WARRANT BOARD QUESTIONS &
ANSWERS (RATED A+)
You have just reached price agreement on a sole-source contract negotiation. You
ask the offeror to provide you a certificate of current cost or pricing data. What will
you be asking the contractor to certify to? Generally speaking, what is the purpose of
the cert? What is the current threshold for requiring cost or pricing data? What are
the exceptions? - ANSWER15.403-4 (b) (2) A Certificate of Current Cost or Pricing
Data, in the format specified in 15.406-2, certifying that to the best of its knowledge
and belief, the cost or pricing data were accurate, complete, and current as of the
date of agreement on price or, if applicable, an earlier date agreed upon between the
parties that is as close as practicable to the date of agreement on price. Gives the
Gov't the right to a price adjustment for bad contractor provided data. The current
Threshold for CPD is $700K. Exceptions for CPD are
(1) Adequate price competition;
(2) Prices set by law or regulation;
(3) Commercial items;
(4) Waivers;
(5) exercise of an option at the price established at contract award or initial
negotiation does not require submission of certified cost or pricing data.
(6) Overrun funding or interim billing price adjustments.
As yo may know, the DoD has recently been heavily scrutinized concerning many of
its determinations of fair and reasonable pricing. In you opinion, under what situation
is the Gov't most likely to receive the best pricing and recevie the least amount of
scrutiny? - ANSWERAPC
Please describe to the panel the process for awarding A&E contracts to include the
pricing of these efforts? - ANSWERFAR 36.6 A&E are considered competitive
awards. They are ranked technically from top to bottom @ least 3; Sole source
negotiations are held w/ each contractor starting with the highest to the lowest.
AS a PCO you may be required to issue an Undefinitized Contract Action (UCA).
Please explain what two clauses you would want to ensure was in the contract and
why? - ANSWERLimitation of Liabiltiy (limits the Gov'ts liability to the funds that are
available on a not-to-exceed bases and a definitazation schedule (to lay a definite
schedule)
You have just received a contractor's proposal for a commerical item. Since
commercial items are exempt from the requirement to obtain cost and pricing data,
how will you determine if the contractor's proposal is fair and reasonable? -
ANSWER"Price analysis is the process of examining and evaluating a proposed
price without evaluating its separate cost elements and proposed profit. Normally,
adequate price competition establishes a fair and reasonable price (see 15.403-1(c)
(1)). (i) Comparison of proposed prices received in response to the solicitation, (ii)
Comparison of proposed prices to historical prices paid, whether by the Government
, or other than the Government, for the same or similar items, (iii) Use of parametric
estimating methods/application of rough yardsticks; (iv) Comparison with competitive
published price lists, published market prices of commodities, similar indexes, and
discount or rebate arrangements; (v) Comparison of proposed prices with
independent Government cost estimates; (vi) Comparison of proposed prices with
prices obtained through market research for the same or similar items; (vii) Analysis
of data other than certified cost or pricing data provided by the offeror.
Contracting Officers must obtain goods and services at fair and reasonable prices.
To this end, there are those who believe that the Gov't should obtain as much
information as possible. Do you think this is a good idea? Why or Why Not? -
ANSWER"15.403-4, obtain data other than certified cost or pricing data as
necessary to establish a fair and reasonable price, generally using the following
order of preference in determining the type of data required: at a minimum,
appropriate data on the prices at which the same or similar items have been sold
previously, adequate for evaluating the reasonableness of the price. (2) Required by
TINA. Creates increased cost and therefore CO should only require enough data to
establish a fair and reasonable price
Please explain what a Price Negotiation Memorandum (PNM) is and why it is
important? - ANSWER""Pricing" means the process of establishing a reasonable
amount or amounts to be paid for supplies or services. FAR 15.406-3 Documemting
the Negotation. The contracting officer shall document in the contract file the
principal elements of the negotiated agreement
You just reviewd a draft PNM develped by a buyer. The PNM, for the sole-source
effort, states that the item procured is a commercial item and that the agreed to price
has been determined fair and reasonable b/c it was the same price as the
contractor's published price list. Do you have any concerns? - ANSWER"Although
possible? Question why is a commercial item sole-source. Most commerical items
have history, therefore; FAR 15.404-1 (ii) Comparison of proposed prices to
historical prices paid, whether by the Government or other than the Government, for
the same or similar items. This method may be used for commercial items including
those "of a type" or requiring minor modifications.
Your buyer is working the negotiation of a contractor's proposal for a multimillion
dollar CPFF effort for a highly visible, munitions upgrade development program. He
comes to you and states that he has successfully reached price agreement, just
above the Gov'ts fee objective of 15%. What is your response? - ANSWER"FAR 15-
404-4 (i) The contracting officer shall not negotiate a price or fee that exceeds the
following statutory limitations, imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 254(b):
Same scenario of high profile acquisition. The need date for contract award had
passed, but you are in a deadlock negotiation. After several counter-offers the
contractor finally states that he will split the difference. After anaylzing the offer you
believe this offered price is not reasonable. What part of the FAR allows you to split
the difference and award the contract? What do you do? - ANSWER"Far 15.405 (d)
If, however, the contractor insists on a price or demands a profit or fee that the
contracting officer considers unreasonable, and the contracting officer has taken all
authorized actions (including determining the feasibility of developing an alternative
ANSWERS (RATED A+)
You have just reached price agreement on a sole-source contract negotiation. You
ask the offeror to provide you a certificate of current cost or pricing data. What will
you be asking the contractor to certify to? Generally speaking, what is the purpose of
the cert? What is the current threshold for requiring cost or pricing data? What are
the exceptions? - ANSWER15.403-4 (b) (2) A Certificate of Current Cost or Pricing
Data, in the format specified in 15.406-2, certifying that to the best of its knowledge
and belief, the cost or pricing data were accurate, complete, and current as of the
date of agreement on price or, if applicable, an earlier date agreed upon between the
parties that is as close as practicable to the date of agreement on price. Gives the
Gov't the right to a price adjustment for bad contractor provided data. The current
Threshold for CPD is $700K. Exceptions for CPD are
(1) Adequate price competition;
(2) Prices set by law or regulation;
(3) Commercial items;
(4) Waivers;
(5) exercise of an option at the price established at contract award or initial
negotiation does not require submission of certified cost or pricing data.
(6) Overrun funding or interim billing price adjustments.
As yo may know, the DoD has recently been heavily scrutinized concerning many of
its determinations of fair and reasonable pricing. In you opinion, under what situation
is the Gov't most likely to receive the best pricing and recevie the least amount of
scrutiny? - ANSWERAPC
Please describe to the panel the process for awarding A&E contracts to include the
pricing of these efforts? - ANSWERFAR 36.6 A&E are considered competitive
awards. They are ranked technically from top to bottom @ least 3; Sole source
negotiations are held w/ each contractor starting with the highest to the lowest.
AS a PCO you may be required to issue an Undefinitized Contract Action (UCA).
Please explain what two clauses you would want to ensure was in the contract and
why? - ANSWERLimitation of Liabiltiy (limits the Gov'ts liability to the funds that are
available on a not-to-exceed bases and a definitazation schedule (to lay a definite
schedule)
You have just received a contractor's proposal for a commerical item. Since
commercial items are exempt from the requirement to obtain cost and pricing data,
how will you determine if the contractor's proposal is fair and reasonable? -
ANSWER"Price analysis is the process of examining and evaluating a proposed
price without evaluating its separate cost elements and proposed profit. Normally,
adequate price competition establishes a fair and reasonable price (see 15.403-1(c)
(1)). (i) Comparison of proposed prices received in response to the solicitation, (ii)
Comparison of proposed prices to historical prices paid, whether by the Government
, or other than the Government, for the same or similar items, (iii) Use of parametric
estimating methods/application of rough yardsticks; (iv) Comparison with competitive
published price lists, published market prices of commodities, similar indexes, and
discount or rebate arrangements; (v) Comparison of proposed prices with
independent Government cost estimates; (vi) Comparison of proposed prices with
prices obtained through market research for the same or similar items; (vii) Analysis
of data other than certified cost or pricing data provided by the offeror.
Contracting Officers must obtain goods and services at fair and reasonable prices.
To this end, there are those who believe that the Gov't should obtain as much
information as possible. Do you think this is a good idea? Why or Why Not? -
ANSWER"15.403-4, obtain data other than certified cost or pricing data as
necessary to establish a fair and reasonable price, generally using the following
order of preference in determining the type of data required: at a minimum,
appropriate data on the prices at which the same or similar items have been sold
previously, adequate for evaluating the reasonableness of the price. (2) Required by
TINA. Creates increased cost and therefore CO should only require enough data to
establish a fair and reasonable price
Please explain what a Price Negotiation Memorandum (PNM) is and why it is
important? - ANSWER""Pricing" means the process of establishing a reasonable
amount or amounts to be paid for supplies or services. FAR 15.406-3 Documemting
the Negotation. The contracting officer shall document in the contract file the
principal elements of the negotiated agreement
You just reviewd a draft PNM develped by a buyer. The PNM, for the sole-source
effort, states that the item procured is a commercial item and that the agreed to price
has been determined fair and reasonable b/c it was the same price as the
contractor's published price list. Do you have any concerns? - ANSWER"Although
possible? Question why is a commercial item sole-source. Most commerical items
have history, therefore; FAR 15.404-1 (ii) Comparison of proposed prices to
historical prices paid, whether by the Government or other than the Government, for
the same or similar items. This method may be used for commercial items including
those "of a type" or requiring minor modifications.
Your buyer is working the negotiation of a contractor's proposal for a multimillion
dollar CPFF effort for a highly visible, munitions upgrade development program. He
comes to you and states that he has successfully reached price agreement, just
above the Gov'ts fee objective of 15%. What is your response? - ANSWER"FAR 15-
404-4 (i) The contracting officer shall not negotiate a price or fee that exceeds the
following statutory limitations, imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 254(b):
Same scenario of high profile acquisition. The need date for contract award had
passed, but you are in a deadlock negotiation. After several counter-offers the
contractor finally states that he will split the difference. After anaylzing the offer you
believe this offered price is not reasonable. What part of the FAR allows you to split
the difference and award the contract? What do you do? - ANSWER"Far 15.405 (d)
If, however, the contractor insists on a price or demands a profit or fee that the
contracting officer considers unreasonable, and the contracting officer has taken all
authorized actions (including determining the feasibility of developing an alternative
