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PMP Exam Prep > Ch 12 Project Procurement Management > Flashcards

Ch 12 Project Procurement Management Flashcards

1
Q

Selected Sellers

A

The seller(s) that have been awarded a contract

An output of the Conduct Procurements process (Procurements/Executing)

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2
Q

Conduct Procurements

A

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
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3
Q

Cost Plus Incentive Fee (CPIF)

A

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)

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4
Q

Bid Documents*

A

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)

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5
Q

Time and Material

A

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

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6
Q

Procurement Strategy*

A

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)

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7
Q

Fixed Price (Lump Sum)

A

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

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8
Q

Cost Plus Award Fee (CPAF)

A

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

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9
Q

Fixed Price Economic Price Adjustment (FP-EPA)

A

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

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10
Q

Proposal Evaluations

A

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)

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11
Q

Fixed Price Incentive Fee (FPIF)

A

A type of Fixed Price contract where the fixed price includes an additional fee for meeting a target set forth in the contract

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12
Q

Independent Cost Estimates

A

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)

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13
Q

Claims Administration

A

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)

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14
Q

Request for Quotation (RFQ)

A

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)

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15
Q

Cost Plus Fixed Fee (CPFF)

A

A type of Cost Reimbursable contract where the buyer pays the work expense and then a fixed fee to the seller for profit

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16
Q

Cost Reimbursable

A

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

17
Q

Alternative Dispute Resolution

A

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)

18
Q

Invitation for Bid (IFB) or Request for Bid (RFB)

A

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)

19
Q

Seller Proposals

A

Seller responses to RFPs, IFBs, RFBs, or RFQs

An input to the Conduct Procurements process (Procurements/Executing)

20
Q

Procurement Management Plan*

A

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)

21
Q

Project Procurement Management

A

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
22
Q

Make-or-Buy Analysis

A

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)

23
Q

Procurement Statement of Work*

A

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)

24
Q

Bidder Conference

A

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)

25
Q

Source Selection Analysis

A

A type of analysis in which the different selection criteria to select a seller are considered (e.g., lowest cost, qualifications)

A tool used to help execute the Plan Procurement Management process (Procurement/Planning)

26
Q

Plan Procurement Management

A

The iterative process of documenting project decisions, specifying the approach, and identifying potential sellers

Knowledge Area: Procurement

Process Group: Planning

Inputs:

  • Scope Baseline
  • Risk Register
  • Stakeholder Register

Tools:

  • Data Analysis
    • Make-or-Buy Analysis
  • Source Selection Analysis

Outputs:

  • Procurement Management Plan
  • Procurement Strategy
  • Bid Documents
  • Procurement Statement of Work
  • Source Selection Criteria
  • Independent Cost Estimates
  • Organizational Process Assets Updates
27
Q

Control Procurement

A

The process of managing the relationship between buyer and seller and monitoring the work to ensure it is done appropriately

Knowledge Area: Procurement

Process Group: Monitoring and Controlling

Inputs:

  • None

Tools:

  • Claims Administration
  • Inspections
  • Audits

Outputs:

  • Closed Procurements
28
Q

Firm Fixed Price (FFP)

A

A type of Fixed Price contract in which the price is fixed and cannot be changed

The most commonly used

Scope and requirements need to be well defined

Profit is not really known

29
Q

Source Selection Criteria

A

The criteria used when selecting a contractor (e.g., cost, location, license, certification, reference, warranty, experience)

An output of the Plan Procurement Management process (Procurement/Planning)

An input to the Conduct Procurements process (Procurement/Executing)

30
Q

Contract or Agreement

A

A formal, legally binding, and writen agreement between a buyer and seller for products, services, or results

The only time it is not legal is when it is for illegal work to be performed and/or violates the law of the land

It can be terminated by both the buyer and seller for work not getting done or payments not being made

Agreements and contracts are generally considered to be the same on the PMP exam

There are three main types:

  • Firm Fixed Price (FFP)
  • Cost Reimbursable
  • Time and Material
31
Q

Request for Proposal (RFP)

A

A type of Bid Document that outlines a buyer’s request to all potential sellers for the details of how the work will be performed

An output of the Plan Procurement Management process (Procurement/Planning)

32
Q

Closed Procurements

A

The outcome of a buyer giving a seller written notice that the work is done and the seller giving the buyer notice of full payment

The PM should approve all deliverables before giving notice to the seller that the work is done

All claims or outstanding issues should be settled before a contract is closed

An output of the Control Procurements process (Procurement/M&C)

33
Q

Signed Agreements

A

Legally binding documents that have been executed between the buyer and seller for work to be performed

An output of the Conduct Procurements process (Procurements/Executing)

PMP Exam Prep (12 decks)

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