

Determination and Findings (D&F) that no other contract type is suitable

Answer

FAR 16.601(d) requires the contracting officer to execute a Determination and Findings (D&F) justifying that no other contract type is suitable before awarding a T&M contract.

Question 2

In a CPFF completion form contract, what happens to the fixed fee if the work is completed before the estimated cost is fully expended?

Accepted Answer

The contractor still receives the full fixed fee

Answer

Under a CPFF completion form, the contractor earns the full fixed fee upon completion of the specified end product, regardless of actual costs.

Question 3

Which of the following best describes the 'term' form of a CPFF contract?

Accepted Answer

The contractor performs a level of effort over a specified period for the fixed fee

Answer

In a CPFF term contract, the fee is earned for performing a specified level of effort over a stated time period, not for delivering a defined end product.

Question 4

Under an FFP contract, how does the contractor maximize profit?

Accepted Answer

By reducing costs below the contract price

Answer

Because the price is fixed, a contractor earns more profit by controlling and reducing its actual costs below the contract price.

Question 5

Which contract type provides the LEAST incentive for contractor cost control?

Accepted Answer

CPFF

Answer

CPFF provides the least incentive for cost control because the contractor is reimbursed for all allowable costs and receives the same fixed fee regardless of efficiency.

(FCC) Federal Contracting Certification Practice Test

(FCC) Federal Contracting Certification Practice Test

FCC Contract Types: FFP, T&M, CPFF 3