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PMP > Procurement Mgmt > Flashcards

Procurement Mgmt Flashcards

1
Q

Procurement Mgmt

A

Set of processes that are used to obtain goods, services or scope from outside the organization

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2
Q

Procurement mgmt processes

A 
Initiating - none 
Planning - plan procurement mgmt 
Executing - conduct procurement s
Monitor & control - control procurements 
Closing - none
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3
Q

Plan procurement mgmt outputs

A

Procurement mgmt plan, independent cost estimates, make or buy decisions, procurement strategy, bid documents, procurement statement of work, work selection criteria

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4
Q

Conduct procurement outputs

A

Selected sellers, agreements

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5
Q

Control procurement outputs

A

Closed procurements, work performance info, change requests

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6
Q

Buyer

A

The org or party purchasing the goods or services from the seller

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7
Q

Seller

A

The org or party providing or delivering the goods/services to the buyer

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8
Q

Fixed price contract

A

Seller bears the risk

Cost overruns may not be passed to the buyer and must be borne by the seller

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9
Q

Firm fixed price (FFP)

A

Price is fixed, no provisions for cost or performance overruns, risk is entirely shifted to the seller

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10
Q

Fixed price incentive fee (FPIF)

A

Price is fixed with an incentive fee for meeting a target specified in the contract

Both parties agree to a price ceiling and all costs above the price ceiling must be covered by the seller

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11
Q

Fixed price economic price adjustment (FP-EPA)

A

Popular in cases where fluctuation in the exchange rate or interest rate may impact the project

Economic stipulation may be added to protect the seller or the buyer

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12
Q

Cost plus fixed fee (CPFF)

A

Buyer bears risk

Since all costs must be reimbursed to the seller, the buyer bears the risk of cost overruns

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13
Q

Cost plus incentive fee (CPIF)

A

Buyer and seller bear risk

Buyer bears most of the risk, but incentive fee for the seller motivates the seller to keep costs down

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14
Q

Cost plus award fee (CPAF)

A

The seller passes the costs back to the buyer, but the sellers award/profit comes from a decision made from whether or not to grant it based on the sellers performance

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15
Q

Time and materials

A

Buyer bears risk

Buyer pays the seller for all time and materials the seller applies to the project

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16
Q

Point of total assumption (PTA)

A

Cost point in the contract where a subcontractor assumes responsibility for all additional costs

Target cost + (ceiling price - target price) / ABC’s % share of cost overruns

Helps identify the point in the contract where the seller has the most motivation to bring things to completion

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17
Q

Plan procurement mgmt

A

Involves looking at the project and determine which component or services of the project will be made or performed internally and which will be performed from an external source

18
Q

Source selection analysis

A

Deciding how you are going to select a seller

Least cost, qualifications only, quality, quality and cost, sole source, fixed budget

19
Q

Least cost

A

May work when quality is not in question

20
Q

Qualifications only

A

Small enough that it doesn’t require an elaborate procurement process, make a short list and make a selection based on qualifications

21
Q

Quality-based (technical score)

A

Value, best quality

22
Q

Quality and cost based

A

Quality and cost based

23
Q

Sole source

A

Unusual, buyer negotiates with one seller

24
Q

Fixed budget

A

Buyer discloses the budget to seller and negotiate on scope, quality and schedule

Doesn’t work well with scope changes

25
Q

Procurement mgmt plan

A

Defines what will be procured, how a seller will be selected, what type of contracts will be used, how risk will be managed, how sellers will be managed, including how their performance will be measured

26
Q

Procurement strategy

A

Defines how procurements will be organized, how the contracts will be structured, and which procurement phases will be carried out

27
Q

Bid documents

A

Written by the buyer and provided to the prospective sellers, provides a narrative description of work to be performed

28
Q

Procurement statement of work

A

Helps explain an section fo the scope to potential sellers in enough detail so they can decide whether or not they want to pursue the work in question

Should focus on the outcome and not the steps

29
Q

Source selection criteria

A

Determined before the seller is selected

30
Q

Make or buy decisions

A

Made and documented with just enough info

31
Q

Independent cost estimates

A

May be created by outside companies or internally

32
Q

Conduct procurements

A

Carries out the procurement mgmt plan, selects one or more sellers, and awards the procurement, usually in the form of a contract

Issues bid, hold bidder conferences, evaluate proposals and select seller

33
Q

Conduct procurement tools

A

Advertising, bidder conferences

34
Q

Selected sellers

A

The RFP is generated, sellers have submitted proposals, negotiations have taken place and now a seller is chosen

35
Q

Agreements

A

Often in the form of contracts, formal documents governing the relationship between the buyer and seller

36
Q

Control procurements

A

Buyer and seller review the contract and the work to ensure that the results match the work

37
Q

Claims administration

A

Defined in the contract itself, but disputes must be managed and ultimately resolved and that the process for doing so must be defined in advance of the claim

Litigation is least preferred, last resort…mediation or arbitration instead

38
Q

Closed procurements

A

Closed contracts, formal notice that contract is complete

39
Q

Work performance info

A

Actionable info about sellers performance

40
Q

Procurement documentation updates

A

As change requests are reviewed, data is analyzed, inspection and audits are carried out, document will likely be updated

PMP (14 decks)

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