Chapter 19 Flashcards
The contractual statement-of-work document is:
A. A nonbinding legal document used to identify the responsibilities of the contractor
B. A definition of the contracted work for government contracts only
C. A narrative description of the work/deliverables to be accomplished and/or the resource
skills required
D. A form of specification
A narrative description of the work/deliverables to be accomplished and/or the resource skills required
A written or pictorial document that describes, defines, or specifies the services or items to
be procured is:
A. A specification document
B. A Gantt chart
C. A blueprint
D. A risk management plan
A specification document
The “order of precedence” is:
A. The document that specifies the order (priority) in which project documents will be
used when it becomes necessary to resolve inconsistencies between project documents
B. The order in which project tasks should be completed
C. The relationship that project tasks have to one another
D. The ordered list (by quality) of the screened vendors for a project deliverable
The document that specifies the order (priority) in which project documents will be
used when it becomes necessary to resolve inconsistencies between project documents
In which type of contract arrangement is the contractor least likely to want to control costs?
A. Cost plus percentage of cost
B. Firm-fixed price
C. Time and materials
D. Purchase order
cost plus percentage of cost
In which type of contract arrangement is the contractor most likely to want to control costs?
A. Cost plus percentage of cost
B. Firm-fixed price
C. Time and materials
D. Fixed-price-incentive-fee
Firm-Fixed Price
In which type of contract arrangement is the contractor at the most risk of absorbing all
cost overruns?
A. Cost plus percentage of cost
B. Firm-fixed price
C. Time and materials
D. Cost-plus-incentive-fee
Firm-Fixed Price
In which type of contract arrangement is the customer at the most risk of absorbing excessive cost overruns?
A. Cost plus percentage of cost
B. Firm-fixed price
C. Time and materials
D. Fixed-price-incentive-fee
Cost plus percentage of cost
What is the primary objective the customer’s project manager focuses on when selecting a
contract type?
A. Transferring all risk to the contractor
B. Creating reasonable contractor risk with provisions for efficient and economical performance incentives for the contractor
C. Retaining all project risk, thus reducing project contract costs
D. None of the above
Creating reasonable contractor risk with provisions for efficient and economical performance incentives for the contractor
Which type of contract arrangement is specifically designed to give a contractor relief for
inflation or material/labor cost increases on a long-term contract?
A. Cost plus percentage of cost
B. Firm-fixed price
C. Time and materials
D. Firm-fixed price with economic price adjustment
Firm-fixed with economic price adjustment
Which of the following is not a factor to consider when selecting a contract type?
A. Type/complexity of the requirement
B. Urgency of the requirement
C. Extent of price competition
D. All are factors to consider.
all are factors considered
In a fixed-price-incentive-fee contract, the “point of total assumption” refers to the point in
the project cost curve where:
A. The customer assumes responsibility for every additional dollar that is spent in fulfillment of the contract.
B. The contractor assumes responsibility for every additional dollar that is spent in fulfillment of the contract.
C. The price ceiling is reached after the contractor recovers the target profit.
D. None of the above
The contractor assumes responsibility for every additional dollar that is spent in fulfillment of the contract.
A written preliminary contractual instrument prepared prior to the issuance of a definitive
contract that authorizes the contractor to begin work immediately, within certain limitations, is known as a:
A. Definitive contract
B. Preliminary contract
C. Letter contract/letter of intent
D. Purchase order
letter contract/letter of intent
A contract entered into after following normal procedures (i.e., negotiation of terms, conditions, cost, and schedule) but prior to initiation of performance is known as a:
A. Definitive contract
B. Completed contract
C. Letter contract/letter of intent
D. Pricing arrangement
Definitive contract
Which of the following is not a function of the contract administration activity?
A. Contract change management
B. Specification interpretation
C. Determination of contract breach
D. Selection of the project manager
selection of the project manager
A fixed-price contract is typically sought by the project manager from the customer’s
organization when:
A. The risk and consequences associated with the contracted task are large and the
customer wishes to transfer the risk.
B. The project manager’s company is proficient at dealing with the contracted activities.
C. Neither the contractor nor the project manager understand the scope of the task.
D. The project manager’s company has excess production capacity.
The risk and consequences associated with the contracted task are large and the
customer wishes to transfer the risk
