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NCMA CPCM Quiz - Contract
Management Solved 100% Verified 2025
_________ and _________ competencies support the technical application of contract management.. - ANSWER-Leadership and Management ____________ should be viewed as a team effort, including the talents and input from contracting personnel, customers, finance experts, technical experts, and legal counsel
- ANSWER-Acquisition planning A "well-trained" contract manager: - ANSWER-Has learned relevant competencies A basic agreement is what type of contract? - ANSWER-It is not a contract A basic ordering agreement is considered what type of contract? - ANSWER-It is not a contract A Basis of Estimate is prepared for each work package (the lowest level of the Work Breakdown Structure). It is: - ANSWER-...a description of how the work will be done, by whom, and the effort or materials required. A bidder with adequate financial resources to perform the contract, who is able to comply with the required delivery schedule, has a satisfactory performance record and record of integrity, and has the necessary organizational controls and production facilities to perform the contract, can be determined to be what? - ANSWER- Responsible A brief statement of the goal to be achieved, the end product desired, or the basic purpose of a requirement is called what? - ANSWER-Objective A buyer that sends its personnel to a work site to visually check on progress is doing what? - ANSWER-Direct observation A buyer who wanted to ensure that the contractor managed costs effectively would likely prefer which of types of contract? - ANSWER-Cost-plus-incentive-fee A change that must be within the original scope of the contract - ANSWER-A directed change A claim made by the government against a contractor - ANSWER-An affirmative claim A claim that has been forwarded to the government from a subcontractor via a prime contractor - ANSWER-Sponsored Claim
A clear, mutual understanding of the work to be done, as well as who will complete it and who the key stakeholders are, can be established how? - ANSWER-By holding a post-award, pre-performance meeting A company accounting for output by identifying specific physical units describes which type of cost system? - ANSWER-Job-order A company is seeking new accounting software. That software must be compatible with already existing software the company uses for personnel management, etc. as well as existing IT equipment. Information about this compatibility requirement should likely be included in which section of the Acquisition Plan? - ANSWER-Conditions or constraints A contract award will be made based on lowest evaluated price, once the proposal meets or exceeds an acceptability standard. How will potential offerors know that award will be made in this fashion? - ANSWER-It will be specified in the solicitation document A contract which provides evidence that there was an agreement for the sale of goods, is signed by the party to be charged, and specifies a quantity is... - ANSWER- Enforceable A contracting officer is preparing to award a contract for Advisory & Assistance Services to a small business. The contracting officer wants to make sure the small business is financially capable of performing and managing the contract. The Contracting Officer requests the contractors Balance Sheet from the most recently completed fiscal year. What is an example of another item the Contracting Officer might consider requesting to make a more informed decision? - ANSWER-Cash flow statement A contracting officer who sends representatives from the buying agency to a work site to watch a statue being cleaned is performing what? - ANSWER-Direct observation A contractor making a claim against another party to a contract must base that claim on what? - ANSWER-A relief-granting clause in the contract A cure notice or show cause notice typically precedes what? - ANSWER-A termination for default A decisive leader is - ANSWER-Confident and effective A description of need, cost targets, delivery or performance requirements, and a plan of action are all components of what? - ANSWER-An acquisition plan
A potential offeror is preparing a response to a solicitation, and needs to know whether separate technical and price proposals are required. Where should the offeror be able to find this information? - ANSWER-In the instructions included in the solicitation package A Procurement Specialist at Company A is responsible for purchasing a fleet of vehicles under federal agency contract. His sister owns a large car dealership that sells the type of vehicles needed and she is planning to submit a bid. This situation could be an example of what? - ANSWER-Personal conflict of interest A proposal submitted without being solicited is called a(n): - ANSWER-Unsolicited Proposal A purchase order has the following two step process that sometimes causes accounting data entry delays: - ANSWER-1 - A commitment is made when the order is approved and funds are deducted, similar to an accrued expense. 2 - The value of the commitment is reduced as the supplier invoices for goods/services. A quality assurance process that focuses on controlling processes to plus or minus a specific standard deviation? - ANSWER-Six Sigma A schedule that outlines what tasks will take place, when they are scheduled to begin and end, and what resources are needed to accomplish them is typically created during the Project Planning Phase and is called a ___________. - ANSWER-Resource-Loaded Schedule. A seller reviewing a solicitation discovers a requirement in one area which is stated elsewhere in the solicitation using contradictory language. What should the seller do? - ANSWER-Immediately bring the discrepancy to the attention of the buyer A set of pre-negotiated IDIQ contracts - ANSWER-Federal Supply Schedule A simple, straightforward, low-dollar-value acquisition may not require what? - ANSWER-A written acquisition plan A small business has $600,000 cash on hand. The business expects another $200, to come in from invoiced orders, and has $100,000 in short-term investments. Additionally, the business has $400,000 in liabilities. What would determine how well the business could satisfy its current liabilities with is current assets? - ANSWER-Acid test ratio A small business set-aside is an allowable limitation on what? - ANSWER-Full and open competition
A solicitation tool used to pre-qualify buyers in two-step sealed bidding. - ANSWER- request for technical proposals A successful contract management framework includes what four elements? - ANSWER--Fast learning -knowledge assets -communities of practice -enabling technology A team member wants to bring an important fact or observation to the lead negotiator's attention during the negotiation. What can the team member use to do this? - ANSWER-Caucus A web portal that allows vendors to review Federal business opportunities. - ANSWER- FedBizOpps A website where government buyers can publicize business opportunities to contractors
- ANSWER-FedBizOpps A written agreement that applies to future contracts between parties is a: - ANSWER- Basic agreement According to the CMBOK, how is certification related to competence? - ANSWER- Certification indicates a tendency toward competence According to the CMBOK, what is necessary for a code of conduct to be effective? - ANSWER-Strong leadership foundation According to the CMBOK, when is learning most fulfilling? - ANSWER-When you learn something because you want to learn it According to the Institute for Supply Management, which of the following is not a step in the purchasing process? - ANSWER-Determining business volume According to the Learning competency, when is learning most fulfilling? - ANSWER- When you learn something because you want to learn it Acquisition statutes are ______________ in the Federal Acquisition Regulation - ANSWER-Implemented Although it is not possible for every negotiator to do an in-depth analysis of each acquisition, what information should the seller have, at a minimum, before beginning negotiations? - ANSWER-The purpose of the acquisition, the buyer's objectives, who the end user is, and the needs of the end user
An underlying concept in the UCC applicable to contracts states that there must be a written record of any contract for the sale of goods of $XX or more in order to be enforceable - ANSWER-$ Analysis to measure the company's ability to meet current and long-term obligations would use the following ratio: - ANSWER-Solvency Ratio. Article 2 of the UCC covers: - ANSWER-The Sale of Goods Article 2 of the UCC requires that a written contract must: - ANSWER-Specify a quantity As the first step in the financial management process, this individual is responsible for estimating how much funding the contract will require over time, and for marrying those costs with the schedule to identify when expenses will occur: - ANSWER-The program manager or contract manager. Asking "Who wrote this, and does it apply to my contract management situation?" is an example of what? - ANSWER-Analyzing research Asking the question "What can we learn and immediately apply?" is an example of which knowledge management tool applied to risk management? - ANSWER-Learning During Assets whose value comes from their physical substance, like land, buildings, and equipment, are what type of asset? - ANSWER-Tangible Assuring your organization adheres to high ethical standards is an example of what? - ANSWER-A leader's focus on character At the lowest level, which of the following is responsible for providing to the buyer a high-quality deliverable? a. Portfolio b. Project c. Program d. Product - ANSWER-Project Barleywine Professionals is awarded a federal contract for advisory and assistance services. Specifically, a certain engineer is needed to perform calculations for an ongoing DoD missile program. Shortly after the contract is executed, the engineer unexpectedly leaves the company. Unable to replace her in time to perform the contract, Barleywine informs the DoD. Fortunately, the DoD is able to obtain the services from another company, and since no debts or obligations are due, the
contractual obligation is severed by the agreement of both parties. This is an example of what? - ANSWER-No-cost cancellation Before an acquisition for information technology is conducted, Company A is awarded a contract to prepare data system specifications and equipment performance criteria to be used as the basis for the equipment competition. Company A is preparing to submit a proposal to supply the equipment. What is this an example of? - ANSWER- Organizational conflict of interest Blue Ceramics has a contract with NASA to develop heat-resistant cladding for the next generation of manned spacecraft. The original contract specified that samples should be packaged and delivered to Kennedy Space Center in Cape Canaveral, FL, but the government informs Blue Ceramics that the samples should instead be delivered to Goddard Space Flight Center in Greenbelt, MD. The contract is changed by mutual assent. This is an example of what? - ANSWER-A directed change Bucklesville, Nebraska has only two cable TV providers. They both provide essentially all the same channels and cost almost exactly the same amount per month. What type of competition is this? - ANSWER-Oligopoly Burn Rate funding analysis "spreads" the contract value over time in a level-loading scheme. This technique: - ANSWER-fails to consider project phases, or the potential for programs to "ramp-up" activity at the beginning, and "tail off" at the end of a project. Can a subcontractor file a claim against the government? - ANSWER-No, because the subcontractor has no privity with the government Categorizing purchases according to dollar value is done in: - ANSWER-Pareto Analysis Categorizing suppliers into Transactional, Collaborative, and Strategic Alliance categories represents - ANSWER-Supplier Relationship Model Changes beyond the contract scope and that materially alter the nature of the contract that the parties entered are called what? - ANSWER-Cardinal changes Character is composed of which three elements? - ANSWER-Integrity, optimism, decisiveness Clear payment terms in a contract fulfill which essential contract element? - ANSWER- Consideration between the parties
Dr. Melissa Bork is the inventor of the Borkulator, a machine that quickly performs a previously difficult chemical extraction. According to the U.S. Patent and Trademark Office, what can Dr. Bork receive for her invention? - ANSWER-A utility patent Dr. Melissa Bork works for a chemical company called Mandarine. While performing a difficult chemical extraction, she has an idea for a new, easier process; her idea eventually leads to her invention of a machine called the Borkulator. If Dr. Bork's employment agreement with Mandarine includes shop rights, what may Mandarine do with Dr. Bork's invention? - ANSWER-Mandarine may use the Borkulator without any payment of royalties During a negotiation, one team proposes a counteroffer, and members of the other team break away from the formal negotiation to privately discuss all aspects of the counteroffer. What is this called? - ANSWER-Caucus During contract performance which party is most likely to bear the risk of loss? - ANSWER-The party who had control of the goods when the loss occurred During the process of evaluating submitted offers, a buyer discovers that one of its offerors is a new company with no relevant past performance information. How will the buyer evaluate this offeror against the competition? - ANSWER-The buyer should use the evaluation methods specified in its evaluation plan Effective problem solving involves which of the following? a. Acknowledging that every problem has a solution b. Solving the same problems over and over c. Understanding the source of the problem d. Knowing that problems can always be avoided - ANSWER-Understanding the source of the problem Employee __________ is a major component of organizational success. - ANSWER- Motivation Evaluation Procedures will impact... - ANSWER-the quality of proposals received Expectation damages are monetary damages paid: - ANSWER-To place the aggrieved party in the same position as if the contract had been performed Explicit, mutual assent, and conduct of the parties are the three types of what? - ANSWER-Contract modifications described in the UCC External market research is typically conducted: - ANSWER-After the requirement is defined
FAPIIS, CPARS, and PPIRS are government databases that can help buyers evaluate what? - ANSWER-An offeror's past performance FAR Part 13 defines procedures for performing acquisitions at or below a specified threshold. What is special about these acquisitions? - ANSWER-They use simplified acquisition processes Fenway Company verbally agreed to purchase 5 fans from Top Fans Inc., at the total price of $476.20. Top Fans Inc. delivered two of the fans but has not delivered the other 3 fans. Fenway paid for the 2 fans delivered. Which of the following is true? a. The dollar value indicates the contract must be in writing to be enforceable, therefore Top Fans Inc. does not have to deliver the remaining fans. b. Since Top Fans delivered, and Fenway paid for the 2 fans, the contract is valid and Top Fans must deliver the remaining fans c. Since there is no written contract, Top Fans Inc. does not have to deliver the remaining fans d. Although Top Fans already delivered, and Fenway accepted, the 2 fans, Top Fans can still provide a written notice of its objection to the contract to preclude it from being enforced
- ANSWER-Although Top Fans already delivered, and Fenway accepted, the 2 fans, Top Fans can still provide a written notice of its objection to the contract to preclude it from being enforced For a given period of time and range of activity, which of the following costs do not change in total but become progressively smaller on a per-unit basis as volume increases? - ANSWER-Fixed costs For claims greater than $100,000, when must the contractor be given a final decision? - ANSWER-Within a "reasonable time," provided the contractor is notified within 60 days of when to expect a decision For claims under $100,000, when must a final decision be issued? - ANSWER-Within 60 days For which party is it important to answer the question "Who is the other party's lead negotiator?" - ANSWER-Both the buyer and the seller Fowley Inc., SpectraCorp, and the Eleven Corporation all responded to the same government solicitation by submitting technical proposals for their products. The government evaluated these proposals on their technical merits and found that Fowley did not appear to have the technical capacity to perform. SpectraCorp and the Eleven Corporation were then asked to submit price bids, which were evaluated and the award made to the lowest bidder. What acquisition method was used here? - ANSWER-Two-step sealed bidding
How can buyers and sellers avoid compliance problems during the contract administration phase? - ANSWER-By establishing and maintaining effective communications How can you determine how you, your employer, and the contract management profession will benefit from your involvement in and completion of your goals? - ANSWER-Through self-assessment How does the Bureau of Labor Statistics provide a measure of price movement in comparison with prices in a base year? - ANSWER-By publishing price level indices How does the degree of competition affect the relevance of negotiation objectives? - ANSWER-In a highly competitive acquisition, the price is primarily determined by market forces Identifying problems that must be resolved, identifying gaps between current performance, identifying current employee knowledge, and examining employees' attitudes toward training are all examples of things that could be found where? - ANSWER-In a needs assessment If a company receives customer feedback that its procurement department is slow in awarding contracts, what type of management activity would find a way to improve the procurement department's productivity? - ANSWER-Operations management If a contract is not in writing, but goods have been accepted and payment has been made and accepted, this may provide evidence of what? - ANSWER-An enforceable contract If a seller clearly indicates to the buyer, by word or deed, that it will not perform the duties of the contract, which of the following is not true? a. The buyer has repudiated b. The contract can be terminated for default c. The seller is likely not entitled to any prior notice of termination d. The buyer may send the seller a cure notice or show cause notice - ANSWER-The buyer has repudiated If the buyer wrote the ambiguous contract, the seller's interpretation should be considered the valid interpretation - ANSWER-Contra preferentem rule If the contract stipulates "free-on-board destination," who is responsible for payment of transportation costs associated with delivering the contract? - ANSWER-The seller If the contracting officer's final decision denies all or part of a claim that the contractor believes is valid, what should the contractor do next? - ANSWER-File an appeal
If the scope of work cannot be precisely known and defined at the start, and will need to be altered, what type of contract provides the seller with the least risk? - ANSWER- Cost-reimbursement If you are an experienced contract management leader and you need to make a fast, high risk decision in an uncertain situation, what is the best approach? - ANSWER- Intuition In a bifurcated appeal of a final decision on a claim, when is quantum addressed? - ANSWER-After it has been determined that the government breached the contract In a monopoly, who has the greatest pricing power? - ANSWER-The seller In a prime/subcontractor relationship under a federal contract, what does the prime contractor necessarily have that the subcontractor does not? - ANSWER-Privity of contract with the government In a principal-agent relationship, a special agent has what authority? - ANSWER-To conduct a specific and limited assignment In a training needs assessment, "What skills to the employees need to be able to do differently?" is an example of what? - ANSWER-A learning need In all negotiations, both the buyer and the seller teams should include which of the following? - ANSWER-A designated lead negotiator In contract interpretation, the practices or methods of dealing that are regularly observed and justify an expectation that they will apply to a specific transaction are called what? - ANSWER-Usage of trade In negotiated acquisitions, when is fact-finding performed? - ANSWER-Prior to the negotiation session, or at the beginning of the session In sealed bidding, the buyer evaluates the sellers' offers based on what factor or factors? - ANSWER-Price and price-related factors In subcontract management, the volume of actions is typically XX than in buying. - ANSWER-Lower In the five-phase third-party certification process, what is the fifth and final phase? - ANSWER-Recertification In which decision-making step should one create objectives and goals? - ANSWER-Pre- plan strategies In which of the five domains of contract management does source selection occur?
Many independent buyers; many independent sellers; easy entry to market; balanced pricing between buyers and sellers - ANSWER-Perfect competition Mermaid Dynamics is a manufacturer of nuclear submarines. The company sells to only one customer: the U.S. federal government. What type of competition is this? - ANSWER-Monopsony Modifications by mutual assent are governed by what? - ANSWER-The Uniform Commercial Code Mystic Consulting sends one of its employees on travel and the employee purchases an airline ticket. However, the employee must file a travel voucher, the voucher must be approved, and payment must be made to reimburse the employee before the cost appears in the accounting data. The delay between the cost being incurred and the cost appearing in the accounting system is called what? - ANSWER-Latency NASA plans to purchase a new type of protective plastic laminate to be used on astronauts' helmets. The material has not yet been developed and, because of the long lead time to bring it to production, it will be necessary to contract for additional quantity before product stability can be established. NASA establishes an initial target cost of $60,000 to develop the laminate. The contractor negotiates a target profit of $10,000. These targets are then used with a profit-adjustment formula to establish a firm target profit of $9,000. According to the contract, the contractor's profit shall not exceed $10,000, but shall not be less than $7,000. When the material is brought to full production capacity, the firm target cost and firm target profit will be renegotiated. What type of contract is described here? - ANSWER-Fixed-price incentive, successive targets Negotiating contract type and negotiating prices are closely related and should be considered together. What is the objective this should achieve? - ANSWER-Imposing a reasonable risk on the seller while incentivizing efficient, economical performance No debt may be paid out of public funds unless Congress has made an ______________ for that purpose. - ANSWER-Appropriation Odenkirk Manufacturing makes three different types of widget: the Orange, the Purple, and the Turquoise. The three widgets involve nearly identical production activities; they are all assembled the same way until the final step, in which they go through a unique chemical process that changes their color. Odenkirk charges the direct costs for multiple contracts for these widgets at the same time; at the end of the accounting period, the costs incurred are assigned to the units completed. What type of cost system is this? - ANSWER-Process Once a buyer has repudiated, which of the following will likely happen next? - ANSWER-Termination for default
Once stakeholder expectations are clear, what must a training manager do with those expectations? - ANSWER-Convert them into observable, measurable success outcomes One aspect of a monopsony is that it: - ANSWER-Has many independent sellers One party in a negotiation is unlikely to offer a ____________ without receiving one from the other party in exchange. - ANSWER-Concession Only contractor claims over $100,000 must be... - ANSWER-Certified Only what is written in the contract is applicable and all previous verbal or written statements are not applicable - ANSWER-Parole evidence rule Operating activities, investing activities, and financing activities are generally found in what type of financial statement? - ANSWER-Cash flow statement Optimism is an important leadership tool, but it can be undermined by: - ANSWER- Inflexibility Parallel Construction fails to complete a scheduled building on time and is taken to court by the buyer. The court rules that, as a remedy, the contractor must return to the work site and complete the work. What is this called? - ANSWER-Specific enforcement Parry Products sets a tactical goal to reach sales of $10,000,000 within the next six months. Identifying how the company will meet this goal requires what kind of planning?
- ANSWER-Operational Partnerships and joint ventures are typical examples of what? - ANSWER-Teaming agreements Patent, copyright, and trademark are forms of what? - ANSWER-Intellectual property Perfect Design was awarded a contract to develop a training program for a software package used by an agency. One month into development, the agency requested that the number of topics in the training program be increased from four to six, then from six to seven. This is an example of what? - ANSWER-Scope creep Pleasant Elevation is a construction company working on a government building. Some of its employees were injured in an accident on the job site. After receiving notification of the accident, the contracting officer, Michelle Jackson, issued an order to suspend contract performance. Pleasant Elevation stopped construction so that the government could conduct an investigation. Ms. Jackson's actions were an example of: - ANSWER-Express authority
Some contracts may require testing of pre-production models, initial production samples, test samples, first lots, or pilot samples for conformance with specified contract requirements before or in the initial stages of production. What is this called? - ANSWER-First article testing Specific enforcement, following the breach of a contract, requires the party that breached the contract to do what? - ANSWER-Complete contract performance Specifically states in the contract what the product will/will not do - ANSWER-express warranty Standardized contract language often used in commercial transactions is called what? - ANSWER-Boilerplate Step 4 of the 6-step Decision-Making Process advises leaders to create a written plan that: - ANSWER-Details the problem, determines the root cause, and lists criteria to help choose a solution Stipulated damages are also called: - ANSWER-Liquidated damages Successful contract management depends on the leader's ability to integrate: - ANSWER-The leadership process competencies Supply Chain Management: - ANSWER-Involves managing the activities to produce and deliver a product or service from suppliers to the end user customer Tadpole Communications is developing a long-range digital transmission device for the DoD. Tadpole awards a subcontract to an electronics company called Samarkand to provide certain components. Tadpole must provide specifications to Samarkand which disclose data that is not publicly available and is owned by Tadpole. What type of document do the prime and the subcontractor need to set forth the conditions under which this data is provided and received? - ANSWER-A proprietary information document The ____________ domain is in the Post-Award phase, and actively involves both the buyer and the seller - ANSWER-Perform Contract The ___________________ statute requires all U.S. performed services contracts greater than $2500 to pay minimum wages based on prevailing wages in that location. - ANSWER-Service Contract Labor Standards The __________is usually responsible for monitoring project performance. - ANSWER- Project Manager
The "bottom line" of an income statement shows what? - ANSWER-The company's net earnings or losses The act of moving goods out of one's internal organization to another organization due to loss of value is: - ANSWER-Disposition The actual damages incurred by a contractor harmed by a lack of contract performance.
- ANSWER-Quantum The buyer in a negotiation describes its objective as "to get the best price we can." Which of the following best describes this objective? - ANSWER-Neither specific nor realistic The CMBOK suggests that Certification is an indicator of... - ANSWER-professional strength The concept which entitles the seller, upon shipment, to the acceptance of goods and to payment according to the terms of the contract, is called what? - ANSWER-Tender The contra preferentem rule states that: - ANSWER-An ambiguous contract shall be interpreted in a way that benefits the party that did not write the contract The contract closeout process should begin as soon as possible after the contract is physically completed. When can the contract closeout process be completed? - ANSWER-After final rates have been received from the DCAA The contract management landscape is constantly being shaped and reshaped by outside forces. How would a contracting professional who understands the CMBOK deal with this? - ANSWER-By acknowledging that change is inevitable and being willing to adapt The contract management strategy is designed to: - ANSWER-Allow buyer and seller to agree on a fair price with an acceptable level of risk The Department of Commerce intends to award a contract to a data broker to provide information on several million U.S. businesses' financial contributions to their state and local governments. The Arcana Group has the analytics the government needs, and negotiates an agreement. Under the proposed contract, the government will reimburse Arcana for its costs in collecting and breaking down the data, plus award a fee equal to 2% of Arcana's expended costs. Which of the following is true about this scenario? a. The contracting method described is explicitly prohibited by the FAR b. The contract type selected will provide motivation for excellence in contract performance c. The contracting method described has a high level of risk for the seller
