Contract Types and Pricing Flashcards
7 cards from real NCMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contract Types and Pricing flashcards as text
Cost analysis is required by the contracting officer when:
Answer: There is no adequate price competition and no other valid commercial pricing basis
When adequate price competition does not exist and commercial pricing benchmarks are unavailable, the contracting officer must perform cost analysis of the proposed cost elements.
'Should-cost' analysis is best described as:
Answer: A government assessment of what an efficiently managed contractor should spend to complete the work
Should-cost analysis is a specialized form of cost analysis that uses industrial engineering and accounting techniques to project what an efficiently managed, performing contractor should pay for a contract.
Price analysis differs from cost analysis primarily in that price analysis:
Answer: Examines proposed prices without evaluating their separate underlying cost elements
Price analysis evaluates the reasonableness of a total proposed price without breaking it down into cost elements, relying instead on comparison to market prices, catalog prices, or prior prices.
The Weighted Guidelines method is primarily used by contracting officers to:
Answer: Develop a fair and reasonable profit or fee negotiation objective
The Weighted Guidelines method is a structured approach under DFARS that helps contracting officers develop a pre-negotiation profit objective by weighting factors such as contractor risk, capital investment, and performance.
An Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract differs from a requirements contract primarily because:
Answer: IDIQ contracts specify both a minimum guaranteed quantity and a maximum quantity the government may order
IDIQ contracts guarantee only the minimum quantity stated in the contract and allow the government to order up to the stated maximum, unlike requirements contracts which obligate all purchases to the contractor.
Bottom-up cost estimating is best described as:
Answer: Estimating costs for individual work elements or components and aggregating them into a total
Bottom-up estimating develops cost estimates by pricing each element of the work breakdown structure individually and then summing them to arrive at a total contract cost estimate.
Forward Pricing Rate Agreements (FPRAs) between the government and a contractor are:
Answer: Negotiated agreements establishing rates to be used in pricing future contract actions during the agreement period
FPRAs are prospective rate agreements negotiated between the government and contractor for use in pricing future proposals, reducing the time needed to negotiate individual contract actions.