Project Procurement Management

Question 1

What are the three project management processes in the Project Procurement Management knowledge area and the inputs, tools, techniques, and outputs (ITTOs) for each process?

Question 2

What are the key concepts and tailoring considerations for Project Procurement Management including trends and emerging processes?

Question 3

Which is an example of a fixed-price contract?

Answer 3

 Firm fixed price (FFP). The most commonly used contract type is the FFP. It is favored by most buying organizations because the price for goods is set at the outset and not subject to change unless the scope of work changes.
 Fixed price incentive fee (FPIF). This fixed-price arrangement gives the buyer and seller some flexibility in that it allows for deviation from performance, with financial incentives tied to achieving agreed-upon metrics. Typically, such financial incentives are related to cost, schedule, or technical performance of the seller. Under FPIF contracts, a price ceiling is set, and all costs above the price ceiling are the responsibility of the seller.
 Fixed price with economic price adjustments (FPEPA). This type is used whenever the seller’s performance period spans a considerable period of years, or if the payments are made in a different currency. It is a fixed-price contract, but with a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation changes or cost increases (or decreases) for specific commodities.