Government Procurement Certification Cost & Price Analysis 3

Question 1

A contracting officer is evaluating proposals for a cost-reimbursement contract with a technical performance component.
Which of the following is a valid reason to adjust an offeror's proposed cost upward during cost realism analysis?

Accepted Answer

The offeror's technical proposal indicates a more complex approach than reflected in the cost proposal, suggesting understated labor hours

Answer

The offeror's proposed cost is 5% lower than the independent government cost estimate

Answer

The offeror has a higher indirect cost rate than competitors

Answer

The offeror failed to include G&A costs in the proposal

Question 2

Under FAR Part 31, what does the term 'allocable cost' mean?

Accepted Answer

A cost that is assignable or chargeable to one or more cost objectives in accordance with the relative benefits received or other equitable relationship

Answer

A cost that has been approved by the contracting officer for reimbursement

Answer

A cost that falls within the contractor's disclosed cost accounting practices

Answer

A cost that does not exceed the amounts found reasonable for similar services in the commercial marketplace

Question 3

The Cost Accounting Standards (CAS) Board applies to which category of contractors?

Accepted Answer

Contractors and subcontractors that receive negotiated contracts over the CAS coverage threshold (currently $2 million) and are not exempt

Answer

All government contractors regardless of contract size or type

Answer

Only defense contractors with contracts exceeding $100 million

Answer

Any contractor performing cost-reimbursement work, regardless of dollar value

Question 4

What is the primary objective of the profit/fee guidelines established under FAR 15.404-4?

Accepted Answer

To ensure that the government pays a profit commensurate with the contractor's effort, risk, and contribution, while maintaining competition

Answer

To guarantee that contractors earn a minimum 10% profit on all negotiated contracts

Answer

To cap contractor profits at 15% of total contract cost to limit government expenditure

Answer

To standardize profit rates across all federal agencies

Question 5

A contractor claims that certain independent research and development (IR&D) costs should be reimbursable under a government cost-reimbursement contract. Under FAR 31.205-18, which condition makes IR&D costs allowable?

Accepted Answer

The costs must be reasonable in amount and the contractor must have an established IR&D program with anticipated future government business

Answer

The research must be directly related to the specific contract on which the costs are claimed

Answer

The contractor must obtain prior written approval from the contracting officer before incurring IR&D costs

Answer

IR&D costs are always unallowable on cost-reimbursement contracts

Question 6

When negotiating a contract price, what does 'most probable cost' refer to in source selection for cost-reimbursement contracts?

Accepted Answer

The government's adjusted estimate of what a contractor will likely incur to perform the contract, used to compare offers on an equal basis

Answer

The contractor's proposed cost as submitted in the original proposal

Answer

The average of all offerors' proposed costs used to establish a fair market price

Answer

The DCAA's independently audited cost figure for the winning offeror

Question 7

Under FAR 31.205-6, which of the following compensation costs for contractor employees is generally UNALLOWABLE?

Accepted Answer

Golden parachute payments and severance pay exceeding normal severance policies triggered by a change in management control

Answer

Reasonable salaries paid to employees performing direct contract work

Answer

Employer contributions to employee retirement plans that are reasonable and actuarially sound

Answer

Overtime premiums paid to employees when overtime is approved by the contracting officer