ACO CORB Study Questions And
Answers
What bare bthe bresponsibilities bof ban bACO? b- bcorrect banswers✔✔The bACO bshould
bensure bthat bthe bbest binterests bof bthe bGovernment bare bprotected bby bensuring bthe
bterms band bconditions bof bthe bcontracts bare bappropriate. ball bparties bexecute bthe
bcontract baccording bto bthe bterms band bcondition
Examples bof bresponsibilities bof ban bACO? b- bcorrect banswers✔✔Conduct bpost
baward bconferences, bnegotiate bforward bpricing brate bagreements, bdetermine
ballowability bof bcosts, bestablish bfinal bindirect bcosts band bbilling brates, bprocess
bnovation band bname bchange bagreements, band bperform badministrative bcloseout
bprocedures.
What bis bthe bdifference bbetween ban bACO band bCA? b- bcorrect banswers✔✔The bACO
bhas ba bwarrant bthat bbinds bthe bGovernment. bThe bACO's bdecisions band bdocuments
bare bbinding. bThe bCA bprepares bdocuments bup bto bsignature bbut bcannot bbind bthe
bGovernment.
What bis bthe brelationship bbetween bthe bprime band bsubcontractor? b- bcorrect
banswers✔✔Privity b- bIf bthe bGovernment bhas ba bcontract bwith bthe bprime bcontractor;
bthere bis bprivity bof bcontract bbetween bthe bGovernment band bthe bprime. bIf bthe bprime
bhas ba bcontract bwith bits bsubcontractors, bprivity bof bcontract bexists bbetween bthe
bprime band bits bsubcontractor. bNo bprivity bof bcontract bexists bbetween bthe
bGovernment band bthe bsub b(unless bthere bis banother bcontract bwith bthem). bIf bno
bprivity, byou bcannot bnegotiate bdirectly bwith bthe bsub bor bdirect bthe bsub bto btake bany
baction.
,Generally bspeaking bhow blong bare bfunds bavailable bbefore bthey bcancel? b- bcorrect
banswers✔✔5 byears
Who bcan bauthorize bthe buse bof bAdvanced bPayments? b- bcorrect banswers✔✔PCO
What bis bthe bdifference bbetween bfinance bpayments band binvoice bpayments? b-
bcorrect banswers✔✔Finance bpayments bare bpayments bmade bto ba bcontractor bprior
bto bacceptance bof bproduct/service, bwhile binvoice bpayments bare bmade bbased bon
bacceptance bof bproduct/service.
Examples bof bfinancing bpayments b- bcorrect banswers✔✔Progress bPayments bbased
bon bcost bor bcompletion bof bwork, bPerformance bBased bPayments, bAdvanced
bPayments bor bInterim bPayment/Voucher bfor bcost btype bcontracts.
What bis bthe bleast bpreferred bmethod bof bfinancing. b- bcorrect banswers✔✔Advanced
bPayments
What bwould bbe breasons bfor ban bACO bto bsuspend bor breduce bprogress bpayments?
bFAR b32.503-6, bClause b52.232-29 b- bcorrect banswers✔✔1. bNon-compliance bwith
bmaterial brequirement bof bcontract b(ex. bApproved bAccounting bsystem) b
2. bUnsatisfactory bfinancial bcondition
3. bInventory bin bexcess bof bcontract brequirements b(unreasonable)
4. bFailure bto bmake badequate bprogress
5. bDelinquent bin bpaying bsubs
6. bOperating bin ba bloss bcondition
What bare bPerformance bBased bPayments? b- bcorrect banswers✔✔Payments bbased
bon bachievement bof bspecific, bmeasurable bevents bor baccomplishments bthat bare
bdefined band bvalued bin bcontract. bThese bevents bshould bbe bidentified bas bcumulative
bor bstand balone bevents, bclearly bdescribe bthe bevents band bhow bthey bwill bbe
bvalidated, band bthe bvalue bfor beach baccepted bevent. b• bNot bused bfor bsmaller
bcontracts
bNot bused bfor bcontracts bless bthan b6 bmonths
What bdoes bit bmean bwhen bit's bsaid bprogress bpayments bare bself-liquidating? b-
bcorrect banswers✔✔The bGovernment brecoups bcontract bfunds bthrough bthe
bdeduction bof bpayment bof binvoices bat bthe btime bof bcompleted bcontract bline bitems.
bWhen binvoicing bfor bsupplies/services, bthe bdebt bis bpaid bby btaking ba bpercentage bof
bthe binvoice. bWhen bthe bcontractor bsubmits ba bprogress bpayments bon bthe bDD1443
bform bthe bcontractor bwill bnot bbill bfor bthe bamount bof bthere bliquidating brate. bThe
btotal bbilled bamount bwill bbe badded band btotaled bin bWIP. bUpon bdelivery bof bthe
bproduct, bthe bcontractor bsubmits ban binvoice bfor bthe btotal bamount bof bthe bcontract
bor bline bitem band bDFAS bwill bempty bthe bWIP bamount brecouping bthose bfunds band
bpaying band bthe bamount bbilled bminus bthe bWIP bamount bfor bthe btotal bamount
bowed.
, What bis bneeded bbefore bapproving bProgress bPayments band bPBP bPayments? b-
bcorrect banswers✔✔The bACO bshall bensure bthe bcontractor bhas ban badequate
baccounting bsystem band bcontracts bthat bensure bthe bgovernment bis botherwise
bprotected bagainst bloss bby badditional bprotective bprovisions. bAdditional bprovisions
bmay binclude brisk bassessment, bcost bbenefit banalysis, bfirst barticle bdollar blimitation,
bsurveillance bplan. bEnsure bthe bMaster bPayment bSchedule bin bMOCAS bis bcompleted
What bare bthe bdifferent btypes bof bfinancing bpayments band bon bwhat btype bof bcontract
bmay bthey bbe bused? b- bcorrect banswers✔✔1. bAdvance bPayments b- bMay bbe bused
bon bany btype bof bcontract bbut bmust bbe bauthorized bby bPCO band bis bused bsparingly
2. bPerformance bBased bPayments b- bused bon bfixed bprice bcontracts bonly
3. bProgress bPayments b- bMay bbe bused bon bFixed bPrice bline bitems; bPayments bare
bmade bon bthe bbasis bof beither ba bpercentage bof bcompletion bof bwork
b(FAR32.101,102) bor bthe bincurrence bof bcosts
4. bLoan bGuarantee b- bMade bby bFederal bReserve bbanks, bon bbehalf bof bdesignated
bguaranteeing bagencies, bto benable bcontracts bto bobtain bfinancing bfrom bprivate
bsources
5. bInterim bPayment bon bCost bType bContracts
What bare bthe bACO's bresponsibilities bfor bProgress bPayments? b- bcorrect
banswers✔✔1. bDetermine bif bthe buse bof bprogress bpayments bare bpratical
2. bEnsure bcontractor bmeets bFAR b32.104(d) brequirements
a. bSmall bbusiness b(90%)
i. bcan't bbill bfor bfirst bdelivery bprior bto b4 bmonths b
ii. bexceeds bSAT b($150,000)
iii. bDemonstrates ban bactual bfinancial bneed
b. bNot ba bsmall bbusiness b(80%)
i. bCan't bbill bfor bfirst bdelivery bprior bto b6 bmonths
ii. bContract bprice bexceeds b$2.5M
iii. bDemonstrates ban bactual bfinancial bneed
3. bEnsure bMOCAS bProg bPay bMaster bis bupdated bto breflect brates, bdistro, betc
4. bEnsure bprogress bpayment brequests b(PPRs) bare bprocessed bpromptly b
5. bValidate band bapprove/disapprove ball bPPRs
6. bEnsure bProgress bpayments bare blimited bto binterim bfinancing bof bnon-commercial
bFFP bContracts, borders bor bline bitems
PBP bSteps b- bcorrect banswers✔✔1. bIdentify bPBP bevents b(contractor bproposed)
2. bEstablish bcompletion bcriteria
3. bObtain/evaluate bcontractors bexpenditure bprofile
4. bEstablish bevent bvalues
5. bDetermine bthe btype bof bevent: bseverable bor bcumulative
6. bIncorporate bPBP bArrangements binto btable/special bprovision
Criteria bthat bshould bnot bbe bused bfor bPBP's: b- bcorrect banswers✔✔• bSigning bof ba
bcontract bor bcontract bmodification
• bExercise bof bcontract boptions
Answers
What bare bthe bresponsibilities bof ban bACO? b- bcorrect banswers✔✔The bACO bshould
bensure bthat bthe bbest binterests bof bthe bGovernment bare bprotected bby bensuring bthe
bterms band bconditions bof bthe bcontracts bare bappropriate. ball bparties bexecute bthe
bcontract baccording bto bthe bterms band bcondition
Examples bof bresponsibilities bof ban bACO? b- bcorrect banswers✔✔Conduct bpost
baward bconferences, bnegotiate bforward bpricing brate bagreements, bdetermine
ballowability bof bcosts, bestablish bfinal bindirect bcosts band bbilling brates, bprocess
bnovation band bname bchange bagreements, band bperform badministrative bcloseout
bprocedures.
What bis bthe bdifference bbetween ban bACO band bCA? b- bcorrect banswers✔✔The bACO
bhas ba bwarrant bthat bbinds bthe bGovernment. bThe bACO's bdecisions band bdocuments
bare bbinding. bThe bCA bprepares bdocuments bup bto bsignature bbut bcannot bbind bthe
bGovernment.
What bis bthe brelationship bbetween bthe bprime band bsubcontractor? b- bcorrect
banswers✔✔Privity b- bIf bthe bGovernment bhas ba bcontract bwith bthe bprime bcontractor;
bthere bis bprivity bof bcontract bbetween bthe bGovernment band bthe bprime. bIf bthe bprime
bhas ba bcontract bwith bits bsubcontractors, bprivity bof bcontract bexists bbetween bthe
bprime band bits bsubcontractor. bNo bprivity bof bcontract bexists bbetween bthe
bGovernment band bthe bsub b(unless bthere bis banother bcontract bwith bthem). bIf bno
bprivity, byou bcannot bnegotiate bdirectly bwith bthe bsub bor bdirect bthe bsub bto btake bany
baction.
,Generally bspeaking bhow blong bare bfunds bavailable bbefore bthey bcancel? b- bcorrect
banswers✔✔5 byears
Who bcan bauthorize bthe buse bof bAdvanced bPayments? b- bcorrect banswers✔✔PCO
What bis bthe bdifference bbetween bfinance bpayments band binvoice bpayments? b-
bcorrect banswers✔✔Finance bpayments bare bpayments bmade bto ba bcontractor bprior
bto bacceptance bof bproduct/service, bwhile binvoice bpayments bare bmade bbased bon
bacceptance bof bproduct/service.
Examples bof bfinancing bpayments b- bcorrect banswers✔✔Progress bPayments bbased
bon bcost bor bcompletion bof bwork, bPerformance bBased bPayments, bAdvanced
bPayments bor bInterim bPayment/Voucher bfor bcost btype bcontracts.
What bis bthe bleast bpreferred bmethod bof bfinancing. b- bcorrect banswers✔✔Advanced
bPayments
What bwould bbe breasons bfor ban bACO bto bsuspend bor breduce bprogress bpayments?
bFAR b32.503-6, bClause b52.232-29 b- bcorrect banswers✔✔1. bNon-compliance bwith
bmaterial brequirement bof bcontract b(ex. bApproved bAccounting bsystem) b
2. bUnsatisfactory bfinancial bcondition
3. bInventory bin bexcess bof bcontract brequirements b(unreasonable)
4. bFailure bto bmake badequate bprogress
5. bDelinquent bin bpaying bsubs
6. bOperating bin ba bloss bcondition
What bare bPerformance bBased bPayments? b- bcorrect banswers✔✔Payments bbased
bon bachievement bof bspecific, bmeasurable bevents bor baccomplishments bthat bare
bdefined band bvalued bin bcontract. bThese bevents bshould bbe bidentified bas bcumulative
bor bstand balone bevents, bclearly bdescribe bthe bevents band bhow bthey bwill bbe
bvalidated, band bthe bvalue bfor beach baccepted bevent. b• bNot bused bfor bsmaller
bcontracts
bNot bused bfor bcontracts bless bthan b6 bmonths
What bdoes bit bmean bwhen bit's bsaid bprogress bpayments bare bself-liquidating? b-
bcorrect banswers✔✔The bGovernment brecoups bcontract bfunds bthrough bthe
bdeduction bof bpayment bof binvoices bat bthe btime bof bcompleted bcontract bline bitems.
bWhen binvoicing bfor bsupplies/services, bthe bdebt bis bpaid bby btaking ba bpercentage bof
bthe binvoice. bWhen bthe bcontractor bsubmits ba bprogress bpayments bon bthe bDD1443
bform bthe bcontractor bwill bnot bbill bfor bthe bamount bof bthere bliquidating brate. bThe
btotal bbilled bamount bwill bbe badded band btotaled bin bWIP. bUpon bdelivery bof bthe
bproduct, bthe bcontractor bsubmits ban binvoice bfor bthe btotal bamount bof bthe bcontract
bor bline bitem band bDFAS bwill bempty bthe bWIP bamount brecouping bthose bfunds band
bpaying band bthe bamount bbilled bminus bthe bWIP bamount bfor bthe btotal bamount
bowed.
, What bis bneeded bbefore bapproving bProgress bPayments band bPBP bPayments? b-
bcorrect banswers✔✔The bACO bshall bensure bthe bcontractor bhas ban badequate
baccounting bsystem band bcontracts bthat bensure bthe bgovernment bis botherwise
bprotected bagainst bloss bby badditional bprotective bprovisions. bAdditional bprovisions
bmay binclude brisk bassessment, bcost bbenefit banalysis, bfirst barticle bdollar blimitation,
bsurveillance bplan. bEnsure bthe bMaster bPayment bSchedule bin bMOCAS bis bcompleted
What bare bthe bdifferent btypes bof bfinancing bpayments band bon bwhat btype bof bcontract
bmay bthey bbe bused? b- bcorrect banswers✔✔1. bAdvance bPayments b- bMay bbe bused
bon bany btype bof bcontract bbut bmust bbe bauthorized bby bPCO band bis bused bsparingly
2. bPerformance bBased bPayments b- bused bon bfixed bprice bcontracts bonly
3. bProgress bPayments b- bMay bbe bused bon bFixed bPrice bline bitems; bPayments bare
bmade bon bthe bbasis bof beither ba bpercentage bof bcompletion bof bwork
b(FAR32.101,102) bor bthe bincurrence bof bcosts
4. bLoan bGuarantee b- bMade bby bFederal bReserve bbanks, bon bbehalf bof bdesignated
bguaranteeing bagencies, bto benable bcontracts bto bobtain bfinancing bfrom bprivate
bsources
5. bInterim bPayment bon bCost bType bContracts
What bare bthe bACO's bresponsibilities bfor bProgress bPayments? b- bcorrect
banswers✔✔1. bDetermine bif bthe buse bof bprogress bpayments bare bpratical
2. bEnsure bcontractor bmeets bFAR b32.104(d) brequirements
a. bSmall bbusiness b(90%)
i. bcan't bbill bfor bfirst bdelivery bprior bto b4 bmonths b
ii. bexceeds bSAT b($150,000)
iii. bDemonstrates ban bactual bfinancial bneed
b. bNot ba bsmall bbusiness b(80%)
i. bCan't bbill bfor bfirst bdelivery bprior bto b6 bmonths
ii. bContract bprice bexceeds b$2.5M
iii. bDemonstrates ban bactual bfinancial bneed
3. bEnsure bMOCAS bProg bPay bMaster bis bupdated bto breflect brates, bdistro, betc
4. bEnsure bprogress bpayment brequests b(PPRs) bare bprocessed bpromptly b
5. bValidate band bapprove/disapprove ball bPPRs
6. bEnsure bProgress bpayments bare blimited bto binterim bfinancing bof bnon-commercial
bFFP bContracts, borders bor bline bitems
PBP bSteps b- bcorrect banswers✔✔1. bIdentify bPBP bevents b(contractor bproposed)
2. bEstablish bcompletion bcriteria
3. bObtain/evaluate bcontractors bexpenditure bprofile
4. bEstablish bevent bvalues
5. bDetermine bthe btype bof bevent: bseverable bor bcumulative
6. bIncorporate bPBP bArrangements binto btable/special bprovision
Criteria bthat bshould bnot bbe bused bfor bPBP's: b- bcorrect banswers✔✔• bSigning bof ba
bcontract bor bcontract bmodification
• bExercise bof bcontract boptions
