Chap 12. Project Procurement Management

Question 1

What are the 3 procurement process in project procurement management?

Answer 1

1. Plan project procurement plan
2. execute/conduct procurement
3. control procurement

Question 2

What is sole source when evaluating the market conditions (Procurement management)?

Answer 2

When there is only 1 seller that will fulfill our need

Question 3

What is single source when evaluating the market conditions (procurement management)?

Answer 3

When there are plenty of sellers, but we only choose 1.

Question 4

What is an oligopoly market condition in procurement management?

Answer 4

When 1 fluctuation in the market affects the rest.

Question 5

What is. Firm Fixed-Price Contracts (FFP) ?

Answer 5

1. Most common contract
2. Seller carries risk of cost overruns
3. Buyer specifies what’s to be purchased

Question 6

What is Fixed Price Incentive Fee Contracts (FPIF)?

Answer 6

1. Financial incentives for perfjoamcne
2. Cost, Schedule, Technical performance
3. Price ceiling (Up to…)
4. Seller carries risk of overruns

Question 7

What is Fixed Price with Economic Price Adjustment Contracts?

Answer 7

1. Long-term contracts
2. Pre-defined financial adjustements
3. Inflation, cost increases, decrease
4. External condition

Question 8

What is Cost Reimbursable Overview contract?

Answer 8

1. Cost plus a fee
2. Happens usually because Scope of work can’t be defined early
3. High risks may exists in the project
4. Buyer carries risk of overruns

Question 9

Cost plus Fixed Fee Contract (CPFF)

Answer 9

1. All allowable costs
2. Fixed fee of the initial estimated costs
3. Fee paid for completed work
4. Fee is constant unless scope changes

Question 10

What is Cost Plus Incentive Fee (CPIF)

Answer 10

1. All allowable costs
2. Fee based on performance goals
3. Incentive sharing (often 80/20)
4. Contract defines measurements

Question 11

What is Cost Plus Award Fee Contracts (CPAF)?

Answer 11

1. All allowable costs
2. Performance criteria for fee to seller
3. Subjective view by buyer
4. Award is determined by the Buyer

Question 12

What is Time and Materials Contract (T&M) ?

Answer 12

1. Seller is paid an hourly fee
2. Seller is paid for materials
3. Not to exceed clause
4. Time limits for contract

Question 13

SOW and TOR?

Answer 13

Statement of Work and Terms of Reference

Seller describes the work fully supplied.