CONTRACTING OFFICER UNLIMITED WARRANT
BOARD | LATEST UPDATE 2025/2026 QUESTIONS
WITH COMPLETE SOLUTIONS!!
What is an option? Answer - An option is a unilateral right in a contract, for a
specific period of time, where the Government may elect to purchase
additional supplies or services called for by the contract, or extend the period
of performance.
The PCO should use options when (1) in the Governments best interest, (2)
there is a need for service beyond the initial period, and (3) to ensure
continuity of service.
The use of options are not normally in the Governments best interest when (1)
The foreseeable requirements involve minimum economic quantities and
delivery requirements are far enough in the future to permit competitive
acquisition, production, and delivery (2) an indefinite quantity or requirements
contract would be more appropriate than a contract with options.
What must a PCO do before exercising an option? Answer - The PCO must
determine that:
1. Funds are available
2. The requirement fulfills an existing Government need
3. Exercising the option is the most advantageous method price and other
factors considered
4. The option was synopsized IAW FAR 5 (or exempted)
The PCO should have a written D&F in the file in order to use options
,The PCO should also consider if the contractor is responsible and if their
performance is satisfactory.
If the option price during a competitive source selection was not evaluated, is
the option valid? Answer - No. All options need to be priced because they
were awarded on a competitive basis.
Can the PCO cite the "Changes Clause" to increase quantities on a production
contract? Answer - No. The Changes Clause cannot be used to increase
quantities on a production contract.
(a) The Contracting Officer may at any time, by written order, and without
notice to the sureties, if any, make changes within the general scope of this
contract in any one or more of the following:
(1) Drawings, designs, or specifications when the supplies to be furnished are
to be specially manufactured for the Government in accordance with the
drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
Is any approval required for an effort that is out of scope ? Answer - Changes
outside the scope of the original contract are considered new work and
constitute a cardinal change, and in this case, one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval
What are the four essential elements the PCO must address when making a
Scope Determination? Answer - 1. Scope of the competition - could the
original offerors have reasonable anticipated such a change?
,2. Contract type - Requirments should be better defined in a FFP contract
therefore require less changes.
As opposed to a RDT&E contract.
3. Period of performance - will the PoP be extended significantly so as to
constitute new work?
4. Overall cost/price change - what has been the total change in price
throughout all modifications?
What must the PCO do for any change and/or modification estimated to be
$1M or more? Answer - Obtain legal review of the proposed action and
document the review in the contract file
Where can a PCO look to help determine if a change is in-scope? Answer -
Various source documents to include: SOO/SOW/PWS, synopsis, RFP,
exchanges with industry, market surveys, RFIs, etc.
What is "scope creep?" Answer - Scope creep occurs when a series of in-scope
changes make the contract as a whole out-of-scope. The PCO must remain
cognizant of scope creep when changing/modifying existing contracts.
What is a T&M contract? Answer - Limitations. A time-and-materials contract
may be used only if—
(1) The contracting officer prepares a determination and findings that no other
contract type is suitable. The determination and finding shall be—
(i) Signed by the contracting officer prior to the execution of the base period or
any option periods of the contracts; and
(ii) Approved by the head of the contracting activity prior to the execution of
the base period when the base period plus any option periods exceeds three
years; and
(2) The contract includes a ceiling price that the contractor exceeds at its own
risk. The contracting officer shall document the contract file to justify the
, reasons for and amount of any subsequent change in the ceiling price. Also see
12.207(b) for further limitations
on use of Time-and-Materials or Labor Hour contracts for acquisition of
commercial items.
Can a T&M contract be used for a commercial service? Answer - a) Except as
provided in paragraph (b) of this section, agencies shall use firm-fixed-price
contracts or fixed-price contracts with economic price adjustment for the
acquisition of commercial items.
(b) (1) A time-and-materials contract or labor-hour contract (see Subpart 16.6)
may be used for the acquisition of commercial services when—
(i) The service is acquired under a contract awarded using— Competitive
Procedures, Fair Opportunity, with an executed D&F
Define Certified Cost or Pricing Data. Answer - All facts, that as of the date of
price agreement, or if applicable, an earlier date agreed upon between the
parties that's as close as practicable to the date of agreement on price, prudent
buyers and sellers would reasonably expect to affect price negotiations
significantly.
When is Certified Cost and Pricing data required? Answer - When executing
actions over $750,000 with the exception of prices established by statute,
commercial items, with adequate price competition, and when a TINA waiver is
granted.
What is the "Bona Fide Needs" Rule? Answer - The Bona Fide Needs Rule
basically means that a federal agency must have a legitimate or bona fide need
for the requirement during the time period that the appropriation is available.
Pursuant to 31 U.S.C. 1502(a), "The balance of an appropriation limited for
obligation to a definite period is available only for payment of expenses
incurred during the period of availability, or to complete contracts properly
made during the period of availability and obligated consistent with Section
1501 of this title.." In other words, the basic rule states that a fiscal year's (FY)
BOARD | LATEST UPDATE 2025/2026 QUESTIONS
WITH COMPLETE SOLUTIONS!!
What is an option? Answer - An option is a unilateral right in a contract, for a
specific period of time, where the Government may elect to purchase
additional supplies or services called for by the contract, or extend the period
of performance.
The PCO should use options when (1) in the Governments best interest, (2)
there is a need for service beyond the initial period, and (3) to ensure
continuity of service.
The use of options are not normally in the Governments best interest when (1)
The foreseeable requirements involve minimum economic quantities and
delivery requirements are far enough in the future to permit competitive
acquisition, production, and delivery (2) an indefinite quantity or requirements
contract would be more appropriate than a contract with options.
What must a PCO do before exercising an option? Answer - The PCO must
determine that:
1. Funds are available
2. The requirement fulfills an existing Government need
3. Exercising the option is the most advantageous method price and other
factors considered
4. The option was synopsized IAW FAR 5 (or exempted)
The PCO should have a written D&F in the file in order to use options
,The PCO should also consider if the contractor is responsible and if their
performance is satisfactory.
If the option price during a competitive source selection was not evaluated, is
the option valid? Answer - No. All options need to be priced because they
were awarded on a competitive basis.
Can the PCO cite the "Changes Clause" to increase quantities on a production
contract? Answer - No. The Changes Clause cannot be used to increase
quantities on a production contract.
(a) The Contracting Officer may at any time, by written order, and without
notice to the sureties, if any, make changes within the general scope of this
contract in any one or more of the following:
(1) Drawings, designs, or specifications when the supplies to be furnished are
to be specially manufactured for the Government in accordance with the
drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
Is any approval required for an effort that is out of scope ? Answer - Changes
outside the scope of the original contract are considered new work and
constitute a cardinal change, and in this case, one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval
What are the four essential elements the PCO must address when making a
Scope Determination? Answer - 1. Scope of the competition - could the
original offerors have reasonable anticipated such a change?
,2. Contract type - Requirments should be better defined in a FFP contract
therefore require less changes.
As opposed to a RDT&E contract.
3. Period of performance - will the PoP be extended significantly so as to
constitute new work?
4. Overall cost/price change - what has been the total change in price
throughout all modifications?
What must the PCO do for any change and/or modification estimated to be
$1M or more? Answer - Obtain legal review of the proposed action and
document the review in the contract file
Where can a PCO look to help determine if a change is in-scope? Answer -
Various source documents to include: SOO/SOW/PWS, synopsis, RFP,
exchanges with industry, market surveys, RFIs, etc.
What is "scope creep?" Answer - Scope creep occurs when a series of in-scope
changes make the contract as a whole out-of-scope. The PCO must remain
cognizant of scope creep when changing/modifying existing contracts.
What is a T&M contract? Answer - Limitations. A time-and-materials contract
may be used only if—
(1) The contracting officer prepares a determination and findings that no other
contract type is suitable. The determination and finding shall be—
(i) Signed by the contracting officer prior to the execution of the base period or
any option periods of the contracts; and
(ii) Approved by the head of the contracting activity prior to the execution of
the base period when the base period plus any option periods exceeds three
years; and
(2) The contract includes a ceiling price that the contractor exceeds at its own
risk. The contracting officer shall document the contract file to justify the
, reasons for and amount of any subsequent change in the ceiling price. Also see
12.207(b) for further limitations
on use of Time-and-Materials or Labor Hour contracts for acquisition of
commercial items.
Can a T&M contract be used for a commercial service? Answer - a) Except as
provided in paragraph (b) of this section, agencies shall use firm-fixed-price
contracts or fixed-price contracts with economic price adjustment for the
acquisition of commercial items.
(b) (1) A time-and-materials contract or labor-hour contract (see Subpart 16.6)
may be used for the acquisition of commercial services when—
(i) The service is acquired under a contract awarded using— Competitive
Procedures, Fair Opportunity, with an executed D&F
Define Certified Cost or Pricing Data. Answer - All facts, that as of the date of
price agreement, or if applicable, an earlier date agreed upon between the
parties that's as close as practicable to the date of agreement on price, prudent
buyers and sellers would reasonably expect to affect price negotiations
significantly.
When is Certified Cost and Pricing data required? Answer - When executing
actions over $750,000 with the exception of prices established by statute,
commercial items, with adequate price competition, and when a TINA waiver is
granted.
What is the "Bona Fide Needs" Rule? Answer - The Bona Fide Needs Rule
basically means that a federal agency must have a legitimate or bona fide need
for the requirement during the time period that the appropriation is available.
Pursuant to 31 U.S.C. 1502(a), "The balance of an appropriation limited for
obligation to a definite period is available only for payment of expenses
incurred during the period of availability, or to complete contracts properly
made during the period of availability and obligated consistent with Section
1501 of this title.." In other words, the basic rule states that a fiscal year's (FY)
