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DCMA Limited Warrant Exam Questions and 100% Correct Verified Answers
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DCMA Limited Warrant Exam Questionsand 100% Correct Verified Answers
Elements of FFP? - ANSWER A firm-fixed-price contract provides for a price that is not
subject to any adjustment on the basis of the contractor's cost experience in
performing the contract. This contract type places upon the contractor maximum risk
and full responsibility for all costs and resulting profit or loss. It provides maximum
incentive for the contractor to control costs and perform effectively and imposes a
minimum administrative burden upon the contracting parties. The contracting officer
may use a firm-fixed-price contract in conjunction with an award-fee incentive (see
16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the
award fee or incentive is based solely on factors other than cost. The contract type
remains firm-fixed-price when used with these incentives.
-Preferred contract type (FAR 16.301-2(a)(1))
-Typically used to procure commercial supplies/services
-Used when the requirement is well-defined, market conditions are stable, and
the contractor is experienced
-Contractor assumes 100% of cost risk (resulting profit or loss), maximum incentive to
contractor to control costs
-Appropriate when:
•There is adequate price competition
•Reasonable price comparisons with prior purchases
, •Cost/Pricing data allows for realistic estimates
•Performance uncertainties/costs can be reasonably
identified •Contractor is willing to accept the risk
-Generally not appropriate for R&D
Elements of a CPFF? - ANSWER A cost-plus-fixed-fee contract is a cost-
reimbursement contract that provides for payment to the contractor of a negotiated fee
that is fixed at the inception of the contract. The fixed fee does not vary with actual cost,
but may be adjusted as a result of changes in the work to be performed under the
contract. This contract type permits contracting for efforts that might otherwise present
too great a risk to contractors, but it provides the contractor only a minimum incentive to
control costs.
Maximum cost risk to Gov
Best with R&D efforts that cannot be well-defined
-Two forms- FAR 16.306(d)
•Completion
-Describes scope of work by stating a definite goal and specifying an end
product. •Term
-Describes scope of work in general terms and obligates the contractor to devote
a specified level of effort for a stated time period.
CPFF statutory limits on fee? - ANSWER •R&D - fee shall not exceed 15% of
the contract's estimated cost, excluding fee.
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