Procurement + Contracts Flashcards
In project management, what does the term “opportunity cost” refer to?
A. The monetary difference between two options that were considered.
B. The cost of the option that was not chosen when making a decision.
C. The total cost of all options available to the project manager.
D. The cost associated with pursuing multiple options simultaneously.
B. The cost of the option that was not chosen when making a decision.
A vendor requests early payment for their work on your project. What is the first step you should take as the project manager?
A. Approve the payment to maintain a good relationship with the vendor.
B. Consult the contract, specifically the Performance Work Statement (PWS), to determine the payment terms.
C. Escalate the request to senior management.
D. Negotiate new payment terms with the vendor.
B. Consult the contract, specifically the Performance Work Statement (PWS), to determine the payment terms.
A vendor has a dispute regarding the project. As the project manager, where should you first look to find guidance on resolving the dispute?
A. The project management plan.
B. The project charter.
C. The arbitration clause in the contract.
D. The stakeholder register.
C. The arbitration clause in the contract.
A vendor provides a product that is different from what was specified in the contract, even though it may be of higher quality. What should you do as the project manager?
A. Accept the product since it is of better quality.
B. Reject the product outright.
C. Verify whether the contract allows for substitutions and decide accordingly.
D. Negotiate with the vendor for a discount on the upgraded product.
C. Verify whether the contract allows for substitutions and decide accordingly.
You encounter an issue during your project. Before taking any action, what is the best practice to ensure you have the correct information?
A. Immediately address the issue based on your experience.
B. Check relevant documents, such as the risk register, stakeholder register, team charter, or benefits management plan, to see if an answer already exists.
C. Discuss the issue with the project team to gather input.
D. Escalate the issue to senior management for guidance.
B. Check relevant documents, such as the risk register, stakeholder register, team charter, or benefits management plan, to see if an answer already exists.
You are in the final stages of your project and are preparing to close it out. What is a critical step that must be completed before you can officially close the project?
A. Ensure all stakeholders have approved the final deliverables.
B. Close out all contracts related to the project.
C. Conduct a final team meeting to gather feedback.
D. Update the project management plan with lessons learned.
B. Close out all contracts related to the project.
You are preparing a document that outlines the specific details of the work required for a project and will be provided to potential vendors. Which document are you most likely preparing?
A. Request for Quotation (RFQ)
B. Statement of Work (SOW)
C. Invitation for Bid (IFB)
D. Request for Proposal (RFP)
B. Statement of Work (SOW)
You are a project manager, and you need to gather cost estimates from vendors for a specific project. You are not looking for detailed proposals, just price quotations. Which procurement document should you use?
A. Request for Proposal (RFP)
B. Request for Quotation (RFQ)
C. Expression of Interest (EOI)
D. Request for Information (RFI)
B. Request for Quotation (RFQ)
As a project manager, you need to gather more information about a vendor’s capabilities before moving forward with the procurement process. Which document would you issue to request this information?
A. Request for Quotation (RFQ)
B. Request for Proposal (RFP)
C. Request for Information (RFI)
D. Invitation for Bid (IFB)
C. Request for Information (RFI)
As a project manager, you are initiating a formal procurement process to select a vendor for a critical project component. Which combination of steps should you take to ensure that all prospective vendors have a clear and common understanding of the procurement requirements?
A. Issue a Request for Proposal (RFP), conduct a bidder conference, and follow a formal evaluation process.
B. Issue a Request for Quotation (RFQ) and accept the lowest bid without further discussion.
C. Send a Request for Information (RFI) to a select few vendors and choose the best response.
D. Post the requirements online and wait for vendor inquiries.
A. Issue a Request for Proposal (RFP), conduct a bidder conference, and follow a formal evaluation process.
What is the benefit of a Bidder Conference?
A bidder conference is a crucial step in the procurement process that helps ensure all vendors have the same understanding of the project or procurement requirements. It facilitates fair competition and improves the quality of the bids received.
During the procurement process, you need to evaluate and select a vendor for your project. Which document outlines the specific criteria you will use to assess and choose the most suitable vendor?
A. Statement of Work (SOW)
B. Procurement Management Plan
C. Source Selection Criteria
D. Request for Quotation (RFQ)
C. Source Selection Criteria
In a Cost-Plus-Fixed-Fee (CPFF) contract, who primarily bears the financial risk if the project costs exceed the original estimates?
A. The buyer, because they must reimburse the seller for all allowable costs incurred, plus the fixed fee.
B. The seller, because they must cover any costs that exceed the fixed fee.
C. Both the buyer and seller equally share the financial risk.
D. Neither, because the contract type eliminates financial risk.
A. The buyer, because they must reimburse the seller for all allowable costs incurred, plus the fixed fee.
In a Firm Fixed Price (FFP) contract, who primarily bears the financial risk if the actual costs of providing the goods or services exceed the agreed-upon price, and under what condition might the price change?
A. The buyer, because they must cover any cost overruns.
B. The seller, because the price is fixed, and any cost overruns must be absorbed by them unless the scope changes.
C. Both the buyer and seller equally share the financial risk.
D. The price will change automatically if costs increase, transferring risk to the buyer.
B. The seller, because the price is fixed, and any cost overruns must be absorbed by them unless the scope changes.
In a Fixed Price Incentive Fee (FPIF) contract, how are financial incentives typically structured?
A. The seller receives a fixed fee regardless of performance.
B. The seller is paid based on the time and materials used, with no incentives.
C. The seller is incentivized to achieve specific performance metrics, such as cost, schedule, or quality, with financial rewards for meeting or exceeding those targets.
D. The seller is penalized for any deviations from the original contract price.
C. The seller is incentivized to achieve specific performance metrics, such as cost, schedule, or quality, with financial rewards for meeting or exceeding those targets.
