Contracting Officer Unlimited Warrant Board with Answers
1. What is an option? An option is a unilateral right in a contract, for
a specific period of time, where the Govern-
ment may elect to purchase additional sup-
plies or services called for by the contract,
or extend the period of performance.
The PCO should use options when (1) in
the Governments best interest, (2) there is
a need for service beyond the initial period,
and (3) to ensure continuity of service.
The use of options are not normally in the
Governments best interest when (1) The
foreseeable requirements involve minimum
economic quantities and delivery require-
ments are far enough in the future to per-
mit competitive acquisition, production, and
delivery (2) an indefinite quantity or require-
ments contract would be more appropriate
than a contract with options.
2. What must a PCO do before The PCO must determine that:
exercising an option? 1. Funds are available
2. The requirement fulfills an existing Gov-
ernment need
3. Exercising the option is the most advanta-
geous method price and other factors con-
sidered
4. The option was synopsized IAW FAR 5 (or
exempted)
The PCO should have a written D&F in the
file in order to use options
The PCO should also consider if the con-
tractor is responsible and if their perfor-
mance is satisfactory.
3. If the option price during a No. All options need to be priced because
competitive source selection they were awarded on a competitive basis.
was not evaluated, is the op-
tion valid?
,Contracting Officer Unlimited Warrant Board with Answers
4. Can the PCO cite the No. The Changes Clause cannot be used to
"Changes Clause" to in- increase quantities on a production contract.
crease quantities on a pro-
duction contract? (a) The Contracting Officer may at any time,
by written order, and without notice to the
sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
5. Is any approval required for Changes outside the scope of the original
an effort that is out of scope contract are considered new work and con-
? stitute a cardinal change, and in this case,
one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval
6. What are the four essential 1. Scope of the competition - could the
elements the PCO must ad- original offerors have reasonable anticipat-
dress when making a Scope ed such a change?
Determination? 2. Contract type - Requirments should be
better defined in a FFP contract therefore
require less changes.
As opposed to a RDT&E contract.
3. Period of performance - will the PoP be ex-
tended significantly so as to constitute new
work?
4. Overall cost/price change - what has been
the total change in price throughout all mod-
ifications?
7. What must the PCO do for Obtain legal review of the proposed action
any change and/or modifica- and document the review in the contract file
,Contracting Officer Unlimited Warrant Board with Answers
tion estimated to be $1M or
more?
8. Where can a PCO look to Various source documents to include:
help determine if a change is SOO/SOW/PWS, synopsis, RFP, ex-
in-scope? changes with industry, market surveys,
RFIs, etc.
9. What is "scope creep?" Scope creep occurs when a series of
in-scope changes make the contract as
a whole out-of-scope. The PCO must re-
main cognizant of scope creep when chang-
ing/modifying existing contracts.
10. What is a T&M contract? Limitations. A time-and-materials contract
may be used only if—
(1) The contracting officer prepares a deter-
mination and findings that no other contract
type is suitable. The determination and find-
ing shall be—
(i) Signed by the contracting officer prior
to the execution of the base period or any
option periods of the contracts; and
(ii) Approved by the head of the contracting
activity prior to the execution of the base
period when the base period plus any option
periods exceeds three years; and
(2) The contract includes a ceiling price that
the contractor exceeds at its own risk. The
contracting officer shall document the con-
tract file to justify the reasons for and amount
of any subsequent change in the ceiling
price. Also see 12.207(b) for further limita-
tions
on use of Time-and-Materials or Labor
Hour contracts for acquisition of commercial
items.
11. Can a T&M contract be used a) Except as provided in paragraph
for a commercial service? (b) of this section, agencies shall use
, Contracting Officer Unlimited Warrant Board with Answers
firm-fixed-price contracts or fixed-price con-
tracts with economic price adjustment for the
acquisition of commercial items.
(b) (1) A time-and-materials contract or la-
bor-hour contract (see Subpart 16.6) may
be used for the acquisition of commercial
services when—
(i) The service is acquired under a contract
awarded using— Competitive Procedures,
Fair Opportunity, with an executed D&F
12. Define Certified Cost or Pric- All facts, that as of the date of price agree-
ing Data. ment, or if applicable, an earlier date agreed
upon between the parties that's as close
as practicable to the date of agreement on
price, prudent buyers and sellers would rea-
sonably expect to affect price negotiations
significantly.
13. When is Certified Cost and When executing actions over $750,000
Pricing data required? with the exception of prices established by
statute, commercial items, with adequate
price competition, and when a TINA waiver
is granted.
14. What is the "Bona Fide The Bona Fide Needs Rule basically means
Needs" Rule? that a federal agency must have a legit-
imate or bona fide need for the require-
ment during the time period that the appro-
priation is available. Pursuant to 31 U.S.C.
1502(a), "The balance of an appropriation
limited for obligation to a definite period is
available only for payment of expenses in-
curred during the period of availability, or
to complete contracts properly made during
the period of availability and obligated con-
sistent with Section 1501 of this title.." In oth-
er words, the basic rule states that a fiscal
year's (FY) appropriation may be obligated
1. What is an option? An option is a unilateral right in a contract, for
a specific period of time, where the Govern-
ment may elect to purchase additional sup-
plies or services called for by the contract,
or extend the period of performance.
The PCO should use options when (1) in
the Governments best interest, (2) there is
a need for service beyond the initial period,
and (3) to ensure continuity of service.
The use of options are not normally in the
Governments best interest when (1) The
foreseeable requirements involve minimum
economic quantities and delivery require-
ments are far enough in the future to per-
mit competitive acquisition, production, and
delivery (2) an indefinite quantity or require-
ments contract would be more appropriate
than a contract with options.
2. What must a PCO do before The PCO must determine that:
exercising an option? 1. Funds are available
2. The requirement fulfills an existing Gov-
ernment need
3. Exercising the option is the most advanta-
geous method price and other factors con-
sidered
4. The option was synopsized IAW FAR 5 (or
exempted)
The PCO should have a written D&F in the
file in order to use options
The PCO should also consider if the con-
tractor is responsible and if their perfor-
mance is satisfactory.
3. If the option price during a No. All options need to be priced because
competitive source selection they were awarded on a competitive basis.
was not evaluated, is the op-
tion valid?
,Contracting Officer Unlimited Warrant Board with Answers
4. Can the PCO cite the No. The Changes Clause cannot be used to
"Changes Clause" to in- increase quantities on a production contract.
crease quantities on a pro-
duction contract? (a) The Contracting Officer may at any time,
by written order, and without notice to the
sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
5. Is any approval required for Changes outside the scope of the original
an effort that is out of scope contract are considered new work and con-
? stitute a cardinal change, and in this case,
one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval
6. What are the four essential 1. Scope of the competition - could the
elements the PCO must ad- original offerors have reasonable anticipat-
dress when making a Scope ed such a change?
Determination? 2. Contract type - Requirments should be
better defined in a FFP contract therefore
require less changes.
As opposed to a RDT&E contract.
3. Period of performance - will the PoP be ex-
tended significantly so as to constitute new
work?
4. Overall cost/price change - what has been
the total change in price throughout all mod-
ifications?
7. What must the PCO do for Obtain legal review of the proposed action
any change and/or modifica- and document the review in the contract file
,Contracting Officer Unlimited Warrant Board with Answers
tion estimated to be $1M or
more?
8. Where can a PCO look to Various source documents to include:
help determine if a change is SOO/SOW/PWS, synopsis, RFP, ex-
in-scope? changes with industry, market surveys,
RFIs, etc.
9. What is "scope creep?" Scope creep occurs when a series of
in-scope changes make the contract as
a whole out-of-scope. The PCO must re-
main cognizant of scope creep when chang-
ing/modifying existing contracts.
10. What is a T&M contract? Limitations. A time-and-materials contract
may be used only if—
(1) The contracting officer prepares a deter-
mination and findings that no other contract
type is suitable. The determination and find-
ing shall be—
(i) Signed by the contracting officer prior
to the execution of the base period or any
option periods of the contracts; and
(ii) Approved by the head of the contracting
activity prior to the execution of the base
period when the base period plus any option
periods exceeds three years; and
(2) The contract includes a ceiling price that
the contractor exceeds at its own risk. The
contracting officer shall document the con-
tract file to justify the reasons for and amount
of any subsequent change in the ceiling
price. Also see 12.207(b) for further limita-
tions
on use of Time-and-Materials or Labor
Hour contracts for acquisition of commercial
items.
11. Can a T&M contract be used a) Except as provided in paragraph
for a commercial service? (b) of this section, agencies shall use
, Contracting Officer Unlimited Warrant Board with Answers
firm-fixed-price contracts or fixed-price con-
tracts with economic price adjustment for the
acquisition of commercial items.
(b) (1) A time-and-materials contract or la-
bor-hour contract (see Subpart 16.6) may
be used for the acquisition of commercial
services when—
(i) The service is acquired under a contract
awarded using— Competitive Procedures,
Fair Opportunity, with an executed D&F
12. Define Certified Cost or Pric- All facts, that as of the date of price agree-
ing Data. ment, or if applicable, an earlier date agreed
upon between the parties that's as close
as practicable to the date of agreement on
price, prudent buyers and sellers would rea-
sonably expect to affect price negotiations
significantly.
13. When is Certified Cost and When executing actions over $750,000
Pricing data required? with the exception of prices established by
statute, commercial items, with adequate
price competition, and when a TINA waiver
is granted.
14. What is the "Bona Fide The Bona Fide Needs Rule basically means
Needs" Rule? that a federal agency must have a legit-
imate or bona fide need for the require-
ment during the time period that the appro-
priation is available. Pursuant to 31 U.S.C.
1502(a), "The balance of an appropriation
limited for obligation to a definite period is
available only for payment of expenses in-
curred during the period of availability, or
to complete contracts properly made during
the period of availability and obligated con-
sistent with Section 1501 of this title.." In oth-
er words, the basic rule states that a fiscal
year's (FY) appropriation may be obligated
