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PMP Exam 2 > 12 - Project Procurement Management > Flashcards

12 - Project Procurement Management Flashcards

1
Q

When the acquisition is not just for shelf material, goods or common products, what three things happen upon purchase?

A
  1. The buyer becomes the customer, a key project stakeholder
  2. The seller’s PM team becomes concerned with all processes of project management
  3. Terms and conditions of the contract become key inputs to many of the seller’s management processes
  4. 0 Project Procurement Management
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2
Q

What is the process of documenting project-purchasing decisions, specifying the approach, and identifying potential sellers?

A

Plan Procurement Management

12.1 Plan Procurement Management

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3
Q

What is the process of documenting project-purchasing decisions, specifying the approach and identifying potential sellers?

A

Plan Procurement management

12.1 Plan Procurement management

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4
Q

What is TAM?

A

Time and materials

Time and material contracts are a hybrid type of contractual arrangement that contain aspects of both cost-reimbursable and fixed-price contracts. They are often used for staff augmentation, acquisition of experts, and any outside support when a precise statement of work cannot be quickly prescribed.

  1. 1 Plan Procurement Management
  2. 1.1.9 Organizational Process Assets
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5
Q

In what kind of contract do the buyer and seller agree to a scope of work and when a seller will be paid for all costs incurred, plus a profit agreed as either a fixed price or a percentage of the initial project costs?

A

Cost-reimbursable contracts

12.1.1. Plan Procurement Management: Inputs

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6
Q

What does a PM use to evaluate the reasonableness of the bids or proposals from potential sellers?

A

Activity cost estimates

12.1.1.6 Activity Cost Estimates

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7
Q

What kind of contract includes financial incentives that are related to cost, schedule, or technical targets?

A

Fixed Price Incentive Fee (FPIF)

12.1.1.9 Organizational Process Assets

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8
Q

What are some types of contractual agreements and relationships that are Organizational Process Assets?

A
  1. Fixed Price
  2. Cost Reimbursable
  3. Time and Materials

All legal contractual relationships generally fall into one of two broad families: either fixed-price or cost reimbursable. Also, there is a third hybrid type commonly in use called the time and materials contract.

12.1.1.9 Organizational Process Assets

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9
Q

In what kind of contract does the seller absorb up to 100% of the risks (especially financial)?

A

Firm Fixed Price

12.1.1.9 Organizational Process Assets

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10
Q

In what kind of contract do the buyer and seller agree to a contract price that remains unchanged for an agreed scope of work or services, no matter what the actual costs are to the seller?

A

Fixed-price (lump sum)

12.1.1.9 Organizational Process Assets

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11
Q

What contracts, also known as “lump sum” are typically the preferred types of contracts that allocate the majority of the financial risk to the seller?

A

Fixed-price

12.1.1.9 Organizational Process Assets

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12
Q

In what kind of contract do the buyer and seller agree to a contract price that remains unchanged for an agreed scope of work or services, no matter what the actual costs are to the seller?

A

Fixed-price (lump sum)

12.1.1.9 Organizational Process Assets

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13
Q

In what kind of contract does the seller absorb up to 100% of the risks (especially financial)?

A

Firm Fixed Price

12.1.1.9 Organizational Process Assets

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14
Q

What kind of contract includes financial incentives that are related to cost, schedule, or technical targets?

A

Fixed Price Incentive Fee (FPIF)

12.1.1.9 Organizational Process Assets

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15
Q

What kind of contract has a price ceiling where all costs above the price ceiling are the responsibility of the seller?

A

Fixed price incentive

12.1.1.9 Organizational Process Assets

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16
Q

What kind of contract provides for the upward and downward revision of the stated contract price based upon the occurrence of previously specified contingencies?

A

Fixed Price with Economic Price Adjustment (FP-EPA)

12.1.1.9 Organizational Process Assets

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17
Q

What kind of cost-plus contract reimburses the seller for allowable costs and receives a fixed fee payment calculated as percentage of the initial estimated project costs?

A

Cost Plus Fixed Fee (CPFF)

12.1.1.9 Organizational Process Assets

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18
Q

What kind of contract allocates the majority of the financial risk to the buyer?

A

“Cost-reimbursable” or “Cost-Plus” contracts

12.1.1.9 Organizational Process Assets

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19
Q

In what kind of contract do the buyer and seller agree to a scope of work and when a seller will be paid for all costs incurred, plus a profit agreed as either a fixed price or a percentage of the initial project costs?

A

Cost-plus contract

12.1.1.9 Organizational Process Assets

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20
Q

What kind of contract does not provide the customer with any real control over the seller’s work efficiency, or to control their costs?

A

Time and material (T&M)

12.1.1.9 Organizational Process Assets

21
Q

What kind of contact assigns the majority of the financial risk to the customer?

A

Cost-plus or “cost reimbursable” contracts

12.1.1.9 Organizational Process Assets

22
Q

What kind of clause must relate to some trustworthy financial index, which is used to negotiate the final price?

A

The EPA clause (Economic Price Adjustment)

12.1.1.9 Organizational Process Assets

23
Q

What is an examination of industry specific vendor capabilities?

A

Market Research

12.1.2.3 Market Research

24
Q

How is the procurement process managed throughout the project?

A

Procurement Management Plan

12.1.3.1 Procurement Management Plan

25
Q

What is developed from the project scope baseline and defines only the part of the scope included within the related contract?

A

Procurement statement of work

12.1.3.2 Procurement Statement of Work

26
Q

What are four common terms for procurement documents?

A
  1. RFI - Request for Information
  2. IFB - Invitation for Bid
  3. RFP - Request for Proposal
  4. RFQ - Request for Quotation

12.1.3.3 Procurement Documents

27
Q

What are criteria developed and used to rate or score seller proposals, and can be objective or subjective?

A

Source selection criteria

12.1.3.4 Source Selection Criteria

28
Q

What is the process of obtaining seller responses, selecting a seller, and awarding a contract?

A

Conduct Procurements

12.2 Conduct Procurements

29
Q

What is the process of obtaining seller responses, selecting a seller and awarding a contract?

A

Conduct Procurements

12.2 Conduct Procurements

30
Q

What document describes how the procurement processes will be managed from developing procurement documentation through contract closure?

A

The procurement management plan

12.2.1.1 Procurement Management Plan

31
Q

What is a meeting between the buyer and all prospective sellers prior to submittal of a bid and used to communicate a common understanding of the procurement where no bidders receive preferential treatment?

A

Bidder Conference

12.2.2.1 Bidder Conferences

32
Q

What are significant differences in cost estimates an indication of?

A

This is an indication that the SOW was deficient, ambiguous and/or that the prospective sellers misunderstood it or failed to respond fully.

12.2.2.3 Independent Estimates

33
Q

What is it called when we investigate the readiness of vendors by examining past performance?

A

Analytical techniques

12.2.2.6 Analytical Techniques

34
Q

Who gives final approval of all complex, high-value, high risk procurements?

A

Organizational senior management

12.2.3.1 Selected Sellers

35
Q

Agreements can be amended at any time prior to contract closure by mutual consent, in accordance with the change control terms of the agreement. Such amendments are typically captured in writing.What kind of procedures follow such a dispute?

A

Alternative dispute resolution procedures [ADR]

12.2.3.2 Agreements

36
Q

How is a resource calendar used to conduct procurements?

A

It shows the working and non-working days for each resource, how long and which people, equipment and material resources are available. “The quantity and availability of contracted resources and those dates on which each specific resource or resource group can be active or idle are documented.”

12.2.3.3 Resource Calendars

37
Q

What are are understandings between parties, including understanding of the duties of each party?

A

Agreements

12.3.1.3 Agreements

38
Q

What can can include modifications to the terms and conditions of the contract, including the procurement statement of work, pricing, and descriptions of the products, services, or results to be provided?

A

Approved Change Requests

12.3.1.4 Approved Change Requests

39
Q

Seller performance-related documentation includes what two kinds of work performance reports?

A
  1. Technical documentation. Seller-developed technical documentation and other deliverable information are provided in accordance with the terms of the contract.
  2. Work performance information. The seller’s performance reports indicate which deliverables have been completed and which have not.
  3. 3.1.5 Work Performance Reports
40
Q

What defines the process by which the procurement can be modified?

A

Contract Change Control System

It includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary for authorizing changes.

12.3.2.1 Contract Change Control System

41
Q

When the buyer and seller cannot reach an agreement on compensation for the change, cannot agree that a change has occurred and negotiation is not possible for the settlement of a procurement claim or dispute, what occurs?

A

Claims Administration

These contested changes are variously called claims, disputes, or appeals. Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract.

12.3.2.6 Claims Administration

42
Q

What is the preferred method for settlement of claims and disputes?

A

Negotiation

12.3.2.6 Claims Administration

43
Q

Why is correspondence important to controlling procurement?

A

Contract terms and conditions often require written documentation of certain aspects of buyer/seller communications, such as the need for warnings of unsatisfactory performance and requests for contract changes or clarification.

12.3.3.5 Organizational Process Assets Updates

44
Q

What process involves administrative activities such as finalizing open claims, updating records to reflect final results, and archiving such information for future use?

A

The Close Procurements Process

12.4 Close Procurements

45
Q

What is the process of completing each project procurement?

A

Close Procurements

12.4 Close Procurements

46
Q

When is ADR explored?

A

Whenever settlement cannot be achieved through direct negotiation, some form of alternative dispute resolution (ADR) including mediation or arbitration may be explored. When all else fails, litigation in the courts is the least desirable option.

12.4.2.2 Procurement Negotiations

47
Q

What clarifies the structure, requirements and other terms so that mutual agreement can be reached prior to the signing of the contract?

A

Procurement negotiations

12.4.2.2 Procurement Negotiations

48
Q

Where are requirements for formal procurement closure are usually defined?

A

In the terms and conditions of the contract. Also included in the procurement management plan.

12.4.3.1 Closed Procurements

PMP Exam 2 (14 decks)

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