Ch 12 Project Procurement Management Flashcards
Selected Sellers
The seller(s) that have been awarded a contract
An output of the Conduct Procurements process (Procurements/Executing)
Conduct Procurements
The process of selecting a seller and awarding them the contract; the key task is evaluating seller proposals
Knowledge Area: Procurements
Process Group: Executing
Inputs:
- Procurement Statement of Work
- Independent Cost Estimates
- Source Selection Criteria
- Seller Proposals
Tools:
- Bidder Conference
- Data Analysis
- Proposal Evaluations
- Negotiations
Outputs:
- Selected Sellers
- Signed Agreements
Cost Plus Incentive Fee (CPIF)
A type of Cost Reimbursable contract where the buyer pays the work expense and an additional fee, if a specific target is met (e.g., finishing two weeks earlier)
Bid Documents*
Documents written by the buyer to inform potential sellers what will be needed to complete the contract and to get a response from potential sellers
They generally include at least one of the following:
- Request for Proposal (RFP)
- Invitation for Bid (IFB) or Request for Bid (RFB)
- Request for Quotation (RFQ)
An output of the Plan Procurement Management process (Procurement/Planning)
Time and Material
A type of contract where the buyer pays for both labor and material
The buyer takes all the risk of cost overrun for both the labor and materials
This type of contract should only be used when the scope his high-level
Procurement Strategy*
Strategy that describes what type of agreement to use and how the project would like delivery to take place
An output of the Plan Procurement Management process (Procurement/Planning)
Fixed Price (Lump Sum)
A type of contract where the buyer pays one flat price (lump sum) for all work in the contract. This would include all labor and materials
The scope must be well-defined and understood, because the seller takes all the risk of executing cost constraints for both labor and materials
Cost Plus Award Fee (CPAF)
A type of Cost Reimbursable contract where the seller is reimbursed for costs, but the award fee will be paid ONLY if the performance criteria outlined in the contract are met
Fixed Price Economic Price Adjustment (FP-EPA)
A type of Fixed Price contract where the fixed cost over the life of the contract is adjusted due to economic conditions (e.g., inflation, the price of commodities)
These contracts usually cover longer periods of time
Proposal Evaluations
A data analysis technique that involves evaluating the proposals that were received from potential vendors
Conducted to ensure the proposal matches the requirements for the project
A tool used to help execute the Conduct Procurements process (Procurements/Executing)
Fixed Price Incentive Fee (FPIF)
A type of Fixed Price contract where the fixed price includes an additional fee for meeting a target set forth in the contract
Independent Cost Estimates
An estimate provided by inspectors or professional estimators to help determine whether or not a given seller is charging too much or too little for work
An important consideration for evaluating proposals
An output of the Plan Procurement Management process (Procurement/Planning)
An input to the Conduct Procurements process (Procurement/Executing)
Claims Administration
Administration of disagreement between buyer and seller concerning money specified by the contract
The best method for resolving a claim is to negotiate a settlement of the claim that is good for both the buyer and seller
A tool used to help execute the Control Procurements process (Procurement/M&C)
Request for Quotation (RFQ)
Type of Bid Document that outlines a buyer’s request to all potential sellers for a price quote per item, hour, foot, or other unit of measure
An output of the Plan Procurement Management process (Procurement/Planning)
Cost Plus Fixed Fee (CPFF)
A type of Cost Reimbursable contract where the buyer pays the work expense and then a fixed fee to the seller for profit
Cost Reimbursable
A type of contract where the buyer pays for the work expenses and then pays the seller a fee for his profit
The buyer assumes the risk, because they cover the cost overrun of work expenses
Should be used when the scope is not well-defined
Auditing all invoices is a method to ensure you are not being overcharged
Alternative Dispute Resolution
A preferred method of settling unresolved claims (e.g., negotiation, mediation, arbitration) as opposed to litigation, which should be used as a last resort
A tool used to help execute the Control Procurements process (Procurement/M&C)
Invitation for Bid (IFB) or Request for Bid (RFB)
A type of Bid Document that outlines a buyer’s request for all potential sellers to submit a total price bid for work to be performed
An output of the Plan Procurement Management process (Procurement/Planning)
Seller Proposals
Seller responses to RFPs, IFBs, RFBs, or RFQs
An input to the Conduct Procurements process (Procurements/Executing)
Procurement Management Plan*
The management plan that describes the steps to Conduct Procurements and Control Procurements
It also describes any type of constraints or assumptions about procurements
An output of the Plan Procurement Management process (Procurement/Planning)
Project Procurement Management
Knowledge area focused on getting products, services, or results from outside the project team
The exam is generally tested from the perspective of a buyer
When dealing with contract questions:
- Always choose the best contract for the customer (buyer)
- Negotiate a price that is fair for both the buyer and seller
- Incentive fees could keep cost down
- A contract can be legally voided if it breaks any local laws and regulations
Make-or-Buy Analysis
A type of analysis done to determine if something on the project should be done by the team or by outside contractors instead
This is a complex technique because this determination depends on many factors (e.g., time needed, cost, risk, country laws)
A tool used to help execute the Plan Procurement Management process (Procurement/Planning)
Procurement Statement of Work*
A statement that describes what from the scope baseline will be procured for the project, namely the specifications and quality requirements and if any warranties are needed
It should contain a clear and complete description of the work and the performance measures, reporting, and format of the work
An output of the Plan Procurement Management process (Procurement/Planning)
Bidder Conference
An event in which a buyer invites all potential sellers to a large gathering where the buyer explains what is needed on a project
This saves the buyer time and ensures that all sellers get an equal amount of information and none receive preferential treatment
A tool used to help execute the Conduct Procurements process (Procurements/Executing)
