CLC 058 Introduction to Contract Pricing
Exam Questions and Answers 100%
Verified
Cost or pricing data - ANSWER-All facts that, as of the date of price agreement or an
earlier date agreed upon between the parties, prudent buyers and sellers would
reasonably expect to affect price negotiations significantly. Cost or pricing data are
factual, not judgmental, and are verifiable. While they do not indicate the accuracy of
the prospective contractor's judgment about estimated future costs or projections, they
do include the data forming the basis for that judgment. Cost or pricing data are more
than historical accounting data; they are all the facts that can be reasonably expected to
contribute to the soundness of estimates of future costs and to the validity of
determinations of costs already incurred.
Certified cost or pricing data - ANSWER-Cost or pricing data that were required to be
submitted and have been certified, or are required to be certified. This certification
states that, to the best of the person"s knowledge and belief, the cost or pricing data are
accurate, complete, and current as of a certain date before contract award.
Data other than certified cost or pricing data - ANSWER-Pricing data, cost data, and
judgmental information necessary for the contracting officer to determine a fair and
reasonable price or to determine cost realism. Such data may include the identical types
of data as certified cost or pricing data, but without the certification. The data may also
include, for example, sales data and any information reasonably required to explain the
offeror's estimating process.
Direct cost - ANSWER-Any cost that is identified specifically with a particular final cost
objective. Direct costs are not limited to items that are incorporated in the end product
as material or labor. Costs identified specifically with a contract are direct costs of that
contract.
Facilities capital cost of money (FCCOM) - ANSWER-FCCOM is used to compensate
contractors for use of capital without regard to whether the source is owner's equity or
borrowed. It is designed to help contractors achieve a return on their investment in
facilities capital. It is NOT considered interest on borrowing, which is unallowable
according to the FAR.
, Fair and reasonable price - ANSWER-A price must be considered fair to both parties. A
price that a prudent and competent buyer would be willing to pay is a reasonable price.
A fair and reasonable price is dependent on the market conditions, general economic
conditions, promised quality, competition, alternative approaches, and timeliness of
contract performance.
Forward pricing rate agreement - ANSWER-A written agreement negotiated between a
contractor and the Government to make certain rates available during a specified period
for use in pricing contracts or modifications.
General and administrative expense - ANSWER-Any management, financial, and other
expense which is incurred by or allocated to a business unit and which is for the general
management and administration of the business unit as a whole.
Indirect cost - ANSWER-Any cost not directly identified with a single final cost objective,
but identified with two or more final cost objectives (i.e. contracts) or with at least one
intermediate cost objective.
Indirect cost rate - ANSWER-A percentage or dollar factor that expresses the ratio of
indirect expense incurred in a given period to an appropriate base for the same period.
Price - ANSWER-Cost plus any fee or profit applicable to the contract.
Pricing - ANSWER-The process of establishing a reasonable amount to be paid for
supplies or services.
Truth in Negotiations Act (exceptions): - ANSWER-The five "exceptions" to the
requirement are:
1. When the contracting officer determines that prices agreed upon are based on
adequate price competition;
2. When the contracting officer determines that prices agreed upon are based on prices
set by law or regulation;
Exam Questions and Answers 100%
Verified
Cost or pricing data - ANSWER-All facts that, as of the date of price agreement or an
earlier date agreed upon between the parties, prudent buyers and sellers would
reasonably expect to affect price negotiations significantly. Cost or pricing data are
factual, not judgmental, and are verifiable. While they do not indicate the accuracy of
the prospective contractor's judgment about estimated future costs or projections, they
do include the data forming the basis for that judgment. Cost or pricing data are more
than historical accounting data; they are all the facts that can be reasonably expected to
contribute to the soundness of estimates of future costs and to the validity of
determinations of costs already incurred.
Certified cost or pricing data - ANSWER-Cost or pricing data that were required to be
submitted and have been certified, or are required to be certified. This certification
states that, to the best of the person"s knowledge and belief, the cost or pricing data are
accurate, complete, and current as of a certain date before contract award.
Data other than certified cost or pricing data - ANSWER-Pricing data, cost data, and
judgmental information necessary for the contracting officer to determine a fair and
reasonable price or to determine cost realism. Such data may include the identical types
of data as certified cost or pricing data, but without the certification. The data may also
include, for example, sales data and any information reasonably required to explain the
offeror's estimating process.
Direct cost - ANSWER-Any cost that is identified specifically with a particular final cost
objective. Direct costs are not limited to items that are incorporated in the end product
as material or labor. Costs identified specifically with a contract are direct costs of that
contract.
Facilities capital cost of money (FCCOM) - ANSWER-FCCOM is used to compensate
contractors for use of capital without regard to whether the source is owner's equity or
borrowed. It is designed to help contractors achieve a return on their investment in
facilities capital. It is NOT considered interest on borrowing, which is unallowable
according to the FAR.
, Fair and reasonable price - ANSWER-A price must be considered fair to both parties. A
price that a prudent and competent buyer would be willing to pay is a reasonable price.
A fair and reasonable price is dependent on the market conditions, general economic
conditions, promised quality, competition, alternative approaches, and timeliness of
contract performance.
Forward pricing rate agreement - ANSWER-A written agreement negotiated between a
contractor and the Government to make certain rates available during a specified period
for use in pricing contracts or modifications.
General and administrative expense - ANSWER-Any management, financial, and other
expense which is incurred by or allocated to a business unit and which is for the general
management and administration of the business unit as a whole.
Indirect cost - ANSWER-Any cost not directly identified with a single final cost objective,
but identified with two or more final cost objectives (i.e. contracts) or with at least one
intermediate cost objective.
Indirect cost rate - ANSWER-A percentage or dollar factor that expresses the ratio of
indirect expense incurred in a given period to an appropriate base for the same period.
Price - ANSWER-Cost plus any fee or profit applicable to the contract.
Pricing - ANSWER-The process of establishing a reasonable amount to be paid for
supplies or services.
Truth in Negotiations Act (exceptions): - ANSWER-The five "exceptions" to the
requirement are:
1. When the contracting officer determines that prices agreed upon are based on
adequate price competition;
2. When the contracting officer determines that prices agreed upon are based on prices
set by law or regulation;
