Plan Procurement Management Flashcards
Planning
What is the purpose of Plan Procurement Management?
Process of documenting purchasing decision, specifying the approach, and identifying potential sellers.
What is Single Source?
Choosing a seller without competition, perhaps because of prior business relationship.
What is Sole Source?
Choosing a seller because it is the only source of the required product or service.
What is Tender?
Another word for bid.
What is Privity?
Signify a contractual relationship between two parties.
What are the 3 main types of Contracts?
1) Fixed Price Contract, 2) Cost Reimbursable Contracts, 3) Time & Material Contracts
What are the 3 types of Fixed Price Contracts?
1) Firm Fixed Price (FFP) - having one firm price., 2) Fixed Price Incentive Fee (FPIF) - incentive for completing work within specified time, 3) Fixed Price with Economics Price Adjustment (FP-EPA) - sellers project expands over a lengthy period due to change conditions, i.e. inflation, increase price of raw goods, etc.
What are the 4 types of Cost Reimbursable Contracts?
1) Cost Plus Percentage of Cost (CPPC) - percentage of the cost sale, 2) Cost Plus Fixed Fee (CPFF) - pay cost of material but the fee is a fixed value, 3) Cost Plus Incentive Fee (CPIF) - keep cost within specified amount and receive incentive fee, 4) Cost Plus Award Fee (CPAF) - receive award fee for praising of work (i.e. bonus.)
What is Time & Material Contracts?
Not to exceed contracts.
Can a contract type can be used to shift risks?
Yes
What is the Point of Total Assumptions?
Point in which the seller has to pay for all cost overruns.
What is Ceiling Price?
The maximum price the buyer agrees to pay.
What is Target Costs?
Initially-negotiated figure for estimated contract costs.
What is Target Profit or Fee?
Initially-negotiated profit.
What is Target Fee?
Target costs plus the target profit.
What is Share Ratio?
Ratio to determine how under-runs or overruns increase or decrease profit (buyer/seller).
What is the formula for Total Point of Assumption?
PTA = ((Ceiling Price - Target Price) / Buyer’s Share) + Target Price
What are the tools and techniques to Plan Procurement Management?
1) Make-or-Buy Analysis, 2) Expert Judgement, 3) Market Research, 4) Meetings
What is Make-or-Buy Analysis?
Deciding whether work should be performed in-house by the team or if it should be procured.
What are the outputs of Plan Procurement Management?
1) Procurement Management Plan, 2) Procurement Statement of Work, 3) Procurement Documents, 4) Source Selection Criteria, 5) Make-or-Buy Decisions, 6) Change Request, 7) Project Document Updates
What is the Procurement Statement of Work?
Describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products, services, or results. Developed from Project Scope Baseline.
What is Source Selection Criteria?
A guide for how to select the right seller.
What is Invitation for Bid (IFB)?
Invitation to contractors to submit a proposal on a specific project. Generally the same thing as Request for Quote (RFQ)
What is Request for Proposal (RFP)?
Informs vendors of customer needs and expectations.
What is Request for Information (RIF)?
Formal request for preliminary information for the purpose of evaluating potential bids for services.
What is Market Research?
Examining industry and specific vendor capabilities.
