Contracting Officer warrant board
questions
You are the PCO for a major competitive negotiated source selection. The RFP, which reflects the user's
requirements and is based on the user's budget, has a requirement for 220 cargo loaders to be delivered
at 55 per year over the next four years. One offeror proposes to deliver all 220 loaders in the first year at
a dramatically reduced price. Can you accept the offeror's proposal? What factors should you consider in
your decision? correct answerYou can accept the offeror's proposal under certain circumstances. Firstly,
what did the RFP say about alternate proposals? Is this a situation where requirements are changed and
the other offerors should be allowed to propose on the basis of the changed requirements? You need to
ask the user if he wants all 220 in the first year and are the operating locations physically able to
accommodate their loaders in the first year. Finally, the offeror could be taken into discussions and
asked to conform to the RFP with there being the possibility of not being selected for award or
elimination from the competitive range if the proposal is not made compliant with the RFP.
You are the PCO on a new $2B aircraft development program. The program is in contract negotiations
for a Fixed Price Incentive (Firm Target) System Development and Demonstration contract award to a
sole source contractor. The program director, a fast-burning young colonel, e-mails you that she is very
concerned with the aircraft's ultimate speed at the full specification payload. She would like the
contractor to achieve the faster, desired objective speed rather than the mandatory threshold speed,
and thinks that an objective performance incentive would be the way to go to achieve her goal. You are
asked to go to her office and discuss the matter and the issues involved in using such an incentive. What
do you tell the colonel? correct answerThere are a number of considerations for the colonel:
The desired additional speed should provide benefit to the Government in order to justify the
expenditure of funds to achieve it. The colonel should be able to articulate the justification.
The situation is very amenable to a classic performance incentive that would allow the contractor to
earn profit for achieving the desired speed above and beyond what the final FPIF profit would be for
achieving threshold speed. If the contractor perceives this can't happen, he will either not sign up to the
incentive or will ignore it from Day One.
The incentive and resulting payment have to be structured so as to be based on observable, measurable
results that would determine how much is earned by the contractor. Subjectivity is not allowable under
current AF policy without HCA approval.
We have to be very careful to understand what possible unintended consequences could be caused by
the existence of this feature in the contract. For example, will the contractor reduce aircraft weight
,beyond safe limits in order to help achieve the payment? Also, will the contractor consume excessive
schedule to get the extra speed?
There has to be a cost incentive in place so that the contractor doesn't spend an unconstrained amount
of money to win the payment, such as under a CPFF contract. The FPIF share line serves this purpose
when balanced against the incentive.
The incentive has to be balanced with the FPIF share line so that the contractor doesn't spend more
money to achieve the desired speed than he has potential to earn by receiving the payment. Similarly,
the contractor can't be allowed to spend an excessive amount of money with little cost penalty to
achieve success.
In some cases, Contracting Officers are also Grants Officers. They can award Grants and Assistance
Instruments as well as contracts. What is Assistance? How does it differ from Acquisition? What gives
the Grants Officers their authority to enter into assistance? What are the types of Assistance? correct
answerWhen the principal purpose is to transfer a thing of value, to carry out a public purpose of
support or stimulation authorized by law of the United States, it is Assistance.
Acquisition, by contrast, has the principal purpose of acquiring property or services for the direct benefit
or use of the United States Government.
Federal agencies must be authorized by statute to support or stimulate a public purpose. The statutory
authority from Congress must exist either in broad legislation or in a program-specific statute. Absent
that statutory authority, a Grants Officer may not use an assistance instrument.
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of Defense by statute,
e.g., 10 U.S.C. 2391; (2) Authority provided to DoD components that requires no delegation by the
Secretary of Defense, e.g., 10 U.S.C. 2358; (3) Authority coming indirectly from statutes, i.e., federal
statute authorizing a program that is consistent with using a grant or cooperative agreement.
Two types of Assistance are Grants and Cooperative Agreements. They differ in the following way: In a
Grant, substantial involvement is not expected between the agency and the recipient. In Cooperative
Agreement, substantial involvement is expected between the agency and the recipient. Cooperative
Agreements, then, are particularly useful in the research arena when the Government is interested in
being involved in program decisions or may be doing some testing or research themselves.
You are the Contracting Officer on a new Research and Development program. Proposals were recently
received in response to a Broad Agency Announcement, and a Cost Plus Fixed Fee contract type is
anticipated. The proposal most favored by the technical team was priced significantly under what was
estimated for the effort. The contractor proposed fee in an amount that equates to 20% of the
estimated cost. The users have more than enough funds to cover the proposal and want you to accept
,the price as is. How should you advise the user and what factors should you consider in determining a
reasonable fee? correct answerThe statutory limitation on fee for CPFF type contracts do no permit
exceeding 15% of estimated cost for experimental, developmental, or research performed under a CPFF
contract. Since the proposed amount of fee is outside the statutory limitations you need to determine
what a fair and reasonable rate is that falls within the limitations. The FAR recommends a structured
approach for determining fee such as Weighted Guidelines. If a cost reasonableness review determines
the estimated costs to be acceptable, we can still negotiate and adjust the fee.
You are the Contracting Officer for a well established transport aircraft program. The program is nearing
the end of production. A Program Manager approaches you requesting that you issue a Broad Area
Announcement (BAA) to support the development of a source list to supply active noise reducing
headsets. The headsets are commercially available from multiple sources and the PM wants to receive
performance specification sheets from each offeror and then request sample headsets be submitted for
testing. The end result of the effort will be the development of a source list that can be used by various
government entities to individually procure the needed headsets for their specific requirements. The PM
tells you that he will not be procuring any of the headsets as a result of the BAA. What do you advise the
PM? correct answerYou should advise the PM that BAAs are a method of solicitation and can only be
used if the Government intends to award a contract. You might suggest that the development of the
source list could be achieved by issuing a Sources Sought Synopsis with the synopsis specifying the 2
step process (spec sheets first and then sample headsets from selected offerors), and the ultimate intent
of the process, e.g., a source list for use by individual users in future procurements. You might also
advise the PM that there could be liability issues associated with the use, handling, and return of the
headsets to the offerors and that it might be appropriate for the Government to cover shipping and any
damage/wear to the units for the testing.
A. Under what circumstances is ratification of an unauthorized commitment permitted?
B. In general, what are the generic procedures for handling ratification actions?
C. Who are the approval authorities for ratifications? correct answerA. If the contract award would have
been proper if executed by a warranted PCO, the price can be determined to be fair and reasonable, and
there must have been enough of the proper type of funding available to pay for the item both at the
time of the commitment and at the time of the ratification.
B. An investigation is required to be completed within 30 days of discovery of the unauthorized
commitment explaining how and why it occurred, how future occurrences will be avoided, and
describing any corrective actions taken against responsible individuals. Legal review is also required.
, C. The ratification approving official for all unauthorized commitments valued at or above $1M is the
SPE. The ratification approving official for all Non-DISA unauthorized commitments (regardless of
amount) and DISA unauthorized commitments valued below $1M is the HCA. (DARS 1.602-3(b)(2))
You are the Contracting Officer for a much-delayed effort. On Friday you finally receive the necessary
authority to release the contract for signature. It's late on Friday afternoon when you e-mail the
modification to the contractor for signature. The only person at the contractor's office on Friday
afternoon is the Company President's 17 year old daughter who is working there as a summer-hire
secretary. She knows her father urgently wants the contract modification so she signs the document and
returns it to your office. You note the last name is the same as the President's so assume that he's the
one who signed the modification. Is this a legal agreement? correct answerProbably not. The elements
of a contract are - offer, acceptance, consideration, for a lawful purpose, certainty of terms, and legal
capacity. It is unlikely that a 17 year old summer hire would have the authority to bind the company,
regardless of her relationship to the Company President. Courts may generally find that individuals lack
"the age majority" if they are under 18 years of age.
The law in a given jurisdiction may never actually use the term "age of majority" and the term thereby
refers to a collection of laws bestowing the status of adulthood. The age of majority is a legally fixed age,
concept, or statutory principle, which may differ depending on the jurisdiction, and may not necessarily
correspond to actual mental or physical maturity of an individual.
In practical terms, there are certain specific actions which a person who attains the age of majority is
permitted to take, which they could not do before. These may include entering into a binding contract,
buying stocks, voting, buying and/or consuming alcoholic beverages, driving motor vehicles on public
roads, and marrying without obtaining consent of others. The ages at which these various rights or
powers may be exercised vary as between the various rights and as between different jurisdictions. For
example, the ages at which a person may obtain a license to drive a car or consume alcoholic beverages
vary considerably between and also within jurisdictions.
You are the Contracting Officer for a follow-on buy source selection. The current effort has had the same
Program Manager for over 10 years. She began as the PM while still a Military Officer and then retired
and was re-hired as an A&AS employee to continue to manage the program. She has extensive
experience on the program and is considered a Primary "Go To" person for all Program-related
managerial issues.
The Program Director wants to utilize the PM's experience to the fullest extent possible and has
proposed that the PM be listed as chief of the technical evaluation team and also a voting member of
the source selection board.
questions
You are the PCO for a major competitive negotiated source selection. The RFP, which reflects the user's
requirements and is based on the user's budget, has a requirement for 220 cargo loaders to be delivered
at 55 per year over the next four years. One offeror proposes to deliver all 220 loaders in the first year at
a dramatically reduced price. Can you accept the offeror's proposal? What factors should you consider in
your decision? correct answerYou can accept the offeror's proposal under certain circumstances. Firstly,
what did the RFP say about alternate proposals? Is this a situation where requirements are changed and
the other offerors should be allowed to propose on the basis of the changed requirements? You need to
ask the user if he wants all 220 in the first year and are the operating locations physically able to
accommodate their loaders in the first year. Finally, the offeror could be taken into discussions and
asked to conform to the RFP with there being the possibility of not being selected for award or
elimination from the competitive range if the proposal is not made compliant with the RFP.
You are the PCO on a new $2B aircraft development program. The program is in contract negotiations
for a Fixed Price Incentive (Firm Target) System Development and Demonstration contract award to a
sole source contractor. The program director, a fast-burning young colonel, e-mails you that she is very
concerned with the aircraft's ultimate speed at the full specification payload. She would like the
contractor to achieve the faster, desired objective speed rather than the mandatory threshold speed,
and thinks that an objective performance incentive would be the way to go to achieve her goal. You are
asked to go to her office and discuss the matter and the issues involved in using such an incentive. What
do you tell the colonel? correct answerThere are a number of considerations for the colonel:
The desired additional speed should provide benefit to the Government in order to justify the
expenditure of funds to achieve it. The colonel should be able to articulate the justification.
The situation is very amenable to a classic performance incentive that would allow the contractor to
earn profit for achieving the desired speed above and beyond what the final FPIF profit would be for
achieving threshold speed. If the contractor perceives this can't happen, he will either not sign up to the
incentive or will ignore it from Day One.
The incentive and resulting payment have to be structured so as to be based on observable, measurable
results that would determine how much is earned by the contractor. Subjectivity is not allowable under
current AF policy without HCA approval.
We have to be very careful to understand what possible unintended consequences could be caused by
the existence of this feature in the contract. For example, will the contractor reduce aircraft weight
,beyond safe limits in order to help achieve the payment? Also, will the contractor consume excessive
schedule to get the extra speed?
There has to be a cost incentive in place so that the contractor doesn't spend an unconstrained amount
of money to win the payment, such as under a CPFF contract. The FPIF share line serves this purpose
when balanced against the incentive.
The incentive has to be balanced with the FPIF share line so that the contractor doesn't spend more
money to achieve the desired speed than he has potential to earn by receiving the payment. Similarly,
the contractor can't be allowed to spend an excessive amount of money with little cost penalty to
achieve success.
In some cases, Contracting Officers are also Grants Officers. They can award Grants and Assistance
Instruments as well as contracts. What is Assistance? How does it differ from Acquisition? What gives
the Grants Officers their authority to enter into assistance? What are the types of Assistance? correct
answerWhen the principal purpose is to transfer a thing of value, to carry out a public purpose of
support or stimulation authorized by law of the United States, it is Assistance.
Acquisition, by contrast, has the principal purpose of acquiring property or services for the direct benefit
or use of the United States Government.
Federal agencies must be authorized by statute to support or stimulate a public purpose. The statutory
authority from Congress must exist either in broad legislation or in a program-specific statute. Absent
that statutory authority, a Grants Officer may not use an assistance instrument.
Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of Defense by statute,
e.g., 10 U.S.C. 2391; (2) Authority provided to DoD components that requires no delegation by the
Secretary of Defense, e.g., 10 U.S.C. 2358; (3) Authority coming indirectly from statutes, i.e., federal
statute authorizing a program that is consistent with using a grant or cooperative agreement.
Two types of Assistance are Grants and Cooperative Agreements. They differ in the following way: In a
Grant, substantial involvement is not expected between the agency and the recipient. In Cooperative
Agreement, substantial involvement is expected between the agency and the recipient. Cooperative
Agreements, then, are particularly useful in the research arena when the Government is interested in
being involved in program decisions or may be doing some testing or research themselves.
You are the Contracting Officer on a new Research and Development program. Proposals were recently
received in response to a Broad Agency Announcement, and a Cost Plus Fixed Fee contract type is
anticipated. The proposal most favored by the technical team was priced significantly under what was
estimated for the effort. The contractor proposed fee in an amount that equates to 20% of the
estimated cost. The users have more than enough funds to cover the proposal and want you to accept
,the price as is. How should you advise the user and what factors should you consider in determining a
reasonable fee? correct answerThe statutory limitation on fee for CPFF type contracts do no permit
exceeding 15% of estimated cost for experimental, developmental, or research performed under a CPFF
contract. Since the proposed amount of fee is outside the statutory limitations you need to determine
what a fair and reasonable rate is that falls within the limitations. The FAR recommends a structured
approach for determining fee such as Weighted Guidelines. If a cost reasonableness review determines
the estimated costs to be acceptable, we can still negotiate and adjust the fee.
You are the Contracting Officer for a well established transport aircraft program. The program is nearing
the end of production. A Program Manager approaches you requesting that you issue a Broad Area
Announcement (BAA) to support the development of a source list to supply active noise reducing
headsets. The headsets are commercially available from multiple sources and the PM wants to receive
performance specification sheets from each offeror and then request sample headsets be submitted for
testing. The end result of the effort will be the development of a source list that can be used by various
government entities to individually procure the needed headsets for their specific requirements. The PM
tells you that he will not be procuring any of the headsets as a result of the BAA. What do you advise the
PM? correct answerYou should advise the PM that BAAs are a method of solicitation and can only be
used if the Government intends to award a contract. You might suggest that the development of the
source list could be achieved by issuing a Sources Sought Synopsis with the synopsis specifying the 2
step process (spec sheets first and then sample headsets from selected offerors), and the ultimate intent
of the process, e.g., a source list for use by individual users in future procurements. You might also
advise the PM that there could be liability issues associated with the use, handling, and return of the
headsets to the offerors and that it might be appropriate for the Government to cover shipping and any
damage/wear to the units for the testing.
A. Under what circumstances is ratification of an unauthorized commitment permitted?
B. In general, what are the generic procedures for handling ratification actions?
C. Who are the approval authorities for ratifications? correct answerA. If the contract award would have
been proper if executed by a warranted PCO, the price can be determined to be fair and reasonable, and
there must have been enough of the proper type of funding available to pay for the item both at the
time of the commitment and at the time of the ratification.
B. An investigation is required to be completed within 30 days of discovery of the unauthorized
commitment explaining how and why it occurred, how future occurrences will be avoided, and
describing any corrective actions taken against responsible individuals. Legal review is also required.
, C. The ratification approving official for all unauthorized commitments valued at or above $1M is the
SPE. The ratification approving official for all Non-DISA unauthorized commitments (regardless of
amount) and DISA unauthorized commitments valued below $1M is the HCA. (DARS 1.602-3(b)(2))
You are the Contracting Officer for a much-delayed effort. On Friday you finally receive the necessary
authority to release the contract for signature. It's late on Friday afternoon when you e-mail the
modification to the contractor for signature. The only person at the contractor's office on Friday
afternoon is the Company President's 17 year old daughter who is working there as a summer-hire
secretary. She knows her father urgently wants the contract modification so she signs the document and
returns it to your office. You note the last name is the same as the President's so assume that he's the
one who signed the modification. Is this a legal agreement? correct answerProbably not. The elements
of a contract are - offer, acceptance, consideration, for a lawful purpose, certainty of terms, and legal
capacity. It is unlikely that a 17 year old summer hire would have the authority to bind the company,
regardless of her relationship to the Company President. Courts may generally find that individuals lack
"the age majority" if they are under 18 years of age.
The law in a given jurisdiction may never actually use the term "age of majority" and the term thereby
refers to a collection of laws bestowing the status of adulthood. The age of majority is a legally fixed age,
concept, or statutory principle, which may differ depending on the jurisdiction, and may not necessarily
correspond to actual mental or physical maturity of an individual.
In practical terms, there are certain specific actions which a person who attains the age of majority is
permitted to take, which they could not do before. These may include entering into a binding contract,
buying stocks, voting, buying and/or consuming alcoholic beverages, driving motor vehicles on public
roads, and marrying without obtaining consent of others. The ages at which these various rights or
powers may be exercised vary as between the various rights and as between different jurisdictions. For
example, the ages at which a person may obtain a license to drive a car or consume alcoholic beverages
vary considerably between and also within jurisdictions.
You are the Contracting Officer for a follow-on buy source selection. The current effort has had the same
Program Manager for over 10 years. She began as the PM while still a Military Officer and then retired
and was re-hired as an A&AS employee to continue to manage the program. She has extensive
experience on the program and is considered a Primary "Go To" person for all Program-related
managerial issues.
The Program Director wants to utilize the PM's experience to the fullest extent possible and has
proposed that the PM be listed as chief of the technical evaluation team and also a voting member of
the source selection board.
