Contracting Officer Unlimited Warrant Board

1. What is an option? An option is a unilateral right in a contract, for a

specific period of time, where the Government may elect to purchase
additional supplies or services called for by the contract, or extend the
period of performance.

2. When should options be used? The PCO should use options when (1) in
the Governments best interest, (2) there is a need for service beyond the
initial period, and (3) to ensure continuity of service.13``
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3. When is it not beneficial to use options? The use of options are not normally in
the Governments best interest when (1) The foreseeable requirements
involve minimum economic quantities and delivery requirements are far
enough in the future to permit competitive acquisition, production, and
delivery (2) an indefinite quantity or requirements contract would be more
appropriate than a contract with options.

4. What must a PCO do before exercising an option? The PCO must determine
that:
a. Funds are available
b. The requirement fulfills an existing Government need
c. Exercising the option is the most advantageous method price and other
factors considered
d. The option was synopsized IAW FAR 5 (or exempted)
The PCO should have a written D&F in the file in order to use options
The PCO should also consider if the contractor is responsible and if their
performance is satisfactory.

5. If the option price during a competitive source selection was not evaluated, is the option
valid? No. All options need to be priced because they were awarded on a
competitive basis.

6. Can the PCO cite the "Changes Clause" to increase quantities on a production contract? No.
The Changes Clause cannot be used to increase quantities on a production
contract.
(a) The Contracting Officer may at any time, by written order, and without
notice to the sureties, if any, make changes within the general scope of this
contract in any one or more of the following:
(1) Drawings, designs, or specifications when the supplies to be furnished are
to be specially manufactured for the Government in accordance with the
drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
7. Is any approval required for an effort that is out of scope? Changes outside the scope of
the original contract are considered new work and constitute a cardinal
change, and in this case, one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval

8. What are the four essential elements the PCO must address when making a
Scope Determination?
a. Scope of the competition - could the original offerors have reasonable
anticipated such a change?
b. Contract type - Requirements should be better defined in a FFP contract
therefore require less changes.
As opposed to a RDT&E contract.
c. Period of performance - will the PoP be extended significantly so as to
constitute new work?
d. Overall cost/price change - what has been the total change in price
throughout all modifications?

9. What must the PCO do for any change and/or modification estimated to be $1M or
more? Obtain legal review of the proposed action and document the review in the
contract file.

10. Where can a PCO look to help determine if a change is in-scope? Various source
documents to include: SOO/SOW/PWS, synopsis, RFP, exchanges with
industry, market surveys, RFIs, etc.

11. What is "scope creep?" Scope creep occurs when a series of in-scope changes
make the contract as a whole out-of-scope. The PCO must remain cognizant
of scope creep when changing/modifying existing contracts.

12. Personal Services is a contract that, by its express terms or as administered, makes the
contractor personnel appear, in effect, Government employees i.e. contractor personnel
are subject to the relatively continuous supervision of a Government official.

13. What is a T&M contract? Limitations. A time-and-materials contract may be

used only if—
(1) The contracting officer prepares a determination and findings that no
other contract type is suitable. The determination and finding shall be—
(i) Signed by the contracting officer prior to the execution of the base period
or any option periods of the contracts; and
(ii) Approved by the head of the contracting activity prior to the execution of
the base period when the base period plus any option periods exceeds three
years; and
(2) The contract includes a ceiling price that the contractor exceeds at its
own risk. The contracting officer shall document the contract file to justify
the reasons for and amount of any subsequent change in the ceiling price. Also
see 12.207(b) for further limitations
 on use of Time-and-Materials or Labor Hour contracts for acquisition of
commercial items.

14. Can a T&M contract be used for a commercial service? a) Except as provided
in paragraph (b) of this section, agencies shall use firm-fixed-price contracts
or fixed-price contracts with economic price adjustment for the acquisition
of commercial items.
(b) (1) A time-and-materials contract or labor-hour contract (see Subpart
16.6) may be used for the acquisition of commercial services when—
(i) The service is acquired under a contract awarded using— Competitive
Procedures, Fair Opportunity, with an executed D&F

15. Define Certified Cost or Pricing Data. All facts, that as of the date of price
agreement, or if applicable, an earlier date agreed upon between the parties
that's as close as practicable to the date of agreement on price, prudent
buyers and sellers would reasonably expect to affect price negotiations
significantly.

16. When is Certified Cost and Pricing data required? When executing actions
over $750,000 with the exception of prices established by statute,
commercial items, with adequate price competition, and when a TINA waiver
is granted.

17. What is the "Bona Fide Needs" Rule? The Bona Fide Needs Rule basically
means that a federal agency must have a legitimate or bona fide need for the
requirement during the time period that the appropriation is available.
Pursuant to 31 U.S.C. 1502(a), "The balance of an appropriation limited for
obligation to a definite period is available only for payment of expenses
incurred during the period of availability, or to complete contracts properly
made during the period of availability and obligated consistent with Section
1501 of this title.." In other words, the basic rule states that a fiscal year's
(FY) appropriation may be obligated to meet a legitimate or bona fide need
existing in the FY for which the appropriation was made. This aspect of fund
availability seeks to ensure that only appropriations, which are available for a
specific FY are used to meet the legitimate needs of that FY. The bona fide
needs rule applies to both multiple year and annual appropriations. TIME,
PURPOSE, AMOUNT

18. You have just awarded 3 contract actions. You remember something in FAR
Part 5 about synopsizing contract awards. The first action was a Small
Business Innovation Research contract for $99,978. The second action was a
$3M new delivery order under an existing IDIQ contract and the third action
was a purchase order for $12,995. As a PCO, would you synopsize these
contract actions? SBIRs, delivery orders under existing IDIQ contracts and
actions under the simplified acquisition threshold ($150K) do not require an
award synopsis. However the dollar threshold is not a prohibition against
 publicizing an award of a smaller amount when publicizing would be
advantageous to industry or to the Government.

19. What is the requirement for obligating funds when awarding indefinite-
quantity contracts? For ID/IQ contracts all supplies and services to be
furnished shall be obtained via delivery order(s) or task order(s) issued by
individuals designated in the contract. Upon execution of the contract, an
obligation shall be recorded based upon the issuance of a delivery or task
order for the cost/price of the minimum quantity specified. Obtaining a
certification of availability of funding from the finance office does not satisfy
the requirement to record an obligation in the official accounting records of
the Government for the minimum order amount established by the award of
an IDIQ contract. The Government's actual obligation must be recorded at the
time of contract award. Recording and subsequently reporting the required
obligation using anything other than a delivery or task order will result in the
action not being reported in FPDS-NG. The Recording of Obligations Act is
implemented in the DoD Financial Management Regulation (FMR) (DOD
7000.14-R) (See paragraph 080504 of the FMR). The Defense Finance and
Accounting Service (DFAS) is responsible for recording contractual obligations
in the Air Force accounting records. Where the quantity required under a
contract is indefinite, the ultimate amount of obligation is determined by
subsequent orders; the amount of any required minimum order specified in
the contract, however, shall be recorded as an obligation upon execution of
the contract. For contracts that require the contractor to perform unilaterally
placed orders above the required minimum, record an obligation in the
amount of the order price or ceiling at the time the order is placed. An order
in excess of the required minimum that has to be negotiated or accepted by
the contractor under terms of the contract shall be recorded as an obligation
upon contractor's acceptance of the order in the amount of the agreed price
or ceiling. In the case of orders for services where a contractor cannot
undertake performance without direction from an authorized Government
official, order amounts may be consolidated periodically (at least monthly)
into a list of orders placed with the contractor identifying the estimated dollar
amount of each. On definite-quantity contracts, obligate the full amount of
the definite quantity at the time of contract award.

20. When may a T&M contract be used? What must the D&F contain? Who would approve the
following D&Fs: A T&M contract for $650K; A T&M contract for $500K in which the base period
plus option periods will be a total of 4 years; A T&M contract for $1.5M of services (base plus
options will be 5 years.)? T&M contract may be used only when it's not possible at
the time of placing the contract to estimate accurately the extent or duration
of the work or to anticipate costs with any reasonable degree of confidence,
and ONLY if the PCO prepares a D&F that "no other contract type is suitable,"
and the contract includes a ceiling price that the contractor exceeds at their
own risk. The D&F must contain sufficient facts and rationale to justify that no
other contract type is suitable (should go through all the contract types). At a
minimum the D&F shall include a description of the market research
 conducted and establish that it is not possible at the time of placing the
contract or order to accurately estimate the extent or duration of the work
or to anticipate costs with any reasonable degree of certainty. A T&M
contract for less than $1 million would have the PCO as the approval for the
D&F. A T&M contract for $500K in which the base plus options is 4 years
would be approved by the HCA. A T&M contract for $1.5 of services, where
the base plus options will be 5 years, would be approved by the COCO and
then the HCA.

21. As a PCO, what kinds of things could cause you to lose your warrant? A PCO
loses their warrant upon retirement from employment, reassignment from the
position requiring a warrant, termination of employment, or unsatisfactory
performance. Terminations must be in writing, and requests must be
submitted 30 days in advance of the requested termination along with the
reason

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.
27. 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.

28. What additional liabilities does the contractor incur when a fixed-price contract is terminated
for default (in lieu of a termination for convenience)?
a. 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.
b. The contractor is liable to the Government for any excess costs incurred in acquiring
supplies and services similar to those terminated for default

29. 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 Counsel, 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.

30. 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 from the contractor before release
of information. It doesn't prohibit the contractor from releasing all data. The
PCO should confer with the Program Manager, legal office and the Foreign
Technology Office to determine if the effort will contain military critical
technologies. While the clause will not be removed, it might be possible to
designate certain portions of the effort that the university could release while
protecting the remainder.

31. You are the Contracting Officer on a very large aircraft sustainment contract with world-wide
performance requirements. There are contractor personnel stationed at various bases that
provide maintenance and repair capabilities, via the contract Over and Above clauses, should
organic repair not be available. The Program Manager has just notified you of an incident that
occurred last week at Frankfurter Air Base in Germany where an aircraft was damaged and
required repair, but tells you not to worry as the aircraft has already been repaired and
returned to service by the Contractor's on-site mechanics. The contract stipulates that before
any repairs can begin, written authorization from the CO or the on-site Contracting Officer's
Technical Representative (COTR) must be provided as the authorization allows the contractor
to begin work and incur costs that will be paid under the contract. You ask the Program
Manager for a copy of the COTR's work authorization and he hands you an email addressed to
the Contractor from an individual you do not recognize (not the designated COTR) that directs
the work to begin. What are your issues and what steps might you take? One of the first
steps is to determine who the "authorizing" official was. If the individual was
an A&AS employee, the authorization to repair the aircraft was not valid as
any action that approves the expenditure of funds is Inherently Governmental
and cannot be performed by a contractor. If the individual was not a
contractor but was a legitimate employee of the U.S. Government you may
have a Ratification Action provided the conditions for a Ratification can be
met: (1) Supplies or services were received and accepted by the Government
or the Government has or will get a benefit from the unauthorized action;
(2) The ratifying official has the authority to enter into a contractual
agreement; (3) The resulting contract would otherwise have been proper if
made by a warranted KO; (4) The KO reviewing the unauthorized commitment
determines the price to be fair and reasonable; (5) The KO recommends
payment and legal counsel concurs in the recommendation, unless agency
procedures expressly do not require such concurrence; and (6) Funds are
currently and were available at the time the unauthorized commitment was
made.
• In either event, the individual did not have the actual authority to commit
the Government by authorizing the work. The contractor, as well as the
Frankfurter Air Base personnel, should also be reminded that only the KO or
his/her designated representative can authorize the expenditure of funds.

32. There are seven statutory exceptions to the Competition in Contracting Act (CICA). Please
list them and the exception most likely to apply to Foreign Military Sales (FMS) contracts.
What specific documentation would be necessary to support this FMS exception?
 (1) FAR 6.302-1 - Only One Responsible Source and No Other Supplies or Services Will Satisfy
Agency Requirements: When there is a reasonable basis to conclude that the agency's
minimum needs can only be satisfied by unique supplies or services available from only
one source or a limited number of sources, or from only one or a limited number of
suppliers with unique capabilities; it shall not be used when any of the other circumstances
is applicable.

(2) FAR 6.302-2 - Unusual and Compelling Urgency: An unusual and compelling urgency
precludes full and open competition, and delay in award of a contract would result
in serious injury, financial or other, to the Government.

(3) FAR 6.302-3 - Industrial Mobilization; Engineering, Developmental, or Research Capability;

or Expert Services: When it is necessary to keep vital facilities or suppliers in business,
train a selected supplier, maintain properly balanced sources of supply, create or maintain
the required domestic capability for production of critical supplies, continue critical
supplies in production when there would be otherwise a break in production, to provide
for an adequate industrial base.

(4) FAR 6.302-4 - International Agreement: When a contemplated acquisition is to be

reimbursed by a foreign country using a LOA directing source; of for services to be performed,
or supplies to be used, in the sovereign territory of another country and the terms of a treaty or
agreement specify or limit the sources to be solicited.
(5) FAR 6.302-5 - Authorized or Required by Statute: When statutes expressly authorize or
require that acquisition be made from a specific source or through another agency.

(6) FAR 6.302-6 - National Security: When disclosure of the Government's needs
would compromise the national security (e.g. would violate security requirements).

(7) FAR 6.302-7 - Public Interest: When the agency head determines that it is not in the public
interest in the particular acquisition; may be used when none of the other authorities in
6.302 apply.

International Agreement: Full and open competition need not be provided for when precluded
by the terms of an international agreement or a treaty between the United States and a foreign
government or international organization (LOA), or the written directions of a foreign
government reimbursing the agency for the cost of the acquisition (LOR) of the supplies or
services for such government.

33. You have been assigned as the Contracting Officer for a new acquisition and the requirement
has just been briefed by the Colonel as the Wing's number one priority. The Program Manager
approaches you with a draft sole-source J&A and asks for your review and comment. Upon
review you note that no mention of Market Research is made and the PM later confirms that
none was accomplished as the Wing wants to use their "usual" contractor; she also tells you
that she isn't really sure why any would be necessary or where to begin the research. What
should you do? You should inform her that Market Research is usually the
foundation for sole-source or limited competition and without it (unless one of
the other
 exceptions in 6.302 applies) you cannot process the J&A. You should also
ensure that she understands that the Market Research will demonstrate if a
commercial item is available, or could be modified, to meet the Government's
requirement thereby saving time and money in the development and delivery
of the item.
You should direct her to FAR Part 10 which provides several avenues of
conduction Market Research, some of which are:
(1) Contacting knowledgeable individuals in Government and industry
regarding market capabilities to meet requirements.
(2) Reviewing the results of recent market research undertaken to meet
similar or identical requirements.
(3) Publishing formal requests for information in appropriate technical or
scientific journals or business publications.
(4) Querying the Government-wide database of contracts and other
procurement instruments intended for use by multiple agencies available at
www.contractdirectory.gov and other Government and commercial databases
that provide information relevant to agency acquisitions.
(5) Participating in interactive, on-line communication among industry,
acquisition personnel, and customers.
(6) Obtaining source lists of similar items from other contracting activities or
agencies, trade associations or other sources.
(7) Reviewing catalogs and other generally available product literature
published by manufacturers, distributors, and dealers or available on-line.
(8) Conducting interchange meetings or holding pre-solicitation conferences
to involve potential offerors early in the acquisition process.

34. As the Contracting Officer on a source selection you recently sent out the notice to unsuccessful
offerors and have received several requests for debriefings. Some of the requests are for pre-
award debriefs and some are for post award debriefs. What are the things you may/may not
tell the offerors in the debriefings? At a minimum, Pre-Award debriefings shall include
--

(1) The agency's evaluation of significant elements in the offeror's proposal;

(2) A summary of the rationale for eliminating the offeror from the
competition; and
(3) Reasonable responses to relevant questions about whether source
selection procedures contained in the solicitation, applicable regulations, and
other applicable authorities were followed in the process of eliminating the
offeror from the competition.

Preaward debriefings shall not disclose --

(1) The number of offerors;
(2) The identity of other offerors;
(3) The content of other offerors proposals;
(4) The ranking of other offerors;
(5) The evaluation of other offerors; or
(6) Any of the information prohibited in 15.506(e).
 For a Post-Award
(1) The Government's evaluation of the significant weaknesses or deficiencies
in the offeror's proposal, if applicable;
(2) The overall evaluated cost or price (including unit prices), and technical
rating, if applicable, of the successful offeror and the debriefed offeror,
and past performance information on the debriefed offeror;
(3) The overall ranking of all offerors, when any ranking was developed by
the agency during the source selection;
(4) A summary of the rationale for award;
(5) For acquisitions of commercial items, the make and model of the item to
be delivered by the successful offeror; and
(6) Reasonable responses to relevant questions about whether source
selection procedures contained in the solicitation, applicable regulations, and
other applicable authorities were followed.

The debriefing shall not include point-by-point comparisons of the debriefed

offeror's proposal with those of other offerors. Moreover, the debriefing shall
not reveal any information prohibited from disclosure by 24.202 or exempt
from release under the Freedom of Information Act (5 U.S.C. 552) including -
(1) Trade secrets;
(2) Privileged or confidential manufacturing processes and techniques;
(3) Commercial and financial information that is privileged or confidential,
including cost breakdowns, profit, indirect cost rates, and similar
information; and
(4) The names of individuals providing reference information about an
offeror's past performance

35. During a kick-off meeting for a new R&D effort in which a CPFF contract is contemplated, the
Program Manager mentions that he heard about this new thing called Performance Based
Payments and it sounded really good. He liked the idea of the contractor only getting paid
when progress towards completion has been made. If your Program Manager wanted to use
Performance Based Payments on a program, how would you advise her/him? In October
1995, the FAR was changed to include Performance Based Payments
It is only available on Fixed Price Contracts, and is preferred financing
method. It differs from Progress Payments in that progress payments are
interim payments based on the costs they incur in the performance on a job,
but PBPs focus on the completion of milestones, and payment is made (90%
OF PRICE when complete and the other 10% when the whole contract is
done) when the milestone is 100% complete. Works well with production
contracts...not so much with R&D.
If you are planning on using PBPs, you must insert clause 52.232-32 in the
solicitation, must include the terms required for the proposal and how they
will be evaluated.

Performance-based contracting methods are intended to ensure required

performance quality levels are achieved and total payment is related to the
degree that services performed meet contract standards. Performance-based
 contracts: (a) Describe the requirements in terms of results required rather
than the methods of performance of the work; (b) Use measurable
performance standards (i.e., terms of quality, timeliness, quantity, etc.) and
quality assurance surveillance plans; (c) specify procedures for reductions of
fee or for reductions to the price of a fixed-price contract when services are
not performed or do not meet contract requirement; and (d) include
performance incentives where appropriate.

36. During a kick-off meeting for a new R&D effort in which a CPFF contract is
contemplated, the Program Manager mentions that he heard about this new
thing called Performance Based Payments and it sounded really good. He
liked the idea of the contractor only getting paid when progress towards
completion has been made. If your Program Manager wanted to use
Performance Based Payments on a program, how would you advise her/him?
In October 1995, the FAR was changed to include Performance Based
Payments
It is only available on Fixed Price Contracts, and is preferred financing
method. It differs from Progress Payments in that progress payments are
interim payments based on the costs they incur in the performance on a job,
but PBPs focus on the completion of milestones, and payment is made (90%
OF PRICE when complete and the other 10% when the whole contract is
done) when the milestone is 100% complete. Works well with production
contracts...not so much with R&D.
If you are planning on using PBPs, you must insert clause 52.232-32 in the
solicitation, must include the terms required for the proposal and how they
will be evaluated.

Performance-based contracting methods are intended to ensure required

performance quality levels are achieved and total payment is related to the
degree that services performed meet contract standards. Performance-based
contracts: (a) Describe the requirements in terms of results required rather
than the methods of performance of the work; (b) Use measurable
performance standards (i.e., terms of quality, timeliness, quantity, etc.) and
quality assurance surveillance plans; (c) specify procedures for reductions of
fee or for reductions to the price of a fixed-price contract when services are
not performed or do not meet contract requirement; and (d) include
performance incentives where appropriate.

37. You are the Contracting Officer on a large aircraft program. When you arrived
at work this morning you are greeted with a notification that your contractor
has been placed on the List of Parties Excluded from Federal Procurement and
Nonprocurement Programs. What are the rules on continuation of your
current contracts with the Contractor? (1) Agencies may continue contracts or
subcontracts in existence at the time the contractor was debarred,
suspended, or proposed for debarment unless the agency head or a designee
directs otherwise. (2) Ordering activities may continue to place orders against
existing contracts, including indefinite delivery contracts, in the absence of a
 termination. (3) Agencies shall not renew or otherwise extend the duration of
current contracts (i.e. exercise options), or consent to subcontracts, unless
the agency head or a designee authorized representative states, in writing,
the compelling reasons for renewal or extension.

38. You are the Contracting Officer on a program where the contractor has
recently submitted a very large claim based on a constructive change to the
contract. The claim is based on direction that the Colonel, the Group
Commander of the program, allegedly gave the contractor. The contractor
maintains it was a constructive change to the contract. You find out from the
Colonel's secretary that he is going out to the contractor's facility next week
to meet with corporate management about the claim. You make inquiries and
find out that nobody from the program's contracting division or JAG will be
accompanying the colonel. What should you do? A constructive change is
sometimes called a 'change by implication' and occurs when the
Government, by its actions, changes the contract without specifically
adhering to the requirements of the 'Changes' clause. A constructive change
order has been defined as an oral or written act or omission by the
Contracting Officer or other authorized Government official, which is of such a
nature that it has the same effect as a formal written change order under the
Changes clause.
You should notify you supervisor immediately and brief them on the situation.
You should also express concern over not being involved in the situation and
concern that the Colonel might be compromising the Government's position
in this matter. You should recommend to your boss that the Group COCO
should ask the colonel either to take along his PCO and JAG or cancel the trip
altogether. If the colonel refuses, then the COCO should elevate the matter by
alerting the SCCO and the JAG office.

39. You are the Contracting Officer for a commercial item acquisition. The
Program Manager comes to your office and asks you to explain how a
commercial item is supported for reasonableness. You tell the PM that FAR
has an order of preference that involves three steps. Please explain what
these three steps are and provide examples of each step.
Step 1 - Determine if information is available within the Government.
Examples - prices from other Government contracts, ASC/PKF historical
information, government independent cost estimates, historical data from
other government services or agencies, records within DCAA and DCMA.
Step 2 - Determine if information is available from sources other than the
offeror. Examples - Market Research, published market prices, published price
lists from both the offeror and other vendors, information requested from
other vendors.
Step 3 - Obtain information from the offeror. Examples - Prices at which the
same or similar items have previously been sold in the commercial
marketplace (sales data), catalogs, market priced items (market quotes from
the vendor), cost or pricing data from the vendor that will not be certified.
40. You have just received the only proposal against a BAA solicitation issued last
month. It is from the University of Southern California and you have to choose
the most appropriate contract instrument for the work being proposed. What
kinds of things would you consider in determining whether to award a
contract, grant, cooperative agreement or other transaction for research?
Contract: If the principle purpose of the research is for the direct benefit of
the government, then a procurement contract would be best.
Grant or Cooperative Agreement: If the principal purpose of the research
is to stimulate or support R&D for another public purpose, then a grant or
cooperative agreement would be best. [A grant if there is NO substantial
government involvement, a cooperative agreement if there will be
involvement!]
TIA: This is a used primarily to leverage businesses that have not dealt with
the government before, but USC could be in a consortium with business,
where a TIA might be appropriate.
Other Transaction for Research: This would be if the university takes
exception to the patent rights provisions. 50/50 cost share is required.

41. You are in a kick-off meeting for a $20M R&D new-start effort and the
Program Manager points out the list of potential offerors, three of which are
small businesses. When asked, he states that all three are capable of doing
the work. Are you required to set this acquisition aside for small business?
What question would you ask the PM? Although the FAR states: Acquisitions
between $3,000 and $150,000 are automatically reserved for SB concerns.
"The Contracting Officer shall set aside any acquisition over $150,000 for
small business participation when there is a reasonable expectation that (1)
offers will be obtained from at least two responsible small business concerns
offering the products of different small business concerns; and (2) award will
be made at fair market prices." It also states, "In making R&D small business
set-asides, there must also be a reasonable expectation of obtaining from
small businesses the best scientific and technological sources consistent with
the demands of the proposed acquisition for the best mix of cost,
performance, and schedules." Your question for the PM would be whether two
or more of the small businesses would offer the best technical solution for the
best mix of cost, performance, and schedule.

42. You are the Contracting Officer for a $5,000,000 acquisition for which the
contractor has taken the position that the product is commercial. You must
now determine if you agree with this position. What documentation would
you need to complete for you contract file and what steps would you take
determining if you agree with the contractor's position of commerciality?
First, as PCO, you will review the definition of a "commercial item" in FAR
2.101(b) to make sure you fully understand what is required for an item to be
determined commercial.
The Commercial Item Determination (CID) may be written as a memorandum,
and shall address the minimum components listed below.
(i) Description of supplies or services;
 (ii) Basis on which the supplies or services meet the definition of a
commercial item;
(iii) Basis on which the commercial item satisfies the government's
requirements;
(iv) Contracting officer signature and date.

43. You were the Contracting Officer for a source selection that bought 500 engine trailers based
on Adequate Price Competition (APC) from Engine Trailers, Inc. Three months later a decision
was made to buy an additional 50 trailers from this company. As a Contracting Officer for this
follow- on buy, would you need to request certified cost or pricing data or would it be
acceptable to buy from this same source based on the TINA exception for adequate price
competition? It would be acceptable to buy the additional 50 trailers based on
the TINA exception for adequate price competition per FAR 15.403-1(c)(1)(iii)
which states "A price is based on adequate price competition if - Price
analysis clearly demonstrates that the proposed price is reasonable in
comparison with current or recent prices for the same or similar items, adjusted
to reflect changes in market conditions, economic conditions, quantities, or
terms and conditions under contracts that resulted from adequate price
competition."

44. You arrive as a new PCO on a XYZ WP/PEO program. The PM comes to you with an $84M -1
J&A in support of XYZ system as a follow-on J&A from a 2010 limited competition between two
offerors with a down select to one Bockwell Rollins, large business. It is a class J&A and the
intent is to award a 5 year IDIQ with various contract types. The type of support is logistics,
such as support at fielded locations, field level maintainability improvements, integration
support, such as mission planning, testing, and studies, and engineering support such as
participation in Technical Interchange Meetings (TIMs), maintaining and updating the ICD and
system software. The IDIQ ordering period is anticipated to be 5 years. Your -1 J&A is justified
with unacceptable delays in fulfilling DoD requirements and qualifying another source would
take 24-48 months to develop the same level of capability and certification. The J&A indicates
that a sources sought synopsis was released and five large businesses submitted a statement of
capability. The technical team rated the responses red, yellow, and green based on knowledge,
experience and risk. Only the incumbent was rated green while the other four were rated
yellow or red. For Section XI (11) related to removing barriers to competition, you review the
previous J&A from 2010 which says there will be a rolling downselect for support and a follow-
on competition for engineering, logistics, and overall XYZ support. When comparing it to the
current J&A, the only information provided is there is an option to obtain a limited data rights
package and market research will be conducted.
Who is the J&A authority? What are your thoughts on the J&A as written? Any particular
concerns related to length of IDIQ, -1 rationale for unacceptable delays, responses to
sources sought synopsis and/or 2010 J&A Section XI on overcoming barriers in comparison
to current J&A Section XI information? Is there anyone you'd consult?
The J&A would be approved at the Weapons PEO level.
-If the sole source rationale is unacceptable delays for 24-48 months, you will
be challenged on a 60 mo (5 year) period of performance. While you may
have justification for up to 48 months, how is it sole source from 48-60
months if you can qualify another source in that time?
 -Even though a sources sought synopsis was posted, the amount of
responses is concerning. If you received FIVE Statement of Capability in
response, that indicates this may not be sole source or else your source
sought did not properly explain the requirement. If at least one source or
more is yellow, that indicates there is a potential for competition with an
offeror who could be more competitive through discussions.
-IAW DFARS PGI 206.304, a J&A must be approved at one level higher than
the previous J&A authority (except SPE) if the J&A authority determines the
actions to overcome competition barriers from the previous J&A did not
happen. The current J&A doesn't explain if you held the downselect or more
concerning, the follow-on competition the 2010 J&A stated. Therefore, the
J&A will need an explanation of how those competitions were fulfilled or the
J&A must be approved at the next higher level (SPE).
-Recommend you talk to legal, policy, and competition advocate. Specifically I
highly recommend you discuss the responses to the sources sought synopsis
with the competition advocate as you may be going down a sole source path
when she will determine after quite a bit of work that the effort is truly
competitive.

45. You are the PCO on the Red, White and Blue (RWB) source selection for $100M. The RWB
source selection is for offerors to take a 10 year old tech data package, do minimal testing and
qualifications, and build to print for a specified quantity of RWB widgets. Based on market
research you expect 3 proposals. You've been through business clearance, have an approved
source selection plan and have released the RFP. You need to issue an amendment as you
realize your most probably quantity has changed. What is your next step?
You would need to consult the MIRT chair to determine if there would be any
impacts to your approved CDP 2 or if the MIRT would need to reconvene.
AFMCMP 5301.9000(10) requires you to obtain business clearance for
amendments unless your amendment is administrative in nature. In this
situation, your most probable quantity is more than an administrative change
so another business clearance would be required.

46. You are the new PCO on a $22M CPFF contract. At that dollar value, over
$20M, and contract type, is there a specific clause that covers a DoD 5000
requirement that you would expect to see in the resulting contract? Would it
make any difference if the contract were FPIF? Would it make a difference if
the contract were a $55M CPFF contract? Is there any event that is required
and can you give some idea of the timeline? If the clause is not included,
what other documentation should be included in the file? The clause is DFARS
252.234-7002 Earned Value Management System which is applicable to all
cost and incentive type of contracts over $20M. Yes, FPIF would require this
clause as an incentive type of contract.
If this contract has a value of $50 million or more, the Contractor shall use an
EVMS that has been determined to be acceptable by the Cognizant Federal
Agency (CFA). If this contract has a value of less than $50 million, the
Government will not make a formal determination that the Contractor's EVMS
complies with the EVMS guidelines in ANSI/EIA-748 with respect to the
 contract.
The Government will schedule integrated baseline reviews as early as
practicable, and the review process will be conducted not later than 180
calendar days after—
(1) Contract award;
(2) The exercise of significant contract options; and
(3) The incorporation of major modifications.
If EVMS will not be obtained, both a waiver from the DoD 5000 process is
required and an individual or class deviation from the DFARS clause is
required.

47. You are the PCO for Program Wild Card in Other Contracting valued at $50M. Two months ago,
you were seeking ASP and Acquisition Plan approval. Your ASP authority, the SCCO, agreed to
allow the ASP to serve as your Acquisition Plan as long as the elements of an acquisition plan
were all covered, such as an N/A chart. You and your friendly procurement analyst ensured all
elements of an Acq Plan were covered, the ASP was held, and ASP/AP minutes were approved
by the SCCO. After ASP/AP approval, a J&A was approved in the amount of $50M. Two days ago
you released your RFP, today your PM has approached you to let you know that real world
events have resulted in a requirement change to buy more Wild Card systems. Your PM asks to
forego some planned test assets and increase the maximum amount of WC production units
based on increased funding, changing your total to $80M. Anything you need to consider
related to the J&A? Anything you need to consider related to the approved ASP/Acq Plan and
J&A? J&A: Per AFFARS 5306.304(e), if the contract value changes after J&A
approval but prior to award, you must submit an amendment to the J&A
authority. This is within the same threshold so you would not be required to
go to a higher level for J&A amendment approval.

ASP/AP: AFFARS 5307.104-91 Changes states "If a change occurs to the

program/acquisition that significantly affects the acquisition, the program
manager with the assistance of the contracting officer must prepare a revised
AP and a statement that summarizes the changes and obtain the approval
from the appropriate approval authority." You must return to the SCCO and
get approval for the change to the Acquisition Plan and ensure the file is
properly documented

48. You have a UON for Acme Missile valued at $70M for sole source to Rockheed Harton. You have
all required acquisition plan approvals. This requirement meets the DoD policy for UCA as the
negotiation of a definitive contract action is not possible in sufficient need to meet the
requirement and the Government's interest demands the contractor be given a binding
commitment immediately. Due to real world threats you must issue a UCA contract so the
resulting missiles are delivered on time. The period of performance will be 20 months. What
needs to be approved, who needs to approve it, and what is required prior to UCA award? Is
there anything in particular that you need to be concerned about regarding J&A postings?
Unless you have a -1 class J&A, a new J&A will be required, probably a 6.302-2
Unusual and Compelling Urgency J&A. Per FAR 6.302-2(d)(1)(ii), PoP of the
effort in the J&A may not exceed 12 months unless approved by HCA. In this
 case it is over 12 months so a D&F must be approved by Deputy Assistant
Secretary (DAS) for contracting. IAW AFFARS MP 5301.601(a)(i), the UCA
approval must be approved by the SCCO and legal must sign off as well. The
UCA request must be approved prior to UCA award. Per FAR 6.302-2, the D&F
(para d1) and J&A (para c4) may be approved after award. However, a UCA
J&A must be posted 30 days after award per FAR 6.305(b), so full D&F and
J&A coordination and approval may not be reasonable within the posting
deadline.

49. You are the PCO on a new source selection. Your team is encouraging the use oral presentations
in lieu of written presentations for the proposal's technical volume and let the briefing serve as
the documentation. Are oral presentations allowed? Please explain some advantages and
disadvantages. Is there anything that you must get in writing? Also, can you talk to any areas of
concern if there are exchanges within the oral presentation? 1. FAR 15.102 allows the
use of oral presentations which may substitute or augment written
proposals. Oral presentations are not mentioned in the DoD guide but use is
not prohibited. PCO should look at complexity of acquisition.
2. Some advantages include reduced costs, advantage to companies that
may not have the most elaborate proposal writing skills but are capable of
meeting the Government's needs, and providing more opportunities for face
to face dialog. Disadvantages include may be costly to industry or may not
have briefing expertise, may be cumbersome to listen to many oral
presentations. A record of the oral proposal, i.e audio, video recording or
written record must be maintained and the method and level of detail is
determined by the SSA.
3. Reps and Certs and any T&Cs intended to be in the resulting contract must
be in writing.
4. The biggest disadvantage is how the team has to be careful with
exchanges so that the team isn't entering discussions during oral
proposals before a competitive range is approved by the SSA. The SSA
makes the determination to enter discussions per DOD Source Selection
Procedures
1.4.1.2.7. Per FAR 15.306(c), there are some steps to evaluate proposals
before a competitive range such as rating the proposals against the criteria.
This is not impossible but can be tricky when the information is presented in
an oral presentation.

50. There is a source selection for X, Y, Z system. The RFP was released a few
months ago and proposals are due soon. It is expected that only 4 or less
proposals will be received based on market research, sources sought, etc.
One offeror sends a request for a 2 month extension. The initial gut reaction
is "no" however the team asks for more information from the offeror. The
offeror provides more information and it seems legitimate that the offeror is
maturing technology internally and feel they can offer better proposal (and
pricing) with a few more months. The PCO is agreeable to the 2mo extension
given that it will help foster competition in a field with somewhat limited
offerors. He intends to amend the RFP for the extension and make a few
minor technical clarifications in the SOW and intends to get approval for an
amendment through a delta business clearance. However, the SSA is not in
agreement to extend the due date because of schedule criticality and
maintaining schedule. The clearance approval authority is in agreement with
the PCO that the schedule should be adjusted to ensure competition.

-Explain the role of the PCO, SSA, and Clearance Authority in a source
selection. How would this difference between SSA vs PCO/CAA be resolved?

Roles are defined as:

- DoD Source Selection Procedures 1.4.1.2. states: The SSA shall:
1.4.1.2.5. Ensure that realistic source selection schedules are established and
source selection events are conducted efficiently and effectively in meeting
overall program schedules. The schedules should support proper and full
compliance with source selection procedures outlined in this document
and the established Source Selection Plan (SSP) for the acquisition.

1.4.2.2. The PCO shall:

1.4.2.2.5. Release the final solicitation only after obtaining all required
approvals including the SSA approval of the SSP.

AFFARS 5301.9001 Policy, Thresholds, and Approvals states:

(a) The objectives of the business and contract clearance process are to
ensure that:
(1) Contract actions effectively implement approved acquisition strategies;
(2) Negotiations and contract actions result in fair and reasonable business
arrangements; (3) Negotiations and contract actions are consistent with laws,
regulations, and policies; and (4) An independent review and assessment
(e.g., by the clearance authority) for the proposed contract action is
accomplished.

(b) The clearance approval authority must ensure that the clearance process
meets the objectives in paragraph (a) above.
(e) The Source Selection Authority (SSA) must not be the clearance approval
authority.

The bottom line is that if there is a disagreement, the SSA, who approves the
SSP, and the clearance approval authority, who approves clearance, must
reach mutual agreement. The PCO's opinion will be considered, but the SSA
and CAA must be in agreement on the final decision. My interpretation of
AFFARS 5301.9001(e) is there is an intentional reason the SSA and CAA
cannot be the same person. In the scenario above, some compromises could
be considered such as a one month extension. Besides the roles, the
important part of this question is really to pause and consider competitive
implications even when there are schedule pressures.
51. Is Past Performance required as an evaluation criterion in source selection? If
it is not evaluated, what must be done? Past performance need not be
evaluated if the contracting officer documents the reason past performance is
not an appropriate evaluation factor for the acquisition. FAR 15.304(c)(3)(iii)

52. 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.

An employer-employee relationship under a service contract occurs when, as

a result of
(i) the contract's terms or
(ii) the manner of its administration during performance, contractor personnel
are subject to the relatively continuous supervision and control of a
Government officer or employee. However, giving an order for a specific
article or service, with the right to reject the finished product or result, is not
the type of supervision or control that converts an individual who is an
independent contractor (such as a contractor employee) into a Government
employee.

Personal Service Contracts specifically authorized by statute are allowed.

Examples: health care experts, subject matter experts.

53. Your PM approaches you with a requirement for customized packaging materials for BLU-121.
He provides an estimate of $109K and says he understands the requirement will need to be
competed because no justification for sole source exists to the best of his knowledge. He
mentions that the work of a particular large business in California is noteworthy, and he wants
to call them to let them know to be looking out for the sources sought and RFP once we post
them to FBO. Is this a good idea? Not particularly, because FAR 19.502-4 requires all
acquisitions between $3,000 and $150,000 to be set aside for small
businesses if there is a reasonable expectation of competition.
• After releasing a sources sought synopsis and having 4 SB respondents, you
release a SB set aside RFP for the effort. After waiting the appropriate length
of time, you receive only 1 offer. The PM says, "Well, I guess we'll have to re-
open the competition to include large businesses, right?"

What do you say?

A: DFARS 215.371-4 Exceptions to the "Only One Offer" Rule, except SB set
asides from requiring Cost of Pricing Data.

Bonus Question: What are other exceptions to that rule?

A: Acquisitions less than or equal to SAT;
contingency/humanitarian/peacekeeping; R&D using BAA; and A&E service
contracts.
54. You are the PCO on a Fixed Price contract for missile stands. The stands were designed by the
government and are built to print by the contractor. The first batch of 5 stands was delivered
last week and there are rumblings in your office that something is wrong with them. They fall
over when the wind blows too hard. DCMA inspected the stands and agrees with the contractor
that the specification was followed precisely. Your PM asks you to tell the contractor to put the
production on hold until a fix can be determined. How do you proceed? Call the
contractor and advise of the situation and attempt to work toward a plan to
minimize costs while the imminent solution is being devised. If the contractor
is not willing to slow work on his own, you should consider a stop work order
(FAR 42.1303) which should be issued "only if it is advisable to suspend work
pending a decision by the Government and a supplemental agreement
providing for the suspension is not feasible."

Issuance of a stop-work order shall be approved at a level higher than the

contracting officer.

55. What information needs to be included in a Stop-work Order?

1) A description of the work to be suspended;
(2) Instructions concerning the contractor's issuance of further orders for
materials or services;
(3) Guidance to the contractor on action to be taken on any subcontracts; and
(4) Other suggestions to the contractor for minimizing costs.

56. You receive a proposal for a sole source $50M FFP effort. Your Contract
Specialist sends it over to Pricing for their assistance in reviewing the
proposal for adequacy. The buyer comes to you and says "Pricing advises this
proposal does not comply with FAR Table 15-2." What does that mean? Far
Table 15-2 provides instructions for preparing a contract pricing proposal
when certified cost or pricing data are required. The proposal should follow
the instructions listed in that section of FAR.

57. FAR Table 15-2 requires "a time-phased breakdown of direct labor hours,
rates, and cost by appropriate category". The proposal cost elements are
broken out by year (2014, 2015, etc). Would you consider this to meet the
requirement of the FAR Table 15-2? It could meet the intended requirement,
but good judgment indicates that rates probably vary some within a 1-year
period and so the contractor should provide either monthly/quarterly rates, or
an aggregate with an explanation that's what they're doing.

58. Explain the minimum required elements of a D&F. Each D&F shall set forth
enough facts and circumstances to clearly and convincingly justify the
specific determination made. As a minimum, each D&F shall include, in the
prescribed agency format, the following information:
(a) Identification of the agency and of the contracting activity and specific
identification of the document as a "Determination and Findings."
(b) Nature and/or description of the action being approved.
(c) Citation of the appropriate statute and/or regulation upon which the D&F
 is based.
(d) Findings that detail the particular circumstances, facts, or reasoning
essential to support the determination Necessary supporting documentation
shall be obtained from appropriate requirements and technical personnel.
(e) A determination, based on the findings, that the proposed action is
justified under the applicable statute or regulation.
(f) Expiration date of the D&F, if required (see 1.706). [only for class D&F]
(g) The signature of the official authorized to sign the D&F (see 1.707) and
the date signed.

59. You are the PCO for an ACAT I program buying complex missiles for use on
multiple aircraft from a sole source. You are currently drafting RFP for Lots
4, 5, and 6. A Contract Specialist mentions that both Australia and Belgium
are interested in buying these missiles. The PM overhears his comment and
interjects that the SML Colonel has already green lit adding Australian and
Belgian requirements to the Lots 4, 5, 6 contract. You check with your
Division Chief, and he agrees that the Aussie and Belgian requirements will
be purchased under Lots 4, 5, 6. Discuss the unique considerations of the Lot
4, 5, 6 RFP and contract if you are to purchase assets for Australia and
Belgium.
--Acq Strategy Plan must agree that FMS is authorized and contemplated
--Letters of Offer and Acceptance (LOAs) must be executed for each FMS
country; must contain proper language to buy your missile; and funding must
match appropriate LOA lines.
--International Agreement Competitive Restrictions (IACR) must be written
because it is sole source (AFFARS 5306.302-4 International Agreement)
--DFARS 225.7301 (b) Conduct FMS acquisitions under the same acquisition
and contract management procedures used for other defense acquisitions.
--Offsets. A U.S. defense contractor may recover all costs incurred for offset
agreements with a foreign government or international organization if the
LOA is financed wholly with customer cash or repayable foreign military
finance credits.
-- DFARS 225.7303-4 Contingent fees.
(a) Except as provided in paragraph (b) of this subsection, contingent fees are
generally allowable under DoD contracts, provided--
(1) The fees are paid to a bona fide employee or a bona fide established
commercial or selling agency maintained by the prospective contractor for
the purpose of securing business (see FAR Part 31 and FAR Subpart 3.4); and
(2) The contracting officer determines that the fees are fair and reasonable

60. The PM gives you a requirement for 100 JDAM weapons stands with custom
specifications. You decide a source selection is necessary. One of the
proposals you receive is from a company which you and your team have
never heard of. Research indicates the company is new, and acquired its
production facility from a previous market source that went out of business.
The offeror's proposal is competitive and could conceivably be the best value
 for your source selection. How would you ascertain an opinion on the
responsibility of the contractor?
a. Adequate Financial Resources
b. Comply with schedule
c. Satisfactory Performance record
d. Business Integrity/Ethics record
e. Have the necessary organization, experience, accounting and operational
controls, and technical skills, or the ability to obtain them
f. Equipment and facilities as necessary
g. Qualified/eligible under law/regs

61. When would you consider a Preaward survey? A preaward survey is normally
required only when the information on hand or readily available to the
contracting officer, including information from commercial sources, is not
sufficient to make a determination regarding responsibility. In addition, if
the contemplated contract will have a fixed price at or below the simplified
acquisition threshold or will involve the acquisition of commercial items (see
Part 12), the contracting officer should not request a preaward survey unless
circumstances justify its cost.

62. In a source selection for firm fixed price supplies, you receive 4 offers. Under
these circumstances, would you choose to perform a price analysis? What
about a cost analysis? Why or why not?
• When contracting on a firm-fixed-price or fixed-price with economic price
adjustment basis, comparison of the proposed prices will usually satisfy the
requirement to perform a price analysis, and a cost analysis need not be
performed.
• Cost analysis is not required for competition. Adequate price competition
motivates low pricing.

63. Define cost realism. When is a cost realism analysis required?

• "Cost realism" means that the costs in an offeror's proposal—
(1) Are realistic for the work to be performed;
(2) Reflect a clear understanding of the requirements; and
(3) Are consistent with the various elements of the offeror's technical
proposal.

• Cost realism analyses shall be performed on cost-reimbursement contracts

to determine the probable cost of performance for each offeror.

64. After much deliberation and analysis, you as the CO have decided that an item proposed as
commercial does not fulfill the definition in FAR 2.101(b). You ask the contractor to submit
certifiable cost or pricing data, however, the contractor refuses your request and still insists that
its product is commercial. What steps would you now take? Explain your position again
to the contractor, emphasizing that you are the CO; you have the final
determination regarding commerciality; and failure of the contractor to
submit the data is a serious situation. 2) Elevate the impasse to management
 and solicit their help through the leverage they have with their contractor
counterparts. 3) Examine the possibility of another source (unlikely at this
point). 4) Ask the contractor to put into writing that the company refuses to
supply certifiable cost or pricing data and the company will withdraw its
proposal if the CO persists in determining that the item is not commercial. 5)
If the contractor does what was requested in bullet (4) above, the next step
would be a TINA waiver request since the government cannot otherwise
obtain the item. 6) The TINA waiver package would also need to address how
the price will be determined fair and reasonable without the submission of
certified cost or pricing data AND that there are demonstrated benefits to
granting the waiver. 7) Finally, develop a strategy for acquiring this item in
the future.

65. Truth in Negotiations Act (TINA) - Truth in Negotiations Act (TINA), was enacted on
September 10, 1962. The law specifies, when dealing in a sole source environment,
that each government procurement contracting officer (PCO) must certify as
accurate, complete, and current all cost or pricing data associated with each
government contract.

66. The need date for contract award had passed, but you are in a deadlock negotiation. After
several counter-offers the contractor finally states that he will split the difference. Can you do
this? What do you consider? What part of the FAR allows you to split the difference and
award the contract? What do you do? FAR 15.405 talks to the fact that we don't
have to agree on every cost element. Make sure the tech eval, audits, etc...
support your position. The Contracting Officer should not become
preoccupied with any single element and should balance the contract type,
cost, and profit or fee negotiated to achieve a final result which is a price
that is fair and reasonable to both the Government and the contractor.

Far 15.405 (d) If, however, the contractor insists on a price or demands a
profit or fee that the contracting officer considers unreasonable, and the
contracting officer has taken all authorized actions (including determining the
feasibility of developing an alternative source) without success, the
contracting officer shall refer the contract action to a level above the
contracting officer. Disposition of the action should be documented.

67. You are negotiating a Firm Fixed Price contract type with Performance Based Payments (PBPs).
During the negotiation of the PBPs your team discovers that the expenditure profile in the PBPs
has significantly more effort occurring earlier in the period of performance than what is
included in the priced proposal. What is your analysis of this situation? The expenditure profile
in the PBPs and in the proposal must match in order to be fair to the contractor and the
government. In this situation the contractor wants money earlier using PBPs than what is in the
proposal and the proposal is pricing the effort later in the period of performance where the
rates will be higher. This scenario could lead to advance payments, which is inconsistent with
the intent of PBPs as a financing method.

68. You are in a source selection and according to the RFP the offerors are to submit a paper copy
and an electronic version of their offer. One offeror submits both versions, on time, one hour
before closing time for receipt of proposals. However, the next day, when the electronic
version
 is loaded to begin evaluations, it is found to be defective and cannot be read. What do you do
and why? Check to make sure the paper version is complete and acceptable for evaluation.
Then you may either use it or you should ask the offeror to submit another electronic version,
verify that it is the same as the paper version you already have, and then use the new electronic
version. Why? No one has been harmed or disadvantaged by this, the government could have
evaluated the paper version alone so the electronic version is merely for the convenience of the
government. FAR part 15 says that if any portion of a proposal received by the contracting
officer electronically or by facsimile is unreadable, the contracting officer immediately shall
notify the offeror and permit the offeror to resubmit the unreadable portion of the proposal.
The method and time for resubmission shall be prescribed by the contracting officer after
consultation with the offeror, and documented in the file. The resubmission shall be considered
as if it were received at the date and time of the original unreadable submission for the purpose
of determining timeliness under 15.208(a), provided the offeror complies with the time and
format requirements for resubmission prescribed by the contracting officer.

69. On 3 Sep 14 the CO awarded a contract for computer purchases using FY08 O&M (3400) funds.
The computers were to be delivered upon completion of a new building expected sometime
early in CY 15, but the contractor could have delivered the computers almost immediately
upon contract award. Are there any fiscal issues here? Yes. O&M (3400) funds are for one year.
You cannot cross FYs unless there is an exception. This could be considered a violation of the
bona fide need rule. The lead-time exception does not apply since the delivery delay is based
on the government's request and not the reality of when the contractor could actually deliver
the computers.

70. You have been assigned as the CO for a new source selection. The Program Manager wants
to receive brief written abstracts, followed by Oral Proposals and makes a convincing case
that, from an evaluation standpoint; this is the easiest method to assess the offerors'
technical abilities. What are some things you should both consider before proceeding?
Authority: FAR
15.102 / IG 5315.102

You should discuss the number of prospective offerors and the schedule/time available to
receive oral proposals. If twice (or more) the number of expected offerors respond,
government resources may not be available for the increased number. Are there facilities
available for the entire (or extended) period?

The method and criteria for documenting and evaluation the oral proposals. Are they to be
filmed? Audio recorded?

Presentation Costs. Would the cost associated with presenting oral proposals prohibit or restrict
competition? Conversely, would the cost be so low as to encourage unqualified offerors whose
presentations must be entertained (and further expend government resources).
Presentation "style". The government evaluators must be sure not to be swayed or influenced by
style over substance. The offeror with the most glossy presentation may not offer the best value
to the government.

71. You are a PCO who has inherited a problem contract. This situation is your contractor is in
the 5th year of a 15-year contract and it has now become obvious that the contractor
"bought in" with a low price during the source selection. The contractor is currently
complaining they are
 losing millions of dollars and are threatening to walk out of the contract. Your Program Manager
comes to you for advice. Given the limited scenario, discuss some of the issues that you would
consider in selecting a course of action. What possible courses of action would you consider
recommending to your Program Manager? Authority: FAR 49.402

Some issues to consider: contract type, government delays or other faults, changes in
requirements, delivery schedule, other available sources, and termination options.
Possible courses of action:
(1) Hold the contractor's feet to the fire and demand performance
(2) Alternate Disputes Resolution
(3) Negotiate an acceptable "exit"
(4) Terminate for Default
(5) Establish incentives for meeting performance measures, helping the contractor offset
a portion of their losses
(6) Renegotiate the contract to satisfy the contractor

72. Under a current contract, Contractor A is to do testing, evaluation and validation of items to
determine their use in a particular area. You are the Contracting Officer on a new source
selection that will have the successful offeror submitting items to be tested by Contractor A
under the current contract. Contractor A is one of many contractors who have expressed
interest in the new source selection. As a CO what should you consider when determining if
Contractor A may be allowed to bid as a prime contractor on this new source selection?
FAR 9.502(c) states "an organizational conflict of interest may result when
factors create an actual or potential conflict of interest on an instant contract,
or when the nature of the work to be performed on the instant contract
creates an actual or potential conflict of interest on a future acquisition." In
this latter case, some restrictions on future activities of the contractor may
be required.
In these cases, under FAR 9.504, the CO shall:
(1) analyze planned acquisitions in order to
(a) identify and evaluate potential conflicts of interests as early in the
acquisition process as possible; and
(b) avoid, neutralize, or mitigate significant potential conflicts before
contract award.
(2) obtain the advice of counsel and the assistance of appropriate technical
specialists in evaluating potential conflicts and in developing any necessary
solicitation provisions and contract clauses
(3) before issuing the solicitation, recommend to the head of the contracting
activity a course of action for resolving the conflict
(4) avoid creating unnecessary delays, burdensome information
requirements, and excessive documentation; and
(5) shall award the contract to the apparent successful offeror unless a
conflict of interest is determined to exist that cannot be avoided or mitigated.

73. You get a call from the General who wants to know what technical data rights the Air Force has
in a military purpose radar, which Company X is building for the Air Force. He wants to compete
future buys of the radar to save money. He tells you he's pretty sure we "own" all the data
since we are paying a fortune for the radar. What do you tell him? Do you have any questions
for him? Authority: FAR 52.227-14
 The data rights the Air Force has in the radar depend upon the extent to
which the U.S. Government (DoD) paid to develop the radar. If DoD agencies
exclusively paid a contractor for the development of the radar, the USAF
would then have "unlimited" rights in the data. If DoD funded part of the
development of the radar, generally speaking the USAF would have
"government purpose" rights in the data. If the contractor exclusively funded
the development of the radar the USAF would only have "limited" rights -
meaning the USAF could not disclose this data to other contractors without
consent or in a very limited circumstances. To compete a future effort, the
USAF would need government purpose rights or unlimited rights in the tech
data.

Note: Even in an instance wherein the USAF of other DoD agency exclusively
funds the development of the radar via a contractor, the U.S. agency would
not assume ownership of the data. The contractor "owns" the data while the
USAF gets an unlimited license to use the data.

74. Describe, in general terms, the relationship between various data rights under a contract
for noncommercial items and processes, and the types of funds used to develop the data?
Authority: DFARS 227.7103-5

Generally, the Government obtains unlimited rights to data developed exclusively with
Government funds; the Government obtains government purpose rights in data when developed
with mixed funding; the Government obtains limited rights to data developed exclusively at
private expense.

75. When a contractor signs a Certificate of Current Cost or Pricing Data, what does the
certificate constitute? Authority: FAR 15.406-2(b) / AFFARS 5315.406-2(c)

The certificate does not constitute a representation as to the accuracy of the contractor's
judgment on the estimate of future costs or projections. It applies to the data upon which the
judgment or estimate was based. This distinction between fact and judgment should be clearly
understood. If the contractor had information reasonably available at the time of agreement
showing that the negotiated price was not based on accurate, complete, and current data, the
contractor's responsibility is not limited by any lack of personal knowledge of the information on
the part of its negotiators.

AFFARS:
• defines "sweep"
• requires the price impact summary
• allows only downward adjustments (but does allow net-zero adjustments)
• requires the "as of" date to be the date of the agreement on price instead of the date
data submitted

76. Please define what a Certificate of Current Cost or Pricing Data is and what is its purpose?
What are some of the key things you would expect to see or review before accepting the
certificate? Authority: FAR 15.406-2
 The definition is: A certificate of Current Cost or Pricing Data certifies that to the best of the
company's knowledge, the cost or pricing data submitted were accurate, complete, and
current as of the date of agreement on price or, if applicable, an earlier date agreed upon
between the parties that is as close as practicable to the date of agreement on price. The
purpose is to have the company commit as to the accuracy, completeness, and currency of
submitted data. If the data is later found to be incorrect or appropriate data was not
submitted, the government reserves the right to downward contract price adjustment for any
monetary damages incurred.

Key things we would expect to see or review in a Certificate of Current Cost or Pricing Data are:

-The certificate is in the format shown in FAR 15.406-2

-Current as of the date of agreement on price or an earlier agreed on date
-Signed by an authorized representative of the company and dates as close as practicable to
the date when price negotiations were concluded
-Check for qualifications or new information disclosed by the sweep and evaluate its impact on
the negotiated price

Exceptions:
Adequate Price Competition
Prices set by law or regulation
Commercial Item
Waiver has been granted
Modifying a contract or subcontract for commercial items

77. You are the PCO in Source Selection and dutifully following the FAR, DFARS, etc., on a particular
issue. However, your higher leadership is now giving you "direction" which you believe is
contrary to your legal guidance. What do you do? Do you comply with the law of higher
leadership direction? First check whether the particular legal guidance is mandatory or
advisory. Check out how much discretion you have. It may be that you were being too strict or
literal and what is being directed is within your discretion. Once you determine the legal
parameters, if there is still a conflict, discuss it with your supervisor, and possibly others in the
chain of command in resolving the issue with higher leadership. The point is, you do not have
to "go it alone." Worst case scenario, if all of this fails, remember that it is your warrant on the
line. It is your obligation to ensure the integrity of the procurement system, and if that means
that you won't sign off on something, then that may be the answer.

78. Provide a brief description of defective pricing and name at least one thing you can during the
pre-award process as a contracting officer in order to protect the government's interest
during the post-award process. Authority: FAR 15.407-1

Defective Pricing. A Contractor's failure to provide current, accurate and complete data as of the
conclusion of negotiations that resulted in an increase to the contract price.

Documentation - Document what data the contractor provided and your reliance on it in the
PNM. If you did not rely on data, document this clearly in PNM. Make sure all data provided by
the contractor is included in the official contract file.

Certificate of Cost and Pricing Data - Review it! Make sure the cert does not contain any caveats
 or tries to limit the government's rights in any way. If there is a list of data attached to the cert as
having been disclosed, make sure all of it was disclosed.

TINA waiver. Only pursue TINA waivers that meet criteria in FAR & are in best interest of gov't.

Disclosure - If contractor refuses to provide data, get refusal in writing. This is extremely
important as it is an excellent tactic to get the data you need and if a contractor is crazy
enough to put in writing a refusal to give data, then the government may be entitled to
doubles (defective pricing) or it may constitute enough evidence for something far worse.

79. What are some of the main conditions necessary to have defective pricing? Authority:
FAR 15.407
There are five:
• The information in question fits the definition of cost or pricing data
• Accurate, complete, and current data existed and were reasonably available to the
contractor before the agreement on price
• Accurate, complete, and current data were not submitted or disclosed to the
Contracting Officer or one of the authorized representatives of the CO
• The government relied on the defective data in negotiating with the contactor
• The government's reliance on the defective data caused an increase in the contract price

80. How do you determine whether or not a change is within the scope of the contract? The scope
of a contract is not defined in regulations but is a fact-specific inquiry based on GAO decisions.
The relevant cases are those in which a competitor has filed a bid protest arguing that the
modification is so far outside the original scope for the contract that it should be considered a
new contracting action for which other companies should be allowed to compete. In general, a
modification is considered to be outside the scope of an existing contract when there is a
"material difference" between the contract as modified and the contract as it existed before the
modification. The rule is to examine any changes in the type of work, performance period and
costs between the contract as awarded and as modified. The PCO must look at the Acquisition
Plan, the SOW, the PNM, J&A, to determine if the change was contemplated by the parties at
the time of contract award. Neither dollar amount nor quantity of changes are sole
determinants in deciding whether a change is in or out of scope. The proposed change must
also be evaluated with the consideration as to whether it would have significantly affected the
original competition (more or different offerors, different technical approaches in the proposals,
use of commercial items, etc.).

81. Its 10:00 AM on Sep 30 2015, one of your A&AS contract specialists just walked out on you. You
now have to find someone to award 10 of her contract actions by midnight. In addition, the
Director of the squadron just dumped another $90K installation service acquisition on your
desk and he wants it awarded by midnight. You do some research and find out this is a follow-
on acquisition and was previously awarded under the 8(a) Business Development Program. Is
there any way that you can get this awarded by midnight? Why/Why Not? What
issues/challenges do you face? Since this effort was under the 8(a) program previously, I would
consult with my small business specialist to see if I could continue the effort with the same
small business. I would also conduct market research to make sure that other small businesses
could not perform the effort in accordance with 19.804-4, Repetitive Acquisitions. If the small
business specialist indicated that award could be made and market research revealed that this
should be a sole-source
 follow-on, then I would contact the SBA district office servicing my geographical area regarding
acceptance of this effort. Technically, they have 10 days to respond but most offices have
procedures in place for expedited processing of end of year requirements.

I would also need to consider whether or not the award of this effort would violate the bona
fide need rule. A recent memo from SAF/AQC reminds COs to consider severability of services
and to exercise care when obligating annual funding for severable CLINs at the end of the fiscal
year. In order for me to award, I would need to document the file with evidence that
performance or a duty to perform occurred in the fiscal year funds were available and obligated
in order to establish a bona fide need. The requirements official or financial management official
would be required to provide the evidence. In this particular instance, it may be difficult to show
a duty to perform or to show performance occurred in this fiscal year; however, if the PM or FM
were able to provide evidence, then I may be able to award the contract before midnight.

Since award is not guaranteed, I would make sure to inform the Director of the issues and I
would let him know that if award is possible, I will need support and documentation from him in
order to award by midnight.

WHAT ABOUT THE 6 month EXTENSION OF SERVICES? The CLAUSE

82. What is a Savings/Reopener Clause and when might you use it? A Savings/Reopener Clause is a
special contract provision which creates a right for an equitable adjustment to the contract
price. The equitable adjustment can be triggered by the occurrence of an event, the non-
occurrence of an event, or some future event or condition which has an unpredictable outcome.

Savings Clauses are used to overcome contingencies. When there will be a significant contingent
cost either during negotiating the contract price or during contract performance, and the parties
cannot mutually agree to resolve the contingency, the parties may consider using a Savings
Clause to provide for an equitable adjustment once the contingent price can be finalized or the
contingency does not materialize. A Savings Clause should only be used in extraordinary
situations, where time does not permit resolution of the contingency and the uncertainty of the
contingency could cause a significant impact to the contract price.

83. You are the PCO on a CPFF program which includes Army and Navy personnel as well as
personnel from your program office. The contractor contacts you to advise that additional costs
have been incurred which result in a cost overrun. What actions do you take? Determine if
the effort resulting in additional costs was used to fulfill existing contract
requirements of if government personnel asked the contractor to perform
work not specifically required. If the former, process as a normal cost overrun.
A determination would need to be made to 1) fund the overrun, 2) reduce the
scope of the effort to match available funding, or 3) terminate the effort if
that would be in the best interest of the government.

If the later, advise all parties of contract provisions regarding legal methods
of redirecting the contract and of the parties' related authority and
responsibility. May end in denial of the costs or a ratification action
84. One of the exceptions to getting certified cost or pricing data is a TINA waiver. If a large
contractor who does military business, such as Boeing, comes to you with a request for a
TINA waiver, what do you do? TINA Waivers: Section 817 of the FY03 Authorization Act
directed the Head of the Contracting Activity (HCA) may only issue waivers upon a
determination that:

• the property or services being purchased by the government cannot be reasonably

obtained without the grant of the waiver;
• the price can be determined reasonable without submission of cost or pricing data; and
• there are demonstrated benefits to granting the waiver.
• is a significant change to the previous requirements for obtaining TINA waivers - in the
past, waivers were essentially granted on the basis of (ii) and (iii)
• Congressional Reporting Requirements for waivers over $15M (also includes commercial
items over $15M)

If it's a large contractor, odds are the items can be purchased without a waiver as they have an
estimating system in place whereby they provide cost or pricing data.

85. You have a cost proposal subject to TINA and there is a subcontract over the TINA threshold.
The prime has not been forthcoming about providing a cost evaluation of the sub. What actions
can you take? Reduce the prime's profit
Consider withholding award and take the issue to management for resolution
Consider a joint review of the sub with the prime
Notify DCAA/DCMA (potential estimating system deficiency).

86. You awarded a Far Part 15 $50M FFP competitive contract to a small business 6 months ago.
You are now in the process of issuing a $750k modification to that contract. The contractor
submits a cost proposal, but states they will not provide a certificate of current cost or pricing
data. Are you ok with this? Is there an exception to TINA that applies under these
circumstances? Consider that the original award was made competitively.
Authority:
• Required for contract actions >$750k if one of the following exceptions does not apply
• Adequate price competition
• Price set by law or regulation
• TINA Waiver
• Commercial
• Modification to commercial contract or subcontract
• Reference FAR 15.403-1(b)

87. Compare and contrast progress payments & Performance Based Payments (PBP).
-PBPs don't need approved contractor accounting system, progress payments do
-both are not subject to interest provision of Prompt Payment Act
-both are contract financing for default purposes
-PBPs are based on completion of events while progress payments are given based on % of
incurred costs
-PBP's are capped at 90% price, progress payment rate varies for large (80%), small (90%), SDB
(95%)
-PBP are preferred
 -have to agree on terms for PBPs or you resort to progress payments
-Both are for FFP contracts only.

88. You are working a FAR Part 12 buy and the contractor requests commercial item financing.
They propose a schedule of time phased payments with dollar amounts due, e.g. 90 days prior
to delivery $1,250,000. What kinds of questions would you ask/research when reviewing this
proposal?
• Is financing customary? (Yes or No)
• What are normal financing terms - based on events, time, etc.
• How much financing usually provided? How does this play with proposed price?
• What kind of security will contractor provide?
• Are advanced payments limited to 15%?
• How does financing get liquidated?
89. Compare and contrast price analysis and cost analysis. Describe when each are used.
• Cost Analysis - Review and evaluation of the separate cost elements and profit in a
contractor's proposal and the application of judgment to determine how well the proposed
costs represent what the cost of the contract should be, assuming reasonable economy and
efficiency.
• COST ANALYSIS is required when (certified) cost or pricing data are required
• May be used to evaluate information other than cost or pricing data
• Price Analysis - Price analysis is the process of examining and evaluating a proposed
price without evaluating its separate cost elements and proposed profit. (15.404-1(b)(1))
• Price analysis shall be used when cost or pricing data are not required.
• (15.404-1(a)(2))
• Examples: Commercial Acquisitions, TINA Waivers, Buys less than $700k
• Even when cost analysis is required, "Price analysis should be used to verify that the
overall price offered is fair and reasonable." (15.404-1(a)(3))
• Methods
-Comparison of proposed prices received in response to the solicitation. (Preferred)
-Comparison of previously proposed prices and previous Government and commercial contract
prices with current proposed prices (Preferred)
-Use of parametric estimating methods/application of rough yardsticks
-Comparison with competitive published price lists, published market prices of commodities,
similar indices, and discount or rebate arrangements.
-Comparison of proposed prices with independent Government cost estimates.
-Comparison of proposed prices with prices obtained through market research for the same or
similar items.
-Analysis of pricing information provided by the offeror
• While the methods are very different, both are analysis techniques we use to make sure we
get fair and reasonable prices.

90. Describe a "cure notice" and when you would use one as a CO? If a contract is to be terminated
for default before delivery date, a "cure notice" is required by the Default clause. Before using
this notice, it must be ascertained that the amount of time equal to or greater than the period
of "cure" remains in the contract delivery schedule or any extension to it. If the amount of time
remaining in the contract delivery schedule is not sufficient to permit a "cure" period of 10 days
or more, the Cure Notice should NOT be issued, instead a "Show Cause Notice" may be issued.
91. You are the PCO. You have a requirement that you have determined to be sole source after
conducting market research. The estimated value of the requirement is $70M. You write a J&A
document citing the appropriate authority. What are the thresholds for approval of J&A
documents, and who is the approval authority at this threshold? J&As under $700K are
approved by the Contracting Officer. Greater than $700K, but less than $13.5M are approved by
the Competition Advocate for the Wing. Greater than $13.5M but less than $93M are approved
by the flag officer or SES level, Mr. Robinson at AFMC. Greater than $93M needs approval by the
Senior Procurement Executive at SAF/AQC. Since our estimate is for $70M, our approval
authority would be the AFMC.

92. You have been working as the PCO for a Colonel program manager who is ambitious, very
results-driven, and somewhat forceful, but has only been in acquisition for a few months after
a noteworthy career as a fighter pilot. The Colonel sends you an e-mail telling you that, since
the organization has not really had the time to properly plan the award of a new contract, he is
directing that an Undefinitized Contract Action (UCA) be used to preserve schedule. The
Colonel also summons you to his office to discuss the issue. As you gather your thoughts and
prepare to meet with the Colonel, how would you proceed? According to the FAR, lack of
planning is not a bona fide reason to issue a UCA - as a matter of fact, UCA approval
documentation should include coverage of acquisition planning accomplished to avoid the use
of a UCA. The PCO should point this out to the Colonel, but attempt to work with the Colonel to
determine alternative ways to keep on schedule or to justify issuing a UCA. In any event, UCA
approval is in the program management chain, probably at the Group/Wing Commander level.
You can also inform your boss and /or ask for help or support from him/her.

93. You are a brand new Contracting Officer and the first question that the Program Manager asks
is the following. What are the four most commonly used contract types and what is the order
from the most risky to the government to the least risky? The four most common contract types
are: Cost Plus Fixed Fee (CPFF), Cost Plus Incentive Fee (CPIF), Fixed Price Incentive Firm (FPIF),
and Firm Fixed Price (FFP). The riskiest to the government is CPFF followed by CPIF, FPIF, and
FFP.

94. You receive a letter from a contractor requesting a no cost time extension (NCTE). The
contractor states that he is behind schedule due to his subcontractor's slow progress. Your
program manager concurs with the request for the NCTE and suggests that it be processed as
an "Excusable Delay". He says it is an "Excusable Delay" because the delay is not the fault of the
prime contractor. How would you respond? FAR 52.212-4(f)
A subcontractor's slow progress is not an excusable delay.

"Excusable Delay" is defined as something beyond the reasonable control of the contractor, and
without its fault or negligence, such as, acts of God or the public enemy, acts of the Government,
fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of
common carriers.

Response to contractor: NCTE is ok, but need different rationale

95. Per FAR 16.102(c), a Cost Plus Percentage of Cost contract type is not to be used for
government contracting. Please define what a Cost Plus Percentage of Cost contract type is and
the logic behind why it is prohibited. A Cost Plus Percentage of Cost contract type is when an
agreement
 is made to apply a pre-determined fee rate against actual that will be incurred in the future. This
type contract is prohibited because it would incentivize the contract to run up costs in order to
maximize their earned fee. If you apply a pre-determined fee rate against a negotiated
prospective cost line, this is not a Cost Plus Percentage of Cost contract type.

96. You get a call from a Program Manager. His program has been experiencing difficulty getting
funding. He nearly had to stop work on his program last quarter due to a lack of funds. He is
facing the same situation this quarter. He has been trying to locate funding and thinks he has
come up with a solution. He explains to you that he can get enough procurement funding to
cover the effort for the rest of the year. Previously, the effort was funded with RDT&E funding.
As the PCO, what issues would you consider before taking action to obligate the procurement
funds? You cannot pay for RDT&E efforts with Procurement funds. This would be a violation of
the Anti-deficiency Act, which creates a Bona-fide need that deals with time, purpose and
amount. You would be augmenting the RDT&E appropriation with procurement funds. The only
way that this would be permitted is if the program has moved to a production capability. If what
you had put on contract before was RDT&E, and now you are past Milestone C and have moved
into production, you will be using production money to accomplish your requirement. This is the
only way your Program Manager can use such funds.

97. You're a PCO and your buyer, Bob, has just concluded negotiations on a $5.2M cost plus fixed
fee contract. At the conclusion of negotiations, the contractor asked Bob how long it would be
before they would receive the signed contract. The contractor is very anxious to get started on
the work because he doesn't have enough work to keep his employees on the payroll. If the
contract you and Bob are awarding doesn't start soon, the contractor will be forced to lay off
some of his employees. Bob tells the contractor that it shouldn't take more than 5 days to get
the fully executed contract awarded. The contractor tells Bob that he may even be willing to
begin work prior to contract award but he's concerned that all of his costs will be recognized
once the contract is awarded. Bob tells the contractor that he'll talk to you to see if there are
any contracting tools that can be used in this situation. What advice would you give Bob the
buyer in this scenario?
-An early effective date could be agreed upon. -Approval for the use of an early effective date
is at the Wing PK level or equivalent.
-Have to agree on terms, conditions, price
-Have to have funds
-Have to notify contractor in writing & that there is risk on contractor until award
-Have to have legal review if award is more than 30 days after effective date
-Obtain legal review for early effective dates established more than 30 days prior to the
envisioned contract award date

98. You are the Contracting Officer for a Cost Plus Incentive Fee (CPIF) acquisition. The contractor
made an offer that included an 80/20 share ratio over target and a 40/60 share ratio under
target. Your Price/Cost Analyst rejected these share ratios as being favorable to the contractor
and not in the best interest of the government. Your trainee buyer comes to you for an
explanation of why the Price/Cost Analyst rejected these ratios. You decide to use an example
of a $100,000 overrun and underrun to explain how the share ratios work mathematically.
What would you say to the trainee buyer?
-On a $100,000 overrun, with a 80/20 share ratio, the government's share would be $80,000 and
the contractor would end up paying $20,000 in the overrun.
-On a $100,000 underrun, the government would recoup $40,000 and the contractor would
receive $60,000 of the underrun.

-In both the overrun and underrun scenarios, most of the risk is carried by the government, and
that is not in the best interest of the government.
DFARS says to give appropriate weight to each stage of the acquisition (ie. When in
development, incentivize performance targets more and when in the later development and
testing, incentivize cost more.)

100. Under what circumstances is ratification of an unauthorized commitment permitted?

The head of the contracting activity may ratify an unauthorized commitment. The ratification
can only be valid when:
• Supplies or services have been provided to and accepted by the Government, or the
Government otherwise has obtained or will obtain a benefit resulting from performance of
the unauthorized commitment;
• The ratifying official has the authority to enter into a contractual commitment;
• The resulting contract would otherwise have been proper if made by an
appropriate contracting officer;
• The contracting officer reviewing the unauthorized commitment determines the price to
be fair and reasonable;
• The contracting officer recommends payment and legal counsel concurs in the
recommendation, unless agency procedures expressly do not require such
concurrence;
• Funds are available and were available at the time the unauthorized commitment was made
• The ratification is in accordance with any other limitations prescribed under
agency procedures.

101. You have a contract for engineering services with a basic period of performance and
several one year options for continued performance. The contract states that all options must
be exercised by 1 October of each year. The basic period of performance has just expired and on
5 October, you realize that you never exercised the option for continued performance. There is
still, however, an immediate need for the services. How would you try to rectify this error? Once
the option date has passed, the option has been nullified by expiration. To turn the contractor
on for continued performance, the PCO would prepare a J&A under FAR 6.3, which provides the
regulation for contracting without full and open completion. The J&A would have to show that it
wasn't just a lack of planning. Some good reasons for a J&A would be 1) only one responsible
source available, 2) unusual and compelling urgency, 3) expert services and national emergency,
4) International agreement, 5) Statutory authorization or requirement, 6) National security, or
7) Public interest. If the J&A is obtained, then the PCO would enter into a bilateral agreement
with the contractor to obtain continued performance by the same contractor, and the
contractor is entitled to renegotiate the price. The contractor is entitled to renegotiate the
price. If a J&A is not approved because it doesn't fit within the requirements of FAR 6.302, then
the PCO would need to publish a brand new solicitation for the requirements, opening it up to
other contractors to bid.
102. The end of the fiscal year '09 is coming up and you get a phone call from HQ. HQ tells you
that several million dollars just became available. They didn't want the money to go to waste so
they gave you a call. You call up a program director for a recon program who urges you to use
the money to buy spare parts for his 4 recon aircraft, which have been operating "round the
clock". He estimates that several million dollars will buy enough replenishment spares for the
remainder of the "war." Do you have any concerns? There are two issues. The Anti-Deficiency
Act deals with time, purpose and amount. We don't know from the facts what kind of money
just became available (color and appropriation year). The director wants to use the money for
an O&M (Operations and Maintenance) purposes: spares. The money that became available
might be something other than O&M money. And the Anti-deficiency Act will not allow O&M
efforts to use funding other than O&M. The money might be FY'08 funds...which you would not
be able to use either, because the requirement didn't exist in '08, and that violates the time
prong of the Anti-Deficiency Act. The second issue deals with the Bona Fide Needs Rule, which
says that appropriations are available only for the needs of the current year, (and sometimes
the previous year, if it is a continuing need), but is not available for future year needs. In this
case, the requirement for replenishment spares could possibly exist in FY09 (because by their
very nature, spares need to be in place before the actual NEED to use them.) The problem with
the director's response is that he said this will buy enough replenishment spares for the
remainder of the "war." This could mean for the next year, if he only expects the war to last
another year. But it could also mean that he expects this war to last 10 years...and buying that
many spares with current year funding is not a "bona fide need," it is considered "stockpiling"
and therefore the purchase should not be made.

103. How many years does the current status last for construction (3300) funds,
procurement (3010) funds, for R&D (3600) funds, and for O&M (3400) funds?
• O&M Funds - (3400) - active/current for 1 year; expired for 5 years; cancelled after that

• RDT&E (3600) Funds - active/current for 2 years; expired for 5 years; cancelled after that

• Procurement Funds (3010, 3020, 3080) - active/current for 3 years; expired for 5;
cancelled after that

• Construction Funds/ MILCON (3300) - active/current for 5 years; expired for 5; cancelled
after that

104. You are the Contracting Officer for a $500M acquisition that has a period of performance
spanning six years. Because of the long period of performance, you are in agreement with the
contractor that the contract includes an Economic Price Adjustment (EPA) clause. When the
contractor sends in their clause you notice that the rate of inflation in the clause is 3% per
year. You ask your Price Analyst what rate of inflation is in the proposal and she responds with
6%. Does this difference between the 3% and the 6% concern you and if so, why? Authority:
FAR 16.203-2(a) / DFARS PGI 216.203-4

This difference is definitely a concern. The two rates need to be the same so the clause is not
"gamed" in order for the contractor to receive additional money that is not reasonable through
the EPA clause. In this particular example the contractor has already priced 6% in the proposal. If
the actual rate of inflation is 5% the contractor would receive an additional 2% through the EPA
clause because the clause is built on only 3% inflation. The total inflation that would be
recognized between the proposal and the EPA adjustment would be 8%. This would result in a
windfall of the additional 2% over what is in the proposal which is a "no-no." The FAR says that
when establishing a base level, the PCO should make sure there is no duplication. DFARS says
that when using the EPA clause, use pricing assistance. AFFARS says that adjustments are
retroactive.

105. What are the seven exceptions to full and open competition? Which exception is
least preferred? Who is authorized to approve the justifications?
• 1) only one responsible source available, 2) unusual and compelling urgency, 3) expert
services and national emergency, 4)International agreement, 5) Statutory authorization or
requirement,
6) National security, or 7) Public interest.

Justification for contract actions below $700K can be approved by the PCO. Between $700K and
$13.5M would be approved by the competition advocate

106. If a contractor is included on the List of Parties Excluded from Federal Procurement
and Nonprocurement Programs, what are the rules on continuation of current contracts
with the contractor? Authority: FAR 9.405

1. Agencies may continue contracts or subcontracts in existence at the time the contractor
was debarred, suspended, or proposed for debarment unless the agency head or a designee
directs otherwise.
2. Ordering activities may continue to place orders against existing contracts, including
indefinite delivery contracts, in the absence of a termination.
3. Agencies shall not renew or otherwise extend the duration of current contracts (i.e.
exercise options), or consent to subcontracts, unless the agency head or a designee
authorized representative states, in writing, the compelling reasons for renewal or extension

107. Describe how the synopsis process can be streamlined when acquiring commercial
items? The synopsis required by FAR 5.203 and the issuance of the solicitation can be
combined into a single document. Therefore, it is not necessary to publicize a separate
synopsis 15 days before the issuance of the solicitation.

108. What are some factors that should be considered when selecting and negotiating contract
type? Price competition, price analysis, cost analysis, type and complexity of the requirement,
urgency, period of performance, contractor's technical capability and financial responsibility,
adequacy of the contractor's accounting system, concurrent contracts, proposed
subcontracting, and acquisition history. Design stability should also be considered.

AFFARS says that incentives are powerful tools that should be used when appropriate

109. What actions can a contracting officer take to ensure that any excess of the
unliquidated progress payments over the contractual limitation is promptly corrected?
Authority: FAR 32.503-12
1. Increase the liquidation rate.
2. Reduce the progress payment rate.
3. Suspend progress payments.
110. What are the clearance thresholds for a competitive and noncompetitive acquisition?
Who would be the CAA for each threshold?
Competitive:
>$1B : SCCO
>$50M < $1B: SCCO
>$25M < $50M: One level below the SCCO
->Chief of the Contracting Office
->Chief of Contracting Division
>$5M < $25M: Two levels below the SCCO

Noncompetitive:
>$500M: DAS(C)/ADAS(C), Business Clearance Only
SCCO for Contract Clearance
>$50M < $500M: SCCO
>$25M < $50M: One level below the SCCO
->Chief of the Contracting Office
->Chief of Contracting Division
>$5M < $25M: Two levels below the SCCO

111. What is the difference between business and contract clearance in a

competitive procurement? Business clearance is required to issue the
solicitation.
When awarding without discussions, contract clearance is required to award.
When awarding with discussions, contract clearance is required prior to the
request for final proposal revisions (FPRs) and again prior to award.

112. What is the difference between business and contract clearance in a

noncompetitive procurement? Business clearance is required prior to beginning
negotiations.
Contract clearance is required prior to award (this may be waived at business clearance).