ACO CORB LATEST 2026 COMPREHENSIVE EXAMS
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔What is the difference between Finance Payments and Invoice Payments? - ✔✔a. A
Finance Payment is a disbursement of monies to a contractor prior to acceptance of
supplies or services by the Government.
b. An Invoice Payment is a disbursement of monies to a contractor for supplies or
services that have been accepted by the Government and is subject to the Prompt
Payment Act.
✔✔What are the different types of financing payments and on what type of contract may
they be used? - ✔✔a. Advance Payments: May be used on any type of contract but
must be authorized by PCO and used sparingly
b. Performance Based Payments: Use on Fixed Price contracts only; never on cost
contracts
c. Progress Payments: May be used on Fixed Price line items; Payments are made on
the basis of either a percentage of completion of work (FAR 32.101, 102) or the
incurrence of costs. DFARS 232.102 limits progress payments based on completion of
work within DoD to construction, shipbuilding, and ship conversion/alteration/repair.
d. Loan Guarantees: Made by Federal Reserve banks, on behalf of designated
guaranteeing agencies, to enable contractors to obtain financing from private sources.
✔✔Are performance based payments allowed for UCAs? - ✔✔a. Yes they are, but
progress payments are preferred
b. The first few months of a contract typically do no provide objectively measurable PBP
events
c. PBP milestones can also be negotiated at definitization.
✔✔Who can authorize the use of Advanced Payments? - ✔✔The PCO
✔✔What business system must be approved in order to use progress payments? -
✔✔a. Accounting; but if the contractor's accounting system and controls are not fully
adequate but portions of costs are adequate and clearly traceable, the ACO may
approve progress payments limited to those costs in coordination with the auditor.
✔✔What type of contract or line item must be present to use progress payments? -
✔✔FFP
✔✔What actions should an ACO take prior to approving Progress Payments? FAR
32.503-3 - ✔✔For contractors the ACO knows to be reliable and competent and
possess an adequate accounting system progress payments should be made promptly.
For all other contractors, the ACO shall not approve progress payments until
determining that the contractor has an adequate accounting system and controls and
,ensuring the government is otherwise protected against loss by additional protective
provisions.
✔✔How often can the Government pay contractors for Progress Payments? - ✔✔Not
more frequently than monthly in amounts of $2,500 or more - FAR 52.232-1
✔✔When can ACO reduce or suspend progress payments and/or reduce liquidation
rate? - ✔✔a. INST 102 - 3.6.10.1.
b. If contractor fails to make progress
c. Unsatisfactory financial condition
d. Inventory allocated to contract substantially exceeds reasonable requirements
e. Contractor is delinquent in payment of costs for performing contract
f. Fair value of undelivered work is less than the amount of unliquidated progress
payments
g. Contractor is realizing less profit than reflected in establishment of alternate
liquidation rate
✔✔Progress payments are self-liquidating. What does that mean? - ✔✔Self-liquidation
is done through contract performance since the contractor doesn't receive 100% of their
invoice payments until after balance of progress payments are repaid. Progress
payments are like loans. The liquidation takes place when the contractor submits an
invoice for completed work. DFAS should do this automatically. As the contractor starts
delivering, the balance that was previously paid on the front end gets reduced. We
should "monitor" the contract to insure that the Progress Payments are fully repaid
before the final deliveries are made, accepted and invoiced.
The Government takes the money back faster than we lend it out. For example, we give
80% of cost in Progress Payments to a large business, however we liquidate (repay) at
80% of Price, which should be greater than 80% of cost (assuming they are not in an
over run status). We recoup faster than we loan it out. By the end of the contract the
loan balance should be zero, and the contractor would receive 100% of the last invoice
payment(s).
✔✔What form is submitted for progress payments? - ✔✔SF 1443 / WAWF
✔✔What contract or line item type must be present for use of PBP's? - ✔✔Fixed Price
(FFP/FPIF)
✔✔What percentage can the contract bill up to on each PBP request prior to final
acceptance of all the PBP scheduled milestones? - ✔✔90% is the max
✔✔Name 4 criteria that are NOT suitable for PBP's. - ✔✔a. The signing of the contract
or contract modifications
b. The exercise of contract options
c. The passage of time
, d. Attendance at meetings, conferences, or seminars
e. The expenditure of funds
f. A surrogate for incurred costs
g. Delivery of material, supplies, or services via DD Form 250, Material Inspection and
Receiving Report
h. Payment for cost-reimbursement line items
i. Payment for accepted goods or services
j. Payment for partial deliveries
k. An incentive arrangement
l. Equal payment for each event/performance criteria
✔✔What are the characteristics of a contract with Performance Based Payments? -
✔✔Performance Based payments are based on objective performance measures, the
accomplishment of specified activities (milestones), or other quantifiable measures of
results.
✔✔How often can PBP requests for payment be submitted? - ✔✔Not more frequently
than monthly. However, multiple events/milestones may be on one monthly PBP
payment request.
✔✔Do performance based payments require an approved accounting system? - ✔✔No,
but progress payments do
✔✔What is an assignment of claims? FAR 32.805(d) - ✔✔It permits contractors to
assign its rights to be paid amounts due or to become due as a result of contract
performance to a third party, provided that the third party is a bank, trust company, or
other financing institution, including any Federal lending agency.
✔✔What is difference between a voucher and an invoice? - ✔✔Generally, a voucher
refers to a request for payment from contractor on a cost-reimbursable type contract. An
invoice refers to request for payment from contractor on a fixed price type contract. Cost
vouchers are processed in WAWF through DCAA auditor (interim vouchers) or the ACO
(final vouchers). Invoices are processed through DFAS and are paid upon verification
and receipt of acceptance documentation.
✔✔What are Cost Accounting Standards? - ✔✔These are a set of 19 standards and
rules imposed by US Government to 1) achieve uniformity and consistency in the cost
accounting principles for DoD contractors and 2) to require contractors to disclose their
cost accounting practices in writing. CAS applies primarily to larger contractors.
✔✔What is a Disclosure Statement and how is it used? - ✔✔A Disclosure Statement is
a written description of a contractor's cost accounting practices and procedures. In
general, must be submitted by any company receiving a CAS covered contract or
subcontracts totaling more than $50 million in a cost accounting period. Disclosure
Statements are reviewed for adequacy by the cognizant auditor and the ACO.
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔What is the difference between Finance Payments and Invoice Payments? - ✔✔a. A
Finance Payment is a disbursement of monies to a contractor prior to acceptance of
supplies or services by the Government.
b. An Invoice Payment is a disbursement of monies to a contractor for supplies or
services that have been accepted by the Government and is subject to the Prompt
Payment Act.
✔✔What are the different types of financing payments and on what type of contract may
they be used? - ✔✔a. Advance Payments: May be used on any type of contract but
must be authorized by PCO and used sparingly
b. Performance Based Payments: Use on Fixed Price contracts only; never on cost
contracts
c. Progress Payments: May be used on Fixed Price line items; Payments are made on
the basis of either a percentage of completion of work (FAR 32.101, 102) or the
incurrence of costs. DFARS 232.102 limits progress payments based on completion of
work within DoD to construction, shipbuilding, and ship conversion/alteration/repair.
d. Loan Guarantees: Made by Federal Reserve banks, on behalf of designated
guaranteeing agencies, to enable contractors to obtain financing from private sources.
✔✔Are performance based payments allowed for UCAs? - ✔✔a. Yes they are, but
progress payments are preferred
b. The first few months of a contract typically do no provide objectively measurable PBP
events
c. PBP milestones can also be negotiated at definitization.
✔✔Who can authorize the use of Advanced Payments? - ✔✔The PCO
✔✔What business system must be approved in order to use progress payments? -
✔✔a. Accounting; but if the contractor's accounting system and controls are not fully
adequate but portions of costs are adequate and clearly traceable, the ACO may
approve progress payments limited to those costs in coordination with the auditor.
✔✔What type of contract or line item must be present to use progress payments? -
✔✔FFP
✔✔What actions should an ACO take prior to approving Progress Payments? FAR
32.503-3 - ✔✔For contractors the ACO knows to be reliable and competent and
possess an adequate accounting system progress payments should be made promptly.
For all other contractors, the ACO shall not approve progress payments until
determining that the contractor has an adequate accounting system and controls and
,ensuring the government is otherwise protected against loss by additional protective
provisions.
✔✔How often can the Government pay contractors for Progress Payments? - ✔✔Not
more frequently than monthly in amounts of $2,500 or more - FAR 52.232-1
✔✔When can ACO reduce or suspend progress payments and/or reduce liquidation
rate? - ✔✔a. INST 102 - 3.6.10.1.
b. If contractor fails to make progress
c. Unsatisfactory financial condition
d. Inventory allocated to contract substantially exceeds reasonable requirements
e. Contractor is delinquent in payment of costs for performing contract
f. Fair value of undelivered work is less than the amount of unliquidated progress
payments
g. Contractor is realizing less profit than reflected in establishment of alternate
liquidation rate
✔✔Progress payments are self-liquidating. What does that mean? - ✔✔Self-liquidation
is done through contract performance since the contractor doesn't receive 100% of their
invoice payments until after balance of progress payments are repaid. Progress
payments are like loans. The liquidation takes place when the contractor submits an
invoice for completed work. DFAS should do this automatically. As the contractor starts
delivering, the balance that was previously paid on the front end gets reduced. We
should "monitor" the contract to insure that the Progress Payments are fully repaid
before the final deliveries are made, accepted and invoiced.
The Government takes the money back faster than we lend it out. For example, we give
80% of cost in Progress Payments to a large business, however we liquidate (repay) at
80% of Price, which should be greater than 80% of cost (assuming they are not in an
over run status). We recoup faster than we loan it out. By the end of the contract the
loan balance should be zero, and the contractor would receive 100% of the last invoice
payment(s).
✔✔What form is submitted for progress payments? - ✔✔SF 1443 / WAWF
✔✔What contract or line item type must be present for use of PBP's? - ✔✔Fixed Price
(FFP/FPIF)
✔✔What percentage can the contract bill up to on each PBP request prior to final
acceptance of all the PBP scheduled milestones? - ✔✔90% is the max
✔✔Name 4 criteria that are NOT suitable for PBP's. - ✔✔a. The signing of the contract
or contract modifications
b. The exercise of contract options
c. The passage of time
, d. Attendance at meetings, conferences, or seminars
e. The expenditure of funds
f. A surrogate for incurred costs
g. Delivery of material, supplies, or services via DD Form 250, Material Inspection and
Receiving Report
h. Payment for cost-reimbursement line items
i. Payment for accepted goods or services
j. Payment for partial deliveries
k. An incentive arrangement
l. Equal payment for each event/performance criteria
✔✔What are the characteristics of a contract with Performance Based Payments? -
✔✔Performance Based payments are based on objective performance measures, the
accomplishment of specified activities (milestones), or other quantifiable measures of
results.
✔✔How often can PBP requests for payment be submitted? - ✔✔Not more frequently
than monthly. However, multiple events/milestones may be on one monthly PBP
payment request.
✔✔Do performance based payments require an approved accounting system? - ✔✔No,
but progress payments do
✔✔What is an assignment of claims? FAR 32.805(d) - ✔✔It permits contractors to
assign its rights to be paid amounts due or to become due as a result of contract
performance to a third party, provided that the third party is a bank, trust company, or
other financing institution, including any Federal lending agency.
✔✔What is difference between a voucher and an invoice? - ✔✔Generally, a voucher
refers to a request for payment from contractor on a cost-reimbursable type contract. An
invoice refers to request for payment from contractor on a fixed price type contract. Cost
vouchers are processed in WAWF through DCAA auditor (interim vouchers) or the ACO
(final vouchers). Invoices are processed through DFAS and are paid upon verification
and receipt of acceptance documentation.
✔✔What are Cost Accounting Standards? - ✔✔These are a set of 19 standards and
rules imposed by US Government to 1) achieve uniformity and consistency in the cost
accounting principles for DoD contractors and 2) to require contractors to disclose their
cost accounting practices in writing. CAS applies primarily to larger contractors.
✔✔What is a Disclosure Statement and how is it used? - ✔✔A Disclosure Statement is
a written description of a contractor's cost accounting practices and procedures. In
general, must be submitted by any company receiving a CAS covered contract or
subcontracts totaling more than $50 million in a cost accounting period. Disclosure
Statements are reviewed for adequacy by the cognizant auditor and the ACO.
