CLC 059 MANAGEMENT OF SUBCONTRACTING
COMPLIANCE EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS A NEW UPDATED VERSION LATEST
2026-2027 ( CORRECT VERIFIED ANSWERS) ALREADY
GRADED A+
1. Under a prime contract subject to FAR Part 12, what is the primary compliance obligation
when subcontracting commercial items?
● A) Submit a subcontracting plan for all commercial subcontracts
● B) Ensure flow-down of only those clauses prescribed for commercial acquisitions
● C) Obtain consent to subcontract for every subcontractor
● D) Register each subcontractor in SAM gov prior to award
Correct Answer: B) Ensure flow-down of only those clauses prescribed for commercial
acquisitions
2. When a subcontractor fails to meet a small business subcontracting goal, what is the prime
contractor’s first required action?
● A) Immediately terminate the subcontract
● B) Document good faith efforts and include them in the ISR/SSR
● C) Report the subcontractor to the SBA for debarment
● D) Withhold all further payments until the goal is met
Correct Answer: B) Document good faith efforts and include them in the ISR/SSR
3. Which of the following best defines “consent to subcontract” under FAR 52.244-2?
● A) Prime’s internal approval to issue a purchase order
● B) Subcontractor’s agreement to comply with prime’s policies
● C) Government’s prior written approval for certain subcontracts
● D) Small Business Administration’s certification of a subcontractor
Correct Answer: C) Government’s prior written approval for certain subcontracts
,4. A prime contractor awarded a cost-reimbursement contract must ensure which clause is
flowed down to all first-tier subcontractors?
● A) FAR 52.203-3, Gratuities
● B) FAR 52.244-6, Subcontracts for Commercial Items
● C) FAR 52.215-2, Audit and Records – Negotiation
● D) FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors
*Correct Answer: C) FAR 52.215-2, Audit and Records – Negotiation*
5. Under the Truth in Negotiations Act (TINA), a subcontractor’s certified cost or pricing data
is required when:
● A) The subcontract is awarded on a firm-fixed-price basis
● B) The subcontract value exceeds $2 million and no exception applies
● C) The prime contract is for commercial products only
● D) The subcontractor is a sole source small business
Correct Answer: B) The subcontract value exceeds $2 million and no exception applies
6. Which system is used by prime contractors to report first-tier subcontractor award data in the
federal government?
● A) FPDS-NG
● B) eSRS (now part of DSBS)
● C) WAWF
● D) CPARS
Correct Answer: B) eSRS (now part of DSBS)
7. A prime contractor discovers that a subcontractor has violated the anti-kickback statute.
What is the mandatory action?
● A) Terminate the subcontract for cause immediately
● B) Report the violation to the Inspector General and the Department of Justice
● C) Re-negotiate the subcontract price downward
● D) Issue a cure notice with a 30-day window
Correct Answer: B) Report the violation to the Inspector General and the Department of Justice
8. Under FAR 52.222-50 (Combating Trafficking in Persons), which activity by a subcontractor
is prohibited?
● A) Offering a signing bonus to new hires
● B) Charging employees a recruitment fee
● C) Providing housing near the worksite
● D) Subcontracting to a foreign entity
, Correct Answer: B) Charging employees a recruitment fee
9. What is the primary purpose of a subcontractor responsibility determination?
● A) To ensure lowest price
● B) To confirm the subcontractor has adequate resources, integrity, and past performance
● C) To satisfy SBA 8(a) program requirements
● D) To avoid filing an ISR
Correct Answer: B) To confirm the subcontractor has adequate resources, integrity, and past
performance
10. A cost-reimbursement prime contractor wants to subcontract a portion of technical work.
What approval is required if the subcontract is on a time-and-materials basis?
● A) Prime’s internal procurement approval only
● B) Government’s advance written consent
● C) Subcontractor’s self-certification of costs
● D) No special approval if T&M is permitted under prime contract
Correct Answer: B) Government’s advance written consent
11. Which FAR clause mandates that prime contractors provide prompt payments to small
business subcontractors (within 15 days of prime’s receipt of payment)?
● A) FAR 52.232-25
● B) FAR 52.232-26
● C) FAR 52.232-40
● D) FAR 52.232-23
*Correct Answer: C) FAR 52.232-40*
12. In the event of a subcontractor’s noncompliance with the Cost Accounting Standards
(CAS), the prime contractor must:
● A) Adjust the subcontract price unilaterally
● B) Notify the contracting officer and seek direction
● C) Terminate the subcontract for default
● D) Ignore if subcontract value is under $750k
Correct Answer: B) Notify the contracting officer and seek direction
13. What does the term “flow-down clause” mean in subcontract management?
● A) Prime contractor passes prime contract requirements to subcontractor
● B) Subcontractor delegates work to lower-tier suppliers
● C) Government pays subcontractor directly
COMPLIANCE EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS A NEW UPDATED VERSION LATEST
2026-2027 ( CORRECT VERIFIED ANSWERS) ALREADY
GRADED A+
1. Under a prime contract subject to FAR Part 12, what is the primary compliance obligation
when subcontracting commercial items?
● A) Submit a subcontracting plan for all commercial subcontracts
● B) Ensure flow-down of only those clauses prescribed for commercial acquisitions
● C) Obtain consent to subcontract for every subcontractor
● D) Register each subcontractor in SAM gov prior to award
Correct Answer: B) Ensure flow-down of only those clauses prescribed for commercial
acquisitions
2. When a subcontractor fails to meet a small business subcontracting goal, what is the prime
contractor’s first required action?
● A) Immediately terminate the subcontract
● B) Document good faith efforts and include them in the ISR/SSR
● C) Report the subcontractor to the SBA for debarment
● D) Withhold all further payments until the goal is met
Correct Answer: B) Document good faith efforts and include them in the ISR/SSR
3. Which of the following best defines “consent to subcontract” under FAR 52.244-2?
● A) Prime’s internal approval to issue a purchase order
● B) Subcontractor’s agreement to comply with prime’s policies
● C) Government’s prior written approval for certain subcontracts
● D) Small Business Administration’s certification of a subcontractor
Correct Answer: C) Government’s prior written approval for certain subcontracts
,4. A prime contractor awarded a cost-reimbursement contract must ensure which clause is
flowed down to all first-tier subcontractors?
● A) FAR 52.203-3, Gratuities
● B) FAR 52.244-6, Subcontracts for Commercial Items
● C) FAR 52.215-2, Audit and Records – Negotiation
● D) FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors
*Correct Answer: C) FAR 52.215-2, Audit and Records – Negotiation*
5. Under the Truth in Negotiations Act (TINA), a subcontractor’s certified cost or pricing data
is required when:
● A) The subcontract is awarded on a firm-fixed-price basis
● B) The subcontract value exceeds $2 million and no exception applies
● C) The prime contract is for commercial products only
● D) The subcontractor is a sole source small business
Correct Answer: B) The subcontract value exceeds $2 million and no exception applies
6. Which system is used by prime contractors to report first-tier subcontractor award data in the
federal government?
● A) FPDS-NG
● B) eSRS (now part of DSBS)
● C) WAWF
● D) CPARS
Correct Answer: B) eSRS (now part of DSBS)
7. A prime contractor discovers that a subcontractor has violated the anti-kickback statute.
What is the mandatory action?
● A) Terminate the subcontract for cause immediately
● B) Report the violation to the Inspector General and the Department of Justice
● C) Re-negotiate the subcontract price downward
● D) Issue a cure notice with a 30-day window
Correct Answer: B) Report the violation to the Inspector General and the Department of Justice
8. Under FAR 52.222-50 (Combating Trafficking in Persons), which activity by a subcontractor
is prohibited?
● A) Offering a signing bonus to new hires
● B) Charging employees a recruitment fee
● C) Providing housing near the worksite
● D) Subcontracting to a foreign entity
, Correct Answer: B) Charging employees a recruitment fee
9. What is the primary purpose of a subcontractor responsibility determination?
● A) To ensure lowest price
● B) To confirm the subcontractor has adequate resources, integrity, and past performance
● C) To satisfy SBA 8(a) program requirements
● D) To avoid filing an ISR
Correct Answer: B) To confirm the subcontractor has adequate resources, integrity, and past
performance
10. A cost-reimbursement prime contractor wants to subcontract a portion of technical work.
What approval is required if the subcontract is on a time-and-materials basis?
● A) Prime’s internal procurement approval only
● B) Government’s advance written consent
● C) Subcontractor’s self-certification of costs
● D) No special approval if T&M is permitted under prime contract
Correct Answer: B) Government’s advance written consent
11. Which FAR clause mandates that prime contractors provide prompt payments to small
business subcontractors (within 15 days of prime’s receipt of payment)?
● A) FAR 52.232-25
● B) FAR 52.232-26
● C) FAR 52.232-40
● D) FAR 52.232-23
*Correct Answer: C) FAR 52.232-40*
12. In the event of a subcontractor’s noncompliance with the Cost Accounting Standards
(CAS), the prime contractor must:
● A) Adjust the subcontract price unilaterally
● B) Notify the contracting officer and seek direction
● C) Terminate the subcontract for default
● D) Ignore if subcontract value is under $750k
Correct Answer: B) Notify the contracting officer and seek direction
13. What does the term “flow-down clause” mean in subcontract management?
● A) Prime contractor passes prime contract requirements to subcontractor
● B) Subcontractor delegates work to lower-tier suppliers
● C) Government pays subcontractor directly
