Plan Procurement Mgmnt

Question 1

Plan Procurements

Answer 1

Documenting project purchasing decisions, specifying approach and identifying potential sellers

Question 2

Make-or-Buy Analysis

Answer 2

Management technique used to determine whether work can be accomplished by a project team, or must be purchased from outside sources

Influenced by budget constraints

Question 3

Fixed Price Contracts

Answer 3

Setting a fixed total price for a defined product or service to be provided

Sellers are legally oblicated to complete such contracts, with possible financial damanges if they do not

Changes in scope can be accomodated but will increase contact price

Question 4

Firm Fixed Price Contracts

(FFP)

Answer 4

Preferred by buyer

Risk for loss is higher for seller

Favored by most organizations because the price for goods is set at the outset and not subject to change unless scope of work changes

Question 5

Fixed Price Incentive Fee Contracts

(FPIF)

Answer 5

Gives buyer and seller some flexibility because it allows deviation from performance with financial incentives tied to achieving agreed metrics

Price ceiling is set and all cotss aove ceiling are responsibilty of seller, who is obligated to complete the work

Question 6

Fixed Price with Economic Price Adjustment Contracts

(FP-EPA)

Answer 6

• Used when sellers performance period spans a considerable period of years
• Long Term Relationships
• Fixed-price contact
• Allows pre-defined final adjustments to contact price due to changed conditions such as inflation changes or cost increase
• Protects buyers and seller from external conditions beyond their control

Question 7

Cost Reimbursement Contracts

Answer 7

Buyer is more at risk

Involves payments (cost reimbursment) to the seller for all legitimate actual costs for completed work

Question 8

Cost Plus Fixed Fee

(CPFF)

Answer 8

Seller reimbursed for all allowable cots. Fixed fee payment. Paid for completed work. Fee won’t change unless scope changes.

Question 9

Cost Plus Incentive Fee

(CPIF)

Answer 9

Seller is reimbursed for performing contract work and receiveds a predetermined incentive fee based upon achieveing objectives

Question 10

Cost Plus Award Fee

(CPAF)

Answer 10

Seller is reimbursed but majority of the fee is only earned based on the satisfaction of certain broad subjective performance criteria

Question 11

Time and Material Constraints

Answer 11

Hybrid type of contractural arragement that are both cost-reimbursement and fixedprice

Used for staff augmentation, acquisition of experts - when a precise statement of work cannotbe quickly prescribed

Question 12

Prevention Costs

Answer 12

Incurred to keep failutre and appraisal costs at a minimum

Question 13

Appraisal costs

Answer 13

Incurred to determine the degree of conformace to customer needs

Question 14

Failure costs

Answer 14

Incurred by defects internal to the system or after shipment to the customer

Question 15

Waste Costs

Answer 15

Driven by structural inefficiencies which add no value to the product delivered to the customer.

Question 16

Conduct Procurements

Answer 16

Process of obtaining seller responses, selecting a seller, and awarding a contract

Question 17

Bidder Conferences

(Contractor Conferences)

Answer 17

Meeting between buyer and seller prior to submittal of a bid or proposal. Ensures common understanding of the procurement treatment

Question 18

Proposal Evaluation Techniques

Answer 18

Selection mode based on seller responses to previously defined weight criteria, a formal evaluation review process will be defined by the buyer’s procurement policies

Question 19

Independent Estimates

Answer 19

Outside professionals to serve as a benchmark

Question 20

Procurement Negotiations

Answer 20

Clarifying structure, requirements, and other terms of purchases so that mutual agreement can be reached prior to signing contract

Question 21

Administer Procurements

Answer 21

process of managing procurement relatipnships, monitoring contract performance, and making changes and corrections as needed.

Question 22

Close Procurements

Answer 22

Process of completing each project procurement.

Admin activities such as finalizing open claims, updating records to reflect final results, and achieving such information for future use.

Question 23

Correspondance

Answer 23

Contract terms and conditions often requrie written documentation of certain aspects of buyer/seller communications

Question 24

Close Procurements

Answer 24

Process of completing each project procurement, admin activites such as finalizing open claims, updating recoards to reflect final results and achieving such information for future use.

Question 25

Procurement File

Answer 25

A complete set of indexed contract documentation, including the closed contract, is prepared for inclusion with final project files

Question 26

Deliverable Accpetance

Answer 26

The buyer, usual through it’s authorized procurement administration, provides the seller with formal written notice, that the deliverables have been accpeted or rejected