12 - Project Procurement Management Flashcards
When the acquisition is not just for shelf material, goods or common products, what three things happen upon purchase?
- The buyer becomes the customer, a key project stakeholder
- The seller’s PM team becomes concerned with all processes of project management
- Terms and conditions of the contract become key inputs to many of the seller’s management processes
- 0 Project Procurement Management
What is the process of documenting project-purchasing decisions, specifying the approach, and identifying potential sellers?
Plan Procurement Management
12.1 Plan Procurement Management
What is the process of documenting project-purchasing decisions, specifying the approach and identifying potential sellers?
Plan Procurement management
12.1 Plan Procurement management
What is TAM?
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 Plan Procurement Management
- 1.1.9 Organizational Process Assets
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?
Cost-reimbursable contracts
12.1.1. Plan Procurement Management: Inputs
What does a PM use to evaluate the reasonableness of the bids or proposals from potential sellers?
Activity cost estimates
12.1.1.6 Activity Cost Estimates
What kind of contract includes financial incentives that are related to cost, schedule, or technical targets?
Fixed Price Incentive Fee (FPIF)
12.1.1.9 Organizational Process Assets
What are some types of contractual agreements and relationships that are Organizational Process Assets?
- Fixed Price
- Cost Reimbursable
- 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
In what kind of contract does the seller absorb up to 100% of the risks (especially financial)?
Firm Fixed Price
12.1.1.9 Organizational Process Assets
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?
Fixed-price (lump sum)
12.1.1.9 Organizational Process Assets
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?
Fixed-price
12.1.1.9 Organizational Process Assets
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?
Fixed-price (lump sum)
12.1.1.9 Organizational Process Assets
In what kind of contract does the seller absorb up to 100% of the risks (especially financial)?
Firm Fixed Price
12.1.1.9 Organizational Process Assets
What kind of contract includes financial incentives that are related to cost, schedule, or technical targets?
Fixed Price Incentive Fee (FPIF)
12.1.1.9 Organizational Process Assets
What kind of contract has a price ceiling where all costs above the price ceiling are the responsibility of the seller?
Fixed price incentive
12.1.1.9 Organizational Process Assets
What kind of contract provides for the upward and downward revision of the stated contract price based upon the occurrence of previously specified contingencies?
Fixed Price with Economic Price Adjustment (FP-EPA)
12.1.1.9 Organizational Process Assets
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?
Cost Plus Fixed Fee (CPFF)
12.1.1.9 Organizational Process Assets
What kind of contract allocates the majority of the financial risk to the buyer?
“Cost-reimbursable” or “Cost-Plus” contracts
12.1.1.9 Organizational Process Assets
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?
Cost-plus contract
12.1.1.9 Organizational Process Assets
What kind of contract does not provide the customer with any real control over the seller’s work efficiency, or to control their costs?
Time and material (T&M)
12.1.1.9 Organizational Process Assets
What kind of contact assigns the majority of the financial risk to the customer?
Cost-plus or “cost reimbursable” contracts
12.1.1.9 Organizational Process Assets
What kind of clause must relate to some trustworthy financial index, which is used to negotiate the final price?
The EPA clause (Economic Price Adjustment)
12.1.1.9 Organizational Process Assets
What is an examination of industry specific vendor capabilities?
Market Research
12.1.2.3 Market Research
How is the procurement process managed throughout the project?
Procurement Management Plan
12.1.3.1 Procurement Management Plan
