Government Procurement Certification Government Procurement Legal & Regulatory Compliance 3 ā Questions and Answers
Question 1: Under the Service Contract Labor Standards (formerly Service Contract Act), what documentation must contractors maintain?
- Only payroll records for employees earning under $27.63/hour
- Wage determinations, payroll records, and fringe benefit records for all covered employees (Correct answer)
- Only records of employees who filed complaints
- Annual compliance certifications submitted to the Department of Labor
Correct answer: Wage determinations, payroll records, and fringe benefit records for all covered employees
Contractors must maintain wage determinations incorporated into the contract, along with payroll and fringe benefit records for all covered service employees for audit purposes.
Question 2: A contractor discovers a $500,000 overcharge on a cost-reimbursement contract. Under FAR 52.243-7, the contractor must notify the contracting officer within how many days?
- 30 days
- 60 days (Correct answer)
- 90 days
- 180 days
Correct answer: 60 days
FAR 52.243-7 (Notification of Changes) requires contractors to notify the contracting officer within 60 days of discovering an increase or decrease in cost.
Question 3: Which principle governs what a contractor may charge to a government cost-reimbursement contract under FAR Part 31?
- Cost must be the lowest price available in the marketplace
- Cost must be allowable, allocable, and reasonable (Correct answer)
- Cost must be pre-approved by the Defense Contract Audit Agency (DCAA)
- Cost must be listed in the contract's approved cost element breakdown
Correct answer: Cost must be allowable, allocable, and reasonable
FAR Part 31 establishes that costs charged to government contracts must be allowable (permitted by regulation), allocable (properly assigned to the contract), and reasonable (reflecting what a prudent person would pay).
Question 4: Under the Federal Aquisition Regulation, which type of contract places the greatest financial risk on the contractor?
- Cost-plus-fixed-fee (CPFF)
- Cost-plus-incentive-fee (CPIF)
- Firm-fixed-price (FFP) (Correct answer)
- Time-and-materials (T&M)
Correct answer: Firm-fixed-price (FFP)
Firm-fixed-price contracts place maximum risk on the contractor because the contractor receives a set price regardless of actual costs incurred.
Question 5: The False Claims Act imposes penalties on contractors who submit false claims to the government. What is the current civil penalty range per false claim?
- $500 to $1,000
- $5,000 to $10,000
- $13,946 to $27,894 (adjusted for inflation) (Correct answer)
- $50,000 to $100,000
Correct answer: $13,946 to $27,894 (adjusted for inflation)
False Claims Act civil penalties are adjusted annually for inflation; as of recent years, penalties range from approximately $13,946 to $27,894 per false claim, plus treble damages.
Question 6: Under FAR 3.502, which of the following constitutes an illegal gratuity that a contractor may NOT provide to a government official?
- A $10 promotional pen with the company's logo
- Tickets to a professional sporting event valued at $200 (Correct answer)
- A publicly available industry report
- Coffee and pastries at a government-facility meeting
Correct answer: Tickets to a professional sporting event valued at $200
Providing entertainment tickets of significant value to a government official constitutes a gratuity intended to obtain favorable treatment, which is prohibited under FAR 3.502 and federal ethics rules.
Question 7: Which clause is required in contracts over the simplified acquisition threshold and addresses mandatory contractor reporting of fraud, waste, and abuse?
- FAR 52.203-13 (Contractor Code of Business Ethics and Conduct) (Correct answer)
- FAR 52.215-2 (Audit and RecordsāNegotiation)
- FAR 52.222-26 (Equal Opportunity)
- FAR 52.232-25 (Prompt Payment)
Correct answer: FAR 52.203-13 (Contractor Code of Business Ethics and Conduct)
FAR 52.203-13 requires contractors above the simplified acquisition threshold to have a written code of business ethics and to establish an internal control system with mandatory disclosure of fraud, waste, and abuse.
Government Procurement Certification Government Procurement Legal & Regulatory Compliance 3
Under the Service Contract Labor Standards (formerly Service Contract Act), what documentation must contractors maintain?