Project Procurement Management Flashcards
When there is an issue or claim that must be settled before the contract can be closed, the parties involved in the issue or claim will try to reach a settlement through mediation or arbitration.
Alternative dispute resolution
From seller to buyer. Price is the determining factor in the decision-making process.
Bid
A meeting of all the project’s potential vendors to clarify the contract statement of work and the details of the contracted work.
Bidder conference
These are disagreements between the buyer and the seller, usually centering on a change, who did the change, and even whether a change has occurred. It is also called disputes and appeals, and are monitored and controlled through the project in accordance with the contract terms.
Claims
This is a formal agreement between the buyer and the seller. They can be oral or written—though written is preferred.
Contract
This defines the procedures for how the contract may be changed. The process for changing the contract includes the forms; documented communications; tracking; conditions within the project, business, or marketplace that justify the needed change; dispute resolution procedures; and the procedures for getting the changes approved within the performing organization.
Contract change control system
This document requires that the seller
fully describe the work to be completed
and/or the product to be supplied. This document then becomes part of the contract
between the buyer and the seller.
Contract statement of work (SOW also
CSOW)
A contract that pays the vendor all costs
for the project, but also includes a buyer-determined
award fee for the project
work.
Cost plus award fee contract
A contract that requires the buyer to pay for the cost of the goods and services procured plus a fixed fee for the contracted work. The buyer assumes the risk of a cost overrun.
Cost plus fixed fee contract
A contract type that requires the buyer to
pay a cost for the procured work, plus an
incentive fee, or a bonus, for the work if
terms and conditions are met.
Cost plus incentive fee
A contract that requires the buyer to pay for the costs of the goods and services procured plus a percentage of the costs. The buyer assumes all of the risks for cost overruns.
Cost plus percentage of costs
These are costs incurred by the project in
order for the project to exist. Examples
include the equipment needed to
complete the project work, salaries of the
project team, and other expenses tied
directly to the project’s existence.
Direct costs
Also known as firm fixed-price and lump-sum contracts, these are agreements that define a total price for the product the seller is to provide.
Fixed-price contracts
A fixed-price contract with opportunities for bonuses for meeting goals on costs, schedule, and other objectives. These contracts usually have a price ceiling for costs and associated bonuses.
Fixed-price incentive fee
A fixed-price contract with a special allowance for price increases based on economic reasons such as inflation or the cost of raw materials.
Fixed-price with economic price adjustments