NCMA Study Guide 2026

Defective pricing under TINA occurs when a contractor's certified cost or pricing data was not accurate, complete, and current as of the date of final agreement, entitling the government to a price reduction.

Bottom-up estimating develops cost estimates by pricing each element of the work breakdown structure individually and then summing them to arrive at a total contract cost estimate.

A Firm-Fixed-Price (FFP) 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 maximum risk and full responsibility for all costs and resulting profit or loss upon the contractor.

For cost-reimbursement contracts, the SF 1435, titled 'Proposal for Indirect Cost Rates,' is a required financial report. Contractors use this form to propose and justify their indirect cost rates, which are essential for billing and final settlement of costs incurred under the contract. It provides the government with detailed information on how indirect costs are calculated and allocated.

FAR 43.103 defines a bilateral modification (also called a supplemental agreement) as a contract modification that is signed by both the contractor and the contracting officer. These are used to make negotiated equitable adjustments, definitize letter contracts, and reflect other agreements of the parties.

FP-EPA contracts include price adjustment clauses tied to labor or material indices, protecting both parties when market volatility makes fixed pricing for the entire period unreasonable.