Contracting Exam 6 Flashcards
When is it appropriate to use cost realism?
For all cost type contracts.
Who develops the Forward Price Rate Agreements (FPRA)?
The ACO (DCMA) and Contractor
What is the Contracting Pricing Reference Guide (CPRG)?
The basic guide for basic pricing policy
Fair and Reasonable price is determined by:
- Economic conditions
- Supply and Demand
- Competition
________ analyzes prices in their entirety
Price Analysis
________ analyzes prices by reviewing the individual elements of cost (price) & the appropriateness & necessity of each element of cost
Cost Analysis
________ independently reviews cost elements to determine are they realistic for the work to be performed.
Cost Realism
_______ costs remain constant, even as activity level changes.
Fixed Costs
________ costs which increase or decrease with respect to each change in the activity level.
Variable Costs
_______ fixed portion & variable portion
Semi-Variable Cost
True of False: There is no maximum profit?
TRUE
When is it appropriate to use cost realism?
For all cost type contracts.
When is it appropriate to use cost analysis?
When TINA applies, you must use cost analysis
When is it appropriate to use price analysis?
You must use price analysis to determine if a price is fair and reasonable when an offeror is not required to provide certified cost and pricing data.
What is the best definition of a price related factor?
A situation where you must determine the benefit associated with two different things (i.e. lease vs. buy GFP, FOB Origin or Destination).
Overhead is developed by the contractor using ___________________.
Pool over Base
True or False: Cost of money must be removed before profit is applied.
True
Define Cost of Money:
Cost of Money is 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.
What is a “fair and reasonable” price?
- Fair to both parties
- Too high or too low
- To a prudent and competent buyer
Cost Accounting Standards are:
Standards designed to achieve uniformity and consistency in cost accounting practices governing measurement, assignment, and allocation of costs to contracts with United States Government.
There are two types of CAS coverages. They are:
- Full: all 19 standards required
- Modified: 4 standards required
Who submits the Disclosure Statement (DS)?
The Contractor.
True or False: Contracting officers cannot charge profit on the cost of money.
True
Cost of Money equation problem is:
Base x Factor, add it together
CPFF fee maximums are:
R&D 15%
10% on others
What are the two categories of Indirect Costs?
- Overhead
- G&A
DCAA Proposal Review Thresholds:
$100 Million Cost-Reimbursable, $10 Million Fixed Price.
What are the 5 types of price analysis. Which one is the most preferred?
- Other proposed (PREFERRED)
- Historical proposed
- Parametric
- IGE
- Commercial pricing
How do you calculate the relative price difference between two indexes?
NI/OI = Price difference
What is a Forward Pricing Rate Agreement (FPRA) and who negotiates it? (All answers are correct on Test!)
- FPRA is the formal binding agreement between ACO and contractor.
- FPRA are unilateral rates developed by ACO.
- FPRA are bilateral agreements resulting from negotiations with the contractor.
