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1. Price Analysis - ANSWER ✔ - Evaluating proposed total price and not the
separate cost elements and profit
- We use price analysis daily when comparing prices of say: Cars or
Restaurants.
- Shall be used when certified cost or pricing data are not required.
- Examples: Multiple Awards vs Single Award and Government
Furnished Property
2. Examples of Price Related Factors - ANSWER ✔ - HUBZone (F&O, exceed
threshold, add 10% to price evaluation preference (PEP))
- Multiple Award (FAR 52.214-22 and FAR 52.214-1(f) (6), achieve
savings)
- Government Furnished Property (Applies to competitive fixed-price
contracts, only!)
- Buy American Act (must be intended for public use within the United
States and procure domestic material and product)
- Transportation Costs (Free on Board: Contractor bears expense to
transport, Government assumes risk after acceptance)
,3. Risks - ANSWER ✔ Potential future events or conditions that may have a
negative effect on achieving program objectives for cost, schedule, and
performance
4. Price Related Factors - ANSWER ✔ Can be defined as any adjustments
required by law or regulation in order to complete price evaluation
5. Four (4) steps in evaluating and applying price-related factors - ANSWER ✔
Step 1 -Determine solicitation provisions
Step 2 - Determine total price offered
Step 3 - Evaluate award combinations
Step 4 - Make award decision
6. Cost Analysis - ANSWER ✔ - When certified cost and pricing data is
required
- Cost-reimbursement contract (part of the TINA)
- Techniques: FAR 15.404-1(c)(2)
- SHALL when certified cost or pricing data are required (TINA)
7. Methods Used to Perform a Cost Analysis (FAR table 15.2, good proposal) -
ANSWER ✔ - Enlist Help of Others
- Review the proposal
- Model the proposal
- Fact-find the proposal
- Evaluate the proposal
8. Three (3) additional steps to conclude the price analysis process - ANSWER
✔ Step 5 - Determine lowest evaluated price
,Step 6 - Compare offered prices with other prices
Step 7 - Account for Differences
9. Truth in Negotiation Act (TINA) - ANSWER ✔ - Means all facts that, as of
the date of price agreement or, if applicable, an earlier date agreed upon
between the parties that is as close as practicable to the date of agreement on
price, prudent buyers and sellers would reasonably expect to affect price
negotiations significantly
- Threshold: $2M
- Exemptions: Commercial, Competition, Waiver
- The contractor must submit cost & pricing data and certify that it is
current, complete, and accurate.
- If contract price is higher than it should be, then Government is
entitled to price reduction
10.Direct Cost - ANSWER ✔ Any cost directly identified with a single, final
cost objective
11.Indirect Cost - ANSWER ✔ Any cost not directly identified with a single,
final cost objective, but identified with two or more final cost objectives or
with at least one intermediate cost objective
12.Cost of Money - ANSWER ✔ An imputed cost related to the cost of
contractor capital committed to facilities
13.Price Negotiation Memorandum (PNM) - ANSWER ✔ - Must be a stand-
alone document that tells the whole story and will pass scrutiny for
review/approval of your negotiation position and subsequent contract award.
- Used to document (the basis) fair and reasonable pricing
14.Elements of a Price Negotiation Memorandum - ANSWER ✔ - Technical
- Material
- Labor
, - Other Direct Costs
- General & Administrative Expenses (G&A)
- Fee or Profit
- Facilities Capital Cost of Money (FCCM)
- Total Estimated Cost
- Certified Cost and Data (if used)
- Identify Risks associated with each element
15.Negotiation (FAR 15.306(d)) - ANSWER ✔ Are exchanges, in either a
competitive or sole source environment, between the Government and
offerors that are undertaken with the intent of allowing the offeror to revise
its proposal
16.Basic Steps in the Negotiation Process - ANSWER ✔ Source selections
under FAR part 15 require the use of Evaluation Notices (ENs) to document
the negotiations
17.Negotiation Process - Preparation - ANSWER ✔ Prepare a negotiation
agenda
18.Negotiation Process - Negotiating - ANSWER ✔ Do NOT "split"
differences. Every number needs to be supported with rationale
19.Interest-Based Negotiation (Win-Win Outcome) - ANSWER ✔ - Interest-
based negotiation (IBN) is a step-by-step approach used to identify common
interests of the parties. Identifying common interests promotes solutions that
satisfy the needs of both parties
- The four (4) steps of IBN are:
- Identify the interest of both parties
- Develop options using brainstorming techniques
- Identify standards
- Reach resolution
20.Position-Based Negotiation (Win-Lose Outcome) - ANSWER ✔ - Position-
based negotiation (PBN) involves each party taking a position and arguing
for it without learning the interests of the other party. It focuses on obtaining
your position through the use of power and adversarial tactics and
techniques without consideration of the other side's interests or needs.