Chapter 12: Project Procurement Management Flashcards
Why is a contract or agreement usually subjected to a more extensive approval process:
A. This is mandated by the PMBOK
B. It’s legally binding
C. Stakeholders will demand this
D. Project clients will wish to be involved
B. It’s legally binding
In most projects the life cycle of a contract will end:
A. When the project is completed
B. When the project phase is completed
C. When the project manager determines that the contract has been delivered
D. During any phase of the project life cycle
D. During any phase of the project life cycle
Which of the following is not a term that’s used to describe a buyer in a procurement relationship:
A. The selected source
B. The client
C. The prime contractor
D. The service requester
A. The selected source
The process that determines whether to acquire outside support, and if so, what to acquire, how to acquire it, how much is needed, and when to acquire it is:
A. Plan procurement management
B. Conduct procurements
C. Control procurements
D. Close procurements
A. Plan procurement management
Company ISO is planning their procurement activity. They’re deciding whether to make or buy an item for their project. They feel that the item could be made by the project team but that there is a significant chance that issues will arise because they lack sufficient experience in this area. They’ve decided to source the item from a contractor. This is known as:
A. Risk acceptance
B. Risk mitigation
C. Risk exploitation
D. Contingent risk response
B. Risk mitigation
Which type of contract should be used when the requirements are well defined and no significant changes to the scope are expected:
A. Fixed price contracts
B. Time and materials contracts
C. Cost-reimbursable contracts
D. Cost plus fixed fee contracts
A. Fixed price contracts
In which type of contract is a hybrid type of contractual arrangement that’s often used for stage augmentation, acquisition of experts and any outside support when a precise statement of work cannot be quickly prescribed:
A. Fixed price contracts
B. Time plus materials contracts
C. Cost-reimbursable contracts
D. Cost plus fixed fee contracts
B. Time plus materials contracts
In which type of contract is the seller reimbursed for all allowable costs for performing the contract work and receives a predetermined incentive fee based upon achieving certain performance objectives as set forth in the contract:
A. Fixed price contracts
B. Cost plus fixed fee contracts
C. Cost plus incentive fee contracts
D. Cost plus award fee contracts
C. Cost plus incentive fee contracts
The technique which is used to determine whether particular work can best be accomplished by the project team or should be purchased from outside sources is:
A. Produce or buy analysis
B. Expert judgement
C. Make or buy analysis
D. Risk sharing analysis
C. Make or buy analysis
The procurement statement of work is developed from:
A. The project scope baseline
B. The project management plan
C. The project charter
D. The project budget
A. The project scope baseline
When the seller decision will be based on the technical capability or technical approach used which of the following terms is typically used:
A. Bid
B. Tender
C. Quotation
D. Proposal
D. Proposal
Which procurement document describes how bidder proposals will be evaluated, including evaluation criteria and weights:
A. Bid documents
B. Source selection criteria
C. Procurement statements of work
D. Independent cost estimates
B. Source selection criteria
Which of the following is not acceptable as part of a bidder conference:
A. All prospective sellers should hear every question from any individual prospective seller
B. All prospective sellers should hear every answer to questions from the buyer
C. Sellers should be able to ask commercially sensitive questions privately
D. Field visits may be arranged in advance of the bidder conference
C. Sellers should be able to ask commercially sensitive questions privately
An estimate of costs that is prepared by an outside professional estimator, to serve as a benchmark on proposed seller Responses is known as:
A. Expert judgement
B. Professional estimates
C. Outside estimates
D. Independent estimates
D. Independent estimates
Which of the following is not allowed in procurement negotiations:
A. The project manager should always be the lead negotiator
B. The project manager should not participate in negotiations
C. The project manager can be present during negotiations
D. The project manager can provide clarification of the project’s technical, quality, and management requirements
A. The project manager should always be the lead negotiator
Whose responsibility is it to ensure that all agreements meet the specific needs of the project while adhering to organizational procurement policies:
A. The project manager
B. The project team
C. The project sponsor
D. The project client
B. The project team
Which of the following is not an input to control procurements:
A. Project management plan
B. Work performance reports
C. Change requests
D. Approved change requests
C. Change requests
Which process reviews and documents how well a seller is performing or has performed based on the contract and establishes corrective actions when needed:
A. Plan procurement management
B. Conduct procurements
C. Control procurements
D. Close procurements
C. Control procurements
Which of the following is not an objective of a contract performance review:
A. To identify performance successes or failures
B. To understand project progress with respect to the procurement statement of work
C. To identify aspects of contract non-compliance
D. To process payments to sellers
D. To process payments to sellers
Contested changes and potential constructive changes are dealt with through:
A. Claims administration
B. Negative dispute resolution
C. Inspections and audits
D. Performance reporting
A. Claims administration
Project Procurement Management process
Processes for determining how the contractors will be found and contracted, and managed, while they do the work, as well as for determining the controls that will exist to ensure that the work is done to standard
- Plan Procurement Management
- Conduct Procurements
- Control Procurement
Plan Procurement Management process
Process for developing and documenting the approach that will be taken to project procurement and how potential sellers will be identified and selected
Plan Procurement Management inputs
- Project charter
- business documents (business case and benefits management plan)
- Project management plan elements (project scope and project quality management plan)
- Resources management plan
- Scope baseline
- statement of work
- Other project documents (Milestone list, team assignments, requirements documentation and traceability matrix, resource requirements and stakeholder register)
- EEFs
- Organizational process assets
- contracts
Types of contracts used in procurement management
- fixed price
- cost reimbursable
- time and materials
Fixed price contract
A set amount is paid for the product or service purchased
Cost reimbursable contract
The amount paid to the contractor is based on the costs that they incur
Time and materials contract
Set rates are established for the time needed and materials used, which may vary due to uncertainty about the work that will be required
Plan Procurement Management tools and techniques
- Expert judgement
- Data gathering
- Data analysis (make or buy and source selection analyses)
- sole sourced suppliers
- fixed budget approach
- Meetings
Make or buy analysis
Technique for Plan Procurement Management process used to decide whether work will be done intenally or sourced from outside the organization
Source selection analysis
Technique for Plan Procurement Management process used to evaluate the various suppliers and determine which will offer the contract
Sole sourced supplier
Only one supplier is considered because there is only one that can do the work, focusing negotiation efforts on achieving a reasonable cost
Fixed budget approach
When the amount of funding is fixed, bidders are told the budget and then propose how they will do the work
Plan Procurement Management outputs
- Procurement management plan
- Project procurement strategy
- bid documents (requests for quotation (RFQ), requests for proposal (RFP))
- Procurement statement of work (SOW, aka terms of reference (TOR))
- criteria for selecting contractors
- make of buy decisions made
- independent cost estimates
- change requests
- project document updates (lessons learned, milestone list, etc.)
- organization process assets updates (list of qualified or available sellers for future projects)
Procurement management plan
Output of Plan Procurement Management process describing how the project procurement work will be done and including elements such as: how procurement will be integrated with project scheduling and control, when key procurement activities will be completed, procurement metrics, the role of stakeholders and risk management issues
Conduct Procurements process
Process for detailing how seller responses will be solicited and how sellers will be chosen and contracts awarded
When procurement can be completed
Any point in a project
Conduct Procurements inputs
- Project management plan elements (scope manage,est plan, etc)
- Other project documents (lessons learned, project schedule, etc)
- procurement documentation (documents pertaining to contracts, ex. Bid documents)
- seller proposals
- EEFs
- Organizational process assets
Conduct Procurement tools and techniques
- Expert judgement
- advertising (online forums, newspapers and trade publications)
- bidder conferences
- Data analysis
- interpersonal and team skills
- negotiation skills
Conduct Procurements outputs
- selected sellers
- agreements with sellers (procurement statement of work, schedule of work, pricing and payment, etc)
- change requests
- Project management plan changes
- Other project documents changes
- Organizational process assets updates
Control Procurements process
Process for ensuring that the work that’s done meets the expectations that are documented in the contracts and elsewhere, by regularly monitoring contract delivery and dealing with any variance
Control Procurements inputs
- Project management plan elements (Requirements, Risk and change management plans and project schedule baseline)
- Other project documents (assumption log, lessons learned, milestone list, risk register, etc)
- agreements established with sellers
- documentation created during procurement process
- Approved change requests
- work performance data
- EEFs
- Organizational process assets
Control Procurements tools and techniques
- Expert knowledge
- Data analysis techniques (earned value and trend analyses)
- performance reviews
- inspection (Project walkthroughs)
- audits
Control Procurements outputs
- closed Procurements
- work performance information
- Project documentation updates
- change requests
- Project management plan updates
- Other project document updates
- Organizational process assets updates
Example EEFs that are inputs to Plan Procurement Management process
- marketplace conditions
- prices
- availability of contractors and suppliers
- typical terms and conditions in local market
- local employment practices
Example organizational process assets that are inputs to Plan Procurement Management process
- list of sellers used in previous projects
- organizations procurement processes
- organizations différent contract types used
Example organizational process assets that are outputs to Plan Procurement Management process
Updates to list of qualified or available sellers (to inform future projects)
Example EEFs that are inputs to Conduct Procurements process
- local procurement laws and regulations
- local marketplace conditions
- past experience with sellers
- System used to manage contracts
Example organizational process assets that are inputs to Conduct Procurements process
- list of previously used or prequalified sellers
- organizations seller selection requirements
- organizations financial policies and procedures used in relationship with seller
Example organizational process assets that are outputs of Conduct Procurements process
Updates list of sellers and details on the experience with those sellers (to inform future projects)
Example EEFs that are inputs to Control Procurements process
- marketplace conditions
- availability and motivation of contractors
Example organizational process assets that are inputs to Control Procurements process
Organizations policies related to procurement
Example organizational process assets that are outputs of Control Procurements process
- Updates to details of payments made to contractors
- Information on contractor performance (to inform future projects)
- updates to prequalified sellers list (to inform future projects)
