CON 3990 / CON 3990V Ultimate Master 2026/2027 |
Latest Update 2026/2027 | Final Mock Exams + 230
Questions & Answers | Verified Study Guide | Complete
Exam Prep
You are procuring a commercially available IT system under FAR Part 12. The vendor provides a
catalog price but offers a 10% discount to the government. What method would you use for
determining fair and reasonable pricing under FAR 13.106-3?
1. Conduct a detailed cost analysis since it is a high-value purchase.
2. Compare the offered price to market research and catalog prices.
3. Require certified cost or pricing data (FAR 15.403-4).
4. Use parametric estimating models to validate the price. - correct answer -2. Compare the offered
price to market research and catalog prices.
You are procuring 500 desktop computers for a federal agency. The computers are commercially
available with minor configuration changes to meet government cybersecurity standards. The vendor
provides a catalog price of $1,200 per unit but offers a 10% government discount.
1. Cost analysis - Break down labor, materials, and overhead costs.
2. Price analysis - Compare the discounted price to market research and GSA Schedule prices.
3. Defective pricing review - Verify if the contractor submitted accurate cost data.
4. Forward pricing rate agreement (FPRA) - Use pre-negotiated indirect rates. - correct answer -2. Price
analysis - Compare the discounted price to market research and GSA Schedule prices.
When is cost analysis not required under FAR 15.403-1?
1. When the item is commercially available.
2. When adequate price competition exists.
3. When the procurement is below the simplified acquisition threshold.
4. All of the above. - correct answer -4. All of the above.
You are evaluating a Cost-Reimbursement contract proposal. The contractor's estimated labor rates
appear significantly lower than industry standards. What should you do to assess the proposal properly?
,1. Accept the proposed costs since the contractor is responsible for cost control.
2. Conduct a cost realism analysis to determine if the proposed costs are realistic.
3. Reject the proposal for being unrealistically low.
4. Convert the contract to Firm-Fixed-Price to avoid cost risks. - correct answer -2. Conduct a cost
realism analysis to determine if the proposed costs are realistic.
What is the primary purpose of cost realism analysis?
1. To determine the lowest-priced offer
2. To assess whether an offeror's proposed costs are realistic for the work to be performed
3. To verify that all offerors are compliant with the Service Contract Act
4. To ensure compliance with the Truth in Negotiations Act (TINA) - correct answer -2. To assess
whether an offeror's proposed costs are realistic for the work to be performed
When is cost realism analysis required?
1. Only for fixed-price contracts
2. Only for cost-reimbursement contracts
3. For both cost-reimbursement contracts and fixed-price contracts when evaluating competitive
proposals
4. Only when the offeror has a history of cost overruns - correct answer -2. Only for cost-
reimbursement contracts
Which of the following is NOT a key element of cost analysis?
1. Evaluating the necessity of proposed costs
2. Verifying cost or pricing data under TINA
3. Comparing proposed costs to historical costs
4. Ensuring the offeror's profit is maximized - correct answer -4. Ensuring the offeror's profit is
maximized
What is the primary purpose of cost analysis in federal contracting?
1. To determine the lowest price technically acceptable (LPTA) offer
,2. To evaluate the reasonableness, allocability, and allowability of proposed costs
3. To compare prices among competing vendors without reviewing cost elements
4. To ensure the contractor's profit margin is minimized - correct answer -2. To evaluate the
reasonableness, allocability, and allowability of proposed costs
Which of the following is NOT a common method of price analysis?
1. Comparison of proposed prices with independent government cost estimates (IGCE)
2. Market research and historical pricing data
3. Reviewing the contractor's payroll records for direct labor rates
4. Comparing competing offers in a competitive procurement - correct answer -3. Reviewing the
contractor's payroll records for direct labor rates
Cost realism analysis is most critical in which type of contract?
1. Firm-Fixed-Price (FFP)
2. Time-and-Materials (T&M)
3. Cost-Reimbursement (CR)
4. Fixed-Price Incentive (FPI) - correct answer -3. Cost-Reimbursement (CR)
What is the key difference between cost analysis and price analysis?
1. Cost analysis evaluates individual cost elements, while price analysis compares overall prices
2. Price analysis is only used for commercial items, while cost analysis is for services
3. Cost analysis is optional, while price analysis is mandatory
4. Price analysis requires certified cost or pricing data, while cost analysis does not - correct answer -1.
Cost analysis evaluates individual cost elements, while price analysis compares overall prices
Which of the following best describes "profit" in federal contracting?
1. A fixed percentage added to all contracts
2. The amount negotiated as fee for the contractor's work, considering risk and performance
3. Always capped at 10% of total costs
, 4. Only applicable to commercial item acquisitions - correct answer -2. The amount negotiated as fee
for the contractor's work, considering risk and performance
What is the primary purpose of an Independent Government Cost Estimate (IGCE)?
1. To provide a benchmark for evaluating contractor proposals
2. To disclose the government's budget to contractors
3. To replace the need for cost or price analysis
4. To determine the contractor's actual incurred costs - correct answer -1. To provide a benchmark for
evaluating contractor proposals
Which FAR part primarily governs cost principles for contracts with commercial organizations?
1. FAR Part 15
2. FAR Part 16
3. FAR Part 31
4. FAR Part 52 - correct answer -3. FAR Part 31
A vendor claims their $1.2M software license is a commercial item and refuses cost data. Market
research shows similar products at $800K-$1M. What should you do?
1. Accept the $1.2M price—commercial items are exempt from TINA.
2. Require cost data—the price is above market.
3. Negotiate to $1M using market research.
4. Cancel the procurement. - correct answer -3. Negotiate to $1M using market research.
During pre-award cost analysis, you notice a contractor included $50,000 for employee bonuses in their
proposed costs. The bonuses are tied to company-wide performance, not the specific contract. How
should you treat this cost?
1. Allow it - Bonuses are always allowable under FAR Part 31.
2. Disallow it - Bonuses must be directly related to the contract (FAR 31.205-6).
3. Split the cost 50/50 between the government and contractor.
4. Request a waiver from the Head of Contracting Activity (HCA). - correct answer -2. Disallow it -
Bonuses must be directly related to the contract (FAR 31.205-6).
Latest Update 2026/2027 | Final Mock Exams + 230
Questions & Answers | Verified Study Guide | Complete
Exam Prep
You are procuring a commercially available IT system under FAR Part 12. The vendor provides a
catalog price but offers a 10% discount to the government. What method would you use for
determining fair and reasonable pricing under FAR 13.106-3?
1. Conduct a detailed cost analysis since it is a high-value purchase.
2. Compare the offered price to market research and catalog prices.
3. Require certified cost or pricing data (FAR 15.403-4).
4. Use parametric estimating models to validate the price. - correct answer -2. Compare the offered
price to market research and catalog prices.
You are procuring 500 desktop computers for a federal agency. The computers are commercially
available with minor configuration changes to meet government cybersecurity standards. The vendor
provides a catalog price of $1,200 per unit but offers a 10% government discount.
1. Cost analysis - Break down labor, materials, and overhead costs.
2. Price analysis - Compare the discounted price to market research and GSA Schedule prices.
3. Defective pricing review - Verify if the contractor submitted accurate cost data.
4. Forward pricing rate agreement (FPRA) - Use pre-negotiated indirect rates. - correct answer -2. Price
analysis - Compare the discounted price to market research and GSA Schedule prices.
When is cost analysis not required under FAR 15.403-1?
1. When the item is commercially available.
2. When adequate price competition exists.
3. When the procurement is below the simplified acquisition threshold.
4. All of the above. - correct answer -4. All of the above.
You are evaluating a Cost-Reimbursement contract proposal. The contractor's estimated labor rates
appear significantly lower than industry standards. What should you do to assess the proposal properly?
,1. Accept the proposed costs since the contractor is responsible for cost control.
2. Conduct a cost realism analysis to determine if the proposed costs are realistic.
3. Reject the proposal for being unrealistically low.
4. Convert the contract to Firm-Fixed-Price to avoid cost risks. - correct answer -2. Conduct a cost
realism analysis to determine if the proposed costs are realistic.
What is the primary purpose of cost realism analysis?
1. To determine the lowest-priced offer
2. To assess whether an offeror's proposed costs are realistic for the work to be performed
3. To verify that all offerors are compliant with the Service Contract Act
4. To ensure compliance with the Truth in Negotiations Act (TINA) - correct answer -2. To assess
whether an offeror's proposed costs are realistic for the work to be performed
When is cost realism analysis required?
1. Only for fixed-price contracts
2. Only for cost-reimbursement contracts
3. For both cost-reimbursement contracts and fixed-price contracts when evaluating competitive
proposals
4. Only when the offeror has a history of cost overruns - correct answer -2. Only for cost-
reimbursement contracts
Which of the following is NOT a key element of cost analysis?
1. Evaluating the necessity of proposed costs
2. Verifying cost or pricing data under TINA
3. Comparing proposed costs to historical costs
4. Ensuring the offeror's profit is maximized - correct answer -4. Ensuring the offeror's profit is
maximized
What is the primary purpose of cost analysis in federal contracting?
1. To determine the lowest price technically acceptable (LPTA) offer
,2. To evaluate the reasonableness, allocability, and allowability of proposed costs
3. To compare prices among competing vendors without reviewing cost elements
4. To ensure the contractor's profit margin is minimized - correct answer -2. To evaluate the
reasonableness, allocability, and allowability of proposed costs
Which of the following is NOT a common method of price analysis?
1. Comparison of proposed prices with independent government cost estimates (IGCE)
2. Market research and historical pricing data
3. Reviewing the contractor's payroll records for direct labor rates
4. Comparing competing offers in a competitive procurement - correct answer -3. Reviewing the
contractor's payroll records for direct labor rates
Cost realism analysis is most critical in which type of contract?
1. Firm-Fixed-Price (FFP)
2. Time-and-Materials (T&M)
3. Cost-Reimbursement (CR)
4. Fixed-Price Incentive (FPI) - correct answer -3. Cost-Reimbursement (CR)
What is the key difference between cost analysis and price analysis?
1. Cost analysis evaluates individual cost elements, while price analysis compares overall prices
2. Price analysis is only used for commercial items, while cost analysis is for services
3. Cost analysis is optional, while price analysis is mandatory
4. Price analysis requires certified cost or pricing data, while cost analysis does not - correct answer -1.
Cost analysis evaluates individual cost elements, while price analysis compares overall prices
Which of the following best describes "profit" in federal contracting?
1. A fixed percentage added to all contracts
2. The amount negotiated as fee for the contractor's work, considering risk and performance
3. Always capped at 10% of total costs
, 4. Only applicable to commercial item acquisitions - correct answer -2. The amount negotiated as fee
for the contractor's work, considering risk and performance
What is the primary purpose of an Independent Government Cost Estimate (IGCE)?
1. To provide a benchmark for evaluating contractor proposals
2. To disclose the government's budget to contractors
3. To replace the need for cost or price analysis
4. To determine the contractor's actual incurred costs - correct answer -1. To provide a benchmark for
evaluating contractor proposals
Which FAR part primarily governs cost principles for contracts with commercial organizations?
1. FAR Part 15
2. FAR Part 16
3. FAR Part 31
4. FAR Part 52 - correct answer -3. FAR Part 31
A vendor claims their $1.2M software license is a commercial item and refuses cost data. Market
research shows similar products at $800K-$1M. What should you do?
1. Accept the $1.2M price—commercial items are exempt from TINA.
2. Require cost data—the price is above market.
3. Negotiate to $1M using market research.
4. Cancel the procurement. - correct answer -3. Negotiate to $1M using market research.
During pre-award cost analysis, you notice a contractor included $50,000 for employee bonuses in their
proposed costs. The bonuses are tied to company-wide performance, not the specific contract. How
should you treat this cost?
1. Allow it - Bonuses are always allowable under FAR Part 31.
2. Disallow it - Bonuses must be directly related to the contract (FAR 31.205-6).
3. Split the cost 50/50 between the government and contractor.
4. Request a waiver from the Head of Contracting Activity (HCA). - correct answer -2. Disallow it -
Bonuses must be directly related to the contract (FAR 31.205-6).
