CLC 056 Analyzing Contract Costs Exam,,., Exams of Science education
What is a fair price to the seller? - ANSWERA fair price for the seller means
that the seller will be able to satisfy the terms and conditions of the contract.
An offer that is too low is considered unrealistic. It may:
•Cut corners on the quality of the product
•Deliver the product late
•Default on delivery, forcing a time-consuming reprocurement
•Refuse to deal with the government in the future
Below-Cost Prices - ANSWERBelow-cost prices are NOT necessarily unfair to
the seller. An offeror, for various reasons as part of business judgment, may
decide to submit a below-cost offer. However, these types of offers are not
invalid.
Mistakes - ANSWERThe offered price may be unexpectedly low because the
seller has made gross mistakes in estimating costs or is non-responsible. A
prospective contractor must affirmatively demonstrate its responsibility,
including, when necessary, the responsibility of its proposed subcontractors.
, Single-source Procurements - ANSWERYou need to remember that you
CANNOT force a final price/cost that will be below cost on the offeror, even if
you believe that the offeror has the financial ability to absorb the probable
loss. Instead, negotiate a contract with a type and price that is likely to cover
all allowable costs of performance, assume reasonable economy and
efficiency, and provide a reasonable profit. Review FAR 15.404-4 and DFARS
215.404-4 on profit analysis.
Ensure your opening position is based on a more optimistic reading of the
potential production improvements, risks, and costs of providing the contract
deliverable rather than targeting price.
One of the elements of the government pricing objective is to ensure that
contract prices are fair and reasonable.
Which of the following statements is true about "fairness to a seller" that
involve concerns? (Select all that apply)
*Sellers need to be concerned about an unrealistic low price because of the
risk.
*Sellers need to be concerned about the market implications of a price that is
too high.
*Sellers need to be concerned about major mistakes in estimating costs.
*Sellers need to be concerned about recovering buy-in losses. - ANSWERAll
statements are true.
What is cost analysis? - ANSWERCost analysis is the review and evaluation of
the separate cost elements and proposed profit/fee of an offeror's certified
cost or pricing data or data other than certified cost or pricing data.
What is a fair price to the seller? - ANSWERA fair price for the seller means
that the seller will be able to satisfy the terms and conditions of the contract.
An offer that is too low is considered unrealistic. It may:
•Cut corners on the quality of the product
•Deliver the product late
•Default on delivery, forcing a time-consuming reprocurement
•Refuse to deal with the government in the future
Below-Cost Prices - ANSWERBelow-cost prices are NOT necessarily unfair to
the seller. An offeror, for various reasons as part of business judgment, may
decide to submit a below-cost offer. However, these types of offers are not
invalid.
Mistakes - ANSWERThe offered price may be unexpectedly low because the
seller has made gross mistakes in estimating costs or is non-responsible. A
prospective contractor must affirmatively demonstrate its responsibility,
including, when necessary, the responsibility of its proposed subcontractors.
, Single-source Procurements - ANSWERYou need to remember that you
CANNOT force a final price/cost that will be below cost on the offeror, even if
you believe that the offeror has the financial ability to absorb the probable
loss. Instead, negotiate a contract with a type and price that is likely to cover
all allowable costs of performance, assume reasonable economy and
efficiency, and provide a reasonable profit. Review FAR 15.404-4 and DFARS
215.404-4 on profit analysis.
Ensure your opening position is based on a more optimistic reading of the
potential production improvements, risks, and costs of providing the contract
deliverable rather than targeting price.
One of the elements of the government pricing objective is to ensure that
contract prices are fair and reasonable.
Which of the following statements is true about "fairness to a seller" that
involve concerns? (Select all that apply)
*Sellers need to be concerned about an unrealistic low price because of the
risk.
*Sellers need to be concerned about the market implications of a price that is
too high.
*Sellers need to be concerned about major mistakes in estimating costs.
*Sellers need to be concerned about recovering buy-in losses. - ANSWERAll
statements are true.
What is cost analysis? - ANSWERCost analysis is the review and evaluation of
the separate cost elements and proposed profit/fee of an offeror's certified
cost or pricing data or data other than certified cost or pricing data.
