2024 (latest) Updated AF
Contracting Officer Study Guide
(unofficial)AF Contracting Officer
warrant board study questions.
You are the PCO for a major competitive negotiated source selection. The RFP, which
reflects the user's requirements and is based on the user's budget, has a requirement
for 220 cargo loaders to be delivered at 55 per year over the next four years. One
offeror proposes to deliver all 220 loaders in the first year at a dramatically reduced
price. Can you accept the offeror's proposal? What factors should you consider in your
decision? - ANSWERS--You can accept the offeror's proposal under certain
circumstances. Firstly, what did the RFP say about alternate proposals? Is this a
situation where requirements are changed and the other offerors should be allowed to
propose on the basis of the changed requirements? You need to ask the user if he
wants all 220 in the first year and are the operating locations physically able to
accommodate their loaders in the first year. Finally, the offeror could be taken into
discussions and asked to conform to the RFP with there being the possibility of not
being selected for award or elimination from the competitive range if the proposal is not
made compliant with the RFP.
You are the PCO on a new $2B aircraft development program. The program is in
contract negotiations for a Fixed Price Incentive (Firm Target) System Development and
Demonstration contract award to a sole source contractor. The program director, a fast-
burning young colonel, e-mails you that she is very concerned with the aircraft's ultimate
speed at the full specification payload. She would like the contractor to achieve the
faster, desired objective speed rather than the mandatory threshold speed, and thinks
that an objective performance incentive would be the way to go to achieve her goal. You
,are asked to go to her office and discuss the matter and the issues involved in using
such an incentive. What do you tell the colonel? - ANSWERS--There are a number of
considerations for the colonel:
The desired additional speed should provide benefit to the Government in order to
justify the expenditure of funds to achieve it. The colonel should be able to articulate the
justification.
The situation is very amenable to a classic performance incentive that would allow the
contractor to earn profit for achieving the desired speed above and beyond what the
final FPIF profit would be for achieving threshold speed. If the contractor perceives this
can't happen, he will either not sign up to the incentive or will ignore it from Day One.
The incentive and resulting payment have to be structured so as to be based on
observable, measurable results that would determine how much is earned by the
contractor. Subjectivity is not allowable under current AF policy without HCA approval.
We have to be very careful to understand what possible unintended consequences
could be caused by the existence of this feature in the contract. For example, will the
contractor reduce aircraft weight beyond safe limits in order to help achieve the
payment? Also, will the contractor consume excessive schedule to get the extra speed?
There has to be a cost incentive in place so that the contractor doesn't spend an
unconstrained amount of money to win the payment, such as under a CPFF contract.
The FPIF share line serves this purpose when balanced against the incentive.
The incentive has to be balanced with the FPIF share line so that the contractor doesn't
spend more money to achieve the desired speed than he has potential to earn by
receiving the payment. Similarly, the contractor can't be allowed to spend an excessive
amount of money with little cost penalty to achieve success.
In some cases, Contracting Officers are also Grants Officers. They can award Grants
and Assistance Instruments as well as contracts. What is Assistance? How does it differ
from Acquisition? What gives the Grants Officers their authority to enter into
assistance? What are the types of Assistance? - ANSWERS--When the principal
purpose is to transfer a thing of value, to carry out a public purpose of support or
stimulation authorized by law of the United States, it is Assistance.
Acquisition, by contrast, has the principal purpose of acquiring property or services for
the direct benefit or use of the United States Government.
Federal agencies must be authorized by statute to support or stimulate a public
purpose. The statutory authority from Congress must exist either in broad legislation or
in a program-specific statute. Absent that statutory authority, a Grants Officer may not
use an assistance instrument.
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of
Defense by statute, e.g., 10 U.S.C. 2391; (2) Authority provided to DoD components
that requires no delegation by the Secretary of Defense, e.g., 10 U.S.C. 2358; (3)
Authority coming indirectly from statutes, i.e., federal statute authorizing a program that
is consistent with using a grant or cooperative agreement.
Two types of Assistance are Grants and Cooperative Agreements. They differ in the
following way: In a Grant, substantial involvement is not expected between the agency
and the recipient. In Cooperative Agreement, substantial involvement is expected
between the agency and the recipient. Cooperative Agreements, then, are particularly
,useful in the research arena when the Government is interested in being involved in
program decisions or may be doing some testing or research themselves.
You are the Contracting Officer on a new Research and Development program.
Proposals were recently received in response to a Broad Agency Announcement, and a
Cost Plus Fixed Fee contract type is anticipated. The proposal most favored by the
technical team was priced significantly under what was estimated for the effort. The
contractor proposed fee in an amount that equates to 20% of the estimated cost. The
users have more than enough funds to cover the proposal and want you to accept the
price as is. How should you advise the user and what factors should you consider in
determining a reasonable fee? - ANSWERS--The statutory limitation on fee for CPFF
type contracts do no permit exceeding 15% of estimated cost for experimental,
developmental, or research performed under a CPFF contract. Since the proposed
amount of fee is outside the statutory limitations you need to determine what a fair and
reasonable rate is that falls within the limitations. The FAR recommends a structured
approach for determining fee such as Weighted Guidelines. If a cost reasonableness
review determines the estimated costs to be acceptable, we can still negotiate and
adjust the fee.
urges you to use the money to buy spare parts for his aircraft which have been
operating 24/7 since "the war" began. The Program Director has estimated the funds
will by enough replenishment spares for the remainder of the war. Do you have any
concerns? - ANSWERS--You have two major concerns. First, you have to ask HQ the
color of money and year of the funds they want to send you. Do not assume that they
are sending you FY10 O&M funds. If they are sending you FY10 O&M funds you can
use the funds for "operations and maintenance' but you will have to obligate the money
before the end of the fiscal year closes out.
Once you have determined the kind and year of money, you can address the Program
Director's request. Since the Program Director is asking you to buy replenishment
spares, you can use the money to buy these spares assuming the Program Director can
show you a bona fide need for the spares. This means you can buy sufficient spares for
a current need (which includes a reasonable inventory) but you cannot stockpile. Even if
the contractor cannot deliver the spares in FY10, you still have a bona fide need of
FY10 if the contractor can deliver the spares in a "reasonable" time.
Here the Program Director appears to want you to buy spares sufficient to satisfy his
needs for the entire war, a sure indication of his intent to stockpile. You will have to go
back to the program director to find out the spares he can actually put on an aircraft
right now plus find out what a reasonable inventory is for his program. You cannot use
current O&M funds to satisfy a "future" need since that violates the bona fide needs
rule.
You are the Contracting Officer for a well established transport aircraft program. The
program is nearing the end of production. A Program Manager approaches you
requesting that you issue a Broad Area Announcement (BAA) to support the
development of a source list to supply active noise reducing headsets. The headsets
are commercially available from multiple sources and the PM wants to receive
, performance specification sheets from each offeror and then request sample headsets
be submitted for testing. The end result of the effort will be the development of a source
list that can be used by various government entities to individually procure the needed
headsets for their specific requirements. The PM tells you that he will not be procuring
any of the headsets as a result of the BAA. What do you advise the PM? - ANSWERS--
You should advise the PM that BAAs are a method of solicitation and can only be used
if the Government intends to award a contract. You might suggest that the development
of the source list could be achieved by issuing a Sources Sought Synopsis with the
synopsis specifying the 2 step process (spec sheets first and then sample headsets
from selected offerors), and the ultimate intent of the process, e.g., a source list for use
by individual users in future procurements. You might also advise the PM that there
could be liability issues associated with the use, handling, and return of the headsets to
the offerors and that it might be appropriate for the Government to cover shipping and
any damage/wear to the units for the testing.
A. Under what circumstances is ratification of an unauthorized commitment permitted?
B. In general, what are the generic procedures for handling ratification actions?
C. Who are the approval authorities for ratifications? - ANSWERS--A. If the contract
award would have been proper if executed by a warranted PCO, the price can be
determined to be fair and reasonable, and there must have been enough of the proper
type of funding available to pay for the item both at the time of the commitment and at
the time of the ratification.
B. An investigation is required to be completed within 30 days of discovery of the
unauthorized commitment explaining how and why it occurred, how future occurrences
will be avoided, and describing any corrective actions taken against responsible
individuals. Legal review is also required.
C. The ratification approving official for all unauthorized commitments valued at or
above $1M is the SPE. The ratification approving official for all Non-DISA unauthorized
commitments (regardless of amount) and DISA unauthorized commitments valued
below $1M is the HCA. (DARS 1.602-3(b)(2))
You are the Contracting Officer for a much-delayed effort. On Friday you finally receive
the necessary authority to release the contract for signature. It's late on Friday afternoon
when you e-mail the modification to the contractor for signature. The only person at the
contractor's office on Friday afternoon is the Company President's 17 year old daughter
who is working there as a summer-hire secretary. She knows her father urgently wants
the contract modification so she signs the document and returns it to your office. You
note the last name is the same as the President's so assume that he's the one who
signed the modification. Is this a legal agreement? - ANSWERS--Probably not. The
elements of a contract are - offer, acceptance, consideration, for a lawful purpose,
certainty of terms, and legal capacity. It is unlikely that a 17 year old summer hire would
have the authority to bind the company, regardless of her relationship to the Company
President. Courts may generally find that individuals lack "the age majority" if they are
under 18 years of age.
The law in a given jurisdiction may never actually use the term "age of majority" and the
term thereby refers to a collection of laws bestowing the status of adulthood. The age of
Contracting Officer Study Guide
(unofficial)AF Contracting Officer
warrant board study questions.
You are the PCO for a major competitive negotiated source selection. The RFP, which
reflects the user's requirements and is based on the user's budget, has a requirement
for 220 cargo loaders to be delivered at 55 per year over the next four years. One
offeror proposes to deliver all 220 loaders in the first year at a dramatically reduced
price. Can you accept the offeror's proposal? What factors should you consider in your
decision? - ANSWERS--You can accept the offeror's proposal under certain
circumstances. Firstly, what did the RFP say about alternate proposals? Is this a
situation where requirements are changed and the other offerors should be allowed to
propose on the basis of the changed requirements? You need to ask the user if he
wants all 220 in the first year and are the operating locations physically able to
accommodate their loaders in the first year. Finally, the offeror could be taken into
discussions and asked to conform to the RFP with there being the possibility of not
being selected for award or elimination from the competitive range if the proposal is not
made compliant with the RFP.
You are the PCO on a new $2B aircraft development program. The program is in
contract negotiations for a Fixed Price Incentive (Firm Target) System Development and
Demonstration contract award to a sole source contractor. The program director, a fast-
burning young colonel, e-mails you that she is very concerned with the aircraft's ultimate
speed at the full specification payload. She would like the contractor to achieve the
faster, desired objective speed rather than the mandatory threshold speed, and thinks
that an objective performance incentive would be the way to go to achieve her goal. You
,are asked to go to her office and discuss the matter and the issues involved in using
such an incentive. What do you tell the colonel? - ANSWERS--There are a number of
considerations for the colonel:
The desired additional speed should provide benefit to the Government in order to
justify the expenditure of funds to achieve it. The colonel should be able to articulate the
justification.
The situation is very amenable to a classic performance incentive that would allow the
contractor to earn profit for achieving the desired speed above and beyond what the
final FPIF profit would be for achieving threshold speed. If the contractor perceives this
can't happen, he will either not sign up to the incentive or will ignore it from Day One.
The incentive and resulting payment have to be structured so as to be based on
observable, measurable results that would determine how much is earned by the
contractor. Subjectivity is not allowable under current AF policy without HCA approval.
We have to be very careful to understand what possible unintended consequences
could be caused by the existence of this feature in the contract. For example, will the
contractor reduce aircraft weight beyond safe limits in order to help achieve the
payment? Also, will the contractor consume excessive schedule to get the extra speed?
There has to be a cost incentive in place so that the contractor doesn't spend an
unconstrained amount of money to win the payment, such as under a CPFF contract.
The FPIF share line serves this purpose when balanced against the incentive.
The incentive has to be balanced with the FPIF share line so that the contractor doesn't
spend more money to achieve the desired speed than he has potential to earn by
receiving the payment. Similarly, the contractor can't be allowed to spend an excessive
amount of money with little cost penalty to achieve success.
In some cases, Contracting Officers are also Grants Officers. They can award Grants
and Assistance Instruments as well as contracts. What is Assistance? How does it differ
from Acquisition? What gives the Grants Officers their authority to enter into
assistance? What are the types of Assistance? - ANSWERS--When the principal
purpose is to transfer a thing of value, to carry out a public purpose of support or
stimulation authorized by law of the United States, it is Assistance.
Acquisition, by contrast, has the principal purpose of acquiring property or services for
the direct benefit or use of the United States Government.
Federal agencies must be authorized by statute to support or stimulate a public
purpose. The statutory authority from Congress must exist either in broad legislation or
in a program-specific statute. Absent that statutory authority, a Grants Officer may not
use an assistance instrument.
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of
Defense by statute, e.g., 10 U.S.C. 2391; (2) Authority provided to DoD components
that requires no delegation by the Secretary of Defense, e.g., 10 U.S.C. 2358; (3)
Authority coming indirectly from statutes, i.e., federal statute authorizing a program that
is consistent with using a grant or cooperative agreement.
Two types of Assistance are Grants and Cooperative Agreements. They differ in the
following way: In a Grant, substantial involvement is not expected between the agency
and the recipient. In Cooperative Agreement, substantial involvement is expected
between the agency and the recipient. Cooperative Agreements, then, are particularly
,useful in the research arena when the Government is interested in being involved in
program decisions or may be doing some testing or research themselves.
You are the Contracting Officer on a new Research and Development program.
Proposals were recently received in response to a Broad Agency Announcement, and a
Cost Plus Fixed Fee contract type is anticipated. The proposal most favored by the
technical team was priced significantly under what was estimated for the effort. The
contractor proposed fee in an amount that equates to 20% of the estimated cost. The
users have more than enough funds to cover the proposal and want you to accept the
price as is. How should you advise the user and what factors should you consider in
determining a reasonable fee? - ANSWERS--The statutory limitation on fee for CPFF
type contracts do no permit exceeding 15% of estimated cost for experimental,
developmental, or research performed under a CPFF contract. Since the proposed
amount of fee is outside the statutory limitations you need to determine what a fair and
reasonable rate is that falls within the limitations. The FAR recommends a structured
approach for determining fee such as Weighted Guidelines. If a cost reasonableness
review determines the estimated costs to be acceptable, we can still negotiate and
adjust the fee.
urges you to use the money to buy spare parts for his aircraft which have been
operating 24/7 since "the war" began. The Program Director has estimated the funds
will by enough replenishment spares for the remainder of the war. Do you have any
concerns? - ANSWERS--You have two major concerns. First, you have to ask HQ the
color of money and year of the funds they want to send you. Do not assume that they
are sending you FY10 O&M funds. If they are sending you FY10 O&M funds you can
use the funds for "operations and maintenance' but you will have to obligate the money
before the end of the fiscal year closes out.
Once you have determined the kind and year of money, you can address the Program
Director's request. Since the Program Director is asking you to buy replenishment
spares, you can use the money to buy these spares assuming the Program Director can
show you a bona fide need for the spares. This means you can buy sufficient spares for
a current need (which includes a reasonable inventory) but you cannot stockpile. Even if
the contractor cannot deliver the spares in FY10, you still have a bona fide need of
FY10 if the contractor can deliver the spares in a "reasonable" time.
Here the Program Director appears to want you to buy spares sufficient to satisfy his
needs for the entire war, a sure indication of his intent to stockpile. You will have to go
back to the program director to find out the spares he can actually put on an aircraft
right now plus find out what a reasonable inventory is for his program. You cannot use
current O&M funds to satisfy a "future" need since that violates the bona fide needs
rule.
You are the Contracting Officer for a well established transport aircraft program. The
program is nearing the end of production. A Program Manager approaches you
requesting that you issue a Broad Area Announcement (BAA) to support the
development of a source list to supply active noise reducing headsets. The headsets
are commercially available from multiple sources and the PM wants to receive
, performance specification sheets from each offeror and then request sample headsets
be submitted for testing. The end result of the effort will be the development of a source
list that can be used by various government entities to individually procure the needed
headsets for their specific requirements. The PM tells you that he will not be procuring
any of the headsets as a result of the BAA. What do you advise the PM? - ANSWERS--
You should advise the PM that BAAs are a method of solicitation and can only be used
if the Government intends to award a contract. You might suggest that the development
of the source list could be achieved by issuing a Sources Sought Synopsis with the
synopsis specifying the 2 step process (spec sheets first and then sample headsets
from selected offerors), and the ultimate intent of the process, e.g., a source list for use
by individual users in future procurements. You might also advise the PM that there
could be liability issues associated with the use, handling, and return of the headsets to
the offerors and that it might be appropriate for the Government to cover shipping and
any damage/wear to the units for the testing.
A. Under what circumstances is ratification of an unauthorized commitment permitted?
B. In general, what are the generic procedures for handling ratification actions?
C. Who are the approval authorities for ratifications? - ANSWERS--A. If the contract
award would have been proper if executed by a warranted PCO, the price can be
determined to be fair and reasonable, and there must have been enough of the proper
type of funding available to pay for the item both at the time of the commitment and at
the time of the ratification.
B. An investigation is required to be completed within 30 days of discovery of the
unauthorized commitment explaining how and why it occurred, how future occurrences
will be avoided, and describing any corrective actions taken against responsible
individuals. Legal review is also required.
C. The ratification approving official for all unauthorized commitments valued at or
above $1M is the SPE. The ratification approving official for all Non-DISA unauthorized
commitments (regardless of amount) and DISA unauthorized commitments valued
below $1M is the HCA. (DARS 1.602-3(b)(2))
You are the Contracting Officer for a much-delayed effort. On Friday you finally receive
the necessary authority to release the contract for signature. It's late on Friday afternoon
when you e-mail the modification to the contractor for signature. The only person at the
contractor's office on Friday afternoon is the Company President's 17 year old daughter
who is working there as a summer-hire secretary. She knows her father urgently wants
the contract modification so she signs the document and returns it to your office. You
note the last name is the same as the President's so assume that he's the one who
signed the modification. Is this a legal agreement? - ANSWERS--Probably not. The
elements of a contract are - offer, acceptance, consideration, for a lawful purpose,
certainty of terms, and legal capacity. It is unlikely that a 17 year old summer hire would
have the authority to bind the company, regardless of her relationship to the Company
President. Courts may generally find that individuals lack "the age majority" if they are
under 18 years of age.
The law in a given jurisdiction may never actually use the term "age of majority" and the
term thereby refers to a collection of laws bestowing the status of adulthood. The age of
