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DAWIA Contracting practice questions

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Question 1Contract Principles and Planning

The bargained-for exchange of promises or performances that makes an agreement legally enforceable is called:

  1. An offer
  2. Acceptance
  3. Novation
  4. Consideration Correct answer.

Explanation

Consideration is the value each party gives up in exchange for the other party's promise; without it a promise is generally unenforceable as a contract. It is what separates a bargain from a gratuitous promise.

Question 2Contract Principles and Planning

A contractor submits a proposal in response to a negotiated solicitation. In contract-formation terms, that proposal is ordinarily:

  1. a binding contract upon submission
  2. a counteroffer that cancels the solicitation
  3. an acceptance of the government's offer
  4. an offer that the government may accept Correct answer.

Explanation

The solicitation is an invitation for offers; the proposal is the offer, and a contract forms only when the government accepts it, typically by written award. Until award the offeror is not bound.

Question 3Contract Principles and Planning

Which contract type places the greatest cost risk on the contractor?

  1. Cost-plus-fixed-fee
  2. Firm-fixed-price Correct answer.
  3. Time-and-materials
  4. Cost-plus-incentive-fee

Explanation

Under a firm-fixed-price contract the contractor receives a set price regardless of the costs actually incurred, so it absorbs any overrun. Cost-reimbursement types shift cost risk to the government, and time-and-materials shares risk through fixed hourly rates.

Question 4Contract Principles and Planning

The bona fide need rule requires that an obligation be based on:

  1. a need supported by a completed acquisition plan
  2. a need certified by the requiring activity's commander
  3. a need arising within the funds' period of availability Correct answer.
  4. a need that will arise in a future fiscal year

Explanation

An appropriation may be obligated only for a need that exists, or will arise in a normal and continuous manner, during that appropriation's period of availability. Buying ahead for a future year's requirement is prohibited stockpiling.

Question 5Contract Principles and Planning

Full and open competition means that:

  1. the lowest-priced offer is selected for award
  2. all responsible sources may submit offers Correct answer.
  3. the solicitation stays open for at least 30 days
  4. at least three competitive offers are received

Explanation

Full and open competition exists when all responsible sources are permitted to compete for the requirement. How many offers arrive, how long the solicitation is open, and which award basis applies are separate questions.

Question 6Contract Principles and Planning

The micro-purchase threshold, the level at or below which competition requirements are minimal, is generally set at:

  1. $250,000
  2. $3,500
  3. $10,000 Correct answer.
  4. $25,000

Explanation

A micro-purchase is an acquisition of supplies or services at or below $10,000 in aggregate, subject to limited statutory exceptions; at that level an agency may buy without soliciting competitive quotations if the price is reasonable. $250,000 is the simplified acquisition threshold.

Question 7Contract Principles and Planning

Market research is required:

  1. after award, to validate the negotiated price
  2. only above the simplified acquisition threshold
  3. only after a solicitation has been issued
  4. before defining requirements and before soliciting offers Correct answer.

Explanation

Market research is performed before developing new requirements documents and before soliciting offers, and it continues as needed to learn what is commercially available and how competitive the market is.

Question 8Contract Principles and Planning

Who normally prepares the independent government cost estimate (IGCE)?

  1. the prospective offeror
  2. the contract administration office
  3. the requiring activity Correct answer.
  4. the contract audit agency

Explanation

The requiring activity prepares the IGCE and furnishes it to the contracting officer for budgeting and price analysis. It is not released to offerors because doing so would compromise the government's negotiating position.

Question 9Contract Principles and Planning

Sealed bidding is appropriate when:

  1. the requirement is well defined and award will be on price alone Correct answer.
  2. only one responsible source can meet the requirement
  3. the government expects to negotiate technical trade-offs with offerors
  4. the requirement is developmental and offerors may propose different approaches

Explanation

Sealed bidding is used when the government's need is clearly describable, award will be made on price and other price-related factors, discussions are not needed, and more than one bid is reasonably expected. It results in a firm-fixed-price contract without negotiations.

Question 10Contract Principles and Planning

Before awarding a cost-reimbursement contract, the contracting officer must determine that:

  1. the contractor has an adequate accounting system Correct answer.
  2. the requirement is fully defined at the time of award
  3. the contractor will receive a guaranteed minimum fee
  4. competition for the requirement is not available

Explanation

Because payment is based on allowable incurred costs, a cost-reimbursement contract may be used only when the contractor's accounting system is adequate and the government can monitor performance and costs effectively. These conditions must be documented before award.

Question 11Contract Principles and Planning

The government's exercise of a priced option is accomplished by:

  1. a unilateral written notice to the contractor Correct answer.
  2. a supplemental agreement signed by both parties
  3. an oral notice later confirmed in writing
  4. a new contract award

Explanation

An option is the government's unilateral right to extend the term or buy additional quantities within stated limits; the contracting officer exercises it by written notice, so no contractor consent or new award is required.

Question 12Contract Principles and Planning

Under a time-and-materials contract, which risk does the government bear?

  1. That the contractor will fail to meet the delivery schedule
  2. That the fixed hourly rates will rise during performance
  3. That the contractor will perform more hours than expected Correct answer.
  4. That material costs will exceed the ceiling

Explanation

A time-and-materials contract pays fixed hourly rates that include profit plus materials at cost, so the government absorbs the risk that more labor hours will be needed than anticipated. That is why a ceiling price and close surveillance are required.

Question 13Contract Principles and Planning

In an indefinite-delivery/indefinite-quantity contract, the government is obligated to order:

  1. at least the guaranteed minimum quantity Correct answer.
  2. the full estimated quantity
  3. the estimated maximum quantity stated in the schedule
  4. nothing until the first task order is issued

Explanation

An IDIQ contract requires the government to order at least a stated minimum quantity and permits orders up to a stated maximum; quantities between the two are not guaranteed. Only the minimum is a binding obligation.

Question 14Contract Principles and Planning

Performance-based payments are made when:

  1. the contracting officer approves a progress payment request
  2. the contractor submits a public voucher for costs incurred
  3. the contractor reaches the midpoint of the period of performance
  4. the contractor achieves defined performance outcomes or events Correct answer.

Explanation

Performance-based payments are financed on accomplishment of defined, measurable performance events, not on costs incurred or the passage of time. They are the preferred financing method when cost-effective and practicable.

Question 15Contract Principles and Planning

After receiving a written change order that is within the scope of the contract, the contractor must:

  1. perform the work and later request an equitable adjustment Correct answer.
  2. suspend work pending agreement on price
  3. decline the change as beyond the contract's scope
  4. file a protest with the Government Accountability Office

Explanation

The changes clause requires the contractor to proceed with the changed work even if price and schedule are unresolved, then submit a request for equitable adjustment within the period stated in the clause. Refusing to perform is not permitted for an in-scope change.

Question 16Contract Principles and Planning

A constructive change arises when:

  1. the contracting officer issues a signed modification citing the changes clause
  2. the parties agree by mutual consent to reduce the scope of work
  3. government conduct requires extra work without a formal change order Correct answer.
  4. the contractor performs work incorrectly and must rework it

Explanation

A constructive change occurs when the government's actions or direction require effort beyond the contract terms without issuing a formal change order, so the contractor is entitled to an equitable adjustment as if one had been issued.

Question 17Contract Principles and Planning

An unauthorized commitment made by a government employee without authority may be resolved by:

  1. ratification by an official with authority Correct answer.
  2. a decision by the Government Accountability Office
  3. payment under the doctrine of quantum meruit
  4. converting it into a purchase order

Explanation

An official with authority to approve the commitment may ratify it after determining that the commitment is a legitimate need, that funds were available, and that the value is fair, which allows the government to pay. Without ratification no payment may be made.

Question 18Contract Principles and Planning

Consolidating two or more requirements into a single solicitation is permissible when the contracting officer determines that:

  1. the expected benefits outweigh reduced small business opportunities Correct answer.
  2. the requirement is funded by more than one appropriation
  3. the consolidated value exceeds the simplified acquisition threshold
  4. each affected small business concern concurs in writing

Explanation

Consolidation must be necessary and justified; the contracting officer documents that the benefits, such as reduced cost or improved management, substantially outweigh any reduction in small business participation.

Question 19Contract Principles and Planning

In a best-value tradeoff source selection, the agency:

  1. must award to the highest technically rated offer regardless of price
  2. may select a higher-rated offer when benefits justify the premium Correct answer.
  3. may not consider past performance in the tradeoff
  4. must award to the lowest-priced technically acceptable offer

Explanation

A tradeoff permits award to a higher-rated, higher-priced offer when the technical superiority is worth the price premium, and the decision must be documented with a rationale. It is not driven solely by price or solely by technical rating.

Question 20Contract Principles and Planning

An agency uses operation and maintenance funds to buy a mainframe computer that should be capitalized. This is a violation of:

  1. the amount test
  2. the bona fide need test
  3. the purpose test Correct answer.
  4. the time test

Explanation

The purpose test requires that an appropriation be used only for the purposes Congress intended; capital equipment must be acquired with procurement appropriations rather than operation and maintenance funds. The other tests address when funds are available, how much may be obligated, and what need may be met.

Question 21Contract Principles and Planning

A contractor may treat a change order as a cardinal change when:

  1. the contractor disagrees with the price
  2. it alters the work so substantially that it exceeds the scope Correct answer.
  3. it is issued after the period of performance has ended
  4. it increases the contract price by more than 10 percent

Explanation

The changes clause authorizes only changes within the general scope of the contract; when directed work is so far beyond that scope that the contract is effectively replaced, the change is cardinal and the contractor may refuse to perform and sue for breach.

Question 22Contract Principles and Planning

Upon encountering a differing site condition, the contractor must:

  1. await a contracting officer's decision before resuming work
  2. submit a claim within 30 days after final payment
  3. give written notice promptly and before disturbing the conditions Correct answer.
  4. record the condition only in its daily reports

Explanation

The Differing Site Conditions clause requires the contractor to notify the contracting officer in writing promptly and before the conditions are disturbed, so the government can investigate the site while the evidence still exists. Failure to give timely notice can reduce or bar recovery.

Question 23Contract Principles and Planning

Which item is generally recoverable in a termination for convenience settlement?

  1. Anticipated profit on work not performed
  2. Profit on the entire contract value
  3. The full contract price as if the work were complete
  4. Costs incurred for work performed Correct answer.

Explanation

A convenience termination compensates the contractor for the work done and costs incurred, plus a reasonable profit on that work and settlement expenses. Profit on work never performed is not allowed, because the contractor is placed in the position it would have occupied had the terminated portion never been awarded.

Question 24Contract Principles and Planning

Which situation is an organizational conflict of interest?

  1. The firm drafted the specifications it will perform against Correct answer.
  2. The contractor hires a subcontractor for part of the work
  3. The contractor has performed similar work for another agency
  4. The contractor's price exceeds the government estimate

Explanation

Organizational conflicts of interest arise when a contractor's other activities or relationships give it an unfair competitive advantage or impair its objectivity. Preparing the specifications on which the firm later competes is the classic biased-ground-rules conflict.

Question 25Contract Principles and Planning

Under the superior knowledge doctrine, the government may be liable when it:

  1. rejects a nonconforming item during inspection
  2. withholds vital data the contractor could not obtain Correct answer.
  3. furnishes more technical data than was requested
  4. changes the delivery schedule by mutual agreement

Explanation

The government must disclose information it possesses that is vital to performance and not reasonably available to the contractor. Withholding such knowledge can support an equitable adjustment or a breach claim.

Question 26Contract Principles and Planning

Which set of elements is required to form a binding contract between the government and a contractor?

  1. Public announcement and a small-business set-aside review
  2. Legal review and congressional notification
  3. Offer, acceptance, and consideration Correct answer.
  4. Adequate funding and an approved acquisition plan

Explanation

A contract requires mutual assent, expressed as a valid offer and acceptance, plus consideration and a lawful purpose; these common-law elements apply to government contracts as well. Internal reviews and funding certifications are procedural prerequisites, not elements of contract formation.

Question 27Contract Principles and Planning

The rule that an appropriation may be used only for the specific purpose for which Congress made it available is known as:

  1. The Antideficiency Act
  2. The miscellaneous receipts statute
  3. The bona fide need rule
  4. The purpose statute at 31 U.S.C. 1301(a) Correct answer.

Explanation

The purpose statute provides that appropriations shall be applied only to the objects for which they were made, unless otherwise provided by law. It is distinct from rules governing the timing of need or the amount of obligations.

Question 28Contract Principles and Planning

In federal acquisition, full and open competition means that:

  1. Competition is limited to firms that meet the applicable size standard
  2. At least three qualified offerors must submit proposals
  3. Only firms holding schedule contracts are invited to respond
  4. All responsible sources are permitted to submit offers Correct answer.

Explanation

Full and open competition exists when all responsible sources are permitted to compete for a contract award. It does not require any particular number of responses, only that no source is improperly excluded.

Question 29Contract Principles and Planning

Under the bona fide need rule, an appropriation is available to meet a need that:

  1. exists when the appropriation's period of availability expires
  2. the contractor satisfies in the year funds are obligated
  3. was documented in the prior year's budget justification
  4. arises during the period of availability of the appropriation Correct answer.

Explanation

The bona fide need rule requires that the need being met exist in the period of availability of the funds used, and that the funds be obligated during that period. It generally restricts the use of expiring funds to buy goods or services for a future period's needs.

Question 30Contract Principles and Planning

Under a firm-fixed-price contract, which party generally bears the risk of increases in the contractor's labor and material costs?

  1. The government, up to the contract's funding ceiling
  2. The government, through an equitable adjustment
  3. The contractor, unless a clause allows adjustment Correct answer.
  4. Both parties, which share the increase equally by operation of law

Explanation

In a firm-fixed-price arrangement the contractor is bound to the stated price and absorbs cost increases unless a specific clause, such as an economic price adjustment or changes clause, provides relief. This allocation of cost risk is the defining feature of the arrangement.

Question 31Contract Principles and Planning

An economic price adjustment clause in a fixed-price contract is intended to:

  1. Convert the fixed-price contract to a cost-reimbursement contract
  2. Allow the government to reopen the price to reflect the contractor's actual costs
  3. Let the contractor reprice the contract whenever its actual costs exceed the estimate
  4. Adjust the price for contingencies such as specified indexes or labor rates Correct answer.

Explanation

An economic price adjustment clause permits upward or downward revision of the price based on an agreed contingency, such as a published index, a market price for a commodity, or a specified labor rate. It preserves the fixed-price character of the contract while limiting exposure to defined economic fluctuations.

Question 32Contract Principles and Planning

Which statement best describes a performance work statement (PWS)?

  1. It restates the contractor's proposal as the governing statement of work
  2. It states required results and leaves the method to the contractor Correct answer.
  3. It fixes the number of labor hours the government estimates for each task
  4. It prescribes the detailed processes and materials the contractor must use

Explanation

A performance work statement describes the required outcome in measurable terms and permits the contractor to determine how to achieve it. This outcome orientation supports performance-based acquisition and shifts method decisions to the contractor.

Question 33Contract Principles and Planning

When a solicitation includes an option for additional quantities, the contracting officer must:

  1. Exercise the option only if the contractor consents in writing at that time
  2. Evaluate the option in the award decision and exercise it unilaterally Correct answer.
  3. Obtain new competition before each option is exercised
  4. Exercise the option only during the first year of the contract

Explanation

An option is a unilateral right of the government to buy additional quantities or extend performance within the terms of the contract. Because the option is part of the evaluated offer, its potential quantities must be considered when making the award decision.

Question 34Contract Principles and Planning

A liquidated damages provision in a government contract is enforceable when the stipulated amount:

  1. Is later calculated from the actual damages the government incurs
  2. Equals at least twice the harm expected from the delay
  3. Is a reasonable forecast of harm that is difficult to estimate Correct answer.
  4. Is proposed unilaterally by the contractor and accepted without analysis

Explanation

Liquidated damages must represent a reasonable estimate of probable loss made at the time of contracting, where actual loss would be difficult to determine. An amount that bears no reasonable relationship to anticipated harm is an unenforceable penalty.

Question 35Contract Principles and Planning

A solicitation is set forth as 'brand name or equal' and lists a specific manufacturer's item. The contracting officer must:

  1. Reject any offer of a different brand as nonresponsive without evaluation
  2. Accept only the named brand because the requirement is proprietary
  3. Identify the salient characteristics so that equal products can compete Correct answer.
  4. Waive the specification whenever an equal product costs less

Explanation

A brand name or equal description must state the salient physical, functional, or performance characteristics that the named item is meant to satisfy. Offerors of equal products must then be given the chance to demonstrate that their items meet those characteristics.

Question 36Contract Principles and Planning

Lowest price technically acceptable source selection is most appropriate when:

  1. Offerors are expected to propose different acceptable solutions
  2. The agency expects a tradeoff among competing technical approaches
  3. Past performance differences among offerors are expected to be significant
  4. The requirement is well defined and no tradeoff is needed Correct answer.

Explanation

The lowest price technically acceptable approach suits requirements that are clearly defined and where the government is confident that better technical performance is not worth a higher price. Award goes to the lowest-priced offer that meets the stated technical acceptability standards.

Question 37Contract Principles and Planning

Progress payments based on costs incurred provide contract financing and:

  1. Are made before delivery and recouped from later payments Correct answer.
  2. Are earned only when the government accepts final delivery
  3. Are limited by statute to small business concerns
  4. Require the contractor to post a performance bond for each payment

Explanation

Progress payments reimburse a portion of costs as work progresses, before the deliverable is accepted, and are later liquidated by deductions from payments due on delivered items. They are a financing mechanism, not a payment for completed work.

Question 38Contract Principles and Planning

A mandatory FAR clause required by statute is inadvertently omitted from a contract. Under the Christian doctrine:

  1. The contract is void because a required clause is missing
  2. The omission can be corrected only by mutual mistake reformation
  3. The clause is incorporated by operation of law and is enforceable Correct answer.
  4. The clause applies only if the contractor accepts it after award

Explanation

The Christian doctrine holds that a mandatory contract clause that expresses a significant or deeply ingrained public policy is read into the contract even if the contracting officer failed to include it. The clause is therefore enforceable as though it had been written into the instrument.

Question 39Contract Principles and Planning

Which action is a violation of the Antideficiency Act?

  1. Using appropriated funds for a purpose Congress did not authorize
  2. Selecting other than the lowest-priced offeror in a tradeoff decision
  3. Accepting voluntary services for the government without authority Correct answer.
  4. Awarding a contract without conducting market research

Explanation

The Antideficiency Act prohibits accepting voluntary services or employing personal services not authorized by law, along with obligating or expending funds in advance of or in excess of available appropriations. Violations of the purpose statute and of procurement policy are separate concerns.

Question 40Contract Principles and Planning

A contractor sells its business and wants the successor firm to perform the existing government contract. Under the Assignment of Claims Act and the FAR novation rules:

  1. The contract must be terminated for convenience and recompeted
  2. The contractor may assign the contract by written notice to the contracting officer
  3. The successor may perform if it assumes all contract obligations
  4. The government, transferor, and transferee must execute a novation agreement Correct answer.

Explanation

Transferring a government contract to a successor in interest requires a novation agreement signed by the government, the transferor, and the transferee, recognizing the successor as the party bound to perform. Absent that agreement, the original contractor remains liable for performance.

Question 41Contract Formation and Award

Under the FAR, what is the micro-purchase threshold for most executive agencies?

  1. $10,000 Correct answer.
  2. $3,500
  3. $25,000
  4. $250,000

Explanation

FAR 2.101 sets the micro-purchase threshold at $10,000 for most agencies, and FAR 13.202 allows purchases at or below that level to be made without competitive procedures. The threshold was raised over time, so older figures still circulate.

Question 42Contract Formation and Award

What is the simplified acquisition threshold under the FAR?

  1. $750,000
  2. $250,000 Correct answer.
  3. $100,000
  4. $10,000

Explanation

FAR 2.101 defines the simplified acquisition threshold as $250,000, and FAR Part 13 procedures are available for acquisitions at or below that level. The threshold drives numerous FAR requirements, including synopsis and competition rules.

Question 43Contract Formation and Award

Sealed bidding is the appropriate method of contracting when which set of conditions is present?

  1. The requirement is complex and needs negotiations
  2. Technical proposals will be scored using a best-value tradeoff
  3. Only one responsible source can perform the work
  4. Time is adequate, award by price, no discussions needed Correct answer.

Explanation

FAR 6.401 permits sealed bidding only when the agency has enough time, award will be made on the basis of price and other price-related factors, and discussions with bidders are not needed. If any of these conditions fails, negotiated procedures must be used.

Question 44Contract Formation and Award

Before issuing a solicitation for a requirement above the simplified acquisition threshold using full and open competition, how far in advance must the contracting officer publish a synopsis?

  1. 15 days Correct answer.
  2. 10 days
  3. 30 days
  4. 5 days

Explanation

FAR 5.203 requires a synopsis of the proposed contract action to be published at least 15 days before issuance of the solicitation. The period gives industry time to decide whether to participate or to comment on the acquisition strategy.

Question 45Contract Formation and Award

Which of the following is a permissible justification for other than full and open competition under FAR 6.302?

  1. The need is of unusual and compelling urgency Correct answer.
  2. Competition would take more staff time than is available
  3. The incumbent has more experience than other firms
  4. The contracting officer prefers a single vendor

Explanation

FAR 6.302-2 authorizes other than full and open competition when the agency's need is of unusual and compelling urgency and delay would seriously injure the Government. Staff convenience and vendor preference are not statutory bases.

Question 46Contract Formation and Award

When a solicitation uses a brand name or equal purchase description, what must the solicitation include?

  1. Salient characteristics that an equal product must meet Correct answer.
  2. A waiver of the requirement to conduct market research
  3. A requirement that offerors submit product samples
  4. A statement that only the named brand will be accepted

Explanation

FAR 11.104 requires brand name or equal descriptions to state the salient physical, functional, or performance characteristics that an equal product must meet so that offerors can compete on a common basis. Without those characteristics, the description is effectively restrictive.

Question 47Contract Formation and Award

Which of the following is a responsibility factor the contracting officer must affirmatively determine under FAR 9.104-1?

  1. Compliance with the required proposal page limits
  2. Acceptance of every term and condition without exception
  3. Adequate financial resources to perform the work Correct answer.
  4. Submission of a bid guarantee with the offer

Explanation

FAR 9.104-1 lists responsibility factors such as adequate financial resources, ability to meet the delivery schedule, satisfactory performance record, integrity, and necessary organization and equipment. These concern the firm's ability to perform, not the form of its offer.

Question 48Contract Formation and Award

An otherwise low bid takes exception to the delivery schedule, which is a material term of the invitation for bids. What is the proper action?

  1. Conduct discussions and let the offeror revise the term
  2. Reject the offer as nonresponsive Correct answer.
  3. Award on the basis that the exception is minor
  4. Waive the exception as a minor informality

Explanation

A bid that takes exception to a material term does not conform to the invitation and must be rejected as nonresponsive; sealed bidding does not permit discussions or revisions. Only minor informalities that do not affect price, quantity, quality, or delivery may be waived.

Question 49Contract Formation and Award

A proposal arrives after the closing time. Under the late-proposal rules, the agency may still consider it if which condition applies?

  1. The contracting officer wants more competition
  2. The offeror is the incumbent contractor
  3. The offer is the lowest priced received
  4. Government mishandling caused the proposal to arrive late Correct answer.

Explanation

FAR 15.208 permits consideration of a late proposal received before award when accepting it would not unduly delay the acquisition and the delay resulted from Government mishandling after receipt at the designated office, among other limited exceptions. Incumbency, price, and a desire for more competition are not exceptions.

Question 50Contract Formation and Award

What is the purpose of establishing a competitive range in a negotiated acquisition?

  1. To fix the maximum price the agency will pay
  2. To rank offerors for purposes of a public announcement
  3. To select the awardee without holding discussions
  4. To identify offerors the agency will hold discussions with Correct answer.

Explanation

FAR 15.306(c) requires the contracting officer to establish a competitive range of the most highly rated proposals, excluding those with no realistic chance of award, and discussions are then conducted with those offerors. The range is not a price ceiling or an award decision.