Government Procurement Certification Cost & Price Analysis 2

Question 1

When evaluating a cost-plus-fixed-fee (CPFF) contract proposal, which element directly affects the government's maximum liability?

Accepted Answer

The contract's Limitation of Cost clause ceiling

Answer

The contractor's proposed profit percentage

Answer

The estimated cost and the fixed fee together form the ceiling obligation

Answer

Only the fixed fee, since costs are reimbursed as incurred

Question 2

A contracting officer wants to establish pre-negotiation objectives for a major negotiated acquisition. What is the primary purpose of the pre-negotiation memorandum (PNM)?

Accepted Answer

To record the contracting officer's cost and price analysis and establish an objective price range before negotiations begin

Answer

To document the final negotiated price for the contract file

Answer

To obtain approval from the SBA before entering negotiations with a small business

Answer

To notify the contractor of the government's maximum budget for the acquisition

Question 3

Which of the following best describes 'should-cost analysis' in government procurement?

Accepted Answer

An in-depth review of a contractor's costs to identify inefficiencies and determine what the contract should cost if performed efficiently

Answer

A standard price analysis technique used for all commercial item purchases

Answer

A method to calculate profit using the weighted guidelines approach

Answer

A DCAA audit procedure required for all contracts over $10 million

Question 4

Under FAR 15.404-4, which factor is given the most weight when using the weighted guidelines method to determine profit or fee?

Accepted Answer

Performance risk (technical and management)

Answer

Contractor facilities capital employed

Answer

Cost efficiency

Answer

Contract type risk

Question 5

A contractor submits an invoice for costs incurred on a cost-reimbursement contract. The contracting officer's representative (COR) notices the contractor billed for first-class airfare for key personnel. What is the correct action?

Accepted Answer

Disallow the excess cost above coach/economy airfare under FAR 31.205-46

Answer

Approve the invoice since senior personnel are entitled to first-class travel on government contracts

Answer

Refer the matter to DCAA for a full audit before taking action

Answer

Reduce total travel costs by 25% as a standard adjustment

Question 6

What is the key distinction between a 'firm-fixed-price' contract and a 'fixed-price with economic price adjustment' contract?

Accepted Answer

A fixed-price with EPA contract includes provisions to adjust the price based on specified contingencies such as labor or material cost changes

Answer

A firm-fixed-price contract allows cost audits; fixed-price with EPA does not

Answer

A firm-fixed-price contract is only used for commercial items

Answer

Fixed-price with EPA requires submission of certified cost or pricing data

Question 7

Which statement about the relationship between cost analysis and price analysis is most accurate?

Accepted Answer

Cost analysis examines individual cost elements while price analysis evaluates the overall price without examining cost components

Answer

Cost analysis and price analysis are interchangeable terms for the same process

Answer

Price analysis is used when cost or pricing data is required; cost analysis is used otherwise

Answer

Cost analysis is only required for sole-source contracts over $10 million