CLC 058 ACTUAL EXAM 2026-2027\NEWEST
UPDATE WITH COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS\VERIFIED 100%
GRADED A+
Facilities Capital Cost of Money
FCCOM is used to compensate contractors for use of capital without regard to
whether the source is owner's equity or borrowed. It is designed to help
contractors achieve a return on their investment in facilities capital. It is NOT
considered interest on borrowing, which is unallowable according to the FAR.
Fair and Reasonable Price
A price must be considered fair to both parties. A price that a prudent and
competent buyer would be willing to pay is a reasonable price. A fair and
reasonable price is dependent on the market conditions, general economic
conditions, promised quality, competition, alternative approaches, and timeliness
of contract performance.
,Forward Pricing Rate Agreement
A written agreement negotiated between a contractor and the Government to
make certain rates available during a specified period for use in pricing contracts
or modifications.
General and Administrative Expense
Any management, financial, and other expense which is incurred by or allocated
to a business unit and which is for the general management and administration of
the business unit as a whole.
Indirect Cost
Any cost not directly identified with a single final cost objective, but identified
with two or more final cost objectives (i.e. contracts) or with at least one
intermediate cost objective.
Indirect Cost Rate
A percentage or dollar factor that expresses the ratio of indirect expense
incurred in a given period to an appropriate base for the same period.
Price
Cost plus any fee or profit applicable to the contract.
Pricing
The process of establishing a reasonable amount to be paid for supplies or
services.
,Note that the terms cost or pricing data and certified cost or pricing data are
purely fact-based, while data other than certified cost or pricing data often
includes judgmental information as well. The Federal Acquisition Regulation
(FAR) defines many of these terms in even greater detail (see FAR 2.101). But don't
worry. These terms may seem like a lot to absorb now, but you'll get acquainted
with them by the end of the lesson! Also note that FAR 15.408 includes relevant
solicitation provisions and contract clauses.
The Truth in Negotiations Act (TINA) established the requirement for submission
of cost or pricing data and for contractors to certify that the data is accurate,
complete, and current for the award of a negotiated contract (unless an
exception per FAR 15.403-1(b) applies).
, 2/15/26, 12:49 PM CLC 058
The current TINA threshold effective on 1 July 2018 (and in accordance with
Defense Pricing and Acqusition Policy (DPAP) Memo, Subject: Certified Cost and
Pricing Data, dated 13 April 2018) is $2,000,000. Even though DPAP is now
Defense Pricing and Contracting (DPC), the memo is still in effect
TINA also applies to contract modifications—even if certified cost or pricing data
was not required on the initial contract—and takes into account the total of
positive and negative adjustments that may exceed $2 million. Link to example
According to FAR 15.403-1, the primary prohibition on obtaining certified cost or
pricing data is for acquisitions at or below the simplified acquisition threshold
(SAT). This accounts for most of the contract actions in the DoD that are exempt
from the certified cost or pricing data requirement. However, this prohibition is in
a category all by itself and is not considered an "exception."
The five "exceptions" to the requirement are:
When the contracting officer determines that prices agreed upon are based on
adequate price competition;
When the contracting officer determines that prices agreed upon are based on
prices set by law or regulation;
When a commercial item is being acquired;
When a waiver has been granted by the Head of the Contracting Activity; and
When modifying a contract or subcontract for commercial items.
/ 4/40
UPDATE WITH COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS\VERIFIED 100%
GRADED A+
Facilities Capital Cost of Money
FCCOM is used to compensate contractors for use of capital without regard to
whether the source is owner's equity or borrowed. It is designed to help
contractors achieve a return on their investment in facilities capital. It is NOT
considered interest on borrowing, which is unallowable according to the FAR.
Fair and Reasonable Price
A price must be considered fair to both parties. A price that a prudent and
competent buyer would be willing to pay is a reasonable price. A fair and
reasonable price is dependent on the market conditions, general economic
conditions, promised quality, competition, alternative approaches, and timeliness
of contract performance.
,Forward Pricing Rate Agreement
A written agreement negotiated between a contractor and the Government to
make certain rates available during a specified period for use in pricing contracts
or modifications.
General and Administrative Expense
Any management, financial, and other expense which is incurred by or allocated
to a business unit and which is for the general management and administration of
the business unit as a whole.
Indirect Cost
Any cost not directly identified with a single final cost objective, but identified
with two or more final cost objectives (i.e. contracts) or with at least one
intermediate cost objective.
Indirect Cost Rate
A percentage or dollar factor that expresses the ratio of indirect expense
incurred in a given period to an appropriate base for the same period.
Price
Cost plus any fee or profit applicable to the contract.
Pricing
The process of establishing a reasonable amount to be paid for supplies or
services.
,Note that the terms cost or pricing data and certified cost or pricing data are
purely fact-based, while data other than certified cost or pricing data often
includes judgmental information as well. The Federal Acquisition Regulation
(FAR) defines many of these terms in even greater detail (see FAR 2.101). But don't
worry. These terms may seem like a lot to absorb now, but you'll get acquainted
with them by the end of the lesson! Also note that FAR 15.408 includes relevant
solicitation provisions and contract clauses.
The Truth in Negotiations Act (TINA) established the requirement for submission
of cost or pricing data and for contractors to certify that the data is accurate,
complete, and current for the award of a negotiated contract (unless an
exception per FAR 15.403-1(b) applies).
, 2/15/26, 12:49 PM CLC 058
The current TINA threshold effective on 1 July 2018 (and in accordance with
Defense Pricing and Acqusition Policy (DPAP) Memo, Subject: Certified Cost and
Pricing Data, dated 13 April 2018) is $2,000,000. Even though DPAP is now
Defense Pricing and Contracting (DPC), the memo is still in effect
TINA also applies to contract modifications—even if certified cost or pricing data
was not required on the initial contract—and takes into account the total of
positive and negative adjustments that may exceed $2 million. Link to example
According to FAR 15.403-1, the primary prohibition on obtaining certified cost or
pricing data is for acquisitions at or below the simplified acquisition threshold
(SAT). This accounts for most of the contract actions in the DoD that are exempt
from the certified cost or pricing data requirement. However, this prohibition is in
a category all by itself and is not considered an "exception."
The five "exceptions" to the requirement are:
When the contracting officer determines that prices agreed upon are based on
adequate price competition;
When the contracting officer determines that prices agreed upon are based on
prices set by law or regulation;
When a commercial item is being acquired;
When a waiver has been granted by the Head of the Contracting Activity; and
When modifying a contract or subcontract for commercial items.
/ 4/40
