CLC 056 Exam Questions and Answers(RATED A+)

Cost 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. It is important to evaluate the separate cost elements and proposed profit/fee to determine how the proposed costs represent the cost of the contract, assuming reasonable economy and efficiency. - ANSWER-Contracting Officers are required to purchase supplies and services from responsible sources at fair and reasonable prices. This requirement is based on the three elements that form the foundation of the government's pricing objective. Government Objective: purchase at fair and reasonable price price each contract separately exclude contingencies - ANSWER-In contracting, when you act as the government's buyer, your primary objective is to acquire supplies and services from responsible sources at fair and reasonable prices. The three approaches acknowledged by the government to attain this objective are: Price analysis Cost analysis Cost realism analysis It is critical that you understand techniques and terms of cost analysis. Terms that are important not only include cost analysis, price analysis, and cost realism analysis, but also terms such as direct costs, indirect costs, and other direct costs. In addition, there are techniques with which you should be familiar. These include the various price analysis techniques and procedures that help the government to ensure a fair and reasonable price. You may be responsible for selecting the techniques for comparison that are used to verify that the overall price that is offered is fair and reasonable. - ANSWER-In order to develop a prenegotiation position, you will analyze contract costs and price using contract analysis techniques. Prenegotiation objectives establish the government's initial negotiation position. The Contracting Officer establishes prenegotiation objectives before the negotiation of any pricing action. There are many methods for estimating costs in an equitable and consistently applied way. Some cost estimating texts identify ten or more! Some common methods are: Round-table Comparison Detailed - ANSWER-Round Table In a round table, experts are brought together to develop cost estimates by exchanging views and making judgments based on knowledge and experience. This method is most commonly used when there is little or no cost experience or detailed product information (e.g., specifications, drawings, or bills of material). Comparison With the comparison method, costs for a new item are estimated using comparisons with the cost of completing similar tasks under past or current contracts. Any differences are isolated and cost elements applicable to the differences are deleted from or added to experienced costs. Comparisons may be made at the cost element level or total price level. Adjustments may also be made for possible upward or downward cost trends. This method is most commonly used when specifications for the item being estimated are similar to other items already produced or currently in production and for which actual cost experience is available. - ANSWER-Detailed