2023 CLC 056 /CLC 056 Analyzing Contract Costs Exam QUESTIONS AND ANSWERS GRADED A
Identify the circumstances when cost analysis should be performed by
... [Show More] answering the following question: “Unless an exception to certified cost or pricing data applies, you can perform cost analysis on which of the following procurements?
All of these are correct
The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor have been required to furnish certified cost or pricing data.
The modification of any sealed bid or negotiated contract
The award of any negotiated contract (except for undefinitized actions such as letter contracts.
What is the best method for determining an improvement curve slope?
Using the median percentage from similar products
Using established slopes from the Cost Estimator’s Reference Manual c. Using actual historical data
d. Using averages derived from recent procurements
Each Price Negotiation Memorandum must contain which one of the following?a.
Statement that the price is fair and reasonable
Signature of the Contract Specialist
Signature of the Legal Counsel
Statement that the FAR was consistently followed.
Which sampling technique is used to focus on high-value items?
Random b. Stratified
Cluster
Nonprobability
Which of the following type of costs would most likely be categorized as both direct costs and indirect costs, depending on the circumstance?
G&A Overhead
Utilities
Direct Material d. Travel Expense
Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique.
True
False
Identify when cost analysis would be required.
For all proposals exceeding the micro purchase threshold
Whenever a price proposal is received
When certified cost or pricing data are required
To evaluate profit or fee
What two costs elements are required to calculate an indirect cost rate?a.
Expense pool and Allocation base
b. Overhead rate and Expense base c. Allocation Pool and Expense base
d. Allocation base and Overhead rate
In reviewing the proposal for the robotic surveillance vehicle you asked for clarification on the travel cost listed as an ODC. Which response would justify travel as an ODC?
The travel costs are for the project manager and the manufacturing supervisor to deliver the prototypeto the Government testing site for final demonstration testing.
The travel costs are for several senior engineers to attend a conference on the latest development in manufacturing.
The travel costs are for the corporate vice president to attend the annual robotic association meeting.
The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous materials.
Which of the following is an indirect cost pool?
Manufacturing labor
Assembly labor
General and Administrative Expenses
Direct material
What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as?
Defective Pricing
Data other than cost or pricing data
Exception to certified cost or pricing data
CICA Violation
How is simple linear regression used?
To make predictions about one dependent variable based on one independent variable
To make predictions about one dependent variable based on more than one independent variable.
To calculate an estimate that demonstrates the most likely average value based on the data supplied
To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive production tasks.
What is the “base” that used in the calculation of the performance rick, contract type rick, and cost efficiency factor when using the weighted guidelines to determine a profit/fee objective?
Indirect costs
Total price
Direct costs d. Total costs
What is an important driver to a successful negotiation?
Obtain the lowest price for the government
Ensure your position os heard
Maintain position of power d. Listen to understand
How may you request an audit?
By mail
By email
By telephone call
All of these are correct
Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate?
Request that the contractor provide a should-cost-estimate
Decrement labor hours estimate according to DCAA standard decrement
Compare proposed hours on all other contracts from the same contractord. Compare proposed hours with a government should-cost estimate
Identify the correct definition of “Cost Realism Analysis”
The process of examining and evaluating a proposal to ensure all elements of cost are in line with the Independent Government Estimate
The review and evaluation of individual cost elements, excluding profit, in a proposal.
The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement.
The review of a proposal to ensure the contractor has properly documented adherence to their approved estimating system guidelines
Select the item below that would likely be categorized as a Direct Material Cost
Extra material or items that are left over from the contract and cannot be used
The purchase of 104 motor assemblies needed to manufacture vehicles
Washers and seals used in the assembly process for all of the manufacturer’s products
Rail transportation used to get the materials to the offeror’s facility
When given a set of data that appears to contain outliers, which measure of central tendency is most appropriate to use?
Mean
Mode
Coefficient of Determination d. Median
The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple customers are:
Process Cost System
Generally Accepted Accounting Practice c. Job Order Accounting
d. Cost Accounting Standards
A cost is allowable if it is:
Established, disclosed and allocated
Reasonable, allocable and compliant with CAS/GAAP
Consistent, uniform and reasonable
According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete
When is it most appropriate to document or model a contractor’s proposal?
Whenever there are values in excess of $1 million included in the proposal
When analyzing multiple commercial supply proposals
When the value, importance and complexity warrant the modeling
Anytime you award a competitive contract
When calculating the confidence interval, the sample standard deviation is used to derive the standard error of the mean
True
False
The purpose of an audit is to:
Verify the transaction legality
Determine the degree of compliance with established procedures
Determine if the data is accurate and complete d. All of these are correct
Which variable is also considered the independent variable? a. X
Y
R
Z
When material prices may vary significantly from current inventory values, which estimating method should be used?
Government User Estimates b. Historical Quotes
c. Long Term Agreement Pricing d. Current Supplier Quotes
When is the working capital adjustment used while calculating profit/fee?
On all fixed price contracts with financing
On all fixed price contracts
On all cost reimbursement contracts
On all fixed price contracts with progress payments
Which of the following factors is critical to a successful negotiation?a.
Effectively prepare, plan and communicate
Avoid being too friendly, in case the negotiations get difficult
The negotiation should be competitive
Set your opening position extremely low to give room to negotiate
Which of the following situations would the use of improvement curve analysis likely be used in evaluating proposed costs?
Assembly line repair of a turret assembly for an M1/M2 Abrams tank
Assembly of two new prototype aerial refueling airplanes
Fabrication of a single jet engine frame assembly d. Fabrication of a new aircraft carrier
What is the negotiation term that reflects each party emphasizing the long term effects and benefits as well as both parties defining their interests to be achieved in conjunction with the outcome?
Win-Lose
Win-Lose-Win c. Win-Win
d. Lose-Lose
“Direct labor positions” share the same titles and pay levels.
True b. False
A contractor submits a cost proposal and includes support that its proposed costs are what it would actually incur during contract performance. In this case, the Government contracting officer is required to consider the proposed costs as reasonable.
True b. False
A contractor incurs costs for raw materials to be used in two different government contracts. Is the value of this raw material allocable to one contract?
No, raw material is always charged as an overhead expense
Yes, because all the material is to be used for government contracts
No, material must be used and charged specifically to the benefiting contract
Yes, due to the efficiency gained by procuring all the material at one time.
The statutory authority for requiring certified cost or pricing data relies primarily on Department of Defense contract policy
True b. False
A contractor estimates labor rates using weighted averages. As a contracting officer, you are NOT required to consider any labor-management agreement when developing your labor rate objective.
True b. False
When is the most appropriate to document or model a contractor’s proposal?
Whenever there are values in excess of $1 million included in the proposal
Anytime you award a competitive contract
When analyzing multiple commercial supply proposals
When the value, importance, and complexity warrant the modeling
Who has the authority to waive CAS applicability for a particular contract?a.
The Agency Head
Agency Lead Counsel
The Contracting Officer’s Representative
A level above the contracting officer
You are preparing to negotiate a service task for routine maintenance of Government equipment. A sample of 25 records for similar maintenance tasks indicates that the average time required to perform similar maintenance tasks has been 6 hours and 40 minutes. How can you use this?
Developing a price negotiation objective for labor costs
Assigning the risk factors for profit calculations
Evaluating the bill of materials
Selecting the appropriate contract type
Which of the following is a phase in the allocation cycle? a. Final Allocation Phase
Adjustment on Rates Phase
Interim Processing Phase
Continuous Rate Application Phase
A Disclosure Statement is required when Contractor receives a CAS covered contract or subcontract valued at
$60 million in a cost accounting period.
True
False
A “questioned cost” is one that has not yet been evaluated
True b. False
The first step when conducting stratified sampling is to identify the population of items to be sampled. a.
True
b. False
“Position class” is a grouping of all positions that share the same title and pay levela.
True
b. False
Which of the following labor category in a contractor’s proposal for Ground Maintenance would raise concern?
Quality Control Manager b. Milwright
Project Manager
Maintenance Technician
Which of the following is an effective use of stratified sampling?
Analyzing the items that make up 80% of the total material cost and 10% of the remaining items
Analyzing 10% of the items selected randomly
Analyzing 100% of the items
Analyzing 20% of the items that are under $25,000
How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? a. Treasury rate is not used in calculating FCCOM
Divided by the Weighted Guidelines profit objective
Multiplied by the FCCOM total amount
Divided into the FCCOM total amount
The national average mortgage rate is used in calculating Facilities Capital Cost of Money (FCCOM)
True b. False
What is the single most important decision the Contracting Officer must make to mitigate cost risk?a.
Selection of contract type
The profit/fee percentage objective
Whether to solicit to large business, or set aside for small business
The selection of the awardee
When a contract is subject to CAS, the Contracting Officer may not award a contract until a written adequacy determination has been made by the cognizant Federal agency officer
True
False
Given the following data, calculate the sample median. Sample data: 17,16,17,16,17,18,18
16
b. 17.5
17
18
When using simple linear regression to analyze the estimated price for a used car, which of the following independent variables would result in a realistic estimating equation?
Mileage of all similar cars
Color of similar cars
Prices of all similar cars currently for sale
Weight of all similar cars
Given the following improvement curve data, calculate the cost objective for unit #64. Labor hours for unit #32: 42,000 hours.
Labor hours for unit #1: 79,000 hours.Rate of improvement: 20%.
Improvement curve slope: 80%. a. 33,600
b. 8,400
c. 62,200
d. 155,800
Which regression method assumes a linear relationship between the dependent and independent variables?
Local regression
Simple linear regression
Curvilinear regression
Segmented regression
Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data?
Price may be determined fair and reasonable based on price analysis proposal techniquesb.
Prices are set by law or regulation
Sole source acquisition of $3.5M FFO effort, price determined using cost analysis
Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of value of modification
When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true?
They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum
They must have the agency’s Small Business Administration representative concur if the contract is with a small business
They must have had legal counsel review the cost or pricing data prior to negotiations
They must certify that they relied on that certified cost or pricing data in the Price Negotiations Memorandum. [Show Less]