The private pilot was completing a biennial flight review with a flight instructor. He was demonstrating a simulated short, soft field landing over a simulated 50 foot obstacle on a 8,599 foot long by 150 foot wide concrete runway. The pilot allowed the airspeed to decrease to 40 knots at 50 feet above the runway and both the pilot and flight instructor failed to execute a go-around. The airplane then stalled, landed hard, and came to rest approximately 175 feet from the initial impact point. There was substantial damage to the engine mounts, nose gear and the firewall. There was a post-impact fuel spill, but no post-impact fire. Both pilots exited the airplane unassisted. The private pilot received minor injuries and the flight instructor received serious injuries. The airplane was not equipped with shoulder harnesses. Because of the airplane’s year of manufacture shoulder harness installation was not required.