2023 CLC 056 /CLC 056 Analyzing Contract Costs Exam

QUESTIONS AND ANSWERS GRADED A

1. Identify the circumstances when cost analysis should be performed by 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?
a. All of these are correct
b. 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.
c. The modification of any sealed bid or negotiated contract
d. The award of any negotiated contract (except for undefinitized actions such as letter contracts.
2. What is the best method for determining an improvement curve slope?
a. Using the median percentage from similar products
b. Using established slopes from the Cost Estimator’s Reference Manual
c. Using actual historical data
d. Using averages derived from recent procurements
3. Each Price Negotiation Memorandum must contain which one of the following? a.
Statement that the price is fair and reasonable
b. Signature of the Contract Specialist
c. Signature of the Legal Counsel
d. Statement that the FAR was consistently followed.
4. Which sampling technique is used to focus on high-value items?
a. Random
b. Stratified
c. Cluster
d. Nonprobability
5. Which of the following type of costs would most likely be categorized as both direct costs and indirect costs,
depending on the circumstance?
a. G&A Overhead
b. Utilities
c. Direct Material
d. Travel Expense
6. Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating
technique.
a. True
b. False
7. Identify when cost analysis would be required.
a. For all proposals exceeding the micro purchase threshold
b. Whenever a price proposal is received
c. When certified cost or pricing data are required
d. To evaluate profit or fee
8. 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
9. 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?
a. The travel costs are for the project manager and the manufacturing supervisor to deliver the prototype to
the Government testing site for final demonstration testing.
b. The travel costs are for several senior engineers to attend a conference on the latest development in
manufacturing.
c. The travel costs are for the corporate vice president to attend the annual robotic association meeting.
 d. The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous
materials.
10. Which of the following is an indirect cost pool?
a. Manufacturing labor
b. Assembly labor
c. General and Administrative Expenses
d. Direct material
11. What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent
known as?
a. Defective Pricing
b. Data other than cost or pricing data
c. Exception to certified cost or pricing data
d. CICA Violation
12. How is simple linear regression used?
a. To make predictions about one dependent variable based on one independent variable
b. To make predictions about one dependent variable based on more than one independent variable.
c. To calculate an estimate that demonstrates the most likely average value based on the data supplied
d. To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive
production tasks.
13. 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?
a. Indirect costs
b. Total price
c. Direct costs
d. Total costs
14. What is an important driver to a successful negotiation?
a. Obtain the lowest price for the government
b. Ensure your position os heard
c. Maintain position of power
d. Listen to understand
15. How may you request an audit?
a. By mail
b. By email
c. By telephone call
d. All of these are correct
16. Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed
labor hour estimate?
a. Request that the contractor provide a should-cost-estimate
b. Decrement labor hours estimate according to DCAA standard decrement
c. Compare proposed hours on all other contracts from the same contractor d.
Compare proposed hours with a government should-cost estimate
17. Identify the correct definition of “Cost Realism Analysis”
a. The process of examining and evaluating a proposal to ensure all elements of cost are in line with the
Independent Government Estimate
b. The review and evaluation of individual cost elements, excluding profit, in a proposal.
c. The process of independently reviewing and evaluating specific elements of cost, in part to determine
whether they reflect a clear understanding of the requirement.
d. The review of a proposal to ensure the contractor has properly documented adherence to their
approved estimating system guidelines
18. Select the item below that would likely be categorized as a Direct Material Cost
a. Extra material or items that are left over from the contract and cannot be used
 b. The purchase of 104 motor assemblies needed to manufacture vehicles
c. Washers and seals used in the assembly process for all of the manufacturer’s products
d. Rail transportation used to get the materials to the offeror’s facility
19. When given a set of data that appears to contain outliers, which measure of central tendency is most
appropriate to use?
a. Mean
b. Mode
c. Coefficient of Determination
d. Median
20. The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple
customers are:
a. Process Cost System
b. Generally Accepted Accounting Practice
c. Job Order Accounting
d. Cost Accounting Standards
21. A cost is allowable if it is:
a. Established, disclosed and allocated
b. Reasonable, allocable and compliant with CAS/GAAP
c. Consistent, uniform and reasonable
d. According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be
accurate, current and complete
22. When is it most appropriate to document or model a contractor’s proposal?
a. Whenever there are values in excess of $1 million included in the proposal
b. When analyzing multiple commercial supply proposals
c. When the value, importance and complexity warrant the modeling
d. Anytime you award a competitive contract
23. When calculating the confidence interval, the sample standard deviation is used to derive the standard error of the
mean
a. True
b. False
24. The purpose of an audit is to:
a. Verify the transaction legality
b. Determine the degree of compliance with established procedures
c. Determine if the data is accurate and complete
d. All of these are correct
25. Which variable is also considered the independent variable?
a. X
b. Y
c. R
d. Z
26. When material prices may vary significantly from current inventory values, which estimating method should be
used?
a. Government User Estimates
b. Historical Quotes
c. Long Term Agreement Pricing
d. Current Supplier Quotes
27. When is the working capital adjustment used while calculating profit/fee?
a. On all fixed price contracts with financing
b. On all fixed price contracts
c. On all cost reimbursement contracts
d. On all fixed price contracts with progress payments
28. Which of the following factors is critical to a successful negotiation? a.
Effectively prepare, plan and communicate
b. Avoid being too friendly, in case the negotiations get difficult
c. The negotiation should be competitive
d. Set your opening position extremely low to give room to negotiate
29. Which of the following situations would the use of improvement curve analysis likely be used in evaluating
proposed costs?
a. Assembly line repair of a turret assembly for an M1/M2 Abrams tank
b. Assembly of two new prototype aerial refueling airplanes
c. Fabrication of a single jet engine frame assembly
d. Fabrication of a new aircraft carrier
30. 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?
a. Win-Lose
b. Win-Lose-Win
c. Win-Win
d. Lose-Lose
31. “Direct labor positions” share the same titles and pay levels.
a. True
b. False
32. 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.
a. True
b. False
33. 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?
a. No, raw material is always charged as an overhead expense
b. Yes, because all the material is to be used for government contracts
c. No, material must be used and charged specifically to the benefiting contract
d. Yes, due to the efficiency gained by procuring all the material at one time.
34. The statutory authority for requiring certified cost or pricing data relies primarily on Department of Defense
contract policy
a. True
b. False
35. 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.
a. True
b. False
36. When is the most appropriate to document or model a contractor’s proposal?
a. Whenever there are values in excess of $1 million included in the proposal
b. Anytime you award a competitive contract
c. When analyzing multiple commercial supply proposals
d. When the value, importance, and complexity warrant the modeling
37. Who has the authority to waive CAS applicability for a particular contract? a.
The Agency Head
b. Agency Lead Counsel
c. The Contracting Officer’s Representative
d. A level above the contracting officer
38. 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?
a. Developing a price negotiation objective for labor costs
b. Assigning the risk factors for profit calculations
c. Evaluating the bill of materials
d. Selecting the appropriate contract type
39. Which of the following is a phase in the allocation cycle?
a. Final Allocation Phase
b. Adjustment on Rates Phase
c. Interim Processing Phase
d. Continuous Rate Application Phase
40. A Disclosure Statement is required when Contractor receives a CAS covered contract or subcontract valued at
$60 million in a cost accounting period.
a. True
b. False
41. A “questioned cost” is one that has not yet been evaluated
a. True
b. False
42. The first step when conducting stratified sampling is to identify the population of items to be sampled. a.
True
b. False
43. “Position class” is a grouping of all positions that share the same title and pay levela.
True
b. False
44. Which of the following labor category in a contractor’s proposal for Ground Maintenance would raise concern?
a. Quality Control Manager
b. Milwright
c. Project Manager
d. Maintenance Technician
45. Which of the following is an effective use of stratified sampling?
a. Analyzing the items that make up 80% of the total material cost and 10% of the remaining items
b. Analyzing 10% of the items selected randomly
c. Analyzing 100% of the items
d. Analyzing 20% of the items that are under $25,000
46. How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)?
a. Treasury rate is not used in calculating FCCOM
b. Divided by the Weighted Guidelines profit objective
c. Multiplied by the FCCOM total amount
d. Divided into the FCCOM total amount
47. The national average mortgage rate is used in calculating Facilities Capital Cost of Money (FCCOM)
a. True
b. False
48. What is the single most important decision the Contracting Officer must make to mitigate cost risk? a.
Selection of contract type
b. The profit/fee percentage objective
c. Whether to solicit to large business, or set aside for small business
d. The selection of the awardee
49. 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
a. True
 b. False
50. Given the following data, calculate the sample median. Sample data: 17,16,17,16,17,18,18
a. 16
b. 17.5
c. 17
d. 18
51. 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?
a. Mileage of all similar cars
b. Color of similar cars
c. Prices of all similar cars currently for sale
d. Weight of all similar cars
52. 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
53. Which regression method assumes a linear relationship between the dependent and independent variables?
a. Local regression
b. Simple linear regression
c. Curvilinear regression
d. Segmented regression
54. Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data?
a. Price may be determined fair and reasonable based on price analysis proposal techniquesb.
Prices are set by law or regulation
c. Sole source acquisition of $3.5M FFO effort, price determined using cost analysis
d. Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of
value of modification
55. When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the
following statements is true?
a. They are not required to certify that they relied on that cost or pricing data in the Price Negotiation
Memorandum
b. They must have the agency’s Small Business Administration representative concur if the contract is with a
small business
c. They must have had legal counsel review the cost or pricing data prior to negotiations
d. They must certify that they relied on that certified cost or pricing data in the Price Negotiations
Memorandum.