Plan Solicitation Flashcards
1
Q
What is the purpose of a needs assessment?
A
A needs assessment identifies and characterizes gaps in existing capabilities that impede achieving mission area objectives.
2
Q
What should requirements be stated in terms of?
A
Requirements should be stated in terms of function, performance, and essential physical characteristics.
3
Q
What can needs assessments lead to?
A
Needs assessments may lead to a new development or process improvement program or a revalidation and review of existing needs.
4
Q
How should the work be described in a requirements analysis?
A
The work should be described in terms of required results, rather than how the work is to be accomplished or the number of hours to be provided.
5
Q
What does conducting a requirements analysis involve?
A
It involves a systematic review of the requirement based on guidance from stakeholders during the planning phase.
6
Q
Who is responsible for conducting a needs assessment to determine operational capabilities?
A
The user community is responsible for conducting a needs assessment.
7
Q
What should be performed once a need has been identified?
A
A requirements analysis should be performed on the requirement (need).
8
Q
What are the key components identified in a requirements analysis?
A
The essential processes and outputs or results required.
9
Q
What is the basis for establishing high-level objectives in a requirements analysis?
A
The analysis of the requirements is the basis for establishing high-level objectives.
10
Q
What documents are developed as a result of a requirements analysis?
A
The Performance Work Statement (PWS) and the Quality Assurance Surveillance Plan (QASP) are developed.
11
Q
What is the focus of the Development Phase in the DoD Service Acquisition Process?
A
The Development Phase focuses on defining High Level Objectives and tasks, standards, allowable variations, and method(s) of inspection.
12
Q
Why is forming the team the first step in the Planning Phase of the DoD Service Acquisition Process?
A
Forming the team is crucial as it brings together the necessary expertise and stakeholders to ensure a comprehensive understanding of the requirements and to develop an effective acquisition strategy.
13
Q
What are the three phases of the DoD Service Acquisition Process?
A
The three phases are Planning Phase, Development Phase, and Execution Phase.
14
Q
What is the purpose of the DoD Service Acquisition Process?
A
The DoD Service Acquisition Process is a method used by the DoD to acquire services from private industry, instrumental in shaping the requirement as it moves through the acquisition process.
15
Q
Who should be included in the acquisition planning team?
A
The acquisition planning team should consist of all those responsible for significant aspects of the acquisition, including contracting, small business, fiscal, legal, and technical personnel.
16
Q
What should the planner do if contract performance is in a designated operational area?
A
The planner should consider the inclusion of the combatant commander or chief of mission, as appropriate.
17
Q
How often should the acquisition plan be reviewed?
A
The acquisition plan should be reviewed at key dates specified in the plan or whenever significant changes occur, and no less often than annually.
18
Q
What is the significance of reviewing previous plans during acquisition planning?
A
Reviewing previous plans helps the planner to discuss them with key personnel involved in similar acquisitions, which can inform and improve the current acquisition strategy.
19
Q
What is the purpose of the acquisition planning phase?
A
The acquisition planning phase aims to begin as soon as the agency need is identified, preferably well in advance of the fiscal year in which contract award or order placement is necessary.
20
Q
What is the role of the Acquisition Team in relation to the requirement?
A
The Acquisition Team, led by the program manager or user, brings together cross-functional individuals to understand the requirement, its relation to the mission, and to develop an executable strategy in support of the mission.
21
Q
What questions should the Acquisition Team ask to verify the continued need for an identified output?
A
The Acquisition Team should ask: Who needs the output or result? Why is the output needed? What is done with it? What occurs as a result? Is it worth the effort and cost?
22
Q
What are the conditions under which contracting officers shall provide property to contractors according to FAR 45.102(b)?
A
Contracting officers shall provide property to contractors only when it is clearly demonstrated to be in the Government’s best interest, the overall benefit to the acquisition significantly outweighs the increased cost of administration, providing the property does not substantially increase the Government’s assumption of risk, and Government requirements cannot otherwise be met.
23
Q
What is the policy regarding small business concerns competing for government contracts?
A
Small business concerns shall be afforded an equitable opportunity to compete for all contracts that they can perform to the extent consistent with the Government’s interest.
24
Q
Is the contractor’s inability or unwillingness to supply its own resources a valid reason for the furnishing or acquisition of property?
A
No, the contractor’s inability or unwillingness to supply its own resources is not sufficient reason for the furnishing or acquisition of property.
25
What does the Anti-Deficiency Act prohibit?
Creating or authorizing an obligation in excess of the funds available or in advance of appropriations.
26
What must a contracting officer obtain before executing any contract?
Written assurance from responsible fiscal authority that adequate funds are available or condition the contract upon availability of funds.
27
What should be established on a realistic basis to encourage small business participation?
Delivery schedules.
28
What is the purpose of dividing proposed acquisitions into reasonably small lots?
To permit offers on quantities less than the total requirement and to allow more than one small business concern to perform the work.
29
What does market research mean according to FAR 2.101?
Market research means collecting and analyzing information about capabilities within the market to satisfy agency needs.
30
What are the job tasks associated with market research in the DoD Contracting Competency Model?
The job tasks associated with market research are identifying potential suppliers and evaluating requirement achievability.
31
What is market research?
Market research is a continuous process of gathering data on business and industry trends, characteristics of products and services, suppliers’ capabilities, and related business practices to make informed decisions about meeting the needs of the Department of Defense (DoD) with commercial products or services.
32
How does the DoD utilize market research?
The DoD utilizes market research to determine the availability of commercial products and services, identify market practices, and stay informed about the latest developments in products and services.
33
Why is market research important for the Department of Defense (DoD)?
Market research is important for the DoD as it helps determine if sources capable of satisfying the agency's requirements exist and aids in understanding the commercial market for necessary products and services.
34
What is the purpose of continuous market research?
The purpose of continuous market research is to collect information to maximize reliance on the commercial marketplace and to benefit from its capabilities, technologies, and competitive forces in meeting an agency need.
35
How does market research benefit the government in acquisitions?
Market research enables the government to buy best-value products and services that solve mission-critical problems.
36
Why is market research required by FAR Part 10?
Market research is required to arm the acquisition team with the knowledge needed to conduct an effective acquisition and to determine the suitability of the marketplace for satisfying a need or requirement.
37
What is the Government's policy regarding Market Research according to FAR 10.001?
Agencies must conduct market research 'appropriate to the circumstances' before developing new requirements, before soliciting offers for acquisitions above the SAT, before soliciting offers that could lead to a bundled contract, and on an ongoing basis to identify capabilities for meeting contingency contracting requirements.
38
How does market research help the acquisition team?
Market research helps the acquisition team by addressing both business and technical considerations of a requirement, enabling them to optimize their strategy.
39
What are the two types of market research?
The two types of market research are strategic market research (market surveillance) and tactical market research (market investigation).
40
What is the goal of market research in acquisition?
The goal of market research is to help the acquisition team become informed consumers, understand cost drivers, and research leverage in the marketplace to optimize a strategy for meeting their requirements.
41
When is strategic market research conducted?
Strategic market research is conducted continuously throughout the acquisition process, even before an acquisition program exists and continuing after it ends.
42
What is the focus of tactical market research?
Tactical market research is focused on answering specific questions about products, services, or capabilities in the market.
43
What should be continually considered when conducting tactical market research?
Users’ requirements need to be continually considered when doing tactical market research.
44
Why is a team effort usually the best approach for large and complex acquisitions in market research?
A team effort is usually the best approach because many functional areas may need information gathered during market research.
45
What is the purpose of tactical market research?
Tactical market research is designed to provide in-depth information to answer specific questions about the capabilities, products, or services available in the market.
46
Who should be involved in market research within military services and defense agencies?
A wide range of people are called upon to perform market research related to their area of expertise, as there is no specific group called 'market researchers'.
47
Which personnel are typically involved in the market research process for larger teams?
Technical Specialist, User, Logistics Specialist, Testing Specialist, Cost Analyst, Contracting Officer, Legal Counsel.
48
Who may be involved in market research for small, low-dollar acquisitions?
Only one person may be involved in market research.
49
What information should Market Research results provide?
Market Research results should provide answers to questions regarding the existence of sources capable of satisfying the requirement, whether these sources are commercial items or non-developmental items (NDIs), and if modifications can be made to meet the requirement.
50
Why is there a preference for commerciality in Market Research?
There is a preference for commerciality because if the answer is 'no' to every step in the questions regarding sources, only then should noncommercial item development be considered. This is to avoid the costs and time associated with new item development, as commercial items often have competitive pricing that benefits the Government.
51
Why is it important to compare 'apples to apples' in market research?
It is important to ensure that all options are evaluated on a similar basis, considering the total price and other relevant factors.
52
What is one effective method of industry engagement mentioned?
'Sources Sought' solicitation is mentioned as an effective method of industry engagement.
53
What are the three considerations outlined in FAR 10.001(a)(3)(ii) regarding commercial items?
The three considerations are: (A) whether commercial items meet the agency's requirements, (B) whether they could be modified to meet the requirements, or (C) whether the requirements could be modified to a reasonable extent to be met by commercial items.
54
What does FAR 10.002(c) require agencies to do?
FAR 10.002(c) requires agencies to reevaluate the need and determine if it can be restated to allow for commercial or non-developmental items to satisfy the agency's needs.
55
What does FAR part 10 emphasize regarding market research?
FAR part 10 emphasizes using market research to understand current practices of firms in the industry, such as warranties, financing, maintenance, packaging, and marking.
56
What should contracting officers do when using evaluation factors in solicitations for commercial items?
Contracting officers may insert a provision similar to FAR 52.212-2, Evaluation-Commercial Items, and tailor paragraph (a) to describe the evaluation factors and their relative importance.
57
What criteria are typically used to evaluate offers for commercial items?
The criteria typically include technical capability, price, and past performance.
58
Are contracting officers required to describe the relative importance of evaluation factors when using simplified acquisition procedures?
No, contracting officers are not required to describe the relative importance of evaluation factors when using simplified acquisition procedures in FAR Part 13.
59
What is the purpose of a Request for Information (RFI) in the acquisition process?
The purpose of a Request for Information (RFI) is to gather information from potential suppliers to help inform the acquisition strategy and requirements.
60
How may technical capability be evaluated for commercial items?
Technical capability may be evaluated by how well the proposed products meet the Government requirement instead of predetermined subfactors.
61
What is not required in solicitations for commercial items regarding technical capability?
Solicitations for commercial items do not have to contain subfactors for technical capability when the solicitation adequately describes the item’s intended use.
62
What must the contracting officer ensure regarding FAR 52.212-1 and FAR 52.212-2?
The contracting officer must ensure that the instructions and evaluation criteria are in agreement.
63
What should be documented when selecting the successful offeror?
The rationale for selection, including any trade-offs considered.
64
What does market research involve?
Collecting and analyzing information about capabilities within the market to satisfy agency needs.
65
What is the purpose of evaluating past performance according to FAR 13.106 or FAR Subpart 15.3?
To assess the past performance of offerors in accordance with established procedures.
66
What are the two different types of market research?
Tactical and Operational
67
Is market research a one-time step in the acquisition process?
False
68
What is FAR part 12 used for?
FAR part 12 - Acquisition of Commercial Items is used in conjunction with FAR parts 13, 14, and 15.
69
What defines a commercial product according to the FAR?
A commercial product is a product, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes.
70
What are the FAR parts that govern contracting methods?
FAR part 13 - Simplified Acquisition Procedures, FAR part 14 - Sealed Bidding, and FAR part 15 - Contracting by Negotiation.
71
What are considered minor modifications to a product in the context of government requirements?
Modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process.
72
What constitutes a combination of products under the definition provided?
Any combination of products meeting the requirements of previously defined paragraphs that are of a type customarily combined and sold.
73
What defines a product that has been sold, leased, or licensed to the general public for governmental purposes?
A product that has been sold, leased, or licensed to the general public, or has been offered for sale, lease, or license to the general public.
74
What is a product that evolves from an existing product but is not yet available in the commercial marketplace?
A product that has evolved through advances in technology or performance and will be available in the commercial marketplace in time to satisfy delivery requirements under a Government solicitation.
75
What factors are considered to determine if a modification is minor?
Factors include the value and size of the modification and the comparative value and size of the final product.
76
What takes precedence when there is an inconsistency between FAR part 12 and another part of the FAR?
FAR part 12 shall take precedence for the acquisition of commercial items.
77
What is the government's policy regarding the acquisition of commercial or non-developmental items?
The policy is that the government acquire commercial or non-developmental items whenever they are available and require prime contractors and subcontractors to incorporate these products as components whenever possible.
78
What policies should contracting officers use when contracting for a commercial product or service?
Contracting officers shall use the policies in FAR part 12 in conjunction with the policies and procedures for solicitation, evaluation, and award prescribed in FAR part 13, 14, or 15, as appropriate.
79
What is the definition of market prices in the context of contracting?
Market prices are current prices established in the course of ordinary trade between buyers and sellers free to bargain, substantiated through competition or independent sources.
80
When can a time-and-materials contract or labor-hour contract be used for the acquisition of commercial services?
A time-and-materials contract or labor-hour contract may be used for the acquisition of commercial services when the service is acquired under a contract awarded using FAR Part 12.
81
What procedures must contracting officers use for acquisitions of supplies or services that meet the definitions of 'commercial product' or 'commercial service'?
Contracting officers shall use commercial item procedures for any acquisition of supplies or services that meet the definitions of 'commercial product' or 'commercial service' found at FAR 2.101.
82
Under what conditions does FAR Part 12 not apply to the acquisition of commercial items?
FAR Part 12 does not apply to the acquisition of commercial items at or below the micro-purchase threshold, when using the Standard Form 44, using the imprest fund, using the Government-wide commercial purchase card as a method of purchase, or directly from another Federal agency.
83
What types of contracts should agencies use for the acquisition of commercial items according to FAR Part 12?
Agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial items.
84
What minimum information must be included in the D&F for a T&M contract?
The D&F must include a description of the market research conducted and establish that it is not possible to accurately estimate the extent or duration of the work or anticipate costs with any reasonable degree of confidence.
85
What are the competitive procedures outlined in FAR 6.102?
The competitive procedures include the procedures in FAR 6.102, the set-aside procedures in FAR subpart 19.5, or competition conducted in accordance with FAR Part 13.
86
What must a contracting officer do when considering a Time and Materials (T&M) contract type?
The contracting officer must execute a determination and findings (D&F) that justifies that no other contract type authorized by FAR Part 12 is suitable and include sufficient facts and rationale.
87
What are the fair opportunity procedures in FAR 16.505?
The fair opportunity procedures in FAR 16.505 include discretionary small business set-asides under FAR 16.505(b)(2)(i)(F) when placing an order under a multiple-award delivery-order contract.
88
Under what conditions can an agency use other than full and open competition according to FAR subpart 6.3?
An agency can use other than full and open competition if it receives offers that satisfy the Government’s expressed requirement from two or more responsible offerors.
89
What does FAR part 12 prescribe?
Policies and procedures unique to the acquisition of commercial products and services.
90
What is the Federal Government's preference in acquisition as stated in the document?
The acquisition of commercial products and commercial services.
91
What types of contracts should be maximized for future acquisitions according to the established requirements?
Firm-fixed-price or fixed-price with economic price adjustment contracts.
92
What actions should be described to maximize the use of certain contracts in future acquisitions?
Actions planned to maximize the use of firm-fixed-price or fixed-price with economic price adjustment contracts.
93
What is the purpose of simplified acquisition procedures according to FAR part 13.002?
The purpose is to reduce administrative costs, improve opportunities for small and disadvantaged businesses, and promote efficiency and economy in contracting.
94
When does a contract come into being according to the FAR?
A contract comes into being when the supplier accepts the order through confirmation in writing, by furnishing the requested supplies, or by proceeding with the work to the point where substantial performance has occurred.
95
What does FAR 13.003(a) state regarding simplified acquisition procedures?
FAR 13.003(a) states that agencies shall use simplified acquisition procedures to the maximum extent practicable for all purchases of supplies or services not exceeding the simplified acquisition threshold.
96
What are some methods included in simplified acquisition methods according to FAR subpart 13.3?
Simplified acquisition methods include the Government-wide commercial purchase card, purchase orders, blanket purchase agreements, imprest funds, and third-party drafts.
97
According to FAR 13.004, what is the status of a quotation in relation to forming a binding contract?
FAR 13.004 states that a quotation is not an offer and cannot be accepted by the government to form a binding contract.
98
What does FAR 13.106-2(a)(2) require of the contracting officer?
FAR 13.106-2(a)(2) requires the contracting officer to evaluate quotations or offers on the basis established in the solicitation.
99
What part of the FAR outlines policies for acquiring commercial products and services?
Part 12 of the FAR outlines policies applicable to the acquisition of commercial products and commercial services exceeding the micro-purchase threshold.
100
What are the specific steps involved in sealed bidding?
The specific steps in sealed bidding include preparing an invitation for bids, publicizing the invitation, submission of bids, evaluation of bids, and awarding the contract.
101
What special authority does Subpart 13.5 provide?
Subpart 13.5 provides special authority for acquisitions of commercial products and commercial services exceeding the simplified acquisition threshold but not exceeding $7.5 million ($15 million for certain acquisitions).
102
What is the simplified acquisition threshold?
The simplified acquisition threshold is an aggregate amount that does not exceed a specified limit, which is defined in the regulations.
103
Under what conditions must contracting officers solicit sealed bids according to FAR 6.401(a)?
Contracting officers shall solicit sealed bids if time permits the solicitation, submission, and evaluation of sealed bids, and there is a reasonable expectation of receiving more than one sealed bid.
104
What is the primary basis for awarding contracts in sealed bidding according to the invitation for bids (IFB)?
The award will be made on the basis of price and other price-related factors.
105
What are the two steps involved in two-step sealed bidding?
Step one consists of requests for submission, evaluation, and discussion of technical proposals without pricing. Step two consists of submission of sealed bids by those who submitted acceptable technical proposals in step one.
106
What is the purpose of two-step sealed bidding?
Two-step sealed bidding is designed to obtain the benefits of sealed bidding when adequate specifications are not available.
107
What conditions must be present for the use of two-step sealed bidding instead of negotiation?
Conditions include: available specifications are not definite or complete, definite criteria for evaluating technical proposals exist, more than one technically qualified source is expected, sufficient time is available for the two-step method, and a firm-fixed price contract or fixed-price contract with economic price adjustment will be used.
108
When must negotiation be used in contracting?
Negotiation must be used whenever one or more of the four prerequisites to sealed bidding is lacking: sufficient time, award based on price or price-related factors, well-defined specifications, or adequate competition.
109
What does FAR part 15 prescribe?
FAR part 15 prescribes policies and procedures governing competitive and non-competitive (sole source) negotiated acquisitions.
110
What may the contracting officer do after evaluating offers in a competitive range?
The contracting officer may hold negotiations (discussions) with offerors in the competitive range.
111
Is there a public opening of proposals in negotiated contracts?
No, there is no public opening of proposals in negotiated contracts.
112
What is required from offerors when contracting by negotiation in a competitive environment?
Offerors are required to package their technical proposals and their price proposals separately.
113
What is a negotiated contract?
A negotiated contract is one awarded using other than sealed bidding procedures.
114
How does the U.S. Government prepare the request for proposals (RFP)?
By describing its requirements clearly, accurately, and as fully as possible, without unnecessarily restrictive requirements.
115
What do offerors prepare and submit in response to the RFP?
Technical and price proposals.
116
What does the contracting officer do at the conclusion of discussions?
Requests final proposal revisions.
117
What is the first step in the contracting by negotiation process?
Draft specification or performance work statement.
118
What is a major feature of negotiated procurement?
Its emphasis on the technical aspects of proposals, in addition to price, rather than on price factors alone.
119
What must be discussed with each offeror in the competitive range during negotiations?
Any deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.
120
What means can the contracting officer use to publicize the RFP?
Through SAM.gov/Contract opportunities, local newspapers, embassy, consulate or procurement office website, or any other locally acceptable means of advertising.
121
What is the purpose of requesting final proposal revisions?
The contracting officer issues a written request for final proposal revisions from all offerors in the competitive range after discussions are concluded.
122
What criteria does the contracting officer consider when awarding a contract?
The contracting officer awards a contract to the responsible offeror whose offer is most advantageous to the U.S. Government, considering price and other related evaluation factors as stated in the solicitation.
123
How does the contracting officer evaluate price proposals?
The contracting officer evaluates the price proposals to determine whether the proposed prices are reasonable and reflect the offeror's understanding of, and ability to perform, the contract.
124
What is the role of the technical evaluation panel (TEP) in evaluating proposals?
The TEP evaluates the technical proposals against the technical evaluation criteria included in the RFP.
125
How are final proposal revisions evaluated?
The TEP and the contracting officer evaluate final proposal revisions in the same manner as initial offers.
126
What happens after the contracting officer determines which proposals are in the competitive range?
The contracting officer holds oral and/or written discussions with each offeror in the competitive range to resolve uncertainties and provide understanding of technical or price weaknesses in their proposals.
127
According to FAR 16.102, what types of contracts shall result from sealed bidding?
Contracts resulting from sealed bidding shall be firm-fixed-price contracts or fixed-price contracts with economic price adjustment.
128
Why must contract type and negotiated contract pricing be considered together?
Contract type and negotiated contract pricing are interrelated and must be considered together as part of the overall compensation arrangement.
129
What factors determine the variation in contract types?
Contract types vary according to the degree and timing of the responsibility assumed by the contractor for the costs of performance and the amount and nature of the profit incentive offered to the contractor for achieving or exceeding goals.
130
What elements are included in the overall contractor compensation arrangement?
The overall contractor compensation arrangement includes contract type, contract financing, profit or fee, incentives, and contract terms and conditions.
131
What is the responsibility of the contractor in a Firm-Fixed-Price contract?
The contractor has full responsibility for the performance costs and resulting profit (or loss).
132
Can contract types not described in the FAR be used?
No, contract types not described in the FAR shall not be used, except as a deviation under subpart 1.4.
133
What are the two broad categories of contract types mentioned in the text?
Fixed Price and Cost Reimbursement
134
What type of contract has minimal responsibility for performance costs and a fixed negotiated fee?
Cost-Plus-Fixed-Fee contract
135
What is the primary risk associated with fixed-price contracts?
The contractor bears maximum risk and responsibility for all costs and resulting profit or loss, meaning inefficient performance can lead to financial loss.
136
What is a hybrid contract in government contracting?
A hybrid contract is a combination of fixed price and cost type contract line item numbers, allowing for both fixed-price and cost-reimbursement elements within the same contract.
137
What should the chosen contract type and negotiated pricing achieve?
They should result in a reasonable degree and balance of risk between the Government and the contractor, while providing incentives for efficient and economical performance.
138
What is the purpose of establishing a ceiling in cost-reimbursement contracts?
The ceiling establishes a maximum amount that the contractor may not exceed without the approval of the contracting officer, ensuring budget control.
139
What is required of contractors under cost-reimbursement contracts?
Contractors are required to put forth a 'best effort' to perform and are reimbursed for allowable, allocable, and reasonable incurred costs.
140
How does performance risk change as a requirement progresses from vague to well-defined?
Performance risk should be reduced from a high to a relatively low level.
141
Why do research and development contracts generally have a high degree of performance risk?
Because they have lesser-defined requirements that arise from the necessity to deal with the upper limits of current technology.
142
How does performance risk in follow-on production contracts compare to research and development contracts?
Follow-on production contracts generally have a relatively low performance risk, as requirements are well known.
143
What are the two areas of concern that should be considered in the appraisal of cost risk?
Contract performance risk and market risk.
144
What is the most important factor when selecting a contract type?
Risk associated with the work to be performed.
145
What is the purpose of fixed-price contracts with economic price adjustment?
They are designed specifically to reduce the risk for contractors associated with market fluctuations.
146
How does a volatile market affect contract pricing?
A volatile market increases the cost risk involved in contract pricing, especially for contracts that extend over several years due to potential fluctuations in material and labor costs.
147
What factors are considered when evaluating a contractor's capability?
Factors considered include urgency, period of performance, contractor's technical capability, financial responsibility, adequacy of the contractor's accounting system, acquisition history, and the extent and nature of proposed subcontracting.
148
What is the primary incentive for contractors under fixed-price contracts?
The primary incentive for contractors under fixed-price contracts is to control costs, as there is a built-in correlation between contract cost incurred and final profit realized. It provides maximum incentive for the contractor to control costs and perform effectively, and imposes a minimum administrative burden upon the contracting parties.
149
What are the types of fixed-price contracts?
The fixed-price family of contracts includes: Firm-Fixed Price, Fixed-Price with Economic Price Adjustment, Fixed-Ceiling-Price Contracts with Retroactive Price Redetermination, Fixed-Price Contracts with Prospective Price Redetermination, Firm-Fixed-Price Level-of-Effort, Fixed-Price Award Fee, Fixed-Price Incentive Firm Target, and Fixed-Price Incentive Successive Target.
150
What is a firm-fixed-price contract and when is it suitable?
A firm-fixed-price contract provides for a price that is not subject to any adjustment based on the contractor's costs experienced in performing the contract, placing maximum risk and full responsibility for all costs and resulting profit or loss on the contractor. It is suitable for acquiring commercial items or for acquiring other supplies or services on the basis of reasonably definite requirements.
151
What happens to a contractor's profit if they complete the contract for less than the negotiated price?
The contractor realizes an additional profit equal to the cost savings.
152
What conditions allow a contracting officer to establish fair and reasonable prices at the outset?
Conditions include adequate competition, reasonable price comparisons with prior purchases, valid cost or pricing data, available cost information for realistic estimates, identifiable performance uncertainties, and the contractor's willingness to accept a firm fixed price.
153
What is a potential risk for contractors under fixed-price contracts compared to cost reimbursement contracts?
The profit line potentially extends below zero, meaning the contractor could experience a loss on the contract.
154
What is the mathematical implication of a firm fixed price (FFP) arrangement?
In an FFP arrangement, the slope is -1, meaning that for every change in contract cost, there is an equal change in profit to the contractor.
155
How does an FPEPA contract incentivize contractors?
An FPEPA contract incentivizes contractors to accept a fixed-price effort without inflating the price to cover risk due to variability of a cost element, as it includes a mechanism to mitigate that risk.
156
What is a fixed-price contract with an economic price adjustment (FPEPA) used for?
FPEPA is used to address specified contingencies beyond the contractor's control, such as fluctuations in the price of commodity items.
157
When should an FPEPA contract be considered?
An FPEPA contract should be considered when market prices at risk are severable and significant, the risk stems from industry-wide contingencies, the dollars at risk outweigh administrative burdens, and market or labor conditions are projected to be unstable.
158
How can an FPEPA contract benefit the government?
An FPEPA contract can benefit the government by hedging against risks associated with a volatile market.
159
What types of adjustments are provided in an FPEPA contract?
An FPEPA contract provides for upward and downward revisions of the stated contract price based on specified contingencies.
160
In what scenarios is a firm-fixed-price, level-of-effort term contract typically used?
This type of contract is typically used for studies and is generally restricted for use to the Simplified Acquisition Threshold (SAT) or less, although a higher limit can be approved by the chief of the contracting office.
161
What is the purpose of cost indices in price adjustments?
Cost indices are used in price adjustments to reflect increases or decreases in labor or material cost standards or indexes that are specifically identified in the contract, such as the Producer Price Index.
162
What characterizes a firm-fixed-price, level-of-effort term contract?
A firm-fixed-price, level-of-effort term contract provides an agreement for a specified level of effort over a period of time for work described in general terms, with payment based on the level of effort rather than results achieved.
163
What are price adjustments based on actual costs of labor or material?
Price adjustments based on actual costs of labor or material are changes in contract prices that reflect increases or decreases in the specified costs that the contractor experiences during contract performance.
164
What is the purpose of structuring incentive contracts?
Incentive contracts should be structured to achieve desired objectives through reasonable and attainable targets that are clearly communicated to the contractor.
165
How does the DoD aim to use incentive strategies?
The DoD is committed to adopting incentive strategies that attract, motivate, and reward traditional and nontraditional contractors to ensure high performance.
166
What should be considered when using competing incentives?
Think carefully when using competing incentives, as the contractor’s goal will be to maximize the incentive it receives, which usually involves tradeoffs.
167
What are the two types of incentives that can be employed in incentive contracts?
Incentives can include both positive rewards and negative rewards.
168
What is the essence of incentive contracting?
The profit/fee motive is the essence of incentive contracting.
169
What is a potential trade-off when considering performance versus schedule in contract incentives?
It will probably take longer to build and test a missile that will travel farther and be more accurate.
170
What are the types of incentives that can be used in contracts according to FAR 16.402?
Incentives can be used for cost, performance, or delivery.
171
What is one type of incentive contract that incentivizes objective elements?
Fixed-price incentive contracts.
172
How does delivering early generally affect costs in contract performance?
Delivering early generally means less cost due to a shorter time for the level of effort functions.
173
What are the two forms of fixed-price incentive contracts?
The two forms of fixed-price incentive contracts are firm target (FPI(F)) and successive targets (FPI(S)).
174
What is the purpose of fixed-price incentive contracts?
Fixed-price incentive contracts provide a positive profit incentive for contractors to control costs, making them suitable for development and production efforts.
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What elements are included in fixed-price incentive contracts?
The elements of fixed-price incentive contracts include a target cost, target profit, ceiling price, and profit adjustment formula, which are negotiated at the outset of the contract.
176
What are fixed-price incentive contracts?
Fixed-price incentive contracts are fixed-price contracts that provide for the adjustment of profit and establishment of the final contract price by a formula based on the relationship of final negotiated total cost to the total target cost.
177
How does the final cost affect profit in fixed-price incentive contracts?
If the final cost is less than the target cost, the final profit is greater than the target profit. Conversely, if the final cost is more than the target cost, the final profit is less than the target profit or results in a loss.
178
How is profit adjustment expressed in fixed-price incentive contracts?
The profit adjustment is expressed as a share ratio with the Government share as the numerator and the contractor share as the denominator, reflecting how overruns and underruns above and below the negotiated target cost will be shared.
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How does the profit vary in a Fixed-Price Incentive (Firm Target) contract?
The profit varies inversely with the cost, providing a calculable profit incentive for the contractor to control costs.
180
What happens if the final cost is less than the target cost in an FPI(F) contract?
If the final cost is less than the target cost, the application of the profit adjustment formula results in a final profit greater than the target profit.
181
What is a Fixed-Price Incentive (Firm Target) contract?
A Fixed-Price Incentive (Firm Target) contract specifies a target cost, a target profit, a price ceiling, and a profit adjustment formula, all negotiated at the outset.
182
What is the price ceiling in an FPI(F) contract?
The price ceiling is the maximum amount that may be paid to the contractor, except for any adjustments under other contract clauses.
183
What occurs if the final negotiated cost exceeds the price ceiling in an FPI(F) contract?
If the final negotiated cost exceeds the price ceiling, the contractor absorbs the difference as a loss.
184
What are the key components specified in a cost-plus-incentive-fee (CPIF) contract?
A CPIF contract specifies a target cost, a target fee, minimum and maximum fees, and a fee adjustment formula.
185
What happens when total allowable costs exceed the range of costs in a CPIF contract?
When total allowable costs exceed the range of costs within which the fee-adjustment formula operates, the contractor is paid total allowable costs plus the minimum or maximum fee.
186
What type of contract is a cost-plus-incentive-fee (CPIF) contract?
A cost-plus-incentive-fee (CPIF) contract is a cost-reimbursement contract that adjusts an initially negotiated fee based on the relationship of total allowable costs to total target costs.
187
What is prohibited in a Cost-Plus-Incentive-Fee contract regarding the minimum fee?
Stating the minimum fee as a percentage of actual cost is prohibited.
188
In a Cost-Plus-Incentive-Fee contract with a target cost of $100, what is the target fee if it is 9.0% of the target cost?
The target fee is 9.0% of the target cost, which is $9.00.
189
What is the maximum fee in a Cost-Plus-Incentive-Fee contract as described in the text?
14
190
How is the target fee expressed in the context of a Cost-Plus-Incentive-Fee contract?
The target fee is expressed as a dollar value, not a percentage of actual cost.
191
What happens to the contractor's fee as the final cost decreases in a Cost-Plus-Incentive-Fee contract?
The contractor will earn more fee until it reaches the maximum fee.
192
In a hypothetical Cost-Plus-Incentive-Fee contract, if the target cost is set at $100, what is the target fee?
100
193
What is the share ratio for costs over and under 80% in the described contract?
Over 80/20 Under 80/20
194
When is a CPIF contract appropriate?
A CPIF contract is appropriate for noncommercial service or development and test programs when a cost-reimbursement contract is necessary, and the parties can negotiate a target cost and a fee adjustment formula that motivates effective contractor management.
195
What are the two basic types of incentive contracts that incentivize subjective elements?
The two basic types of incentive contracts that incentivize subjective elements are Fixed-price Award Fee and Cost Plus Award Fee.
196
What should a fee adjustment formula in a CPIF contract provide?
The fee adjustment formula should provide an incentive that is effective over the full range of reasonably foreseeable variations from the target cost.
197
Under what conditions may a CPIF contract include technical performance incentives?
A CPIF contract may include technical performance incentives when it is highly probable that the required development of a major system is feasible and the Government has established its performance objectives, at least in general terms.
198
What is required if a high maximum fee is negotiated in a CPIF contract?
If a high maximum fee is negotiated, the contract shall also provide for a low minimum fee that may be a zero fee or, in rare cases, a negative fee.
199
What does a cost-plus-award-fee (CPAF) contract consist of?
A CPAF contract consists of a base amount (base fee) fixed at inception and an award amount (award fee pool) that the contractor may earn during performance.
200
When may award-fee provisions be used in fixed-price contracts?
Award-fee provisions may be used when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively.
201
What is the maximum percentage for the base fee in a CPAF contract?
The base fee percentage shall not exceed 3%.
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How is the award fee determined in a CPAF contract?
The award fee is determined by contractor performance and is a subjective Government evaluation decision.
203
What is the primary focus of an award-fee plan in a fixed-price contract?
The primary focus is to motivate the contractor's efforts on technical and schedule performance.
204
What does the best efforts language in cost-reimbursement contracts allow for?
It allows contractors to receive payment even if a final deliverable is not achieved.
205
What incentive do cost-reimbursement contracts provide for contractors?
Cost-reimbursement contracts provide little to no incentive for a contractor to limit costs unless there is an incentive built into them for that purpose.
206
What is required from a contractor under a cost-reimbursement contract?
The contractor must put forth its best efforts in performance of the contract.
207
When should CPAF contracts not be used?
CPAF may not be used in lieu of CPFF or CPIF contracts where objective measurement is feasible.
208
What type of work are CPAF contracts applicable for?
CPAF contracts may be applicable for level of effort type of work when DoD seeks to motivate excellence in quality, timeliness, technical ingenuity, and cost-effective management.
209
What risk does the Government assume under cost-reimbursement contracts?
The Government assumes more risk as it could not attract a contractor to take on the risk of some projects without paying an inflated price.
210
What are the limitations for using cost-reimbursement contracts according to FAR 16.301-3?
Cost-reimbursement contracts may only be used when a written acquisition plan has been approved and signed at least one level above the contracting officer, and the contractor’s accounting system is adequate for determining costs applicable to the contract or order.
211
What types of contracts are included in the cost-reimbursement family?
The cost-reimbursement family includes cost, cost-sharing, cost-plus-incentive-fee, cost-plus-award-fee, and cost-plus-fixed-fee contracts.
212
What are the requirements for the execution of a fixed-price contract?
Requirements must be sufficient for research and development, major system development, prototype development and testing, and low rate initial production.
213
What is the main characteristic of cost-sharing contracts?
In a cost-sharing contract, the contractor shares in a portion of the costs of contract performance and does not receive a fee.
214
Are cost-reimbursement contracts allowed for the acquisition of commercial items?
No, cost-reimbursement contracts are prohibited for the acquisition of commercial items.
215
What is a pure cost contract?
In a pure cost contract, the contractor receives no fee and these contracts are generally used for research and development, specifically for educational institutions and nonprofit organizations.
216
Why might a contractor agree to a cost-sharing contract?
A contractor might agree to a cost-sharing contract in the expectation of substantial compensating benefits.
217
What is the maximum fee for architect-engineer services for public works or utilities under a Cost-Plus-Fixed-Fee contract?
The contract price or the estimated cost and fee for production and delivery of designs, plans, drawings, and specifications shall not exceed 6 percent of the estimated cost of construction of the public work or utility, excluding fees.
218
Why are Cost-Plus-Fixed-Fee contracts not appropriate for use with delivery or performance incentives?
Cost-Plus-Fixed-Fee contracts do not contain a cost incentive or constraint, making them unsuitable for delivery or performance incentives.
219
What is the maximum fee allowed for experimental, developmental, or research work under a Cost-Plus-Fixed-Fee contract according to statutory limitations?
The fee shall not exceed 15 percent of the contract’s estimated cost, excluding fee.
220
What is the primary use of Cost-Plus-Fixed-Fee contracts?
Cost-Plus-Fixed-Fee contracts are primarily used in research, advanced development, or exploratory development when the level of effort required is unknown.
221
What is required for a contractor to earn the entire fee under a CPFF Completion contract?
The end product must be delivered to earn the entire fee.
222
How is the fixed fee determined in a CPFF contract?
The fixed fee is established as a percentage of the estimated target cost prior to contract performance.
223
What are the two forms of cost-plus-fixed-fee contracts?
The two forms are Completion and Term contracts.
224
What does a CPFF Term contract obligate the contractor to do?
It obligates the contractor to devote and expand a specified level of effort for a stated period of time.
225
What is the maximum fee percentage for cost-plus-fixed-fee contracts?
The fee shall not exceed 10 percent of the contract’s estimated cost, excluding fee.
226
What is required for additional periods of performance under a CPFF term contract?
Additional periods of performance are considered new acquisitions that involve new cost and fee arrangements.
227
When is the fee earned in a CPFF term contract?
The fee is earned when the contractor has provided a level-of-effort for a stated period of time, regardless of the performance outcome.
228
Under what condition is the entire fixed fee paid in a CPFF completion form contract?
Completion or delivery of the specified end product, usually a report or study, is a condition for payment of the entire fixed fee.
229
What must the contractor state to receive the fixed fee at the expiration of the agreed-upon period in a CPFF term contract?
The contractor must state that the level of effort specified in the contract has been expended in performing the contract work.
230
What happens if the contractor does not reach the goal or target in a CPFF completion form contract?
If the contractor does not reach the goal or target and the Government does not increase funding, the contractor may not receive the entire fee, but their allowable costs are still covered.
231
What is the main incentive for contractors under a CPFF completion form contract?
There is only minimal incentive for the contractor to control costs, as the Government can provide additional funds without increasing the fee earned.
232
What is a Time-and-Materials (T&M) contract used for?
A T&M contract may be used only when it is not possible to estimate accurately the extent or duration of the work or to anticipate costs.
233
What is the primary characteristic of Time-and-Materials contracts regarding cost incentives?
In practice, there is no cost incentive for either Time-and-Materials or Labor Hour contract types.
234
How do Time-and-Materials contracts and Labor Hour contracts differ from fixed-price contracts?
Both T&M and Labor Hour contracts have a fixed fully-burdened labor rate and pay for actual hours worked, resembling cost reimbursement contracts, while fixed-price contracts require completion within an agreed maximum price.
235
What should be identified for amendments to solicitations?
A supplementary PIID should be identified in conjunction with the PIID for the solicitation.
236
What should be identified for all solicitations?
The PIID for all solicitations should be identified.
237
What is a Procurement Instrument Identifier (PIID)?
A PIID is a unique number identifying each solicitation, contract, agreement, or order and related procurement instrument.
238
What information is conveyed by the first six positions of a PIID?
The first six positions identify the department/agency and office issuing the instrument.
239
What do the seventh and eighth positions of a PIID represent?
The seventh and eighth positions represent the last two digits of the fiscal year in which the procurement instrument is issued or awarded.
240
How many characters can agencies choose for the number assigned in positions 10 through 17 of a PIID?
Agencies may choose a minimum of four characters up to a maximum of eight characters for positions 10 through 17.
241
What is the purpose of identifying the PIID for contracts and purchase orders?
The PIID is used to uniquely identify contracts and purchase orders for tracking and management purposes.
242
What is the significance of the instrument letter designation in a PIID?
The instrument letter designation in position 9 indicates the type of procurement instrument.
243
How should amendments to solicitations be numbered?
Amendments to solicitations should be numbered sequentially using a four position numeric serial number added to the 13-17 character PIID, beginning with 0001.
244
In accordance with which regulations shall the contracting officer issue solicitations to potential sources?
The policies and procedures in 5.102, 19.202-4, and part 6.
245
What is a master solicitation used for?
Negotiated acquisitions.
246
Who should receive amendments issued after the established time and date for receipt of proposals?
All offerors that have not been eliminated from the competition.
247
To whom should amendments issued before the established time and date for receipt of proposals be sent?
All parties receiving the solicitation.
248
What information should be included in each solicitation amendment?
The amendment should include the name and address of the issuing activity, solicitation number and date, amendment number and date, number of pages, description of the change, government point of contact and phone number, and revision to the solicitation closing date if applicable.
249
How should exhibits be identified in a contract?
Exhibits should be identified individually using alpha characters, which can be either single or double capital letters, excluding the letters I and O.
250
Can more than one exhibit apply to a single contract line item?
Yes, more than one exhibit may apply to a single contract line item.
