Bootcamp Chapter 12 Flashcards
There are not enough resources to get the project work done. Whose responsibility is it to solve this problem?
A. Project Manager
B. Team members
C. Sponsor
D. Senior management or functional manager
Answer: D
Senior management or functional manager controls resources in a matrix organization.
Which of the following statements about procurement management contracts is false?
A. Must adhere to the organization’s policies and procedures
B. May always be altered by verbal agreement between the buyer and seller
C. Often require input from specialists from areas such as Contracting, Procurement, or Legal
D. Are subject to some type of review and approval of the project team
Answer: B
The statement in answer B is not true because procurement management contracts can be altered by verbal agreement only if such an option is established in the terms and conditions of the contract.
Which of the following is not a tool or technique for for the Plan Procurement Management Process? A. Make or buy analysis B. Organizational process Assets C. Contract types D. Expert Judgment
Answer: B
Organizational Process Assets (OPA) are ALWAYS inputs, NEVER tools and techniques
The risk register is an important input for the Plan Procurement Management process because it includes all of the following except:
A. Insurance contracts
B. Identified risks
C. Risk owners
D. Risk responses
Answer: A
Insurance contracts are an example of risk-related contract decisions, which are also an input to Plan Procurement Management, but exist outside of the risk register to specify each party’s responsibility for specific risks.
What is the primary goal of procurement audits?
A. To identify and document successes and failures during the contract
B. To prepare documentation for future project teams
C. To prove that the procurement process was successful
D. To guarantee a bonus to the project manager
Answer: A
What type of contract provides the least risk to the buyer? A. Cost plus incentive fee B. Fixed-price incentive fee C. Fixed-price with economic adjustment D. Firm fixed price
Answer: D
Advertising on the Internet for a solicitation is an example of a procurement: A. Tool and technique B. Input C. Output D. Solution criteria
Answer: A
advertising is a tool of the Conduct Procurements process and is used to expand the field of potential sellers
The main reason for including a PTA (Point of Total Assumption) in the fixed price incentive contract is to:
A. Maintain control over the seller’s schedule
B. Maintain control over project risks
C. Obtain approval of the contract by senior management
D. Maintain some control over the seller’s cost
Answer: D
By establishing the PTA the seller is encouraged to exercise control of costs because there is a known point at which the buyer will cease to be responsible for the seller’s cost overruns or inefficiencies.
Which item below is not a required component of a legal contract?
A. Offer
B. Signature
C. Acceptance
D. Capacity
Answer: B
A signature is not one of the five mandatory components of a legal contract outlined by CCOLA (Capacity, Consideration, Offer, Legal purpose, Acceptance)
Which of the following statements is always true?
A. The Purchasing department handles all procurements
B. The Legal department handles negotiations
C. The project manager negotiates contracts
D. The project manager must ensure that the contract is tailored to meet the needs of the project
Answer: D
Which type of contract provides the most risk for the seller?
A. Fixed price
B. Time and material
C. Cost plus
D. Unit price
Answer: A
The seller has the most risk because the seller might have to pay for any cost or performance issues
You are completing the Close Procurements process and would like to discuss and document the successes and failures of the procurements can be improved based on experience. Which tool should you use?
A. Lessons Learned
B. Performance reporting
C. Project performance appraisals
D. Procurement Audits
Answer: D
Procurement audits represent a formal, structured review of the entire procurement process.
Which of the following is not typically a component of a procurement contract?
A. SOW/Deliverables
B. Pricing
C. Names of the resources who will do the work
D. The process for handling change requests
ANSWER: C
The roles and responsibilities of the work will typically be addressed in the contract but not the names of the people who will fill the roles.
Documenting procurement decisions, determining the procurement approach, and identifying potential sellers occur during which process?
A. Conduct Procurements
B. Control Procurements
C. Plan Procurement Management
D. Close Procurements
ANSWER: C
Which of the following is not an input to Plan Procurement Management?
A. Make-or-buy decisions
B. Scope baseline
C. Project schedule
D. Activity resource requirements
ANSWER: A
Make or buy decisions are an OUTPUT of Plan Procurement Management. B, C and D are INPUTS
What does PTA (Point of Total Assumption) represent?
A. The ceiling price in a cost plus contract
B. The point at which the seller assumes full responsibility for cost overruns
C. The seller’s profit
D. The target price
ANSWER: B
The PTA is the point of total assumption which is typically calculated for fixed price incentive fee contracts and represents the point at which the buyer:seller ratio for sharing cost overruns stops and the seller assumes all of the burden of additional cost overruns.
The formula: PTA= (Ceiling price-total price/Buyer Share)+ Total Cost
A procurement management plan should be:
A. Very Formal
B. Informal
C. Highly detailed
D. Based upon the needs of the project
ANSWER: D
The PMI recommends that all project processes and documents be customized to meet the needs of the project
You have chosen a vendor to provide services for your project. Throughout the life of the procurement contract, you would like to be able to use experts within your organization to verify that the vendor’s work meet agreed-upon requirements. What should you do?
A. Include details about inspections and audits in the procurement contract
B. Perform inspections and audits, but do not announce them in the procurement contract
C. Include details about performance reporting in the procurement contract
D. Request performance reports during the project, but don’t announce the intention in the procurement contract
ANSWER: A
The means by which a buyer will conduct inspections and audits should be included in the contract, and these inspections and audits can include members of both the buyer’s and seller’s project teams. Performance reporting refers to work performance data and reports supplied by the seller, which might not allow your organization’s experts to be fully involved in auditing the vendor’s work.
You are negotiating a contract with the WeRipUOff Company and you are concerned they will overcharge you for their costs, so you have included a PTA (point of total assumption) clause in the contract. From the information provided below, what is the PTA?
Target cost=$515,000 Estimated Profit=$51,000 Total price=$566,000 Ceiling prices=$620,000 Buyer/seller ratio is 80/20 for overruns
A. $566,000
B. $582,500
C. $616,500
D. $620,000
ANSWER: B
PTA=(ceiling price-total price/buyer share)+total cost
(620,000-566,000/.8)+515,000=$582,500
Which statement regarding work completed under a contract is always true?
A. The buyer manages all of the project work
B. The buyer manages the work of the seller
C. The seller manages the work of the seller
D. The seller manages the work of the buyer
ANSWER: C
Bids, tenders, and quotes are other names for:
A. Procurement documents
B. Proposals
C. Buyer responses
D. Pre-bid conferences
ANSWER: B
Which statement is not true?
A. The contract is a legally binding document
B. The contract may be changed by anyone in the buyer’s or seller’s organization
C. The contract describes who will own the intellectual property rights of the deliverables
D. The contract includes the relationship between payments an deliverables
ANSWER: B
The contract can be changed only by the parties listed in the contract as having capacity
Which statement is not true about a procurement award?
A. A procurement award is presented to each selected seller
B. A procurement award must be approved by senior management
C. A procurement award might be challenged by contractors who were not selected
D. A procurement award guarantees successful completion of the project
ANSWER: D
Nothing guarantees successful completion of a project
Why are resource calendars important to procurement management?
A. They are an output of Conduct Procurements
B. They document the quantity and availability of contracted resources
C. They document how much you are paying for each response
D. They are an input to Control Procurements
ANSWER: B
Answer A is factually correct; resource calendars are an output of Conduct Procurements, but that is not what makes them valuable
The Project Management Institute Code of Ethics and Professional Conduct requires all project managers to respect intellectual property. Your company, a client, or a customer may have you sign a non disclosure agreement to project its intellectual property (creative work that has economic value and is protected by laws). Which of the following is not classified as intellectual property?
A. Trademarks
B. Copyrights
C. Patents
D. Common Knowledge
ANSWER: D
