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CAPM® in Depth: Certified Associate in Project Management Study Guide for the CAPM® Exam > 12. Project Procurement Management > Flashcards

12. Project Procurement Management Flashcards

1
Q

What percentage of the exam do the objectives covered in this chapter make up?

A

4 percent

Equivalent to about 4 questions.

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2
Q

What are the three main avenues explored in managing procurements?

A
  • Planning procurements
  • Conducting procurements
  • Controlling procurements
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3
Q

Define procurement in the context of project management.

A

Procurement refers to obtaining—purchasing or renting—products, services, or results from outside the project team.

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4
Q

What are the two main roles involved in procurement management?

A
  • Buyer
  • Seller
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5
Q

What is the process of making purchasing decisions called?

A

Plan Procurements

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6
Q

What does the Conduct Procurements process involve?

A

Soliciting seller responses, selecting sellers, and awarding contracts.

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7
Q

What is the goal of the Control Procurements process?

A

Monitoring and controlling the contract execution and managing relationships among the parties involved.

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8
Q

What is the first step in planning procurements?

A

Get High-level Project Information

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9
Q

What document helps in developing a statement of work (SOW)?

A

Scope baseline

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10
Q

What should be considered when determining whether to make or procure an item?

A

Information collected during planning steps.

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11
Q

What is a contract?

A

A mutually binding agreement between a buyer and a seller.

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12
Q

What type of contract contains a fixed price and is used for well-defined products?

A

Fixed-price Contracts

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13
Q

Define Firm Fixed Price (FFP) contracts.

A

An agreement that specifies the fixed total price for the product, service, or result to be procured.

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14
Q

What are Cost-reimbursable Contracts characterized by?

A

Payment includes actual costs and a fee representing the seller’s profit.

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15
Q

What does T&M stand for in contract types?

A

Time and Material Contracts

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16
Q

What is the purpose of market research in procurement planning?

A

To gather information about industry and seller qualifications regarding items to be procured.

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17
Q

What analysis determines if an item should be procured or made in-house?

A

Make-or-Buy Decision Analysis

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18
Q

What is the output of the make-or-buy decision analysis?

A

A make-or-buy decision

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19
Q

What are source-selection criteria used for?

A

To rate responses from the sellers during procurement planning.

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20
Q

What is the significance of the requirement traceability matrix?

A

Links seller deliverable requirements to the product requirements.

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21
Q

What factors are considered in source-selection analysis?

A
  • Business Size and Type
  • Financial Capacity and Stability
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22
Q

What is the purpose of procurement planning?

A

To develop a procurement management plan and facilitate the procurement process

Procurement planning ensures that all aspects of procurement are organized and aligned with project goals.

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23
Q

What factors are considered in source-selection analysis?

A
  • Business Size and Type
  • Financial Capacity and Stability
  • Production Capacity and Interest
  • Technical Approach
  • Technical Capability and Expertise
  • Other factors like delivery date and relevant experience

These factors help in evaluating potential sellers for procurement items.

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24
Q

What is the major output of procurement planning?

A

The procurement management plan

This plan outlines how procurement will be managed throughout the project.

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25
What is the make-or-buy decision?
A decision on whether to make an item internally or buy it from external sellers ## Footnote This analysis is crucial for determining the best approach to procurement.
26
What are the components of a procurement strategy?
* Determine Delivery Methods * Determine Hows of Phase Management * Determine Contract Payment Types ## Footnote Each component helps guide the procurement process effectively.
27
What are bidding documents?
Documents structured to facilitate accurate seller responses and evaluations ## Footnote These documents include the statement of work (SOW) and any contractual provisions.
28
What is the purpose of a Statement of Work (SOW)?
To provide detailed information about the procurement item that enables sellers to deliver the required product or service ## Footnote The SOW must be specific and precise to avoid misunderstandings.
29
What is an independent cost estimate?
A benchmark prepared to evaluate the reasonableness of proposed costs from sellers ## Footnote This estimate can be done in-house or by a third party.
30
What is the goal of the Conduct Procurement process?
To secure an agreement with the seller on the procurement item ## Footnote This involves evaluating proposals and negotiating terms.
31
What steps are involved in conducting procurements?
* Seek Sellers * Select Sellers * Obtain Agreement ## Footnote Each step is crucial for successfully completing the procurement process.
32
What are the tools and techniques used in conducting procurements?
* Advertising * Bidder Conferences * Proposal Evaluation * Procurement Negotiations * Expert Judgment ## Footnote These techniques help in finding sellers and ensuring clear communication.
33
What are procurement negotiations aimed at clarifying?
* Terms of the purchase * Rights and obligations of parties in the contract ## Footnote Effective negotiations are essential for reaching a mutual agreement.
34
What constitutes the output of conducting procurements?
* List of selected sellers * Agreements with selected sellers ## Footnote These outputs finalize the procurement process and establish contractual obligations.
35
True or False: Bids and quotations are used to ask for solutions.
False ## Footnote Proposals are used to ask for solutions, while bids and quotations typically request prices.
36
Fill in the blank: The term __________ is used when the procurement item is a service.
Term of Reference (TOR) ## Footnote TOR serves a similar purpose as SOW but is specific to services.
37
What is the definition of 'Selected Sellers'?
The list of sellers selected as a result of proposal and bid evaluations, with a subset being rewarded a contract.
38
What are Agreements in procurement?
Contracts awarded to selected sellers after negotiations, obligating the seller to provide specified items and the buyer to make payment.
39
List some elements that can be included in a procurement contract.
* List of deliverables and statement of work * Schedule * Performance reporting * Acceptance criteria * Change-request handling * Inflation adjustments * Penalties and incentives * Terms of pricing and payment * Product support * Roles and responsibilities * Termination and dispute-handling mechanisms * Insurance * Limitation of liability * Warranty
40
True or False: The main goals of the Conduct Procurements process are to select the sellers, award procurement contracts, and obtain the procurement item.
True
41
What is the purpose of the Control Procurements process?
To ensure that the performances of the buyer and seller meet agreed-upon procurement requirements and that the procurement is properly closed.
42
List the four main activities included in controlling procurements.
* Manage procurement-specific relationships * Monitor the performance of the procurement part of the project * Manage procurement-related changes * Close procurement contracts
43
What is the core of controlling procurements?
To manage the interface of the procurement processes with the other processes of the project.
44
What types of documents manage information about procurement sellers?
* Documents from procurement processes (e.g., agreements, procurement documentation, procurement management plan) * Documents from non-procurement processes (e.g., milestones list, assumptions log, risk register)
45
What does work performance data include?
Raw performance data from the seller side, such as activities in progress, finished activities, and incurred costs.
46
What is the purpose of audits and inspections in the control procurement process?
To perform structural reviews of the contractor’s work and the overall procurement process.
47
What is generated as a result of data analysis and audits during the Control Procurements process?
Work performance information that includes seller performance in terms of schedule, cost, and technical performance.
48
What may generate change requests during the Control Procurements process?
Deviations found during data analysis and audits.
49
What is claim administration in procurement?
Handling changes that arise from disputes between buyer and seller regarding deviations or acceptable solutions.
50
When can procurements be formally closed?
When all deliverables have been accepted, and there are no payments due or unresolved claims.
51
What are the three most important takeaways from the chapter on procurement management?
* Identifying procurements and potential sellers is part of the Plan Procurement Management process. * The procurement strategy and plan are implemented through Conduct Procurement and Control Procurements processes. * The goal of Conduct Procurement is to reach an agreement; the goal of Control Procurement is to ensure delivery of acceptable items.
52
What is the definition of procurement?
Obtaining items (products, services, or results) from outside the project team to complete the project.
53
What is the role of the buyer in procurement?
The party purchasing or procuring the items.
54
What is the role of the seller in procurement?
The party delivering the items to the buyer.
55
The analysis to make a buy-or-make decision is performed during which procurement process?
Plan Procurements
56
Which of the following is not a bidding document?
Seller proposal
57
Which type of contract carries the most risk for the seller?
Firm Fixed Price (FFP)
58
Which type of contract is most beneficial for a seller when specifications are incomplete?
Time and Material (T&M)
59
Which of the following is not an activity of the Control Procurements process?
Archiving lessons-learned documents
60
What is the correct order of processes to perform for the first time?
Perform Integrated Change Control, Control Procurements, Direct and Manage Project Work

CAPM® in Depth: Certified Associate in Project Management Study Guide for the CAPM® Exam (14 decks)

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