ACO CORB Study UPDATED ACTUAL Questions and CORRECT Answers
What are the responsibilities of an ACO? The ACO should ensure that the best interests of the Government are protected
by ensuring the terms and conditions of the contracts are appropriate. all parties
execute the contract according to the terms and condition
Examples of responsibilities of an ACO? Conduct post award conferences, negotiate forward pricing rate agreements,
determine allowability of costs, establish final indirect costs and billing rates,
process novation and name change agreements, and perform administrative
closeout procedures.
What is the difference between an ACO and CA? The ACO has a warrant that binds the Government. The ACO's decisions and
documents are binding. The CA prepares documents up to signature but cannot
bind the Government.
What is the relationship between the prime and Privity - If the Government has a contract with the prime contractor; there is
subcontractor? privity of contract between the Government and the prime. If the prime has a
contract with its subcontractors, privity of contract exists between the prime and
its subcontractor. No privity of contract exists between the Government and the
sub (unless there is another contract with them). If no privity, you cannot negotiate
directly with the sub or direct the sub to take any action.
Generally speaking how long are funds available before 5 years
they cancel?
Who can authorize the use of Advanced Payments? PCO
,What is the difference between finance payments and Finance payments are payments made to a contractor prior to acceptance of
invoice payments? product/service, while invoice payments are made based on acceptance of
product/service.
Examples of financing payments Progress Payments based on cost or completion of work, Performance Based
Payments, Advanced Payments or Interim Payment/Voucher for cost type
contracts.
What is the least preferred method of financing. Advanced Payments
What would be reasons for an ACO to suspend or reduce 1. Non-compliance with material requirement of contract (ex. Approved
progress payments? FAR 32.503-6, Clause 52.232-29 Accounting system)
2. Unsatisfactory financial condition
3. Inventory in excess of contract requirements (unreasonable)
4. Failure to make adequate progress
5. Delinquent in paying subs
6. Operating in a loss condition
What are Performance Based Payments? Payments based on achievement of specific, measurable events or
accomplishments that are defined and valued in contract. These events should be
identified as cumulative or stand alone events, clearly describe the events and
how they will be validated, and the value for each accepted event. • Not used for
smaller contracts
Not used for contracts less than 6 months
What does it mean when it's said progress payments are The Government recoups contract funds through the deduction of payment of
self-liquidating? invoices at the time of completed contract line items. When invoicing for
supplies/services, the debt is paid by taking a percentage of the invoice. When
the contractor submits a progress payments on the DD1443 form the contractor
will not bill for the amount of there liquidating rate. The total billed amount will be
added and totaled in WIP. Upon delivery of the product, the contractor submits
an invoice for the total amount of the contract or line item and DFAS will empty
the WIP amount recouping those funds and paying and the amount billed minus
the WIP amount for the total amount owed.
What is needed before approving Progress Payments The ACO shall ensure the contractor has an adequate accounting system and
and PBP Payments? contracts that ensure the government is otherwise protected against loss by
additional protective provisions. Additional provisions may include risk
assessment, cost benefit analysis, first article dollar limitation, surveillance plan.
Ensure the Master Payment Schedule in MOCAS is completed
What are the different types of financing payments and 1. Advance Payments - May be used on any type of contract but must be
on what type of contract may they be used? authorized by PCO and is used sparingly
2. Performance Based Payments - used on fixed price contracts only
3. Progress Payments - May be used on Fixed Price line items; Payments are made
on the basis of either a percentage of completion of work (FAR32.101,102) or the
incurrence of costs
4. Loan Guarantee - Made by Federal Reserve banks, on behalf of designated
guaranteeing agencies, to enable contracts to obtain financing from private
sources
5. Interim Payment on Cost Type Contracts
, What are the ACO's responsibilities for Progress 1. Determine if the use of progress payments are pratical
Payments? 2. Ensure contractor meets FAR 32.104(d) requirements
a. Small business (90%)
i. can't bill for first delivery prior to 4 months
ii. exceeds SAT ($150,000)
iii. Demonstrates an actual financial need
b. Not a small business (80%)
i. Can't bill for first delivery prior to 6 months
ii. Contract price exceeds $2.5M
iii. Demonstrates an actual financial need
3. Ensure MOCAS Prog Pay Master is updated to reflect rates, distro, etc
4. Ensure progress payment requests (PPRs) are processed promptly
5. Validate and approve/disapprove all PPRs
6. Ensure Progress payments are limited to interim financing of non-commercial
FFP Contracts, orders or line items
PBP Steps 1. Identify PBP events (contractor proposed)
2. Establish completion criteria
3. Obtain/evaluate contractors expenditure profile
4. Establish event values
5. Determine the type of event: severable or cumulative
6. Incorporate PBP Arrangements into table/special provision
Criteria that should not be used for PBP's: • Signing of a contract or contract modification
• Exercise of contract options
• The passage of time
• Attendance at meetings, conferences, seminars
• The expenditures of funds
• A surrogate for incurred costs
• Delivery of material, supplies or services via DD250
• Payment for cost-reimburseable line items
• Payment for goods or services
• Payment for partial deliveries
• An incentive arrangement
• Equal payment for each event/performance criteria
What is the difference between expiring vs canceling Expiring Funds can no longer be obligated but can be used to pay contractors
funds?
Canceled funds can no longer be obligated or paid
Expiring Funds can no longer be obligated but can be used to pay contractors
Canceling funds Canceled funds can no longer be obligated or paid
What are the responsibilities of an ACO? The ACO should ensure that the best interests of the Government are protected
by ensuring the terms and conditions of the contracts are appropriate. all parties
execute the contract according to the terms and condition
Examples of responsibilities of an ACO? Conduct post award conferences, negotiate forward pricing rate agreements,
determine allowability of costs, establish final indirect costs and billing rates,
process novation and name change agreements, and perform administrative
closeout procedures.
What is the difference between an ACO and CA? The ACO has a warrant that binds the Government. The ACO's decisions and
documents are binding. The CA prepares documents up to signature but cannot
bind the Government.
What is the relationship between the prime and Privity - If the Government has a contract with the prime contractor; there is
subcontractor? privity of contract between the Government and the prime. If the prime has a
contract with its subcontractors, privity of contract exists between the prime and
its subcontractor. No privity of contract exists between the Government and the
sub (unless there is another contract with them). If no privity, you cannot negotiate
directly with the sub or direct the sub to take any action.
Generally speaking how long are funds available before 5 years
they cancel?
Who can authorize the use of Advanced Payments? PCO
,What is the difference between finance payments and Finance payments are payments made to a contractor prior to acceptance of
invoice payments? product/service, while invoice payments are made based on acceptance of
product/service.
Examples of financing payments Progress Payments based on cost or completion of work, Performance Based
Payments, Advanced Payments or Interim Payment/Voucher for cost type
contracts.
What is the least preferred method of financing. Advanced Payments
What would be reasons for an ACO to suspend or reduce 1. Non-compliance with material requirement of contract (ex. Approved
progress payments? FAR 32.503-6, Clause 52.232-29 Accounting system)
2. Unsatisfactory financial condition
3. Inventory in excess of contract requirements (unreasonable)
4. Failure to make adequate progress
5. Delinquent in paying subs
6. Operating in a loss condition
What are Performance Based Payments? Payments based on achievement of specific, measurable events or
accomplishments that are defined and valued in contract. These events should be
identified as cumulative or stand alone events, clearly describe the events and
how they will be validated, and the value for each accepted event. • Not used for
smaller contracts
Not used for contracts less than 6 months
What does it mean when it's said progress payments are The Government recoups contract funds through the deduction of payment of
self-liquidating? invoices at the time of completed contract line items. When invoicing for
supplies/services, the debt is paid by taking a percentage of the invoice. When
the contractor submits a progress payments on the DD1443 form the contractor
will not bill for the amount of there liquidating rate. The total billed amount will be
added and totaled in WIP. Upon delivery of the product, the contractor submits
an invoice for the total amount of the contract or line item and DFAS will empty
the WIP amount recouping those funds and paying and the amount billed minus
the WIP amount for the total amount owed.
What is needed before approving Progress Payments The ACO shall ensure the contractor has an adequate accounting system and
and PBP Payments? contracts that ensure the government is otherwise protected against loss by
additional protective provisions. Additional provisions may include risk
assessment, cost benefit analysis, first article dollar limitation, surveillance plan.
Ensure the Master Payment Schedule in MOCAS is completed
What are the different types of financing payments and 1. Advance Payments - May be used on any type of contract but must be
on what type of contract may they be used? authorized by PCO and is used sparingly
2. Performance Based Payments - used on fixed price contracts only
3. Progress Payments - May be used on Fixed Price line items; Payments are made
on the basis of either a percentage of completion of work (FAR32.101,102) or the
incurrence of costs
4. Loan Guarantee - Made by Federal Reserve banks, on behalf of designated
guaranteeing agencies, to enable contracts to obtain financing from private
sources
5. Interim Payment on Cost Type Contracts
, What are the ACO's responsibilities for Progress 1. Determine if the use of progress payments are pratical
Payments? 2. Ensure contractor meets FAR 32.104(d) requirements
a. Small business (90%)
i. can't bill for first delivery prior to 4 months
ii. exceeds SAT ($150,000)
iii. Demonstrates an actual financial need
b. Not a small business (80%)
i. Can't bill for first delivery prior to 6 months
ii. Contract price exceeds $2.5M
iii. Demonstrates an actual financial need
3. Ensure MOCAS Prog Pay Master is updated to reflect rates, distro, etc
4. Ensure progress payment requests (PPRs) are processed promptly
5. Validate and approve/disapprove all PPRs
6. Ensure Progress payments are limited to interim financing of non-commercial
FFP Contracts, orders or line items
PBP Steps 1. Identify PBP events (contractor proposed)
2. Establish completion criteria
3. Obtain/evaluate contractors expenditure profile
4. Establish event values
5. Determine the type of event: severable or cumulative
6. Incorporate PBP Arrangements into table/special provision
Criteria that should not be used for PBP's: • Signing of a contract or contract modification
• Exercise of contract options
• The passage of time
• Attendance at meetings, conferences, seminars
• The expenditures of funds
• A surrogate for incurred costs
• Delivery of material, supplies or services via DD250
• Payment for cost-reimburseable line items
• Payment for goods or services
• Payment for partial deliveries
• An incentive arrangement
• Equal payment for each event/performance criteria
What is the difference between expiring vs canceling Expiring Funds can no longer be obligated but can be used to pay contractors
funds?
Canceled funds can no longer be obligated or paid
Expiring Funds can no longer be obligated but can be used to pay contractors
Canceling funds Canceled funds can no longer be obligated or paid
