CONTRACTING OFFICER WARRANT n n nnnnnnnnnnnnnnnnnn
BOARD EXAM 2024
nnnnn n n
You are the PCO for a major competitive negotiated source selection. The RFP, whi
n n n n n n n n n n n n n
ch reflects the user's requirements and is based on the user's budget, has a require
n n n n n n n n n n n n n n
ment for 220 cargo loaders to be delivered at 55 per year over the next four years.
n n n n n n n n n n n n n n n n n
One offeror proposes to deliver all 220 loaders in the first year at a dramatically red
n n n n n n n n n n n n n n n
uced price. Can you accept the offeror's proposal? What factors should you consid
n n n n n n n n n n n n
er in your decision? -
n n n n
nnANSWER ☑☑You can accept the offeror's proposal under certain circumstances. F
n n n n n n n n n n
irstly, what did the RFP say about alternate proposals? Is this a situation where req
n n n n n n n n n n n n n n
uirements are changed and the other offerors should be allowed to propose on the
n n n n n n n n n n n n n
nbasis of the changed requirements? You need to ask the user if he wants all 220 in
n n n n n n n n n n n n n n n n n
the first year and are the operating locations physically able to accommodate their
n n n n n n n n n n n n n
loaders in the first year. Finally, the offeror could be taken into discussions and ask
n n n n n n n n n n n n n n
ed to conform to the RFP with there being the possibility of not being selected for a
n n n n n n n n n n n n n n n n
ward or elimination from the competitive range if the proposal is not made compli
n n n n n n n n n n n n n
ant with the RFP.n n n
You are the PCO on a new $2B aircraft development program. The program is in co
n n n n n n n n n n n n n n n
ntract negotiations for a Fixed Price Incentive (Firm Target) System Development a
n n n n n n n n n n n
nd Demonstration contract award to a sole source contractor. The program directo
n n n n n n n n n n n
r, a fast-burning young colonel, e-
n n n n n
mails you that she is very concerned with the aircraft's ultimate speed at the full sp
n n n n n n n n n n n n n n n
ecification payload. She would like the contractor to achieve the faster, desired obj
n n n n n n n n n n n n
ective speed rather than the mandatory threshold speed, and thinks that an objecti
n n n n n n n n n n n n
ve performance incentive would be the way to go to achieve her goal. You are aske
n n n n n n n n n n n n n n n
d to go to her office and discuss the matter and the issues involved in using such an
n n n n n n n n n n n n n n n n n n
incentive. What do you tell the colonel? - n n n n n n n
ANSWER ☑☑There are a number of considerations for the colonel:
nn n n n n n n n n n
,The desired additional speed should provide benefit to the Government in order to
n n n n n n n n n n n n
njustify the expenditure of funds to achieve it. The colonel should be able to articula
n n n n n n n n n n n n n n
te the justification.
n n
The situation is very amenable to a classic performance incentive that would allow
n n n n n n n n n n n n n
the contractor to earn profit for achieving the desired speed above and beyond wh
n n n n n n n n n n n n n
at the final FPIF profit would be for achieving threshold speed. If the contractor per
n n n n n n n n n n n n n n
ceives this can't happen, he will either not sign up to the incentive or will ignore it fr
n n n n n n n n n n n n n n n n n
om Day One. n n
The incentive and resulting payment have to be structured so as to be based on obs
n n n n n n n n n n n n n n n
ervable, measurable results that would determine how much is earned by the cont
n n n n n n n n n n n n
ractor. Subjectivity is not allowable under current AF policy without HCA approval.
n n n n n n n n n n n
We have to be very careful to understand what possible unintended consequences
n n n n n n n n n n n n
could be caused by the existence of this feature in the contract. For example, will t
n n n n n n n n n n n n n n n
he contractor reduce aircraft weight beyond safe limits in order to help achieve the
n n n n n n n n n n n n n
payment? Also, will the contractor consume excessive schedule to get the extra sp
n n n n n n n n n n n n n
eed?
There has to be a cost incentive in place so that the contractor doesn't spend an un
n n n n n n n n n n n n n n n n
constrained amount of money to win the payment, such as under a CPFF contract.
n n n n n n n n n n n n n n
The FPIF share line serves this purpose when balanced against the incentive.
n n n n n n n n n n n
The incentive has to be balanced with the FPIF share line so that the contractor doe
n n n n n n n n n n n n n n n
sn't spend more money to achieve the desired speed than he has potential to earn
n n n n n n n n n n n n n n n
by receiving the payment. Similarly, the contractor can't be allowed to spend an ex
n n n n n n n n n n n n n
cessive amount of money with little cost penalty to achieve success.
n n n n n n n n n n
In some cases, Contracting Officers are also Grants Officers. They can award Grants
n n n n n n n n n n n n
nand Assistance Instruments as well as contracts. What is Assistance? How does it d
n n n n n n n n n n n n n
iffer from Acquisition? What gives the Grants Officers their authority to enter into
n n n n n n n n n n n n n
assistance? What are the types of Assistance? - n n n n n n n
nnANSWER ☑☑When the principal purpose is to transfer a thing of value, to carry o
n n n n n n n n n n n n n n
ut a public purpose of support or stimulation authorized by law of the United State
n n n n n n n n n n n n n n
s, it is Assistance.
n n n
,Acquisition, by contrast, has the principal purpose of acquiring property or services
n n n n n n n n n n n
for the direct benefit or use of the United States Government.
n n n n n n n n n n n
Federal agencies must be authorized by statute to support or stimulate a public pur
n n n n n n n n n n n n n
pose. The statutory authority from Congress must exist either in broad legislation o
n n n n n n n n n n n n
r in a program-
n n n
specific statute. Absent that statutory authority, a Grants Officer may not use an as
n n n n n n n n n n n n n
sistance instrument. n
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of
n n n n n n n n n n n n n n
nDefense by statute, e.g., 10 U.S.C. 2391; (2) Authority provided to DoD component
n n n n n n n n n n n n
s that requires no delegation by the Secretary of Defense, e.g., 10 U.S.C. 2358; (3) A
n n n n n n n n n n n n n n n
uthority coming indirectly from statutes, i.e., federal statute authorizing a program
n n n n n n n n n n
nthat is consistent with using a grant or cooperative agreement.
n n n n n n n n n
Two types of Assistance are Grants and Cooperative Agreements. They differ in the
n n n n n n n n n n n n
nfollowing way: In a Grant, substantial involvement is not expected between the ag
n n n n n n n n n n n n
ency and the recipient. In Cooperative Agreement, substantial involvement is expe
n n n n n n n n n n
cted between the agency and the recipient. Cooperative Agreements, then, are par
n n n n n n n n n n n
ticularly useful in the research arena when the Government is interested in being i
n n n n n n n n n n n n n
nvolved in program decisions or may be doing some testing or research themselves
n n n n n n n n n n n n
.
You are the Contracting Officer on a new Research and Development program. Pro
n n n n n n n n n n n n
posals were recently received in response to a Broad Agency Announcement, and a
n n n n n n n n n n n n
nCost Plus Fixed Fee contract type is anticipated. The proposal most favored by the
n n n n n n n n n n n n n n
technical team was priced significantly under what was estimated for the effort. Th
n n n n n n n n n n n n
e contractor proposed fee in an amount that equates to 20% of the estimated cost.
n n n n n n n n n n n n n n n
The users have more than enough funds to cover the proposal and want you to acc
n n n n n n n n n n n n n n n
ept the price as is. How should you advise the user and what factors should you con
n n n n n n n n n n n n n n n n
sider in determining a reasonable fee? -
n n n n n n
ANSWER ☑☑The statutory limitation on fee for CPFF type contracts do no permit
nn n n n n n n n n n n n n n
exceeding 15% of estimated cost for experimental, developmental, or research per
n n n n n n n n n n
formed under a CPFF contract. Since the proposed amount of fee is outside the stat
n n n n n n n n n n n n n n
utory limitations you need to determine what a fair and reasonable rate is that falls
n n n n n n n n n n n n n n
, within the limitations. The FAR recommends a structured approach for determinin
n n n n n n n n n n n
g fee such as Weighted Guidelines. If a cost reasonableness review determines the
n n n n n n n n n n n n n
estimated costs to be acceptable, we can still negotiate and adjust the fee.
n n n n n n n n n n n n
You are the Contracting Officer for a well established transport aircraft program. T
n n n n n n n n n n n n
he program is nearing the end of production. A Program Manager approaches you
n n n n n n n n n n n n n
requesting that you issue a Broad Area Announcement (BAA) to support the develo
n n n n n n n n n n n n
pment of a source list to supply active noise reducing headsets. The headsets are c
n n n n n n n n n n n n n n
ommercially available from multiple sources and the PM wants to receive perform
n n n n n n n n n n n
ance specification sheets from each offeror and then request sample headsets be s
n n n n n n n n n n n n
ubmitted for testing. The end result of the effort will be the development of a sourc
n n n n n n n n n n n n n n n
e list that can be used by various government entities to individually procure the ne
n n n n n n n n n n n n n n
eded headsets for their specific requirements. The PM tells you that he will not be
n n n n n n n n n n n n n n n
procuring any of the headsets as a result of the BAA. What do you advise the PM? -
n n n n n n n n n n n n n n n n n
nnANSWER ☑☑You should advise the PM that BAAs are a method of solicitation and
n n n n n n n n n n n n n
ncan only be used if the Government intends to award a contract. You might sugges
n n n n n n n n n n n n n n
t that the development of the source list could be achieved by issuing a Sources So
n n n n n n n n n n n n n n n
ught Synopsis with the synopsis specifying the 2 step process (spec sheets first and
n n n n n n n n n n n n n n
then sample headsets from selected offerors), and the ultimate intent of the proce
n n n n n n n n n n n n
ss, e.g., a source list for use by individual users in future procurements. You might a
n n n n n n n n n n n n n n n
lso advise the PM that there could be liability issues associated with the use, handli
n n n n n n n n n n n n n n
ng, and return of the headsets to the offerors and that it might be appropriate for t
n n n n n n n n n n n n n n n n
he Government to cover shipping and any damage/wear to the units for the testing
n n n n n n n n n n n n n
.
A. Under what circumstances is ratification of an unauthorized commitment permi
n n n n n n n n n n
tted?
B. In general, what are the generic procedures for handling ratification actions?
n n n n n n n n n n n
C. Who are the approval authorities for ratifications? -
n n n n n n n n
ANSWER ☑☑A. If the contract award would have been proper if executed by a wa
nn n n n n n n n n n n n n n n
rranted PCO, the price can be determined to be fair and reasonable, and there mus
n n n n n n n n n n n n n n
BOARD EXAM 2024
nnnnn n n
You are the PCO for a major competitive negotiated source selection. The RFP, whi
n n n n n n n n n n n n n
ch reflects the user's requirements and is based on the user's budget, has a require
n n n n n n n n n n n n n n
ment for 220 cargo loaders to be delivered at 55 per year over the next four years.
n n n n n n n n n n n n n n n n n
One offeror proposes to deliver all 220 loaders in the first year at a dramatically red
n n n n n n n n n n n n n n n
uced price. Can you accept the offeror's proposal? What factors should you consid
n n n n n n n n n n n n
er in your decision? -
n n n n
nnANSWER ☑☑You can accept the offeror's proposal under certain circumstances. F
n n n n n n n n n n
irstly, what did the RFP say about alternate proposals? Is this a situation where req
n n n n n n n n n n n n n n
uirements are changed and the other offerors should be allowed to propose on the
n n n n n n n n n n n n n
nbasis of the changed requirements? You need to ask the user if he wants all 220 in
n n n n n n n n n n n n n n n n n
the first year and are the operating locations physically able to accommodate their
n n n n n n n n n n n n n
loaders in the first year. Finally, the offeror could be taken into discussions and ask
n n n n n n n n n n n n n n
ed to conform to the RFP with there being the possibility of not being selected for a
n n n n n n n n n n n n n n n n
ward or elimination from the competitive range if the proposal is not made compli
n n n n n n n n n n n n n
ant with the RFP.n n n
You are the PCO on a new $2B aircraft development program. The program is in co
n n n n n n n n n n n n n n n
ntract negotiations for a Fixed Price Incentive (Firm Target) System Development a
n n n n n n n n n n n
nd Demonstration contract award to a sole source contractor. The program directo
n n n n n n n n n n n
r, a fast-burning young colonel, e-
n n n n n
mails you that she is very concerned with the aircraft's ultimate speed at the full sp
n n n n n n n n n n n n n n n
ecification payload. She would like the contractor to achieve the faster, desired obj
n n n n n n n n n n n n
ective speed rather than the mandatory threshold speed, and thinks that an objecti
n n n n n n n n n n n n
ve performance incentive would be the way to go to achieve her goal. You are aske
n n n n n n n n n n n n n n n
d to go to her office and discuss the matter and the issues involved in using such an
n n n n n n n n n n n n n n n n n n
incentive. What do you tell the colonel? - n n n n n n n
ANSWER ☑☑There are a number of considerations for the colonel:
nn n n n n n n n n n
,The desired additional speed should provide benefit to the Government in order to
n n n n n n n n n n n n
njustify the expenditure of funds to achieve it. The colonel should be able to articula
n n n n n n n n n n n n n n
te the justification.
n n
The situation is very amenable to a classic performance incentive that would allow
n n n n n n n n n n n n n
the contractor to earn profit for achieving the desired speed above and beyond wh
n n n n n n n n n n n n n
at the final FPIF profit would be for achieving threshold speed. If the contractor per
n n n n n n n n n n n n n n
ceives this can't happen, he will either not sign up to the incentive or will ignore it fr
n n n n n n n n n n n n n n n n n
om Day One. n n
The incentive and resulting payment have to be structured so as to be based on obs
n n n n n n n n n n n n n n n
ervable, measurable results that would determine how much is earned by the cont
n n n n n n n n n n n n
ractor. Subjectivity is not allowable under current AF policy without HCA approval.
n n n n n n n n n n n
We have to be very careful to understand what possible unintended consequences
n n n n n n n n n n n n
could be caused by the existence of this feature in the contract. For example, will t
n n n n n n n n n n n n n n n
he contractor reduce aircraft weight beyond safe limits in order to help achieve the
n n n n n n n n n n n n n
payment? Also, will the contractor consume excessive schedule to get the extra sp
n n n n n n n n n n n n n
eed?
There has to be a cost incentive in place so that the contractor doesn't spend an un
n n n n n n n n n n n n n n n n
constrained amount of money to win the payment, such as under a CPFF contract.
n n n n n n n n n n n n n n
The FPIF share line serves this purpose when balanced against the incentive.
n n n n n n n n n n n
The incentive has to be balanced with the FPIF share line so that the contractor doe
n n n n n n n n n n n n n n n
sn't spend more money to achieve the desired speed than he has potential to earn
n n n n n n n n n n n n n n n
by receiving the payment. Similarly, the contractor can't be allowed to spend an ex
n n n n n n n n n n n n n
cessive amount of money with little cost penalty to achieve success.
n n n n n n n n n n
In some cases, Contracting Officers are also Grants Officers. They can award Grants
n n n n n n n n n n n n
nand Assistance Instruments as well as contracts. What is Assistance? How does it d
n n n n n n n n n n n n n
iffer from Acquisition? What gives the Grants Officers their authority to enter into
n n n n n n n n n n n n n
assistance? What are the types of Assistance? - n n n n n n n
nnANSWER ☑☑When the principal purpose is to transfer a thing of value, to carry o
n n n n n n n n n n n n n n
ut a public purpose of support or stimulation authorized by law of the United State
n n n n n n n n n n n n n n
s, it is Assistance.
n n n
,Acquisition, by contrast, has the principal purpose of acquiring property or services
n n n n n n n n n n n
for the direct benefit or use of the United States Government.
n n n n n n n n n n n
Federal agencies must be authorized by statute to support or stimulate a public pur
n n n n n n n n n n n n n
pose. The statutory authority from Congress must exist either in broad legislation o
n n n n n n n n n n n n
r in a program-
n n n
specific statute. Absent that statutory authority, a Grants Officer may not use an as
n n n n n n n n n n n n n
sistance instrument. n
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of
n n n n n n n n n n n n n n
nDefense by statute, e.g., 10 U.S.C. 2391; (2) Authority provided to DoD component
n n n n n n n n n n n n
s that requires no delegation by the Secretary of Defense, e.g., 10 U.S.C. 2358; (3) A
n n n n n n n n n n n n n n n
uthority coming indirectly from statutes, i.e., federal statute authorizing a program
n n n n n n n n n n
nthat is consistent with using a grant or cooperative agreement.
n n n n n n n n n
Two types of Assistance are Grants and Cooperative Agreements. They differ in the
n n n n n n n n n n n n
nfollowing way: In a Grant, substantial involvement is not expected between the ag
n n n n n n n n n n n n
ency and the recipient. In Cooperative Agreement, substantial involvement is expe
n n n n n n n n n n
cted between the agency and the recipient. Cooperative Agreements, then, are par
n n n n n n n n n n n
ticularly useful in the research arena when the Government is interested in being i
n n n n n n n n n n n n n
nvolved in program decisions or may be doing some testing or research themselves
n n n n n n n n n n n n
.
You are the Contracting Officer on a new Research and Development program. Pro
n n n n n n n n n n n n
posals were recently received in response to a Broad Agency Announcement, and a
n n n n n n n n n n n n
nCost Plus Fixed Fee contract type is anticipated. The proposal most favored by the
n n n n n n n n n n n n n n
technical team was priced significantly under what was estimated for the effort. Th
n n n n n n n n n n n n
e contractor proposed fee in an amount that equates to 20% of the estimated cost.
n n n n n n n n n n n n n n n
The users have more than enough funds to cover the proposal and want you to acc
n n n n n n n n n n n n n n n
ept the price as is. How should you advise the user and what factors should you con
n n n n n n n n n n n n n n n n
sider in determining a reasonable fee? -
n n n n n n
ANSWER ☑☑The statutory limitation on fee for CPFF type contracts do no permit
nn n n n n n n n n n n n n n
exceeding 15% of estimated cost for experimental, developmental, or research per
n n n n n n n n n n
formed under a CPFF contract. Since the proposed amount of fee is outside the stat
n n n n n n n n n n n n n n
utory limitations you need to determine what a fair and reasonable rate is that falls
n n n n n n n n n n n n n n
, within the limitations. The FAR recommends a structured approach for determinin
n n n n n n n n n n n
g fee such as Weighted Guidelines. If a cost reasonableness review determines the
n n n n n n n n n n n n n
estimated costs to be acceptable, we can still negotiate and adjust the fee.
n n n n n n n n n n n n
You are the Contracting Officer for a well established transport aircraft program. T
n n n n n n n n n n n n
he program is nearing the end of production. A Program Manager approaches you
n n n n n n n n n n n n n
requesting that you issue a Broad Area Announcement (BAA) to support the develo
n n n n n n n n n n n n
pment of a source list to supply active noise reducing headsets. The headsets are c
n n n n n n n n n n n n n n
ommercially available from multiple sources and the PM wants to receive perform
n n n n n n n n n n n
ance specification sheets from each offeror and then request sample headsets be s
n n n n n n n n n n n n
ubmitted for testing. The end result of the effort will be the development of a sourc
n n n n n n n n n n n n n n n
e list that can be used by various government entities to individually procure the ne
n n n n n n n n n n n n n n
eded headsets for their specific requirements. The PM tells you that he will not be
n n n n n n n n n n n n n n n
procuring any of the headsets as a result of the BAA. What do you advise the PM? -
n n n n n n n n n n n n n n n n n
nnANSWER ☑☑You should advise the PM that BAAs are a method of solicitation and
n n n n n n n n n n n n n
ncan only be used if the Government intends to award a contract. You might sugges
n n n n n n n n n n n n n n
t that the development of the source list could be achieved by issuing a Sources So
n n n n n n n n n n n n n n n
ught Synopsis with the synopsis specifying the 2 step process (spec sheets first and
n n n n n n n n n n n n n n
then sample headsets from selected offerors), and the ultimate intent of the proce
n n n n n n n n n n n n
ss, e.g., a source list for use by individual users in future procurements. You might a
n n n n n n n n n n n n n n n
lso advise the PM that there could be liability issues associated with the use, handli
n n n n n n n n n n n n n n
ng, and return of the headsets to the offerors and that it might be appropriate for t
n n n n n n n n n n n n n n n n
he Government to cover shipping and any damage/wear to the units for the testing
n n n n n n n n n n n n n
.
A. Under what circumstances is ratification of an unauthorized commitment permi
n n n n n n n n n n
tted?
B. In general, what are the generic procedures for handling ratification actions?
n n n n n n n n n n n
C. Who are the approval authorities for ratifications? -
n n n n n n n n
ANSWER ☑☑A. If the contract award would have been proper if executed by a wa
nn n n n n n n n n n n n n n n
rranted PCO, the price can be determined to be fair and reasonable, and there mus
n n n n n n n n n n n n n n
