CONTRACTING OFFICER UNLIMITED WARRANT BOARD QUESTIONS
AND CORRECT DETAILED ANSWERS LATEST UPDATE GRADED A+
ACTUAL EXAM | 100% VERIFIED ANSWERS
What is a personal service? Are Personal Service Contracts allowed?
A personal services contract is characterized by the employer-employee relationship it creates
between the Government and the contractor's personnel. The Government is normally required to
obtain its employees by direct hire under competitive appointment or other procedures required by
the civil service laws
Recent focus has been on decreasing the amount of time it takes to negotiate a contract. There are
several current examples of contracts that are taking months to negotiate from the date of business
clearance to the handshake. What can you do, as the PCO, to shorten this timespan?
As the PCO on the effort, you have the ability to negotiate "rules of engagement" before the
negotiation actually begins. You need to, with your counterparts, establish written rules regarding
who the major participants will be, where negotiations will be conducted, a schedule for completion
of negotiations, how much time will be permitted between offers and counteroffers, whether
negotiations will be on the telephone, in person, or by e-mail, whether DCAA will participate, and
whether you will accept "updated" proposals for anything other than BIG changes (not just rate
changes, etc.) I would establish that anything that could be handled at the negotiation table to
"update" the proposal, should not require an updated written proposal.
I would keep the contractor aware of exceptions all along the way to avoid surprises in negotiations.
You are the PCO on a new acquisition and have just received the DCAA audit for the $12M proposal that
you received last month. The audit had $100,000 in questioned material costs, and $100,000 in
unsupported costs for the subcontractor labor hours. As you put together your clearance charts for the
effort, you realize that you have only decremented $30,000 from the proposed materials costs in
building your objective, and you find that decrement to be fair and reasonable. You have decremented
the entire $100,000 that was unsupported in the audit from the costs proposed for the subcontractor
labor, and you find that decrement to be fair and reasonable. What must you do?
DPAP policy letter dated 4 Dec 09 highlights the responsibilities of the PCO when he/she does not
include significant audit recommendations in the Air Force Objective. The letter excludes
"unsupported" costs, and focuses only on "questioned" costs in the audit. So we won't even focus on
the "unsupported" cost category. When the PCO plans to sustain less than 75% of the recommended
questioned costs in the Air Force Objective, and the proposal is $10M or more, the PCO must have a
,discussion with the auditor and document the disagreement in writing to the auditor, and through
business clearance before negotiations! If business clearance is approved, then the disagreement is
supported. If the auditor doesn't agree with the decision of the PCO, and the subsequent approval by
the Clearance Approval Authority, then DCAA may request a higher level review, which could go all
the way to DPAP. In our case, our proposal is over $10M, and the only 30% of the questioned costs
were sustained by the PCO. Unless the PCO upholds at least $75,000 of the $100,000 in questioned
costs, he/she will have to discuss why not with the auditor, document that in the business clearance,
and possibly defend his/her decision at a level all the way up to DPAP.
When the contracting officer properly issues a unilateral change under the Changes clause, what
responsibility, if any, does the contractor have to continue performance?
The contractor must continue performance of the contract as changed, except that in cost-
reimbursement or incrementally funded contracts the contractor is not obligated to continue
performance or incur costs beyond the limits established in the Limitation of Cost (fully funded) or
Limitation of Funds (incrementally funded) clause.
Describe what a warranty provides and describe its use in a cost-reimbursement type contract?
Authority: FAR 46.702(b) / FAR 46.705(a) / DFARS 246.705
• Generally, a warranty provides a contractual right for the correction of defects notwithstanding any
other requirement of the contract pertaining to acceptance of the supplies or services by the
Government; and a stated period of time or use, or the occurrence of a specified event, after
acceptance by the Government to assert a contractual right for the correction of defects.
• Except for the warranties in the clauses at 52.246-3, Inspection of Supplies -- Cost-Reimbursement,
and 52.246-8, Inspection of Research and Development -- Cost-Reimbursement, the contracting officer
shall not include warranties in cost-reimbursement contracts.
• DFARS gives one other exception to the rule against using warranties in cost-reimbursement
contracts: Clause for Warranty of Data.
How is a warranty impacted if the Government specifies or doesn't specify the design of the item?
If the Government specifies the design of the end item and its measurements, tolerances, materials,
tests, or inspection requirements, the contractor's obligations for correction of defects is usually be
,limited to defects in material and workmanship or failure to conform to specifications. If the
Government does not specify the design, the warranty extends also to the usefulness of the design.
Where is profit allowed and not allowed under a fixed-price contract terminated for convenience?
Profit is allowed on preparations made and work done by the contractor for the terminated portion of
the contract but not on the settlement expenses. Anticipatory profits and consequential damages are
not allowed. Profit is not allowed for material or services that, as of the effective date of termination,
have not been delivered by a subcontractor, regardless of the percentage of completion. The TCO may
use any reasonable method to arrive at a fair profit.
What additional liabilities does the contractor incur when a fixed-price contract is terminated for default
(in lieu of a termination for convenience)?
1. The Government is not liable for the contractor's costs on undelivered work and is entitled to the
repayment of any advance and progress payments applicable to that work.
2. The contractor is liable to the Government for any excess costs incurred in acquiring supplies and
services similar to those terminated for default.
You are the Contracting Officer on a large aircraft sustainment contract. The contract has a base year
and several one year options for various support requirements. The contract period of performance runs
from 1 Oct through 30 Sep of each year. On 5 Oct one of the Program Managers comes to you with a
request to exercise an option for continued Tech Order Updates however the contract states that the
particular option the PM has identified was to be exercised by 1 Oct. The PM asserts there is still a
requirement for the TO support and is willing to give you a memo addressing the need and accepting
responsibility for not notifying you of his requirement in sufficient time to exercise the option. How
would you proceed?
Although the period for unilaterally exercising the option has expired your PM may still be able to
have the requirement fulfilled. You should contact the contractor, express the Government's need to
have the work performed, and see if the contractor is amenable to performing the work. If they are,
you should contact your Legal Council, review the circumstances and get their buy-in for a contract
modification. If your council agrees, you should prepare a J&A under FAR 6.302 and FAR 6.304, if there
are no other suppliers who could perform the work, and there is rationale for other than full and open
competition, and proceed with a bilateral contract agreement. The contractor is entitled to
renegotiate the price as the option was not exercised IAW the contract terms and conditions.
, You have recently awarded a contract for an infrared laser targeting system. It contains the FAR clause,
"Export Controlled Data Restrictions." The contractor calls you and says that although not originally
proposed, he now needs to have a Dr. McKenzie work on the contract. Dr. McKenzie is from Australia,
although he will be working here at the US at the contractor's facility for this effort. What is your
response to the contractor and what kinds of initial actions would you take? What would your response
be if the work is not subject to ITAR? What would your response be if the work is subject to ITAR?
• If Dr. McKenzie is a foreign national, and although he is working here in the U.S., by giving him the
data, it is equated to giving the information to Australia. If the information that he will be working on
can be segregated from all of the ITAR sensitive data, then he will be able to work on the segregated
data only...but if the information that Dr. McKenzie will require access to is ITAR sensitive data, then
he will need an export license [under 22 CFR Sec. 125.2, Exports of Unclassified Technical Data] from
the Dept. of State, or the contractor will need to find a U.S. national or citizen who can perform the
work.
• (a) Determine if the non-U.S. citizen is a permanent resident ("green-card" holder, admitted lawfully
into the U.S. for permanent residence). If so, the individual is considered to have the same rights as a
U.S. citizen as far as export-controlled data is concerned and no approval is required.
• (b) If the individual is not a permanent resident, he/she is a foreign national and is not allowed to
have access to any export-controlled data. The contractor must submit a description of the work to be
performed by the foreign national and a determination must be made as to whether or not this work
is export-controlled. This determination can be made by the Government Program Manager or the
Foreign Disclosure Office. If the proposed work is not export-controlled, you may approve the use of
the foreign national on the contract on the condition that the individual work only on those non-
sensitive tasks. Another solution is to modify the contract to segregate the work into sensitive and
non-sensitive areas, and let the contractor make the determination as to whether the proposed work
is sensitive.
You are the Contracting Officer negotiating an unclassified substantial research effort with a large
business as the Prime Contractor. During negotiations the Contractor notifies you that one of its
subcontractors, a Large University whose unique capabilities make it a major player in the effort, refuses
to accept the DFARS clause 252.204-7000, Disclosure of Information. You want this clause included to
prohibit the prime or its subs from releasing potentially sensitive information without your permission.
The University has advised the prime they feel so strongly that this clause would impair their academic
freedom that they will not participate in this effort unless the clause is removed. What should you
consider in formulating your response?
In this case, the Government must have the right to protect sensitive information from release and
will not agree to the deletion of the clause. The clause just requires that the contractor get permission
AND CORRECT DETAILED ANSWERS LATEST UPDATE GRADED A+
ACTUAL EXAM | 100% VERIFIED ANSWERS
What is a personal service? Are Personal Service Contracts allowed?
A personal services contract is characterized by the employer-employee relationship it creates
between the Government and the contractor's personnel. The Government is normally required to
obtain its employees by direct hire under competitive appointment or other procedures required by
the civil service laws
Recent focus has been on decreasing the amount of time it takes to negotiate a contract. There are
several current examples of contracts that are taking months to negotiate from the date of business
clearance to the handshake. What can you do, as the PCO, to shorten this timespan?
As the PCO on the effort, you have the ability to negotiate "rules of engagement" before the
negotiation actually begins. You need to, with your counterparts, establish written rules regarding
who the major participants will be, where negotiations will be conducted, a schedule for completion
of negotiations, how much time will be permitted between offers and counteroffers, whether
negotiations will be on the telephone, in person, or by e-mail, whether DCAA will participate, and
whether you will accept "updated" proposals for anything other than BIG changes (not just rate
changes, etc.) I would establish that anything that could be handled at the negotiation table to
"update" the proposal, should not require an updated written proposal.
I would keep the contractor aware of exceptions all along the way to avoid surprises in negotiations.
You are the PCO on a new acquisition and have just received the DCAA audit for the $12M proposal that
you received last month. The audit had $100,000 in questioned material costs, and $100,000 in
unsupported costs for the subcontractor labor hours. As you put together your clearance charts for the
effort, you realize that you have only decremented $30,000 from the proposed materials costs in
building your objective, and you find that decrement to be fair and reasonable. You have decremented
the entire $100,000 that was unsupported in the audit from the costs proposed for the subcontractor
labor, and you find that decrement to be fair and reasonable. What must you do?
DPAP policy letter dated 4 Dec 09 highlights the responsibilities of the PCO when he/she does not
include significant audit recommendations in the Air Force Objective. The letter excludes
"unsupported" costs, and focuses only on "questioned" costs in the audit. So we won't even focus on
the "unsupported" cost category. When the PCO plans to sustain less than 75% of the recommended
questioned costs in the Air Force Objective, and the proposal is $10M or more, the PCO must have a
,discussion with the auditor and document the disagreement in writing to the auditor, and through
business clearance before negotiations! If business clearance is approved, then the disagreement is
supported. If the auditor doesn't agree with the decision of the PCO, and the subsequent approval by
the Clearance Approval Authority, then DCAA may request a higher level review, which could go all
the way to DPAP. In our case, our proposal is over $10M, and the only 30% of the questioned costs
were sustained by the PCO. Unless the PCO upholds at least $75,000 of the $100,000 in questioned
costs, he/she will have to discuss why not with the auditor, document that in the business clearance,
and possibly defend his/her decision at a level all the way up to DPAP.
When the contracting officer properly issues a unilateral change under the Changes clause, what
responsibility, if any, does the contractor have to continue performance?
The contractor must continue performance of the contract as changed, except that in cost-
reimbursement or incrementally funded contracts the contractor is not obligated to continue
performance or incur costs beyond the limits established in the Limitation of Cost (fully funded) or
Limitation of Funds (incrementally funded) clause.
Describe what a warranty provides and describe its use in a cost-reimbursement type contract?
Authority: FAR 46.702(b) / FAR 46.705(a) / DFARS 246.705
• Generally, a warranty provides a contractual right for the correction of defects notwithstanding any
other requirement of the contract pertaining to acceptance of the supplies or services by the
Government; and a stated period of time or use, or the occurrence of a specified event, after
acceptance by the Government to assert a contractual right for the correction of defects.
• Except for the warranties in the clauses at 52.246-3, Inspection of Supplies -- Cost-Reimbursement,
and 52.246-8, Inspection of Research and Development -- Cost-Reimbursement, the contracting officer
shall not include warranties in cost-reimbursement contracts.
• DFARS gives one other exception to the rule against using warranties in cost-reimbursement
contracts: Clause for Warranty of Data.
How is a warranty impacted if the Government specifies or doesn't specify the design of the item?
If the Government specifies the design of the end item and its measurements, tolerances, materials,
tests, or inspection requirements, the contractor's obligations for correction of defects is usually be
,limited to defects in material and workmanship or failure to conform to specifications. If the
Government does not specify the design, the warranty extends also to the usefulness of the design.
Where is profit allowed and not allowed under a fixed-price contract terminated for convenience?
Profit is allowed on preparations made and work done by the contractor for the terminated portion of
the contract but not on the settlement expenses. Anticipatory profits and consequential damages are
not allowed. Profit is not allowed for material or services that, as of the effective date of termination,
have not been delivered by a subcontractor, regardless of the percentage of completion. The TCO may
use any reasonable method to arrive at a fair profit.
What additional liabilities does the contractor incur when a fixed-price contract is terminated for default
(in lieu of a termination for convenience)?
1. The Government is not liable for the contractor's costs on undelivered work and is entitled to the
repayment of any advance and progress payments applicable to that work.
2. The contractor is liable to the Government for any excess costs incurred in acquiring supplies and
services similar to those terminated for default.
You are the Contracting Officer on a large aircraft sustainment contract. The contract has a base year
and several one year options for various support requirements. The contract period of performance runs
from 1 Oct through 30 Sep of each year. On 5 Oct one of the Program Managers comes to you with a
request to exercise an option for continued Tech Order Updates however the contract states that the
particular option the PM has identified was to be exercised by 1 Oct. The PM asserts there is still a
requirement for the TO support and is willing to give you a memo addressing the need and accepting
responsibility for not notifying you of his requirement in sufficient time to exercise the option. How
would you proceed?
Although the period for unilaterally exercising the option has expired your PM may still be able to
have the requirement fulfilled. You should contact the contractor, express the Government's need to
have the work performed, and see if the contractor is amenable to performing the work. If they are,
you should contact your Legal Council, review the circumstances and get their buy-in for a contract
modification. If your council agrees, you should prepare a J&A under FAR 6.302 and FAR 6.304, if there
are no other suppliers who could perform the work, and there is rationale for other than full and open
competition, and proceed with a bilateral contract agreement. The contractor is entitled to
renegotiate the price as the option was not exercised IAW the contract terms and conditions.
, You have recently awarded a contract for an infrared laser targeting system. It contains the FAR clause,
"Export Controlled Data Restrictions." The contractor calls you and says that although not originally
proposed, he now needs to have a Dr. McKenzie work on the contract. Dr. McKenzie is from Australia,
although he will be working here at the US at the contractor's facility for this effort. What is your
response to the contractor and what kinds of initial actions would you take? What would your response
be if the work is not subject to ITAR? What would your response be if the work is subject to ITAR?
• If Dr. McKenzie is a foreign national, and although he is working here in the U.S., by giving him the
data, it is equated to giving the information to Australia. If the information that he will be working on
can be segregated from all of the ITAR sensitive data, then he will be able to work on the segregated
data only...but if the information that Dr. McKenzie will require access to is ITAR sensitive data, then
he will need an export license [under 22 CFR Sec. 125.2, Exports of Unclassified Technical Data] from
the Dept. of State, or the contractor will need to find a U.S. national or citizen who can perform the
work.
• (a) Determine if the non-U.S. citizen is a permanent resident ("green-card" holder, admitted lawfully
into the U.S. for permanent residence). If so, the individual is considered to have the same rights as a
U.S. citizen as far as export-controlled data is concerned and no approval is required.
• (b) If the individual is not a permanent resident, he/she is a foreign national and is not allowed to
have access to any export-controlled data. The contractor must submit a description of the work to be
performed by the foreign national and a determination must be made as to whether or not this work
is export-controlled. This determination can be made by the Government Program Manager or the
Foreign Disclosure Office. If the proposed work is not export-controlled, you may approve the use of
the foreign national on the contract on the condition that the individual work only on those non-
sensitive tasks. Another solution is to modify the contract to segregate the work into sensitive and
non-sensitive areas, and let the contractor make the determination as to whether the proposed work
is sensitive.
You are the Contracting Officer negotiating an unclassified substantial research effort with a large
business as the Prime Contractor. During negotiations the Contractor notifies you that one of its
subcontractors, a Large University whose unique capabilities make it a major player in the effort, refuses
to accept the DFARS clause 252.204-7000, Disclosure of Information. You want this clause included to
prohibit the prime or its subs from releasing potentially sensitive information without your permission.
The University has advised the prime they feel so strongly that this clause would impair their academic
freedom that they will not participate in this effort unless the clause is removed. What should you
consider in formulating your response?
In this case, the Government must have the right to protect sensitive information from release and
will not agree to the deletion of the clause. The clause just requires that the contractor get permission
