1.

Wylie Coyote wishes to establish a mechanism to buy widgets from Acme Corporation on a
recurring basis but does not (like most men) want to commit unnecessarily. Which of the
following types of contractual devices will allow Wylie to get all the details like pricing, terms,
and so forth out of the way but not commit any of his scare money to a binding deal?
a. Indefinite Delivery / Indefinite Quantity contract
b. Basic Agreement
c. Basic Ordering Agreement
d. Wide Area Announcement
2. Tom has a Cost Plus fixed fee contract with Atomic International to research the effects of
sunlight on auto paint. Tom provided Atomic with an estimated cost of $20,000 and a period of
performance of 6 months. It is now 5 months into the effort and Tom has more work to do to
finish his study. Which of the following statements is NOT true of this scenario?
a. Tom is contractually obligated to make a best effort to complete the study for the quoted
amount
b. If Tom runs out of money before he finishes he may request additional funding from
Atomic who is under no obligation to provide it.
c. Typically any additional money provided would also provide additional fee.
d. Tom is perfectly within his rights to stop work when the funding runs out.
3. Contracts awarded under FAR Part 14 (Sealed Bids) are most likely:
a. Cost Reimbursement contracts for developmental items
b. Cost type contracts for commercial items
c. Fixed price contracts for developmental items
d. Fixed price contracts for commercial items
4. International contracts contain the risk of currency fluctuations. A contract that provides a
means to reevaluate and adjust the price structure based on exchange rates at the beginning of
each contract year (after the first) is:
a. Fixed Price with redetermination (Prospective)
b. Fixed Price with redetermination (Retroactive)
c. Fixed Price with Economic Price Adjustment
d. Cost Sharing
5. A contract that provides for upward and downward revision of the stated contract price
contingent on a specified occurrence such as actual cost of labor or material are called:
a. Fixed Price with redetermination (Prospective)
b. Fixed Price with redetermination (Retroactive)
c. Fixed Price with Economic Price Adjustment
d. Fixed Price Level-of-Effort
6. Wylie Coyote wants Acme International to get him a super dematerializer that he urgently need
to ambush that danged Road Runner. He offers Acme a 10 percent increase in contract price if
they can beat their stated 2 weeks after receipt of order time. This is called:
a. A performance Incentive
b. A quality Incentive
c. A delivery Incentive
d. Multiple Incentives.
Answers:
1. C (Basic Ordering agreements are like Basic Agreements but have a price schedule in
addition to the general terms and conditions)
2. C (Overruns are typically not entitled to fee since if they paid fee the contractor
would have no incentive to control costs.
3. D.
4. A. Not C because there is no contingent situation which would trigger the Economic
Price Adjustment.
5. C.
6. C. Delivery Incentive