CON 3990 Contracting Certification EXAM TEST
QUESTIONS AND CORRECT ANSWESR (VERIFIED
ANSWERS) PLUS RATIONALES 2025/2026 Q&A |INSTANT
DOWNLOAD PDF
1. What is the primary purpose of a government contract?
A. To establish a legally enforceable agreement
B. To guarantee profits for contractors
C. To ensure compliance with federal regulations
D. To create a verbal understanding between parties
Correct answer: A. To establish a legally enforceable agreement. Government
contracts legally bind the parties to specified obligations.
2. Which of the following is a characteristic of a fixed-price contract?
A. Contractor bears the risk of cost overruns
B. Government bears all cost risks
C. Price can fluctuate with market conditions
D. Only used for research and development projects
Correct answer: A. Contractor bears the risk of cost overruns. Fixed-price contracts
set a price in advance, so contractors must manage costs.
3. What is a cost-reimbursement contract used for?
A. Projects with clearly defined requirements
B. Projects where costs are unpredictable
C. Small routine purchases
D. Simple services with fixed rates
Correct answer: B. Projects where costs are unpredictable. The government
reimburses actual costs plus a fee.
4. Which clause in a contract governs disputes between the contractor and the
government?
A. Termination clause
,B. Disputes clause
C. Payment clause
D. Scope of work clause
Correct answer: B. Disputes clause. This clause provides procedures for resolving
disagreements under the contract.
5. What does the “scope of work” define in a contract?
A. The contract duration
B. The specific tasks and deliverables required
C. The payment schedule
D. The dispute resolution process
Correct answer: B. The specific tasks and deliverables required. It outlines what the
contractor must accomplish.
6. Which contract type is most suitable for research and development projects?
A. Firm-fixed-price
B. Cost-plus-fixed-fee
C. Indefinite-delivery/indefinite-quantity
D. Time-and-materials
Correct answer: B. Cost-plus-fixed-fee. This allows reimbursement for costs plus a
set fee, ideal for unpredictable R&D projects.
7. What is the purpose of a performance bond?
A. To guarantee contractor payment
B. To guarantee contractor completion of work
C. To outline the project schedule
D. To define dispute resolution procedures
Correct answer: B. To guarantee contractor completion of work. A performance
bond protects the government if the contractor fails to perform.
8. What is a “termination for convenience”?
A. Ending a contract due to contractor default
B. Ending a contract at the government’s discretion
C. Ending a contract due to bankruptcy
D. Ending a contract for disputes
, Correct answer: B. Ending a contract at the government’s discretion. It allows the
government to terminate without fault.
9. Which regulation primarily governs federal contracting?
A. FAR (Federal Acquisition Regulation)
B. GAAP (Generally Accepted Accounting Principles)
C. OSHA regulations
D. FLSA (Fair Labor Standards Act)
Correct answer: A. FAR (Federal Acquisition Regulation). FAR sets the rules for
federal contracting procedures.
10. What is a time-and-materials contract?
A. A contract where cost is fixed
B. A contract reimbursing labor at set rates and materials at cost
C. A contract that guarantees profits for the contractor
D. A contract used only for construction
Correct answer: B. A contract reimbursing labor at set rates and materials at cost.
This allows flexibility for uncertain work quantities.
11. What is the difference between a solicitation and an invitation for bid?
A. Solicitation is informal; IFB is formal
B. Solicitation requests proposals; IFB requests sealed bids
C. Solicitation always leads to a contract; IFB does not
D. There is no difference
Correct answer: B. Solicitation requests proposals; IFB requests sealed bids. IFBs
are strict bid submissions; solicitations may involve negotiation.
12. Which is an example of an indirect cost?
A. Raw materials
B. Salaries of project support staff
C. Equipment used directly on the project
D. Travel for site inspections
Correct answer: B. Salaries of project support staff. Indirect costs are not directly
assignable to a specific project deliverable.
QUESTIONS AND CORRECT ANSWESR (VERIFIED
ANSWERS) PLUS RATIONALES 2025/2026 Q&A |INSTANT
DOWNLOAD PDF
1. What is the primary purpose of a government contract?
A. To establish a legally enforceable agreement
B. To guarantee profits for contractors
C. To ensure compliance with federal regulations
D. To create a verbal understanding between parties
Correct answer: A. To establish a legally enforceable agreement. Government
contracts legally bind the parties to specified obligations.
2. Which of the following is a characteristic of a fixed-price contract?
A. Contractor bears the risk of cost overruns
B. Government bears all cost risks
C. Price can fluctuate with market conditions
D. Only used for research and development projects
Correct answer: A. Contractor bears the risk of cost overruns. Fixed-price contracts
set a price in advance, so contractors must manage costs.
3. What is a cost-reimbursement contract used for?
A. Projects with clearly defined requirements
B. Projects where costs are unpredictable
C. Small routine purchases
D. Simple services with fixed rates
Correct answer: B. Projects where costs are unpredictable. The government
reimburses actual costs plus a fee.
4. Which clause in a contract governs disputes between the contractor and the
government?
A. Termination clause
,B. Disputes clause
C. Payment clause
D. Scope of work clause
Correct answer: B. Disputes clause. This clause provides procedures for resolving
disagreements under the contract.
5. What does the “scope of work” define in a contract?
A. The contract duration
B. The specific tasks and deliverables required
C. The payment schedule
D. The dispute resolution process
Correct answer: B. The specific tasks and deliverables required. It outlines what the
contractor must accomplish.
6. Which contract type is most suitable for research and development projects?
A. Firm-fixed-price
B. Cost-plus-fixed-fee
C. Indefinite-delivery/indefinite-quantity
D. Time-and-materials
Correct answer: B. Cost-plus-fixed-fee. This allows reimbursement for costs plus a
set fee, ideal for unpredictable R&D projects.
7. What is the purpose of a performance bond?
A. To guarantee contractor payment
B. To guarantee contractor completion of work
C. To outline the project schedule
D. To define dispute resolution procedures
Correct answer: B. To guarantee contractor completion of work. A performance
bond protects the government if the contractor fails to perform.
8. What is a “termination for convenience”?
A. Ending a contract due to contractor default
B. Ending a contract at the government’s discretion
C. Ending a contract due to bankruptcy
D. Ending a contract for disputes
, Correct answer: B. Ending a contract at the government’s discretion. It allows the
government to terminate without fault.
9. Which regulation primarily governs federal contracting?
A. FAR (Federal Acquisition Regulation)
B. GAAP (Generally Accepted Accounting Principles)
C. OSHA regulations
D. FLSA (Fair Labor Standards Act)
Correct answer: A. FAR (Federal Acquisition Regulation). FAR sets the rules for
federal contracting procedures.
10. What is a time-and-materials contract?
A. A contract where cost is fixed
B. A contract reimbursing labor at set rates and materials at cost
C. A contract that guarantees profits for the contractor
D. A contract used only for construction
Correct answer: B. A contract reimbursing labor at set rates and materials at cost.
This allows flexibility for uncertain work quantities.
11. What is the difference between a solicitation and an invitation for bid?
A. Solicitation is informal; IFB is formal
B. Solicitation requests proposals; IFB requests sealed bids
C. Solicitation always leads to a contract; IFB does not
D. There is no difference
Correct answer: B. Solicitation requests proposals; IFB requests sealed bids. IFBs
are strict bid submissions; solicitations may involve negotiation.
12. Which is an example of an indirect cost?
A. Raw materials
B. Salaries of project support staff
C. Equipment used directly on the project
D. Travel for site inspections
Correct answer: B. Salaries of project support staff. Indirect costs are not directly
assignable to a specific project deliverable.
