Government Procurement Certification Audit & Accountability 2 — Questions and Answers
Question 1: Under FAR Part 42, which agency is primarily responsible for conducting contract audits for defense contractors?
- Government Accountability Office (GAO)
- Defense Contract Audit Agency (DCAA) (Correct answer)
- Office of Inspector General (OIG)
- Defense Contract Management Agency (DCMA)
Correct answer: Defense Contract Audit Agency (DCAA)
The DCAA is responsible for auditing defense contractor accounting systems and costs under FAR Part 42.
Question 2: What is a 'forward pricing rate agreement' (FPRA) used for in government contracting?
- Setting fixed prices for all future contracts
- Establishing agreed-upon indirect cost rates for pricing future proposals (Correct answer)
- Auditing past contract performance
- Determining contractor profit margins
Correct answer: Establishing agreed-upon indirect cost rates for pricing future proposals
An FPRA establishes agreed indirect cost rates between the contractor and government for use in pricing future proposals.
Question 3: Which audit type examines whether a contractor's accounting system is capable of accurately tracking costs by contract?
- Performance audit
- Accounting system audit (Correct answer)
- Incurred cost audit
- Price proposal audit
Correct answer: Accounting system audit
An accounting system audit evaluates whether the contractor's system can adequately segregate and track costs by contract.
Question 4: What is the statute of limitations for the government to assert a claim against a contractor under the Contract Disputes Act (CDA)?
- 3 years from the date of contract award
- 6 years from the date the claim accrues (Correct answer)
- 5 years from contract completion
- 10 years from contract closeout
Correct answer: 6 years from the date the claim accrues
Under the CDA, both the government and contractor have 6 years from when the claim accrues to assert a claim.
Question 5: A contractor submits an incurred cost submission (ICS) that is found to be inadequate. What is the consequence?
- The contract is automatically terminated
- The government may withhold payments until adequate submission is received (Correct answer)
- The contractor is barred from future contracts
- The contracting officer must accept the submission as-is
Correct answer: The government may withhold payments until adequate submission is received
If an ICS is found inadequate, the government may withhold a percentage of payments until the contractor submits an adequate ICS.
Question 6: Under the Truth in Negotiations Act (TINA), what is 'defective pricing'?
- Submitting a bid that is too low to be profitable
- Providing cost or pricing data that was inaccurate, incomplete, or non-current at the time of agreement (Correct answer)
- Failing to submit any cost or pricing data
- Overcharging for materials compared to market rates
Correct answer: Providing cost or pricing data that was inaccurate, incomplete, or non-current at the time of agreement
Defective pricing occurs when certified cost or pricing data submitted was inaccurate, incomplete, or non-current, entitling the government to a price reduction.
Question 7: What does a 'should-cost' analysis involve in government procurement?
- Reviewing contractor invoices for mathematical errors
- Independently estimating what a contract should cost using engineering and cost analysis (Correct answer)
- Comparing bids from multiple offerors
- Auditing contractor labor rates after contract completion
Correct answer: Independently estimating what a contract should cost using engineering and cost analysis
A should-cost analysis is a government evaluation that estimates the realistic cost of performance using detailed engineering and cost analysis techniques.
Government Procurement Certification Audit & Accountability 2
Under FAR Part 42, which agency is primarily responsible for conducting contract audits for defense contractors?