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

Under FAR 52.232-20, the Limitation of Cost clause establishes the maximum amount the government is obligated to reimburse; the contractor must notify the government when costs approach this ceiling.

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

A pre-negotiation memorandum documents the contracting officer's analysis of the contractor's proposal and establishes the government's negotiation objectives, including the objective price, before the negotiation session begins.

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

Should-cost analysis (FAR 15.407-4) is a government team review of a contractor's operations to identify uneconomical practices and quantify potential savings, resulting in a price reflecting efficient performance.

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

The weighted guidelines method assigns the highest weight range to performance risk factors (technical and management), reflecting the contractor's effort, complexity, and the risk assumed in executing the contract.

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

FAR 31.205-46 limits allowable air travel costs to the lowest available coach/economy fares; costs in excess of that standard are unallowable and should be disallowed on the invoice.

Government Procurement Certification Practice Test

Government Procurement Certification Practice Test

Government Procurement Certification Cost & Price Analysis 2