Cost & Pricing Exam 3 Flashcards
(35 cards)
The reference guides prepared by AFIT and FAI that provide guidance to pricing and negotation personnel?
Cost and Pricing Reference Guide
Fair and reasonable price
amount that a prudent buyer would pay for something
Price analysis
process of examining and evaluating a proposed price to determine if it is fair and reasonable, without evaluating its separate cost elements and proposed profit
Cost analysis
review and evaluation of the separate cost elements and proposed profit/fee of an offeror’s certified cost and pricing data
What is the best price analysis method?
competition
Equation to calculate the percentage change between two indices
% change = NI / OI x 100 - 100
Fixed cost
a cost that remains constant, even as activity level changes
Variable cost
a cost that increases or decreases with respect to each change in activity level
Semi-variable cost
a cost that includes a fixed and variable element
What is the FPRA and who develops it?
Forward Pricing Rate Agreement
Administrative Contracting Officer (ACO) develops this
It is negotiated between the KTR and the KO
Price-related factor
adjustments required by law or regulation in order to complete price evaluation
What type of analysis is always required?
Price analysis
(T/F) - No final cost objective shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose in like circumstances have been included in any indirect cost pool to be allocated to that or any other final cost objective
True
Direct cost
cost tied to a single element or one cost objective
Indirect cost
any cost that can be tied to more than one cost objective
Cost of money
an imputed (or hypothetical) measure of the cost of capital related to facilities investment that is calculated using a rate set by the Secretary of the Treasury
How do you calculate cost of money?
factor multiplied by the category (base)
When is cost realism analysis required?
for all cost type contracts
What is the equation to determine overhead or indirect cost?
Rate = Pool divided by Base
Two types of indirect costs
Overhead
General and Administrative (G and A)
Why is G and A different?
accounts for general and executive office, staff services (legal, accounting, financial, etc), selling and marketing
What are the limits on profit and fee?
Profit: no limit
R and D: 15%
A and E / public works: 6%
Other: 10%
(T/F) - Profit cannot be charged on cost of money. We do not apply profit to cost of money.
True
(T/F) - If you have advertised a solicitation for less than 30 days and only receive one quote, you have to re-solicit it. If you then only get one offer, you may or may not negotiate the action
False
You MUST negotiate