Cost & Price Analysis Flashcards
7 cards from real Government Procurement Certification practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cost & Price Analysis flashcards as text
Under FAR Part 15, when is a contracting officer required to obtain certified cost or pricing data?
Answer: When the contract exceeds $750,000 and no exception applies
FAR 15.403-4 requires certified cost or pricing data when a contract, subcontract, or modification exceeds $750,000 and no exception (adequate price competition, commercial items, etc.) applies.
What is the primary purpose of a price analysis in government procurement?
Answer: To determine the reasonableness of a proposed price without examining cost elements
Price analysis evaluates whether a proposed price is fair and reasonable by comparing it to benchmarks such as competitive offers, catalog prices, or historical data, without dissecting individual cost elements.
Which of the following is NOT a recognized price analysis technique under FAR 15.404-1?
Answer: Comparison with prices found in the contractor's disclosed accounting practices
FAR 15.404-1(b) lists price analysis techniques including competitive offers, catalog/market prices, prior prices, and parametric estimates—comparing to disclosed accounting practices is a cost analysis technique, not a price analysis technique.
A contracting officer performing cost analysis receives a contractor's proposal with indirect cost rates. Which of the following actions is most appropriate?
Answer: Verify the rates against DCAA-audited or cognizant agency-established rates
Contracting officers should use rates established or recommended by the cognizant audit agency (typically DCAA) to ensure indirect cost rates are reasonable and consistent with the contractor's disclosed practices.
Under the Truth in Negotiations Act (TINA), what constitutes 'defective pricing'?
Answer: Submission of certified cost or pricing data that was not accurate, complete, or current at the time of agreement
Defective pricing under TINA occurs when a contractor submits certified cost or pricing data that was inaccurate, incomplete, or not current as of the date of price agreement, entitling the government to a price reduction.
What does the term 'cost realism analysis' mean in the context of government source selection?
Answer: An assessment of whether a contractor's proposed costs are realistic, complete, and consistent with the technical proposal
Cost realism analysis under FAR 15.404-1(d) evaluates whether proposed costs in a cost-reimbursement environment are realistic, reflect a clear understanding of the work, and are consistent with the technical approach.
Which cost is generally considered UNALLOWABLE under FAR Part 31?
Answer: Entertainment costs for hosting a contractor appreciation event
FAR 31.205-14 expressly identifies entertainment costs as unallowable, meaning the government will not reimburse costs for entertainment, amusements, diversion, or social activities.