PMBOK Ch 12

Question 1

Knowledge Areas

Answer 1

1. Integration (I)
2. Scope (SAW)
3. Schedule (SIX)
4. Cost (CROWS)
5. Quality (QUIETLY)
6. Resources (REFILLING)
7. Communication (COFFEE &)
8. Risk (READING)
9. Procurement (POETIC)
10. Stakeholders (SONGS)

Question 2

Procurement Management Processes (3)

Answer 2

o Ponies Chew Carrots

1. Plan Procurement Management - Planning
2. Conduct Procurements - Executing
3. Control Procurements – Monitoring/Controlling

Question 3

The process of documenting project procurement decisions, specifying the approach, and identifying potential sellers.

Answer 3

12.1 Plan Procurement Management

Question 4

The key benefit of this process is that it determines whether to acquire goods and services from outside the project and, if so, what to acquire as well as how and when to acquire it.

Answer 4

Plan Procurement Management Key Benefits

Question 5

The process of obtaining seller responses, selecting a seller, and awarding a contract.

Answer 5

12.2 Conduct Procurements

Question 6

o The key benefit of this process is that it selects a qualified seller and implements the legal agreement for delivery.

Answer 6

Conduct Procurements Key Benefits

Question 7

The process of managing procurement relationships, monitoring contract performance, making changes and corrections as appropriate, and closing out contracts.

Answer 7

12.3 Control Procurements

Question 8

The key benefit of this process is that it ensures that both the seller’s and buyer’s performance meet the project’s requirements according to the terms of the legal agreement.

Answer 8

Control Procurements Key Benefits

Question 9

includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.

Answer 9

Project procurement management

Question 10

The procurement strategy and business case need to be aligned to ensure the business case remains valid.

Answer 10

Business case

Question 11

The benefits management plan describes when specific project benefits are expected to be available, which will drive procurement dates and contract language.

Answer 11

Benefits management plan

Question 12

This list of major milestones show when the sellers are required to deliver their results.

Answer 12

Milestone list

Question 13

This category of contracts involves setting a fixed total price for a defined product, service, or result to be provided. These contracts should be used when the requirements are well defined and no significant changes to the scope are expected.

Answer 13

Fixed price contracts

Question 14

This category of contract involves payments (cost reimbursements) to the seller for all legitimate actual costs incurred for completed work, plus a fee representing seller profit. This type should be used if the scope of work is expected to change significantly during the execution of the contract.

Answer 14

Cost-reimbursable contracts

Question 15

Time and material contracts (also called time and means) are a hybrid type of contractual arrangement with aspects of both cost-reimbursable and fixed-price contracts. They are often used for staff augmentation, acquisition of experts, and any outside support when a precise statement of work cannot be quickly prescribed.

Answer 15

Time and materials contracts

Question 16

The least cost method may be appropriate for procurements of a standard or routine nature where well-established practices and standards exist and from which a specific and well-defined outcome is expected, which can be executed at different costs.

Answer 16

Least cost source selection

Question 17

The qualifications only selection method applies when the time and cost of a full selection process would not make sense because the value of the procurement is relatively small. The buyer establishes a short list and selects the bidder with the best credibility, qualifications, experience, expertise, areas of specialization, and references.

Answer 17

Qualifications only source analysis

Question 18

The buyer asks a specific seller to prepare technical and financial proposals, which are then negotiated. Since there is no competition, this method is acceptable only when properly justified and should be viewed as an exception.

Answer 18

Sole source analysis

Question 19

The fixed-budget method requires disclosing the available budget to invited sellers in the RFP and selecting the highest-ranking technical proposal within the budget. Because sellers are subject to a cost constraint, they will adapt the scope and quality of their offer to that budget. The buyer should therefore ensure that the budget is compatible with the SOW and that the seller will be able to perform the tasks within the budget. This method is appropriate only when the SOW is precisely defined, no changes are anticipated, and the budget is fixed and cannot be exceeded.

Answer 19

Fixed budget analysis

Question 20

Once the make-or-buy analysis is complete and the decision is made to acquire from outside the project, a procurement strategy should be identified. The objective of the procurement strategy is to determine the project delivery method, the type of legally binding agreement(s), and how the procurement will advance through the procurement phases.

Answer 20

Procurement strategy

Question 21

An RFI is used when more information on the goods and services to be acquired is needed from the sellers. It will typically be followed by an RFQ or RFP.

Answer 21

Request for information (RFI)

Question 22

An RFQ is commonly used when more information is needed on how vendors would satisfy the requirements and/or how much it will cost.

Answer 22

Request for quotation (RFQ)

Question 23

An RFP is used when there is a problem in the project and the solution is not easy to determine. This is the most formal of the “request for” documents and has strict procurement rules for content, timeline, and seller responses.

Answer 23

Request for proposal (RFP)

Question 24

The procurement statement of work (SOW) provides sellers with a clearly stated set of goals, requirements, and outcomes from which they can provide a quantifiable response.

Answer 24

Statement of work

Question 25

These criteria describe how bidder proposals will be evaluated, including evaluation criteria and weights. For risk mitigation, the buyer may decide to sign agreements with more than one seller to mitigate damage caused by a single seller having problems that impact the overall project.

Answer 25

Source selection criteria

Question 26

A make-or-buy analysis results in a decision as to whether particular work can best be accomplished by the project team or needs to be purchased from outside sources.

Answer 26

Make-or-buy decisions

Question 27

For large procurements, the procuring organization may elect to either prepare its own independent estimate or have a cost estimate prepared by an outside professional estimator to serve as a benchmark on proposed responses. Significant differences in cost estimates can be an indication that the procurement SOW was deficient or ambiguous, or that the prospective sellers either misunderstood or failed to respond fully to the procurement SOW.

Answer 27

Independent cost estimates

Question 28

Bidder conferences (also called contractor conferences, vendor conferences, and pre-bid conferences) are meetings between the buyer and prospective sellers prior to proposal submittal. They are used to ensure that all prospective bidders have a clear and common understanding of the procurement and no bidders receive preferential treatment.

Answer 28

Bidder conferences

Question 29

A contract is a mutually binding agreement that obligates the seller to provide the specified products, services, or results; obligates the buyer to compensate the seller; and represents a legal relationship that is subject to remedy in the courts. The major components in an agreement document will vary, and may include but are not limited to

Answer 29

Agreements

Question 30

As sellers are incorporated into the project’s plan, the requirements register and the traceability matrix may change depending on the capabilities of the specific seller.

Answer 30

Requirement traceability matrix

Question 31

Contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred. These contested changes are called claims. When they cannot be resolved, they become disputes and finally appeals. Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract.

Answer 31

Claims administration

Question 32

An inspection is a structured review of the work being performed by the contractor. This may involve a simple review of the deliverables or an actual physical review of the work itself. On a construction/engineering/infrastructure project, inspections involve walkthroughs of the site by both the buyer and the contractor to ensure a mutual understanding of the work in progress.

Answer 32

Inspection

Question 33

The buyer, usually through its authorized procurement administrator, provides the seller with formal written notice that the contract has been completed. Requirements for formal procurement closure are usually defined in the terms and conditions of the contract and are included in the procurement management plan. Typically, all deliverables should have been provided on time and meet technical and quality requirements, there should be no outstanding claims or invoices, and all final payments should have been made. The project management team should have approved all deliverables prior to closure.

Answer 33

Closed procurements

Question 34

Audits are a structured review of the procurement process. Rights and obligations related to audits should be described in the procurement contract. Resulting audit observations should be brought to the attention of the buyer’s project manager and the seller’s project manager for adjustments to the project, when necessary.

Answer 34

Audit

Question 35

Change requests to the project management plan, its subsidiary plans, and other components such as the cost baseline, schedule baseline, and procurement management plan, may result from the Control Procurements process. Change requests are processed for review and disposition through the Perform Integrated Change Control process.

Answer 35

Change requests

Question 36

This document contains all the details about the identified stakeholders. The stakeholder register is updated as agreements are made with specific sellers.

Answer 36

Stakeholder register