1) Which one of the following best describes DoD philosophy of budgeting for a Fixed Price Incentive, Firm Target contract?

Budget for the ceiling price

Budget for the estimated negotiated price

Budget for the estimated negotiated price and the maximum amount of the price adjustment clause

Budget for the target price

2) Which one of the following best describes termination liability on a contract?

Amount that the contractor owes the government when the contract is terminated for default

Amount that the government owes a contractor when the contract is terminated for convenience

Maximum amount to be paid by the government to the contractor when a multiyear contract is cancelled

Minimum amount to be paid by the government to the contractor when a multiyear contract is cancelled