Procurement Management

Question 1

Types of Contracts: Fixed Price

Answer 1

seller bears all risk

Question 2

FFP =

Answer 2

Firm Fixed Price (most common , seller covers any cost increases)

Question 3

FPIF =

Answer 3

Fixed Price Plus Incentive Fee (includes an extra performance bonus)

Question 4

FP - EPA

Answer 4

Fixed Price with Economic Price Adjustment (used on long-term projects, buyer covers inflation costs)

Question 5

CPPC =

Answer 5

Cost Plus Percentage of Cost (seller reimbursed for costs, plus a % commission)

Question 6

CPFF =

Answer 6

Cost Plus Fixed Fee (seller reimbursed for costs, plus an objective bonus)

Question 7

CPAF =

Answer 7

Cost Plus Award Fee (seller reimbursed for costs, plus a subjective bonus)

Question 8

T&M =

Answer 8

Time & Material (hybrid, moderate risk to buyer, often used for staff augmentation and constraints)

Question 9

Procurement Documents

Answer 9

RFP = Request for Proposal, RFB = Request for Bid, RFQ = Request for Quote, RFI = Request for Information, IFB = Inviatation for Bid

Question 10

Point of total assumption

Answer 10

the point where the seller has to pay for any further cost overruns; formula: PTA = Target Cost + ((Ceiling Price - Target Price) / Buyer’s Share)

Question 11

Teaming Agreements

Answer 11

a standardized contract between two parties to simplify procurements, aka master service agreements.