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PMP With PMI > Chapter Twelve | Procurement Management > Flashcards

Chapter Twelve | Procurement Management Flashcards

1
Q

What does BIM stand for

A

Building information model

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2
Q

What does CPAF stand for

A

Cost plus award fee

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3
Q

What does CPFF stand for

A

Cost plus fixed fee

The buyer pays the actual costs plus a fixed fee calculated as a percentage of initial estimate

the fee does not vary based on performance and is paid for only completed work

fee amounts don’t change unless the scope changes and it is mutually approved

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4
Q

What does CR stand for And when is it used

A

Cost reimbursable

It is used when it does not need to be done quickly and there is no detailed scope.

Expecting significant changes

Scope is expected to change significantly, high risks, or flexibility as required

The buyer pays the actual costs plus a fee for the sellers profit

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5
Q

What does FFP stand for

A

Firm fixed price

This is the most common contract type

the price is that at the beginning and is not subject to change unless the scope of work changes

any cost increase due to performance issues is the responsibility of

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6
Q

What does FP stand for

when is it used

Who bears the risk

A

Fixed price

Used when there is a detailed scope of work.

The seller bears the risk of cost overruns due to performance

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7
Q

What does FP-EPA stand for and when is it used

A

Fix price with economic price adjustment

Are use for multi year contracts, to adjust for future economic conditions (future prices)

used when future costs are not predictable for materials, supplies and equipment or payments are made in different currency

Usually tied to a reliable financial index

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8
Q

What does FPIF stand for

A

Fixed Price incentive fee

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9
Q

What does IFB stand for

A

Invitation for bid

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10
Q

What does MOA stand for

A

Memo of agreement

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11
Q

What does NDA stand for

A

Non-disclosure agreement

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12
Q

What does PDP stand for

A

Procurement document package

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13
Q

What does RFB stand for

A

Request for bid

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14
Q

What does RFI stand for

A

Request for information

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15
Q

What does RFP stand for

A

Request for proposal

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16
Q

What does RFQ stand for

A

Request for quotation

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17
Q

What does T & C stand for

A

Contract terms and conditions

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18
Q

What does T & M stand for And when is it used

A

Time and material

It is used when things need to be done quickly and there is no detailed scope of work.

Examples could be 
service efforts 
short term 
staff augmentation 
small cost 
consultants or experts 
emergency contract
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19
Q

What does TOR stand for

A

Terms Of reference

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20
Q

What is project procurement management?

A

The process necessary to purchase or acquire products, services, or results from outside the project team

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21
Q

Procurement management begins early in the project. The process is……

A

Analyzes the detailed scope in WBS

Defines the deliverables

creates a procurement SOW

combined that with contract terms and conditions

this makes up procurement document package

potential sellers review the packages

submit a bill or proposal

the buyer applies selection criteria

negotiate a draft contract

contract is awarded

when the work is complete the procurement is close

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22
Q

Note . The PM is typically not authorized to sign legal agreements

A

.

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23
Q

Note. For all exam questions assume you are the buyer and never the seller

A

.

24
Q

What is it called when there are multiple procurement and purchasing experts who may administer multiple projects?

A

Centralized contracting

25
Q

What is it called when there is a contract administrator who is assigned to an individual project and reports to the p.m.?

A

Decentralized contracting

26
Q

12.1. What are the four questions a procurement plan should answer?

A

What to acquire

how to acquire it

how much is needed

when to acquire it

27
Q

What does It look like to plan procurement

A

Determine a procurement management plan

determine what to buy, maker by analysis

create a procurement SOW or terms of reference

prepare a high-level cost estimate to determine the budget

advertise the opportunity and identify short list of qualified sellers

prepare and issue bid documents and select a contract type

28
Q

12.1 NOTE

EEF Can include past sellers

A

.

29
Q

What is a contract

A

A mutually binding agreement that obligates the seller to provide a specific product, service, a result and obligates the buyer to pay for it

30
Q

What are the three types of basic contracts?

A

Fixed price FP

cost reimbursable CR

Time and material T & M

Note in practice it is not unusual to combine one or more discrete types of contracts into a single procurement

31
Q

FPIF
Gives the buyer and seller flexibility by allowing for performance deviation

the seller is paid for actual cost plus an incentive fee based on performance

the buyer and seller share any cost variance

the buyer sets ceiling price

A

.

32
Q

FPIF & CPIF
If actual costs are less than target cost, shares the cost saving….. think bonus +

If actual costs are greater than the target costs, shares the cost overrun…..think payment -

A

.

33
Q

FPIF

The negotiated ratio is always stated how

A

Buyer/seller

Ex 80/20 the buyer share is 80% in the seller share is 20%

34
Q

CPIF

Who is paid and for what?

A

The seller is paid for actual costs plus an incentive fee based on performance objectives stated in the contract

34
Q

CPIF
NOTE
The seller estimates the total costs (target cost) and a fee or profit (target fee) the buyer and the seller share any cost variance from the target cost

no ceiling price on cost

A

.

35
Q

CPIF

What is another name for total cost

A

Target cost

36
Q

CPIF

What is another name for a fee or profit

A

Target fee

37
Q

What cost reimbursable contract

The buyer pays all actual costs, but the majority of the fee is based on subjective performance criteria that is identified and incorporated into the contract.

A

Cost plus award fee CPAF

38
Q

The buyer retains more risk with which contracts?

A

CPFF. Cost plus fixed fee

CPAF. cost plus award fee

CPIF. cost plus Incentive fee

TM. time and material (per hour)

39
Q

The seller accepts more risk and what type of contracts

A

FP - EPA. fixed price with economic price adjustment

FPIF fixed price incentive fee

FFP firm fixed price

40
Q

Note. Contracts can share or transfer potential project risk

A

.

41
Q

12.1 T&T

What is source selection analysis?

A

Typically included in procurement documents.

Selection methods include 
   lease cost 
   qualifications only 
   quality based/highest technical proposal score 
   quality and cost based
   fixed budget 
   sole-source noncompetitive form of 
   procurement
42
Q

12.1 Non-competitive forms of procurement are best used when______

A

Project schedule is too tight to solicit bids and evaluate the bids

only one seller for the product or service

only seller with specific technical capabilities

seller owns the patent, proprietary rights, or intellectual property

43
Q

12.1 T&T What does sole source mean

A

Only one seller

seller and intellectual property proprietary rights or patents

44
Q

12.1 T&T What does single source mean

A

Using a single seller you prefer instead of going through the procurement process

45
Q

12.1. OUTPUT | What does the procurement management plan describe

A

Describes how to document project procurement decisions, specifies approach and activities, and identify as potential sellers

46
Q

12.1 Output What does the procurement strategy identify

A

Identifies the buyers approach including the product delivery method
the type of agreement used
the procurement phases and how they advance
the delivery methods

47
Q

12.1 Output

What are the two delivery methods for procurement strategies

A

Professional services delivery

industrial or commercial construction delivery

48
Q

12.1 Output

What does the procurement statement of work describe

A

Describes that item in enough detail for perspective Stellers to determine if they are capable of providing it. Descriptions must be clear, complete, and concise

49
Q

12.1 Output When is terms of reference used TOR

A

Used when contracting for service. Similar to a procurement SOW

50
Q

12.1 Output What is source selection criteria

A

Ensures that the proposal selected will offer the best quality of services. Documents to give the seller an understanding of the buyers needs and help the seller bid.

Source selection criteria is used to rate or score of the bids or proposal. May also use a weighted criteria to evaluate may be a numerical score, color code or written description with a weighted evaluation system

51
Q

12.3 What does control procurement do

A

Manages the procurement relationships, managers contract performance, make contract changes or corrections and closes our contracts

52
Q

12.3 T&T

When our audits conducted

A

Audits are conducted during execution to verify compliance

53
Q

Contract terms

What does boilerplate contract mean

A

The term boilerplate language describes the parts of the contract that are considered standard

54
Q

Contract privity

Whoever signatures on the contract are in the contractual relationship.

If you sell the house the new owner did not sign a warranty contract.

A

.

55
Q

LOI info

A

Non-binding non-legal

used when negotiating a contract

“at this point in time, we expect to sign the contract.”

It is your contract to lose not your contract to win

PMP With PMI (18 decks)

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