CLC 058 Contract Pricing Exam Questions and Answers 2026

1. Cost or Pricing Data All facts that, as of the date of price agreement or an earlier date agreed upon between the parties, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are factual, not judgmental, and are verifiable. While they do not indicate the accuracy of the prospective contractor's judgment about estimated future costs or projections, they do include the data forming the basis for that judgment. Cost or pricing data are more than historical accounting data; they are all the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred.: Certified Cost or Pricing Data Cost or pricing data that were required to be submitted and have been certified, or are required to be certified. This certification states that, to the best of the person's knowledge and belief, the cost or pricing data are accurate, complete, and current as of a certain date before contract award. 2. Data Other Than Certified Cost or Pricing Data Pricing data, cost data, and judgmental information necessary for the con- tracting officer to determine a fair and reasonable price or to determine cost realism. Such data may include the identical types of data as certified cost or pricing data, but without the certification. The data may also include, for example, sales data and any information reasonably required to explain the offeror's estimating process.: Direct Cost Any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end product as material or labor. Costs identified specifically with a contract are direct costs of that contract. 3. Facilities Capital Cost of Money FCCOM is used to compensate contractors for use of capital without regard to whether the source is owner's equity or borrowed. It is designed to help contractors achieve a return on their investment in facilities capital. It is NOT considered interest on borrowing, which is unallowable according to the FAR.: Fair and Reasonable Price A price must be considered fair to both parties. A price that a prudent and competent buyer would be willing to pay is a reasonable price. A fair and reason- able price is dependent on the market conditions, general economic conditions, promised quality, competition, alternative approaches, and timeliness of contract performance. 4. Forward Pricing Rate Agreement A written agreement negotiated between a contractor and the Government to make certain rates available during a specified period for use in pricing contracts or modifications.: General and Administrative Expense Any management, financial, and other expense which is incurred by or allocated to a business unit and which is for the general management and administration of the business unit as a whole. 5. Indirect Cost Any cost not directly identified with a single final cost objective, but identi- fied with two or more final cost objectives (i.e. contracts) or with at least one intermediate cost objective.: Indirect Cost Rate A percentage or dollar factor that expresses the ratio of indirect expense incurred in a given period to an appropriate base for the same period. 6. Price Cost plus any fee or profit applicable to the contract.: Pricing The process of establishing a reasonable amount to be paid for supplies or services. 7. Note that the terms cost or pricing data and certified cost or pricing data are purely fact-based, while data other than certified cost or pricing data often includes judgmental information as well. The Federal Acquisition Regulation (FAR) defines many of these terms in even greater detail (see FAR 2.101). But don't worry. These terms may seem like a lot to absorb now, but you'll get acquainted with them by the end of the lesson! Also note that FAR 15.408 includes relevant solicitation provisions and contract clauses.: The Truth in Negotiations Act (TINA) established the requirement for submission of cost or pricing data and for contractors to certify that the data is accurate, complete, and current for the award of a negotiated contract (unless an exception per FAR 15.403-1(b) applies).