CLC 058 Questions And Answers Solved 100% Correct!!

Cost or Pricing Data All facts that, as of the date of price agreement or an earlier date agreed upon between the parties, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are factual, not judgmental, and are verifiable. While they do not indicate the accuracy of the prospective contractor's judgment about estimated future costs or projections, they do include the data forming the basis for that judgment. Cost or pricing data are more than historical accounting data; they are all the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred. - Certified Cost or Pricing Data Cost or pricing data that were required to be submitted and have been certified, or are required to be certified. This certification states that, to the best of the person's knowledge and belief, the cost or pricing data are accurate, complete, and current as of a certain date before contract award. Data Other Than Certified Cost or Pricing Data Pricing data, cost data, and judgmental information necessary for the contracting officer to determine a fair and reasonable price or to determine cost realism. Such data may include the identical types of data as certified cost or pricing data, but without the certification. The data may also include, for example, sales data and any information reasonably required to explain the offeror's estimating process. - Direct Cost Any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end product as material or labor. Costs identified specifically with a contract are direct costs of that contract. 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 PriceA 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 costor 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). 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. FAR 15.403-1(c) goes into significant detail on what each of the five exceptions involves, but let's look here at the details for the first exception, adequate price competition. Adequate price competition exists when:(i) Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government's expressed requirement and if—(A) Award will be made to the offeror whose proposal represents the best value where price is a substantial factor in source selection (B) There is no finding that the price of the otherwise successful offeror is unreasonable. Any finding that the price is unreasonable must be supported by a statement of the facts and approved at a level above the contracting officer (ii) (Note: FAR 15.403-1(c)(1)(ii) does not apply to DoD acquisitions.) (iii) Price analysis clearly demonstrates that the proposed price is reasonable in comparison with current or recent pric - The figure above demonstrates that contracting officers are prohibited from ever requiring certified cost or pricing data for acquisitions at or below the SAT. The contracting officer may require certified cost or pricing data for acquisitions above the SAT but below the TINA threshold with approval from the Head of the Contracting Activity. Finally, the contracting officer shall require certified cost or pricing data for acquisitions at or above the TINA threshold, unless one of the exceptions at FAR 15.403- 1(b) applies. * Effective 1 July 2018 the new dollar threshold for TINA is $2,000,000. - According to FAR 15.407- 1(a), defective cost or pricing data is any submitted certified cost or pricing data that are inaccurate, incomplete, or noncurrent—whether the defective data increases or decreases the contract price.