FAR Part 16 Deck 1 Flashcards
(87 cards)
1
Q
What is the purpose of Part 16?
A
Describes types of contracts used in acquisitions and prescribes policies and procedures
2
Q
What are the two broad categories of contract types?
A
- Fixed-price contracts
- Cost-reimbursement contracts
3
Q
What is a firm-fixed-price contract?
A
A contract with a price not subject to adjustment based on contractor cost experience
4
Q
What does ‘established price’ mean?
A
A price that is a catalog or market price for a commercial product sold in substantial quantities
5
Q
Who is the Fee-Determining Official (FDO)?
A
Designated Agency official(s) who reviews recommendations for award fee determinations
6
Q
What is the role of the Award-Fee Board?
A
Assists the Fee-Determining Official in making award-fee determinations
7
Q
What is the ‘rollover of unearned award fee’?
A
Transferring unearned award fee from one evaluation period to a subsequent one
8
Q
What are the key factors in selecting contract types?
A
- Price competition
- Price analysis
- Cost analysis
- Type and complexity of the requirement
- Combining contract types
- Urgency of the requirement
- Period of performance
- Contractor’s technical capability
- Adequacy of the contractor’s accounting system
- Concurrent contracts
- Extent of proposed subcontracting
- Acquisition history
9
Q
What is the minimum requirement for a contract award before execution?
A
Execution of any determination and findings (D&F) required by this part
10
Q
Fill in the blank: Contracts resulting from sealed bidding shall be _______.
A
firm-fixed-price contracts or fixed-price contracts with economic price adjustment
11
Q
What is the purpose of the solicitation provision at 52.216-1?
A
To indicate the type of contract in a solicitation
12
Q
What is a cost-plus-incentive-fee contract?
A
A contract where the contractor is reimbursed for costs and earns an additional fee for performance
13
Q
What is included in fixed-price contracts with economic price adjustment?
A
Adjustable prices with ceiling or target prices subject to contract clauses
14
Q
What should be documented in the contract file regarding contract type selection?
A
Reasons for the selected contract type, including risks and management burdens
15
Q
True or False: Cost-plus-a-percentage-of-cost system of contracting is allowed.
A
False
16
Q
What is the definition of ‘Time-and-materials contracts’?
A
Contracts that are not fixed-price contracts
17
Q
What are the limitations of a firm-fixed-price contract?
A
The contractor assumes maximum risk and full responsibility for costs and profit/loss
18
Q
What should be considered if urgency is a primary factor in contract selection?
A
The Government may choose to assume greater risk or offer performance incentives
19
Q
What is the primary risk assumption in complex research and development contracts?
A
Greater risk assumption by the Government due to performance uncertainties
20
Q
What is the significance of contractor’s technical capability in contract selection?
A
It affects the choice of contract type, especially if past experience was fixed-price
21
Q
What types of contracts are prohibited for prime contracts other than firm-fixed-price?
A
Cost-plus-a-percentage-of-cost subcontracts
22
Q
Fill in the blank: The contracting officer must ensure that the contractor’s _______ will permit timely cost data development.
A
accounting system
23
Q
What is the effect of acquisition history on contractor risk?
A
Risk usually decreases as the requirement is repetitively acquired
24
Q
What is a basic ordering agreement?
A
An agreement that establishes terms for future orders without specifying quantities
25
What are the types of contracts mentioned in Subpart 16.2?
* Firm-fixed-price contracts
* Fixed-price contracts with economic price adjustment
26
What document must each contract file include regarding contract type?
Documentation explaining why the selected contract type meets agency needs
27
What type of contracts are not considered fixed-price contracts?
Time-and-materials contracts and labor-hour contracts
## Footnote
These types of contracts do not provide a fixed price and instead rely on actual costs incurred.
28
What is a firm-fixed-price contract?
A contract that provides for a price not subject to adjustment based on contractor's cost experience
## Footnote
This type of contract places maximum risk on the contractor and incentivizes cost control.
29
What are the key applications for a firm-fixed-price contract?
Suitable for acquiring commercial products or services when:
* There is adequate price competition
* There are reasonable price comparisons with prior purchases
* Available cost information allows realistic estimates
* Performance uncertainties can be identified
30
What are the three general types of economic price adjustments in fixed-price contracts?
1. Adjustments based on established prices
2. Adjustments based on actual costs of labor or material
3. Adjustments based on cost indexes of labor or material
## Footnote
These adjustments allow for price revisions based on specific contingencies.
31
When may a fixed-price contract with economic price adjustment be used?
When there is serious doubt about market or labor stability during contract performance
## Footnote
It allows for contingencies to be identified and covered separately.
32
What must a contracting officer determine before using a fixed-price contract with economic price adjustment?
It is necessary to protect against significant fluctuations in labor or material costs
## Footnote
This ensures that both the contractor and government are safeguarded against cost volatility.
33
What is a fixed-price incentive contract?
A fixed-price contract that adjusts profit and establishes final price based on negotiated total cost
## Footnote
These contracts are covered in subpart 16.4, Incentive Contracts.
34
What does a fixed-price contract with prospective price redetermination provide?
A firm fixed price for an initial period and prospective redetermination for subsequent periods
## Footnote
This allows for price adjustments at stated times during performance.
35
What limitations apply to fixed-price contracts with prospective price redetermination?
Conditions for firm-fixed-price contracts are not present, and accounting system must be adequate
## Footnote
Ensures proper management of contract pricing and adjustments.
36
What is a fixed-ceiling-price contract with retroactive price redetermination?
A contract that has a fixed ceiling price and allows for retroactive price redetermination after completion
## Footnote
Used primarily for research and development contracts when fair fixed prices cannot be negotiated.
37
What are the conditions under which a fixed-ceiling-price contract with retroactive price redetermination may be used?
For research and development contracts at or below the simplified acquisition threshold
* Contractor's accounting system must be adequate
* Approval must be obtained from higher-level officials
38
What characterizes a firm-fixed-price, level-of-effort term contract?
Requires contractor to provide a specified level of effort over a stated period for work stated generally
## Footnote
Payment is a fixed dollar amount, typically producing a report of results.
39
What is a firm-fixed-price, level-of-effort term contract?
A contract requiring a specified level of effort over a stated time period, with payment as a fixed dollar amount.
## Footnote
This type of contract is suitable for general work descriptions where specific outcomes cannot be guaranteed.
40
What is the main product of a firm-fixed-price, level-of-effort term contract?
A report showing the results achieved through the application of the required level of effort.
## Footnote
Payment is based on effort expended rather than results.
41
Under what conditions can a firm-fixed-price, level-of-effort term contract be used?
When the work cannot be clearly defined, required level of effort is agreed upon, assurance exists that intended results require stipulated effort, and contract price is within the simplified acquisition threshold.
## Footnote
Approval by the chief of the contracting office is needed if the price exceeds the threshold.
42
What do cost-reimbursement contracts provide for?
Payment of allowable incurred costs, with an estimate of total cost to obligate funds and establish a ceiling.
## Footnote
The contractor cannot exceed this ceiling without approval.
43
When should cost-reimbursement contracts be used?
When requirements cannot be sufficiently defined for a fixed-price contract or when uncertainties prevent accurate cost estimation.
## Footnote
Documentation in the acquisition plan is required.
44
What is a cost contract?
A cost-reimbursement contract in which the contractor receives no fee.
## Footnote
Typically used for research and development work with nonprofit organizations.
45
What characterizes cost-sharing contracts?
A cost-reimbursement contract where the contractor receives no fee and is reimbursed for only a portion of allowable costs.
## Footnote
Used when the contractor expects substantial benefits by absorbing some costs.
46
Define cost-plus-incentive-fee contracts.
Cost-reimbursement contracts that provide an initially negotiated fee adjusted by a formula based on total allowable costs to total target costs.
## Footnote
Incentives are based on performance.
47
What is the structure of cost-plus-award-fee contracts?
Contracts that provide a base fee (which may be zero) and an additional award amount based on performance evaluation by the Government.
## Footnote
Designed to motivate excellence in contract performance.
48
What is a cost-plus-fixed-fee contract?
A cost-reimbursement contract providing a fixed negotiated fee that does not vary with actual costs but may adjust for changes in work.
## Footnote
Suitable for high-risk projects where cost control is essential.
49
What forms can a cost-plus-fixed-fee contract take?
Completion form and term form.
## Footnote
The completion form has a definite goal, while the term form requires a specified level of effort over time.
50
What must be included in the contract clauses for cost-reimbursement contracts?
Clauses like Allowable Cost and Payment, Fixed Fee, and Incentive Fee must be inserted as per the contract type.
## Footnote
Specific clauses apply based on the nature of the contract and the entity involved.
51
What are the two basic categories of incentive contracts?
Fixed-price incentive contracts and cost-reimbursement incentive contracts.
## Footnote
Fixed-price contracts are preferred when costs and performance requirements are reasonably certain.
52
What is an award-fee contract?
A type of incentive contract that motivates exceptional performance without predetermined objective targets.
## Footnote
The award fee is based on overall performance against contract requirements.
53
What is required for an award-fee plan?
It must establish evaluation procedures, link criteria to acquisition objectives, and describe performance measurement methods.
## Footnote
The plan must be approved by the FDO.
54
What is the purpose of the award-fee evaluation criteria?
To measure the contractor's performance against specific criteria.
55
What adjectival rating corresponds to an award-fee pool of 91%-100%?
Excellent
56
What adjectival rating corresponds to an award-fee pool of 76%-90%?
Very Good
57
What adjectival rating corresponds to an award-fee pool of 51%-75%?
Good
58
What adjectival rating corresponds to an award-fee pool of 0%-50%?
Unsatisfactory
59
What must be documented in the award-fee plan according to the guidelines?
The method used to determine the adjectival rating.
60
True or False: Contractors can earn an award fee if their overall performance is below satisfactory.
False
61
What should be defined regarding the total award-fee pool amount?
How this amount is allocated across each evaluation period.
62
What is prohibited regarding unearned award fees?
Rollover of unearned award fee.
63
What is required for awarding an award-fee contract?
Compliance with all applicable limitations and completion of an award-fee plan.
64
What must each agency collect regarding award fees?
Data on award fee and incentive fees paid to contractors.
65
What is the purpose of sharing proven incentive strategies among contracting officials?
To improve contractor performance and achieve desired program outcomes.
66
What is the primary focus of most incentive contracts?
Cost incentives.
67
Fill in the blank: Performance incentives should relate profit or fee to _______.
[results achieved by the contractor]
68
What is essential for determining the degree of attainment of performance targets?
Performance tests and assessments of work performance.
69
What should be specified in delivery incentives?
Application of the reward-penalty structure in case of delays.
70
What is the purpose of structuring multiple-incentive contracts?
To motivate the contractor in all incentive areas and compel trade-off decisions.
71
What is a fixed-price incentive contract?
A contract that adjusts profit and establishes final price based on total final negotiated cost.
72
What types of fixed-price incentive contracts are there?
* Firm target
* Successive targets
73
What is the maximum that may be paid to the contractor in a fixed-price incentive (firm target) contract?
The price ceiling.
74
What is a cost-plus-incentive-fee contract?
A cost-reimbursement contract that adjusts the fee based on allowable costs and target costs.
75
What is a requirement for a cost-plus-incentive-fee contract to be appropriate?
A target cost and fee adjustment formula must be negotiable.
76
What is a cost-plus-incentive-fee contract?
A cost-reimbursement contract that provides for payment of total allowable costs plus a negotiated fee adjusted based on performance and cost management.
77
When is a cost-plus-incentive-fee contract appropriate?
When a cost-reimbursement contract is necessary and a target cost with a fee adjustment formula can be negotiated.
78
What can a cost-plus-incentive-fee contract include to motivate contractors?
Technical performance incentives when development of a major system is feasible and performance objectives are established.
79
What should the fee adjustment formula in a cost-plus-incentive-fee contract provide?
An incentive that is effective over the full range of reasonably foreseeable variations from target cost.
80
What are the limitations regarding the award of cost-plus-incentive-fee contracts?
All limitations in 16.301-3 must be complied with.
81
What is a cost-plus-award-fee contract?
A cost-reimbursement contract that includes a base fee and an award amount for motivating excellence in cost, schedule, and technical performance.
82
What are the components of a cost-plus-award-fee contract's fee structure?
* Base amount fixed at the contract's inception
* Award amount that can be earned during performance
83
What clause should be inserted in solicitations for fixed-price incentive (firm target) contracts?
The clause at 52.216-16, Incentive Price Revision-Firm Target.
84
Which clause is used for fixed-price incentive (successive targets) contracts?
The clause at 52.216-17, Incentive Price Revision-Successive Targets.
85
When should the clause at 52.216-7, Allowable Cost and Payment, be used?
In solicitations and contracts for cost-plus-incentive-fee or cost-plus-award-fee contracts.
86
What clause is prescribed for insertion in cost-plus-incentive-fee contracts?
The clause at 52.216-10, Incentive Fee.
87
What requirements must an award-fee clause meet?
* Prescribed by or approved under agency acquisition regulations
* Compatible with the clause at 52.216-7
* Award amount and determination methodology are unilateral decisions by the Government.
