Chapter 6 - Contracts

Question 1

3 requirements of a contract:

Answer 1

-competent parties
-propper format required by law
-legally enforceable

Question 2

5 major steps in the contracting process:

Answer 2

-preparation
-response
-negotiation
-administration
-modification

Question 3

Contracts and Pricing Department

Answer 3

O19

Question 4

________ department - handles activities after a contract has been awarded

Answer 4

Administration

Question 5

two catagories of NNS contracts:

Answer 5

fixed price, cost reimbursable

Question 6

______ is high in risk and profit potential

Answer 6

fixed price

Question 7

expected cost fo the project

Answer 7

target cost

Question 8

expected fee (or profit) the seller will receive if pre-construction forecasts are met

Answer 8

target fee

Question 9

the seller’s actual cost to do the work specified

Answer 9

performance cost

Question 10

maximum amount the buyer will pay at completion of the contract

Answer 10

ceiling price

Question 11

negotiated percentage that divides the risk of cost overruns and the excess of cost underruns betweent he buyer and seller.

Answer 11

shareline

Question 12

point on the shareline in which the seller assumes all of the cost overruns

Answer 12

point of total assumption

Question 13

is lower in risk and profit potential

Answer 13

cost reimbursable contract

Question 14

two types of cost reimbursable contracts

Answer 14

-cost plus incentive fee
-cost plus fixed fee

Question 15

has no ceiling price, used on overhauls and first ship in a new class

Answer 15

cost plus incentive fee

Question 16

is selling man hours when contract scope is hard to define

Answer 16

cost plus fixed fee