Plan Procurement Management

Question 1

What is the purpose of Plan Procurement Management?

Answer 1

Process of documenting purchasing decision, specifying the approach, and identifying potential sellers.

Question 2

What is Single Source?

Answer 2

Choosing a seller without competition, perhaps because of prior business relationship.

Question 3

What is Sole Source?

Answer 3

Choosing a seller because it is the only source of the required product or service.

Question 4

What is Tender?

Answer 4

Another word for bid.

Question 5

What is Privity?

Answer 5

Signify a contractual relationship between two parties.

Question 6

What are the 3 main types of Contracts?

Answer 6

1) Fixed Price Contract, 2) Cost Reimbursable Contracts, 3) Time & Material Contracts

Question 7

What are the 3 types of Fixed Price Contracts?

Answer 7

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.

Question 8

What are the 4 types of Cost Reimbursable Contracts?

Answer 8

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.)

Question 9

What is Time & Material Contracts?

Answer 9

Not to exceed contracts.

Question 10

Can a contract type can be used to shift risks?

Answer 10

Yes

Question 11

What is the Point of Total Assumptions?

Answer 11

Point in which the seller has to pay for all cost overruns.

Question 12

What is Ceiling Price?

Answer 12

The maximum price the buyer agrees to pay.

Question 13

What is Target Costs?

Answer 13

Initially-negotiated figure for estimated contract costs.

Question 14

What is Target Profit or Fee?

Answer 14

Initially-negotiated profit.

Question 15

What is Target Fee?

Answer 15

Target costs plus the target profit.

Question 16

What is Share Ratio?

Answer 16

Ratio to determine how under-runs or overruns increase or decrease profit (buyer/seller).

Question 17

What is the formula for Total Point of Assumption?

Answer 17

PTA = ((Ceiling Price - Target Price) / Buyer’s Share) + Target Price

Question 18

What are the tools and techniques to Plan Procurement Management?

Answer 18

1) Make-or-Buy Analysis, 2) Expert Judgement, 3) Market Research, 4) Meetings

Question 19

What is Make-or-Buy Analysis?

Answer 19

Deciding whether work should be performed in-house by the team or if it should be procured.

Question 20

What are the outputs of Plan Procurement Management?

Answer 20

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

Question 21

What is the Procurement Statement of Work?

Answer 21

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.

Question 22

What is Source Selection Criteria?

Answer 22

A guide for how to select the right seller.

Question 23

What is Invitation for Bid (IFB)?

Answer 23

Invitation to contractors to submit a proposal on a specific project. Generally the same thing as Request for Quote (RFQ)

Question 24

What is Request for Proposal (RFP)?

Answer 24

Informs vendors of customer needs and expectations.

Question 25

What is Request for Information (RIF)?

Answer 25

Formal request for preliminary information for the purpose of evaluating potential bids for services.

Question 26

What is Market Research?

Answer 26

Examining industry and specific vendor capabilities.