CLC 222 EXAM QUESTIONS AND CORRECT ANSWERS,
WITH COMPLETE SOLUTION.
Truth in Negotiations Act (TINA)
Occurs when the contractor gives false cost and pricing data during negotiations
subject.
Defective pricing means the contractor certified to false data. Currently, the TINA
threshold is $750,000. The possibility of defective pricing must be analyzed and
substantiated before the KO takes action.
What are Fixed Price Contracts?
Fixed price contracts provide for a price that is not subject to any adjustment on the
basis of the contractor's cost experienced in performing the contract. A fixed price
contract is used when the risk involved is minimal or can be predicted with an
acceptable degree of accuracy.
What are Cost-Reimbursement Contracts?
Cost-reimbursement contracts provide for payment of allowable incurred costs. They
establish:
•An estimate of total cost
•The purpose of obligating funds
•A ceiling that the contractor may not exceed, except at its own risk, without the
approval of the KO
This type of contract is suitable for use only when the uncertainties involved in contract
performance do not permit costs to be estimated with sufficient accuracy to use any
type of fixed price contract.
Time and Materials/Labor Hour Contracts
T&M contracts provide for acquiring supplies or services on the basis of direct labor
hours at specified fixed rates that include:
•Wages
•Overhead
•General and administrative expenses
•Profit
•Actual costs for materials
Time and materials are a hybrid of fixed price and cost-reimbursement contracts.
Although it contains fixed prices for wages like a fixed price contract, it is generally
considered to be more like a cost reimbursement contract because the contractor can
bill for actual hours worked (charged at the fixed hourly rate established in the contract)
and actual costs for materials. A T&M contract is only used when it is not possible at the
time of placing the contract to estimate accurately the extent or duration of the work or
to anticipate costs with any reasonable degree of confidence.
Indefinite Delivery/Indefinite Quantity Contracts
IDIQ contracts are used to acquire supplies and/or services when the exact time of
future deliveries are unknown at the time of contract award.
An IDIQ contract provides for an indefinite quantity, within stated limits, of supplies or
WITH COMPLETE SOLUTION.
Truth in Negotiations Act (TINA)
Occurs when the contractor gives false cost and pricing data during negotiations
subject.
Defective pricing means the contractor certified to false data. Currently, the TINA
threshold is $750,000. The possibility of defective pricing must be analyzed and
substantiated before the KO takes action.
What are Fixed Price Contracts?
Fixed price contracts provide for a price that is not subject to any adjustment on the
basis of the contractor's cost experienced in performing the contract. A fixed price
contract is used when the risk involved is minimal or can be predicted with an
acceptable degree of accuracy.
What are Cost-Reimbursement Contracts?
Cost-reimbursement contracts provide for payment of allowable incurred costs. They
establish:
•An estimate of total cost
•The purpose of obligating funds
•A ceiling that the contractor may not exceed, except at its own risk, without the
approval of the KO
This type of contract is suitable for use only when the uncertainties involved in contract
performance do not permit costs to be estimated with sufficient accuracy to use any
type of fixed price contract.
Time and Materials/Labor Hour Contracts
T&M contracts provide for acquiring supplies or services on the basis of direct labor
hours at specified fixed rates that include:
•Wages
•Overhead
•General and administrative expenses
•Profit
•Actual costs for materials
Time and materials are a hybrid of fixed price and cost-reimbursement contracts.
Although it contains fixed prices for wages like a fixed price contract, it is generally
considered to be more like a cost reimbursement contract because the contractor can
bill for actual hours worked (charged at the fixed hourly rate established in the contract)
and actual costs for materials. A T&M contract is only used when it is not possible at the
time of placing the contract to estimate accurately the extent or duration of the work or
to anticipate costs with any reasonable degree of confidence.
Indefinite Delivery/Indefinite Quantity Contracts
IDIQ contracts are used to acquire supplies and/or services when the exact time of
future deliveries are unknown at the time of contract award.
An IDIQ contract provides for an indefinite quantity, within stated limits, of supplies or
