CPPA Module 3 Exam 182 Questions with Verified Answers,100% CORRECT

CPPA Module 3 Exam 182 Questions with Verified Answers Prior to nineties, what two regulations dictated property management industry? - CORRECT ANSWER 1. Federal Acquisition Regulation (FAR) part 45 "Government Property" 2. Federal Property Management Regulations (FPMR), for non-federal employees In NPMA, what is meant by "property"? - CORRECT ANSWER Government property What is the goal of the American National Standards Institute (ANSI)? - CORRECT ANSWER To enhance both the global competitiveness of the U.S. Business and the U.S. quality of life by promoting and facilitating voluntary consensus standards and conformity assessment systems while safeguarding their integrity. What department of our government does the National Institute of Standards and Technology (NSIT) a part of? - CORRECT ANSWER Department of Commerce When did the National Institute of Standards and Technology (NISIT) sign a memorandum of understanding with the American National Standards Institute (ANSI) and what did it pertain to? - CORRECT ANSWER - 1995 - To enhance and strengthen the U.S. voluntary standards system through strong public-private sector interaction What act was passed in 1995 which coincided with American National Standards Institute (ANSI) - National Institute of Standards and Technology (NIST) memorandum of understanding? - CORRECT ANSWER The National Technology Transfer and Advancement Act of 1995 (P.L. 104-113) (NTTAA) What did (P.L 104-113) (NTTAA) bridge the gap between? - CORRECT ANSWER Standards developers and the Government agencies that create legislation affecting the standards community The importance of a strong partnership between the private and public sector was strengthen by the revising of what and when? - CORRECT ANSWER - OMB Circular A-119 in 1997 What does the acronym OMB? - CORRECT ANSWER Office of Management and Budget What did OMB Circular A-119 accomplish? - CORRECT ANSWER It guided U.S. Government agencies in the implementation of the NTTAA reinforcing the values of Government participation in the voluntary standards system. What is the OMB definition of the term "standard" - CORRECT ANSWER The common and repeated use of rules, conditions, guidelines, or characteristics for products or related processes and production methods, an related management systems practices As per OMB A-119, what are voluntary consensus standard bodies? - CORRECT ANSWER They are "domestic or international organizations which plan, develop, establish, or coordinate voluntary consensus standards using agreed-upon procedures What does the NTTAA encourage? - CORRECT ANSWER It encourages the participation of Federal representative in the voluntary consensus standards bodies to increase the likelihood that the standards they develop will meet both public and private sector needs. What are some of the attributes which define a voluntary consensus standards body? - CORRECT ANSWER - Openness - Balance of interest - Due process - An appeal process - Consensus, which is defined as general agreement, but necessarily unanimity What does ASTM E2135-04, Standard Terminology for Property and Asset Management define? - CORRECT ANSWER If defines standards as "rules" or bases of comparison used in judging capacity, quantity, context, extent, value, or quality: levels of excellence or attainment regarded as a measure of adequacy When was ASTM E2135-04 published? - CORRECT ANSWER September 2004 What was the first tangible step toward achieving a consensus standardization policy for the property industry in 2000? - CORRECT ANSWER When Committee E53 on Property Management Systems was officially organinzed What was Committee E53 charged with as their first task once they were established via a partnership between the NPMA and ASTM International? - CORRECT ANSWER The development of management systems criteria and methods of effectiveness for the conduct of management and administration activities for durable and movable assets. What does the general areas of interest of Committee E53 include? - CORRECT ANSWER Standard practices to support all aspects of personal property management, including systems for the management of industrial and Federal state, and local government personal property as well as educational and medical institution property For TC E53, What agencies are currently included for classifications? - CORRECT ANSWER 1. Colleges and universities 2. Commercial enterprises 3. Federal agencies and departments 4. Government contractors 5. Service provided, consultants, hardware suppliers, and software suppliers 6. Specialists having expert knowledge not otherwise covered by another category of interest 7. State and local governments To ensure balance, not more than ____________ of the membership comes from any single category. - CORRECT ANSWER 1/3 What are the duties of the Technical Committee E53? - CORRECT ANSWER - Developing standards within its scope - Maintaining standards within its scope - Achieving a consensus for the action proposed on a standard - Ensuring that duplication of standards is minimized - Not promulgating conflicting standards - Providing for interpretations of standards within its scope, if applicable, as determined by the COTCO - Reporting the status of standards within its scope to the COTCO at least annually What are the specific areas of Committee E53? - CORRECT ANSWER They include all aspects of personal property management from the determination of needs and initial acquisition through final disposition, including receipt, identification and marking, record keeping, custodial and administrative accountability, reporting, consumption, maintenance, movement, storage, inventory, control utilization, and disposition. What is the purpose of the ASTM International Bylaws? - CORRECT ANSWER It assigns the supervision of standards activities to the Committee on Technical Committee Operations (COTCO). What does the COTCO manage? - CORRECT ANSWER It manages the development of standards through the establishment and supervision of one or more Technical Committees (TC) by specific functional areas What are the COTCO's responsibilities with respect to standards development and maintenance by TCs? - CORRECT ANSWER - Approving and discharging TC personnel - Ensuring that any TC under its jurisdiction is operating with its approved scope and according to ASTM International-compliant procedures - Ensuring that TCs with the charter of the Committee are providing due process - Providing a forum for hearing appeals of actions or inaction by TCs Approximately, how many members are on the E53 committee? - CORRECT ANSWER 70 members How many approved standards does the 70 members of the E53 committee have jurisdiction over?? - CORRECT ANSWER 12 Where are the 12 approved standards of E53 committee published? - CORRECT ANSWER in the Annual Book of ATSM Standards, Vol. 4.12 What is requirements determination? - CORRECT ANSWER It is the process of identifying and justifying future property acquisitions and providing the necessary funds What is the task of property management? - CORRECT ANSWER To manage the property the organization needs to meet the objectives at the lowest costs What information must the property manager have to be fully aware of the overall picture to be effective in requirements determination? - CORRECT ANSWER - Organizational objectives - Target dates for achieving them - Any funding restrictions - Type and quantity of property needed What must the majority of the information identified during requirements determination compiled as a part of? - CORRECT ANSWER Budget Process What information can the property manager provide to maximize the effective acquisition of assets? - CORRECT ANSWER - Potential vendors - Lease vs. Buy recommendations - Cost of comparable property already in use - Reliability of candidate brands and models - Information related to make-or-buy decisions - Possible locations for acquired property once it has been placed in service What terms must property management be defined as? - CORRECT ANSWER The processes, programs, and objectives which must be supported by the property system If property must be acquired to meet organization objectives, who should be involved from beginning in the planning process? - CORRECT ANSWER Property Manager To be effective in requirement determination, what must the property manager aware of? - CORRECT ANSWER The overall picture including organizational objectives, the target dates for achieving them, any funding restrictions, and the type and quantity of property needed Since most organizations' asset bases far exceed their annual payroll value, what can be done by reducing these two areas to get a bigger benefit than larger gains in productivity? - CORRECT ANSWER 1. Reduce the cost of acquiring 2. Reduction of holding property Besides looking very closely at the organization's objectives, what role does the Property Manager play in the resource allocation process and in all aspects of the planning and acquisition of organization assets? - CORRECT ANSWER - Review by each department of its plans with respect to the organization's strategic plan - Development of requirements based on all known equipment and general-purpose facility needs for the future year/s - Separation of organization-funded items into those which must be capitalized and those which will be expensed - Prioritization of needs on a reasonable and consistent basis - Funds allocation by higher management - Submission by each department of a single list of requested projects - Capital budget review to include recommendations by property management for additional items from the departmental planning process - Creation of the final budget and communicating of a final list of all approved capital projects to the respective departments - Creation, refinement, and finalization of a depreciation projection - Substitutions, additions, or cost increase and their attendant modifications to the capital plan During the resource allocation process, who does the Property Management Office provide concise, complete monthly updates to? - CORRECT ANSWER The accounting office and higher management What must the Capital Planning process take into account when dealing with current and future commitments? - CORRECT ANSWER - Provide equipment and facilities to support current contract obligations and customer needs - Meet all environmental and safety obligations - Establish future strategic capabilities - Provide for future new business development What information must be reviewed and analyzed pertaining to Capital Investment requests? - CORRECT ANSWER - Acquisition of the property would be consistent with the overall strategic plan - Request will not duplicate available existing equipment or facilities - Property requested will be compatible with existing and currently planned equipment or facility acquisitions - Property requested has the technical capability to meet the need for which it has been requested - Proper account codes have been used, consistent with policies and procedures and if appropriate, with the Disclosure Statement What is the process outline for requirements determination? - CORRECT ANSWER 1. Timing 2. Process 3. Developing Requirements 4. Determination of Capital Items (Organization Funded) 5. Prioritization 6. Allocation of Funds 7. Department Submissions 8. Capital Budget Review 9. Creation of the Final Budget 10. Creation of a Depreciation Projection 11. Substitutions/Additions/Cost Increases In the processing outline, what are some of the critical factors? - CORRECT ANSWER - Investment plans submitted based on organization's objectives for the next year or years - Projected out-year, year after current fiscal year, equipment depreciation must be determined prior to formulation of budget data - Budget projection and five-year plan for future years prepared in third or fourth quarter of current fiscal year What does the capital planning process begin with? - CORRECT ANSWER With a review by each department of its plans with respect to the organization's strategic plan. What managers do the department heads communicate to the requirements and considerations once the overall direction has been established? - CORRECT ANSWER Lower-tier managers who then develop internal lists of required capital equipment for integration into the department plan When managers develop lists for Developing Requirements, what do they contain? - CORRECT ANSWER All known equipment and general-purpose facility needs for the future year/s If the organization is a Government contractor, when making requirement determinations, what are requirements based on? - CORRECT ANSWER - Contractual terms and conditions - Acquisition authority What is meant by Capital Items? - CORRECT ANSWER Items which are Organization Funded When equipment and general purpose facility item requirements have been determined, what is the next step in the Determination of Capital Items? - CORRECT ANSWER Items which must be capitalized and those which will be expensed must be separated IAW the organization's capitalization criteria. What basis is given at the department level to prioritize the necessary investment items and what are they? - CORRECT ANSWER Reasonable and consistent basis A. Support for existing business requirements B. Support for potential work under new contracts c. New business development D. Environment, health, and safety E. Infrastructure F. Cost reduction and productivity improvement G. Maintenance and replacement What priorization basis places the highest priority on property that is necessary to support contract efforts? - CORRECT ANSWER Support for existing business requirement which satisfies all known contracts that have been awarded What two conditions which exist under the prioritization of support for potential work under new contracts? - CORRECT ANSWER 1. Property that may be required to support new contracts should be considered on a probability basis, with higher priority given to work that is more likely to be awarded 2. If contract does not develop which funds have been allocated, funds must be re-prioritized for other projects What two conditions which exist under the prioritization of environment, health, and safety? - CORRECT ANSWER 1. Attention must be given to those investments necessary to meet Government regulations 2. Preserve the safety and well-being of employees Critical items are addressed first What the basis of priorization for Cost reduction and productivity improvement? - CORRECT ANSWER Prioritization is done on the basis of the comparative return for the investment made, where return is defined as the cost savings or productivity improvement generated vs. the initial investment expressed in terms of net present value (NPV). Bottom line..... Higher-return projects should receive higher priority If items improve productivity or are needed for new business they should be placed in what priority category? - CORRECT ANSWER Maintenance and replacement What is considered a carry-over project? - CORRECT ANSWER Any project that were not funded during the previous fiscal year but for which a valid need still exists. How does a carry-over item/project affect a department's current projected allocation of funds? - CORRECT ANSWER It reduces the owning department's current projected allocation prior to establishing new commitments When should requisitions for capital equipment be submitted for inclusion into the next fiscal year's budget? - CORRECT ANSWER 45 days prior to the fiscal year end which facilitates getting all current-year requests processed prior to year-end. When can Procurement accept requisitions after the established cut-off for processing capital equipment? - CORRECT ANSWER With the approval from higher level management Who makes required adjustments to the individual department allocations during the Capital Budget Review and communicates them to the coordinating office? - CORRECT ANSWER Upper management What options might a property manager suggest to upper management during Capital Budget review and why? - CORRECT ANSWER - Might suggest trade-offs or other potential opportunities to reduce investment when appropriate which may include leasing, previously owned, or Government sources What data elements are listed on the final list of approved capital projects which is provided to the respective departments that are required when purchase requisitions are initiated? - CORRECT ANSWER - Purchase account keys (charge numbers/codes) - Asset category - Identification codes, if appropriate - Depreciation expense account number Who department does Property Management work with to project the depreciation expense of existing assets and those approved for the next and subsequent fiscal years? - CORRECT ANSWER Fixed Asset Accounting What department retains the final projection for depreciation along with supporting details to made available for review by audit agencies and parent organizations? - CORRECT ANSWER Property Management What two departments work together and projects the depreciation expense of existing assets and those approved for the next and subsequent fiscal years? - CORRECT ANSWER - Property Management - Fixed Asset Accounting When does distribution the Depreciation Projection begin and describe the complete process? - CORRECT ANSWER - It begins shortly after the time of the initial department submissions - Projections are provided on a preliminary basis and are refined through the planning period up to the point when final department capital budgets have been determined. Prior to the generation of purchase requisitions for capital investment items involving substitution, additions, or cost increase, what action needs to take place? - CORRECT ANSWER The requests should be processed IAW internal department procedures What action needs to be determined by the requesting department when making a decision on substitution, addition, or cost increase and how it will affect the Capital Investment Plan? - CORRECT ANSWER Whether the substitution, addition, or cost increase can be absorbed within its existing Capital Investment Plan or should a request for additional funds be submitted What standards are guidelines, established by the organization, for determining in what quantity, when and when items or categories are required? - CORRECT ANSWER Use Standards When is equipment replacement forecast advisable? - CORRECT ANSWER In budget preparation To effectively facilitate Use and Replacement Standards, what must the Property Manager conduct? - CORRECT ANSWER - The coordination of the receipt of new personal property with the anticipated need for the the replacement of existing property - Periodic reviews of departments to identify underutilized or uneeded property which can be reassigned or which can be pooled to facilitate more economical and efficient use - Periodic analysis of new personal property items whose acquisition could result in lower total costs through greater productivity, reduced maintenance costs, or longer service life - Periodic maintenance programs to extend the useful service life of existing property What must the Property Manager do to justify the replacement of items when further expenditure of funds for maintenance is uneconomical? - CORRECT ANSWER Maintain records on maintenance costs to justify the replacement of such items What are replacement standards? - CORRECT ANSWER Factors that should be considered in making a decision as to whether to repair or replace a piece of equipment What should be used when "use or replacement standards" have not be established? - CORRECT ANSWER Written Justification which is presented to that level of management authorized to grant approval When the requisition based on the approval of a written justification, what is the disposition of the justification? - CORRECT ANSWER It must be incorporated into the requisition or shown as an attachment What is the task of Property Management? - CORRECT ANSWER To manage the property the organization needs to meet its objectives at the lowest cost What does consumables management deal with primarily? - CORRECT ANSWER Everyday items that are used by everyone in the organization What type of organizations often have warehouses that stock consumable items? - CORRECT ANSWER Large and geographically-diverse organizations Taken individually, consumables items represent insignificant amounts of money... taken together, what do consumables present? - CORRECT ANSWER - Opportunities for excessive spending - Good stewardship of the organization's funds Consumable management has two faces both equally important. What are they? - CORRECT ANSWER 1. To ensure that customers (users) have free and immediate access to needed supplies 2. Contain costs What must a consumable management program include to be successful? - CORRECT ANSWER - Established repository for consumables - Adequate means of determining requirements and a way to adjust requirements based on the organization's needs - Consumables tracking system to ensure that what, how much, and when stock should be reordered to keep inventory levels to a minimum - Regular inventories whose frequency and sampling rate are determined by the cost of, demand for, and mission criticality of consumable items What is one key characteristics of a consumable? - CORRECT ANSWER Something that is "consumed" upon being issued and once issued, all accountability of the item ceases to exist What are expendables? - CORRECT ANSWER Items that are acquired and used to perform a function until they are used or worn out... drill bits and small tools What determines the scale and degree of complexity of warehouse system and it's uses for stocking consumables? - CORRECT ANSWER - The organization's structure - Mission - Size Geographical dispersion - other factors What are three considerations of stocking consumables? - CORRECT ANSWER 1. Access to stock along with physical access and delivery capabilities, communication between warehouse and users is extremely important 2. Stock costs money - if not used in a reasonable time actual cost increases due to cost of storage 3. Shelf life or obsolescence may render it excess before it ever gets issued What is the obvious disadvantage of a central warehouse for consumables? - CORRECT ANSWER - Cost It includes the land, the facility, equipment, and the manning of the warehouse What are the advantages of having a central warehouse for consumables which have to outweigh the costs and other disadvantages of operating a facility? - CORRECT ANSWER - Central warehouse permits the centralized purchase of consumables with dedicated personnel whose job it is to find the best products for the best available prices - Cost advantages can be gained because of quantity discounts - Time is saved because end users do not have to research to find best item at best price - Great avenue for controlling costs and adhering to governmental and/or cooperate purchasing procedures - Warehouse can handle retrograde and used-up consumables thus serving a dual purpose Requirement determination for consumable stock begins with what assessment? - CORRECT ANSWER Needs assessment Consumables program cannot exist without what? - CORRECT ANSWER - Determining consumables requirements - establishing consumable stock process - determine who receives it - how it is stocked - how it is issued - having a tracking system in place to determine and review stock levels In order to catalog consumable stock, what is recommended as a minimum to categorize or group common items? - CORRECT ANSWER - Short description - Unit of measure and unit of issue - Cost per unit - Manufacturer - National Institute of Governmental Purchasing (NGIP) code for public sector purchasing - Class or Commodity code In order to maintain the proper stock levels, it is necessary to manage these two items? - CORRECT ANSWER Re-order Point (ROP) Re-order Quantity (ROQ) What is ROP? - CORRECT ANSWER It is the point at which the inventory level is low enough to order stock What is the formula for determining ROP? - CORRECT ANSWER (Average Monthly Demand (AMD)/30 days) x (Lead Time + Test Time + Safety Stock) which is expressed in days What is Lead time? - CORRECT ANSWER It is the number of days between the requisition date and the first receipt is processed What Lead Time is used for computing the ROP? - CORRECT ANSWER The average Lead Time What is Safety Stock? - CORRECT ANSWER It is the number of days of stock that should be on-hand when the first receipt is processed for an item on an outstanding requisition What is ROQ and when does it take place? - CORRECT ANSWER ROQ (re-order quantity) is the amount to order each time the ROP (re-order point) is reached What is ROQ often based on? - CORRECT ANSWER AMD - average monthly demand When would a 100% wall-to-wall inventory be required for consumable inventory? - CORRECT ANSWER When the stock is on hand, the Government Accounting Standards Board requires that its value be included in the annual financial report What is the outcome of proper planning and controlling consumable inventory? - CORRECT ANSWER - A low dollar investment - A high service level - A high inventory turnover rate What factors make the ABC Plan work? - CORRECT ANSWER The ROP and ROQ for each category in the plan/item What does the ABC plan measure? - CORRECT ANSWER It measures the cost importance of each item demanded from a stock account dividing the inventory into three categories (A,B, and C) based on dollar value of demands What does Category A account for in the ABC plan in a stock account? - CORRECT ANSWER "A category" accounts for approximately 75% of the dollar value of warehouse demand and is usually about 10% of the total number of stock records - These items deserve the most management attention since the dollar value of their demands is high resulting in the greatest impact on inventory turnover When should the ROPs and ROQs be reviewed for Category A? - CORRECT ANSWER Reviewed at least quarterly When should items in Category A be ordered and why? - CORRECT ANSWER They should be ordered frequently to reduce the dollar value of inventory in stock account What level should the Safety Stock be for Category A stock account? - CORRECT ANSWER It should low as possible without risking stock outages What does Category B account for in the ABC plan in a stock account? - CORRECT ANSWER B category accounts for approximately 15% of the dollar value of the warehouse demand and about 15% of the stock records. Moderate management attention should be applied to these items due to their low impact on both dollar investment and inventory turnover is smaller When should items in Category B be ordered? - CORRECT ANSWER May be ordered two to six times per year depending on demand What level should the Safety Stock be for Category B stock account? - CORRECT ANSWER Safety stock should be at a moderate level, 30 to 60 days What does Category C account for in the ABC plan in a stock account? - CORRECT ANSWER C Category accounts for only 10% to 15% of the dollar value but makes up the remaining 75% of the items in the stock records. Items in this category receive the least management attention due to their low impact When should items in Category C be ordered? - CORRECT ANSWER once or twice a year What level should the Safety Stock be for Category C stock account? - CORRECT ANSWER Safety stock maybe large since the dollar investment in inventory is low When should the ROPs and ROQs for each category in the ABC Selective Stock Plan be reviewed? - CORRECT ANSWER A - Quarterly B - Quarterly or semi-annually C- Updated at least annually When should Sample Inventories be conducted on Category A items? - CORRECT ANSWER They should be done throughout the year with inventory conducted once a week or once a month Which items are not included in the ABC plan control? - CORRECT ANSWER Pilferable items such as film, compact disks, and electronic media. ...... They are kept in a controlled area and inventoried often What are Insured Items in the stock plan? - CORRECT ANSWER They are those items that are retained regardless of their lack of demand or their surplus stock position They may include: - Items with a high dollar unit cost - Items with a long lead time - Items with an unpredictable demand rate - Items whose lack of would have a significant detrimental impact on mission performance To be an effective Property Manager, what is important when administering their portion of a contract or an agreement? - CORRECT ANSWER They must fully understand the terms of the contract and contract administration process Who is responsible for incorporating provisions into the contract covering the control, use, disposition, etc., of contract-accountable property? - CORRECT ANSWER Contracting Officer Under what authority are Federal Government contracts awarded? - CORRECT ANSWER under the authority of Federal Acquisition Regulation (FAR) Under what authority are local Government o commercial business contracts awarded? - CORRECT ANSWER under the Uniform Commercial Code (UCC) What are at the heart of adding value to an organization? - CORRECT ANSWER Understanding how a contract is formed and knowing where to look for essential information concerning property management Contract wise, what is the most important part of the job for a Property Manager? - CORRECT ANSWER How to interpret the contract for the benefit of the organization What factors determine what type of agreement to be selected for a given project? - CORRECT ANSWER - Work to be performed - Methods of financing - Billing - Payment to be used - Purpose of the project What are some of the common types of agreements - CORRECT ANSWER - Contract (most familiar) - Grants - Cooperative agreements - Sub-awards - Bailment agreements What are parts of a contract? - CORRECT ANSWER First part - design of the equipment followed by the phases of development, test, evaluation, and finally production What must the contract types accommodate? - CORRECT ANSWER They must accommodate the entire spectrum of possible transactions and their associated risks to each party involved What is the main determination when selecting which contract is best? - CORRECT ANSWER Which contract type will diminish the risk and increase the benefits to both parties involved Contracts are divided into what two broad families? - CORRECT ANSWER 1. Fixed-price 2. Cost reimbursement Where does the greatest financial risk fall in a Firm-Fixed-Price (FFP) contract? - CORRECT ANSWER On the vendor Where does the greatest financial risk fall in a Cost-Plus-Fixed-Fee (CPFF) contract? - CORRECT ANSWER on the acquiring organization Between Firm-Fixed-Price (FFP) and Cost-Plus-Fixed-Fee (CPFF) contracts, which one is the easiest to understand and administer and why? - CORRECT ANSWER - FFP - Even with subsequent contract modifications, both parties know at the start what the price will be and precisely what the deliverable will be. Conversely, when is a CPFF contract used? - CORRECT ANSWER When uncertainty exists as to the nature of the product to be delivered and the ultimate cost What are the five types of fixed-price? - CORRECT ANSWER 1. Firm-fixed-price 2. Fixed-price with economic price adjustment 3. Fixed-price redetermination 4. Firm-fixed price, level-of-effort term 5. Fixed-price-incentive What are two common characteristics of a all fixed-price contracts? - CORRECT ANSWER 1. The vendor is contractually bound to complete the contract work or as in level-of-effort, provide the specified level. 2. The acquiring organization is obligated to pay a price equal to the firm price specified in the contract or for fixed-price incentive or redetermination contracts, at no more than a specified ceiling, regardless of the vendor's cost of performance What are three characteristics of a Grant? - CORRECT ANSWER - Best defined as an assistance agreement - Provides support or stimulates recipient activities - Managed under the OMB circular A-102 or the requirement of an individual state What is the main difference between a Grant and a Cooperative Agreement? - CORRECT ANSWER There is a substantial technical involvement which is anticipated between the awarding agency and the recipient during the period of performance What is a contract? - CORRECT ANSWER It is a procurement instrument specifically for the purchase of goods and services which is managed under FAR for Federal Gov. contracts and UCC for state, local gov. and commercial entities What is a sub-award? - CORRECT ANSWER It is a subcontracting plan with the prime contract with a privity of contract between the prime contractor and the sub-recipient What is a Bailment Agreement? - CORRECT ANSWER A legally-binding loan agreement used for loaning government property to another governmental entity under a prime contract Firm-Fixed-Price-Contract - CORRECT ANSWER - Places upon the vendor the maximum risk and full responsibility for all costs and any resulting profit loss - Provides maximum incentive for the vendor to control costs and imposes minimum administrative burden upon the contracting parties What are three advantages of a FFP contract? - CORRECT ANSWER 1. Minimum administrative burden on both parties 2. Maximum incentive for the vendor to control costs and perform efficiently 3. A known monetary obligation What does a Fixed-Price Contract with Economic Price Adjustment (FP-EPA) provide? - CORRECT ANSWER An upward or downward revision of the stated contract price when specific contingencies occur. What are the two types of Fixed-Price Redetermination (FPR) contracts? - CORRECT ANSWER - Prospective - Retroactive What is a fixed-price contract with prospective price redetermination? - CORRECT ANSWER It provides for a firm fixed price during initial contract performance and for prospective price determination at stated times during the contract What is a fixed-pice contract with retroactive price redetermination? - CORRECT ANSWER It provides for a fixed ceiling price and retroactive price redetermination with the ceiling after contract performance has been completed What does Firm-Fixed-Price, Level-of-Effort Term (FFP-LOE) require the vendor to provide and what is payment based on? - CORRECT ANSWER - It requires the vendor to provide a specified level of effort over a stated period of time that can be specified only in general terms. - Payment is a fixed dollar amount based on the effort expanded What is a Fixed-Price-Incentive (FPI) contract? - CORRECT ANSWER It is a contract that provided for adjusting the profit and establishing the final contract price by a formula based on the relationship between final negotiated total cost and total target cost and negotiated at the outset. When are Cost-Reimbursement contracts suitable? - CORRECT ANSWER When uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy What is the most distinctive feature of a Cost-Reimbursement (CR) contract? - CORRECT ANSWER Flexibility in compensation provisions and work definition What is another name for Cost-Reimbursement (CR)? - CORRECT ANSWER Cost type What is an advantage of Cost-Reimbursement (CR) contracts? - CORRECT ANSWER - Low-risk arrangement for both parties - Permits great latitude in working out and finalizing the details of contract performance as the work progresses When may Cost-Reimbursement (CR) contracts be used? - CORRECT ANSWER - Vendor's accounting system is adequate - Appropriate oversight surveillance by a representative of the acquiring organization can provide reasonable assurance that efficient methods and cost controls are used during contract performance. - A determination and findings has been executed IAW organization's procedures showing the following: - CR contract is likely to be less costly than a fixed-fee (FF) contract - it is impractical to obtain supplies or services of the kind or quantity required without the use of a CR contract What is an important feature of cost-reimbursement contract? - CORRECT ANSWER the method of payment which are vouchers sent to the Contracting Officer (COR) for payment During an audit for payment, when are costs allowable on a CR contract? - CORRECT ANSWER - When they are reasonable - Are allocable - Comply with applicable cost accounting standards and terms of contract - Are not unallowable When is written notice to the Contracting Officer (COR) to obtain authorization to exceed the cost ceiling to complete the contract which will exceed the estimated target? - CORRECT ANSWER - Prior to reaching the cost ceiling, - - Generally within 60 days after the incurred costs reach 75% of cost ceiling What are the seven types of Cost-Reimbursement (CR) contracts? - CORRECT ANSWER 1. Cost 2. Cost Sharing 3. Cost-Plus-Fixed-Fee 4. Cost-Plus-a-Percentage-of-Cost 5. Profit-Sharing 6. Cost-Plus-Incentive-Fee 7. Cost-Plus-Award-Fee What is a Cost Contract and when is it mostly used? - CORRECT ANSWER - It is one under which the vendor receives no fee - Used most for research and development work, particularly nonprofit educational institutions and other nonprofit organizations What is a Cost Sharing (CS) contract? - CORRECT ANSWER It is a CR contract which the vendor receives no fee and is reimbursed only for an agreed-upon portion of its allowable cost What is Cost-Plus-Fixed-Fee (CPFF) contract? - CORRECT ANSWER It is a contract which allows for vendor reimbursement on a negotiated fixed fee basis which the fixed fee does not fluctuate not withstanding actual costs but maybe adjusted based on changes of scope of contract performance What is the Government's view on CPFF contracts? - CORRECT ANSWER CPFF contracts does not provide any real incentives for vendors to control their costs or perform in an effective and efficient manner and either infrequently awarded or not awarded at all What is Cost-Plus-a-Percentage-of-Cost (CPPC) Contract? - CORRECT ANSWER The vendor is reimbursed for its costs of performance plus a fixed percentage of the costs as profit In Federal Government contracting, what prohibits the use of CPPC contracts between prime contractors and subcontractors? - CORRECT ANSWER FAR - Federal Acquisition Regulation What is a Profit-Sharing Contract? - CORRECT ANSWER It is a seldom used contract that does not have negotiated or fixed price but the two parties involved enter a profit sharing arrangement to reap the benefit it successful What is a Cost-Plus-Incentive-Fee (CPIF) contract? - CORRECT ANSWER It is a contract with an initially-negotiated fee that will be adjusted later by a formula based on the relationship of total allowable costs to total target costs What is a Cost-Plus-Award-Fee (CPAF) Contract? - CORRECT ANSWER It is a contract with a base amount that does not vary in addition an award amount that is determined by the COR that would be sufficient to provide motivation for the vendor to exceed all management areas What is to be considered as a "boilerplate" for all future agreements? - CORRECT ANSWER Basic Agreement which is not a contract but merely sets the baseline to agree to do business in the future What is a Blanket Purchase Agreement? - CORRECT ANSWER Often viewed as a type of "charge account" with a qualified vendor What are the five key facets of contract property management? - CORRECT ANSWER 1. Infrastructure - refers to the organizational structure of the government entity, corporation, or institution's property management system 2. Notification, Review, and Recording - activities that must occur immediately after the award has been made 3. Life-Cycle Management - - Changes in the period of performance - Changes in the scope, budget, deliverables, or reporting - The awarding of subcontracts or subgrants - Notice of terminations 4. End of Period and Closure (Closeout) - the final 60-90 days of a contract Closeout Letter should be received once all obligations are met and reflect zero balance for provided property 5. Records Retrieval, Retention, and Purging - PMO is responsible for the development of written policies for the marking, retention, and subsequent purging of documents What is the records retention for both non-Federally sponsored projects and Federal Government property? - CORRECT ANSWER - Federal Government Property 3- 4 years from the date of final payment to the vendor - Non-Federally sponsored projects 3-4 years from the disposal/retirement date of the assets What is "value-added"? - CORRECT ANSWER Anything that adds more to an organization's profits or effectiveness than it costs What are some examples of the property function's value-added activities? - CORRECT ANSWER - reducing property loss - increasing reutilization - maintaining the organization's effectiveness through accurate inventories and equipment readiness What is JFMIP-SR-00-4? - CORRECT ANSWER Joint Financial Management Improvement Program (JFMIP) Property Management Systems Requirements and it was established in October 2000 For most organizations, what does the business process include? - CORRECT ANSWER - Strategic planning - Resource planning - Revenue, expense, and capital needs forecasting - Budgeting - Asset acquisition and disposal - Financial accounting What is an effective way to find waste and identify opportunities in both the property management function and the overall business process? - CORRECT ANSWER Business System Analysis What is the acronym "JFMIP" - CORRECT ANSWER Joint Financial Management Improvement Program What is the desired result of Business System Analysis? - CORRECT ANSWER - Processes that are compliant and efficient - Procedures that reflect these improved processes and the people who are trained in them What are the steps Business System Analysis generally incorporate? - CORRECT ANSWER 1. Identify requirements and issues: contracts, audits, etc. 2. Review current procedures, forms, reports and systems use 3. Perform analysis through whatever technique is appropriate: flowchart, decision analysis, fishbone, cause and effect diagram, check sheet, histogram, etc. 4. Identify changes, metrics, training, and implementation techniques What are three ways of adding value? - CORRECT ANSWER 1. Using state-of-the- art technology 2. Employing the preferred or best business practices 3. Meeting the special management needs of the organization What is the primary focus of property management? - CORRECT ANSWER Adding value to the organization by integrating property management goals into the organization's goals and ensuring that property management activities support the organization's need to operate efficiently and effectively What are the six Property Management Goals? - CORRECT ANSWER 1. Safety 2. Cycle time 3. Quality 4. Cost 5. Compliance 6. Teamwork What should Property Management Goals be? - CORRECT ANSWER - Measurable - Time bound with a firm completion date