FAR Part 15 Deck 2

Question 1

What is the scope of subpart 15.4?

Answer 1

It prescribes the cost and price negotiation policies and procedures for pricing negotiated prime contracts and contract modifications.

Question 2

Define ‘Price’ as used in subpart 15.401.

Answer 2

Cost plus any fee or profit applicable to the contract type.

Question 3

What does ‘Subcontract’ include according to 15.401?

Answer 3

It includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or a subcontractor.

Question 4

What is the primary responsibility of contracting officers under 15.402?

Answer 4

To purchase supplies and services from responsible sources at fair and reasonable prices.

Question 5

What must contracting officers obtain when certified cost or pricing data is required?

Answer 5

Certified cost or pricing data along with other necessary data to establish a fair and reasonable price.

Question 6

Fill in the blank: The contracting officer shall obtain _______ from the offeror if the price is based on adequate price competition.

Answer 6

No additional data

Question 7

List the types of data other than certified cost or pricing data that contracting officers may use.

Answer 7

• Data related to established catalog or market prices
• Sales data to non-governmental and governmental entities
• Cost data necessary for determining a fair and reasonable price

Question 8

True or False: Contracting officers can include a specified contingency amount in the contract price if it provides for a price adjustment based on that contingency.

Answer 8

False

Question 9

What situations exempt a contracting officer from obtaining certified cost or pricing data according to 15.403-1?

Answer 9

• Acquisitions at or below the simplified acquisition threshold
• Adequate price competition
• Prices set by law or regulation
• Acquisition of commercial products or services
• Waivers granted

Question 10

What is adequate price competition as defined in 15.403-1(c)(1)?

Answer 10

A price based on offers from two or more responsible offerors competing independently.

Question 11

What is the contracting officer’s action if the proposed price is based on inadequate price competition?

Answer 11

Require submission of additional data sufficient to support the determination of a fair and reasonable price.

Question 12

Fill in the blank: The head of the contracting activity (HCA) may waive the requirement for submission of _______ in exceptional cases.

Answer 12

certified cost or pricing data

Question 13

What are the conditions under which commercial products are exempt from the requirement for certified cost or pricing data?

Answer 13

• Modifications do not change the product to non-commercial
• Total price of modifications does not exceed specified thresholds

Question 14

What must contracting officers consider when requiring data other than certified cost or pricing data?

Answer 14

The extent necessary to determine a fair and reasonable price.

Question 15

What happens if an offeror does not comply with data submission requirements?

Answer 15

They are ineligible for award unless the HCA determines it is in the best interest of the Government.

Question 16

What is required for an acquisition for other than commercial products or services treated as commercial?

Answer 16

Exempt from certified cost or pricing data requirements, except for sole source contracts over $20 million.

Question 17

What should the contracting officer use to support price negotiations according to 15.403-3?

Answer 17

Data that are sufficiently current to permit negotiation of a fair and reasonable price.

Question 18

What does the inclusion of a price in a catalog imply about its fairness and reasonableness?

Answer 18

It does not, in and of itself, make it fair and reasonable.

Question 19

What must a contracting officer do if they cannot determine whether an offered price is fair and reasonable?

Answer 19

Require the offeror to submit data other than certified cost or pricing data.

Question 20

What types of data may a contracting officer require to determine if a price is fair and reasonable?

Answer 20

• History of sales to non-governmental and governmental entities
• Cost data
• Any other information required by the contracting officer

Question 21

What minimum data must the contracting officer require from the offeror unless an exception applies?

Answer 21

Appropriate data on the prices at which the same item or similar items have previously been sold.

Question 22

What limitations must a contracting officer consider when requesting sales data for commercial products or services?

Answer 22

• Limit requests to data for the same or similar items during a relevant time period
• Limit the scope of the request to data regularly maintained by the offeror

Question 23

What does 10 U.S.C. 3705(b) and 41 U.S.C. 3505(b) relate to?

Answer 23

Limitations relating to commercial products or commercial services.

Question 24

What is the threshold for obtaining certified cost or pricing data for prime contracts awarded before July 1, 2018?

Answer 24

$750,000.

Question 25

What is the threshold for obtaining certified cost or pricing data for prime contracts awarded on or after July 1, 2018?

Answer 25

$2 million.

Question 26

Under what circumstances can the contracting officer request a waiver for certified cost or pricing data?

Answer 26

If they believe exceptional circumstances exist and have sufficient data to determine a fair and reasonable price.

Question 27

What must the head of the contracting activity do to authorize the contracting officer to obtain certified cost or pricing data below the threshold?

Answer 27

Justify the requirement and document the necessity for certified cost or pricing data.

Question 28

What must be included in the Certificate of Current Cost or Pricing Data?

Answer 28

Certification that the cost or pricing data were accurate, complete, and current.

Question 29

What happens if certified cost or pricing data are submitted but an exception applies later?

Answer 29

The data must not be considered certified cost or pricing data.

Question 30

What is the main objective of proposal analysis?

Answer 30

To ensure that the final agreed-to price is fair and reasonable.

Question 31

What are the two main types of analysis used by contracting officers?

Answer 31

* Price analysis * Cost analysis

Question 32

What is price analysis?

Answer 32

The process of examining and evaluating a proposed price without evaluating its separate cost elements.

Question 33

What techniques can be used in price analysis?

Answer 33

* Comparison of proposed prices * Comparison with historical prices * Use of parametric estimating methods * Comparison with competitive published price lists * Comparison with independent Government cost estimates

Question 34

What is cost analysis?

Answer 34

The review and evaluation of any separate cost elements and profit in an offeror's proposal.

Question 35

What techniques can be used in cost analysis?

Answer 35

* Verification of cost data * Evaluating the necessity and reasonableness of proposed costs * Projection of cost trends * Comparison of costs proposed by the offeror

Question 36

True or False: The contracting officer is responsible for evaluating the reasonableness of offered prices.

Answer 36

True.

Question 37

What must the contracting officer do if discrepancies or mistakes of fact are found in submitted data?

Answer 37

Bring them to the contracting officer's attention for appropriate action.

Question 38

What role do expert technical advice and assistance play in proposal analysis?

Answer 38

They help ensure that an appropriate analysis is performed.

Question 39

What is value analysis?

Answer 39

It gives insight into the relative worth of a product and may be used in conjunction with price analysis techniques.

Question 40

What is the purpose of estimating relationships in contract pricing?

Answer 40

To analyze the offeror's past practices and their impact on future costs ## Footnote This involves ensuring that inefficient or uneconomical past practices are not projected into future pricing.

Question 41

What should a contracting officer evaluate in regards to an offeror's proposed costs?

Answer 41

Comparison of costs with: * Actual costs previously incurred by the same offeror * Previous cost estimates from the offeror or other offerors * Other cost estimates received in response to the Government's request * Independent Government cost estimates * Forecasts of planned expenditures ## Footnote This helps in assessing the reasonableness of the proposed costs.

Question 42

What is cost realism analysis?

Answer 42

The process of reviewing and evaluating specific elements of each offeror's proposed cost estimate to determine their realism for the work to be performed ## Footnote It ensures that the costs reflect a clear understanding of the requirements.

Question 43

When should cost realism analyses be performed?

Answer 43

On cost-reimbursement contracts to determine the probable cost of performance for each offeror ## Footnote The probable cost may differ from the proposed cost.

Question 44

How is the probable cost determined in cost realism analysis?

Answer 44

By adjusting each offeror's proposed cost to reflect realistic levels based on the analysis results ## Footnote This includes adjustments to the proposed fee when appropriate.

Question 45

True or False: Cost realism analyses can be used on competitive fixed-price incentive contracts.

Answer 45

True ## Footnote It is applicable in exceptional cases where new requirements are not fully understood.

Question 46

What is included in a technical analysis performed by the contracting officer?

Answer 46

Examination of: * Types and quantities of materials proposed * Reasonableness of labor hours and labor mix * Associated factors in the proposal ## Footnote This analysis helps determine the need for proposed resources.

Question 47

What should unit prices reflect according to the guidelines?

Answer 47

The intrinsic value of an item or service and be proportional to the item's base cost ## Footnote Distorting methods of distributing costs to line items are not acceptable.

Question 48

What is unbalanced pricing?

Answer 48

When one or more line items are significantly over or understated despite an acceptable total evaluated price ## Footnote This may increase performance risk and lead to payment of unreasonably high prices.

Question 49

What must a contracting officer do if unbalanced pricing is indicated?

Answer 49

Consider the risks to the Government and whether the award will result in unreasonably high prices ## Footnote An offer may be rejected if the unbalance poses an unacceptable risk.

Question 50

What are the requirements for pass-through contracts?

Answer 50

Consider alternative contract vehicles, determine the best interest of the Government, and document the basis for the determination ## Footnote This applies particularly when more than 70% of the total cost is subcontracted.

Question 51

What should field pricing assistance include?

Answer 51

Technical, audit, and special reports associated with cost elements, and information on pricing practices and history ## Footnote This assistance helps determine fair and reasonable prices.

Question 52

What is required for subcontractor certified cost or pricing data?

Answer 52

Must be submitted for subcontracts expected to exceed certain thresholds, including analyzing the data for reasonableness ## Footnote This ensures transparency and fairness in pricing.

Question 53

What happens if the data provided for review is deficient?

Answer 53

The auditor or ACO must notify the contracting officer immediately, leading to appropriate actions to obtain the required data ## Footnote If access to necessary data is denied, the contracting officer may withhold the award.

Question 54

What is required for subcontractor certified cost or pricing data?

Answer 54

Must be submitted in the format provided in 15.408 or alternate format specified in the solicitation ## Footnote This ensures compliance with the solicitation provisions and contract clauses.

Question 55

When must subcontractor certified cost or pricing data be current, accurate, and complete?

Answer 55

As of the date of price agreement or an earlier agreed date ## Footnote This must be specified on the contractor's Certificate of Current Cost or Pricing Data.

Question 56

If there are multiple prospective subcontractors, what does the contractor need to submit?

Answer 56

Certified cost or pricing data for the most likely subcontractor to receive the award ## Footnote This reduces the burden of providing data for all potential subcontractors.

Question 57

What do profit or fee prenegotiation objectives represent?

Answer 57

The potential total remuneration contractors may receive over allowable costs ## Footnote This does not necessarily represent net income.

Question 58

What is the Government's interest in profit for contractors?

Answer 58

To stimulate efficient contract performance and attract qualified businesses ## Footnote This helps maintain a viable industrial base.

Question 59

True or False: Negotiations aimed solely at reducing prices by cutting profit are in the Government's interest.

Answer 59

False ## Footnote Proper recognition of the function of profit is necessary for optimum contract performance.

Question 60

What should structured approaches for determining profit or fee objectives ensure?

Answer 60

All relevant factors are considered ## Footnote This applies especially to noncompetitive contracts over $100,000 totaling $50 million or more per year.

Question 61

When are contracting officers not required to analyze profit?

Answer 61

When the price negotiation is not based on cost analysis ## Footnote This simplifies the negotiation process in certain situations.

Question 62

What must contracting officers exclude from pre-negotiation cost objective amounts?

Answer 62

* Purchase cost of contractor-acquired property categorized as equipment * Facilities capital cost of money ## Footnote This ensures accurate calculations of profit or fee objectives.

Question 63

What are the statutory limitations on fees for cost-plus-fixed-fee contracts?

Answer 63

* 15% for experimental, developmental, or research work * 6% for architect-engineer services for public works or utilities * 10% for other cost-plus-fixed-fee contracts ## Footnote These limits ensure fairness and reasonableness in contract pricing.

Question 64

What does the contracting officer's signature on documentation signify?

Answer 64

Determination that statutory price or fee limitations have not been exceeded ## Footnote This is essential for compliance with legal requirements.

Question 65

What factors are common in profit-analysis considerations?

Answer 65

* Contractor effort * Contract cost risk * Federal socioeconomic programs * Capital investments * Cost-control and past accomplishments * Independent development ## Footnote Each factor affects the profit opportunity for contractors.

Question 66

What does the contractor effort factor measure?

Answer 66

Complexity of the work and resources required for contract performance ## Footnote Higher skill levels typically allow for greater profit opportunities.

Question 67

What is the purpose of cost or price analysis in negotiations?

Answer 67

To develop a negotiation position for fair and reasonable price agreement ## Footnote This process is essential for both the contracting officer and the offeror.

Question 68

What should prenegotiation objectives be based on?

Answer 68

Analysis of the offeror’s proposal and all pertinent information ## Footnote This includes field pricing assistance, audit reports, and independent cost estimates.

Question 69

What does the Certificate of Current Cost or Pricing Data require?

Answer 69

Certification that cost or pricing data submitted is accurate, complete, and current ## Footnote This is a critical step in the negotiation process.

Question 70

What distinction must be understood regarding the contractor's responsibility in pricing data?

Answer 70

The certificate applies to the data upon which judgment or estimate was based, not the accuracy of future cost projections ## Footnote This emphasizes the importance of accurate historical data.

Question 71

Fill in the blank: The contracting officer shall establish prenegotiation objectives before the negotiation of any _______.

Answer 71

[pricing action] ## Footnote This is crucial for a systematic negotiation approach.

Question 72

What is the contractor's responsibility if they had information showing that the negotiated price was not based on accurate data?

Answer 72

The contractor's responsibility is not limited by any lack of personal knowledge of the information on the part of its negotiators. ## Footnote This implies that contractors must ensure the accuracy of the data used for negotiations, regardless of their personal awareness.

Question 73

What are the contracting officer and contractor encouraged to agree on regarding proposal updates?

Answer 73

They are encouraged to reach a prior agreement on criteria for establishing closing or cutoff dates. ## Footnote This helps minimize delays associated with proposal updates.

Question 74

What should be included as part of the data submitted with the proposal?

Answer 74

Closing or cutoff dates should be included. ## Footnote This ensures that data is updated to the latest available information before price agreement.

Question 75

Is the use of cutoff dates coinciding with reports acceptable?

Answer 75

Yes, it is acceptable as certain data may not be reasonably available before normal periodic closing dates. ## Footnote For example, actual indirect costs may fall under this category.

Question 76

How is data treated within the contractor's or subcontractor's organization?

Answer 76

Data on matters significant to contractor management and to the Government will be treated as reasonably available. ## Footnote The significance of the data depends on the circumstances of each acquisition.

Question 77

What is not a substitute for examining and analyzing the contractor's proposal?

Answer 77

Possession of a Certificate of Current Cost or Pricing Data. ## Footnote This emphasizes the need for thorough review beyond just having certification.

Question 78

What happens if certified cost or pricing data are requested but an exception is later found to apply?

Answer 78

The data shall not be considered certified cost or pricing data and shall not be certified. ## Footnote This indicates the importance of ensuring compliance with certification requirements.