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Project Management > Project Procurement Management > Flashcards

Project Procurement Management Flashcards

1
Q

In a standard contract, ________ are bound.

A.
Buyer and seller

B.
Project manager and sponsor

C.
Seller and sponsor

D.
Buyer and project manager

A

A

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2
Q

The seller agrees to furnish products/services, and the buyer agrees to provide ________.

A.
Time

B.
Effort

C.
Consideration

D.
Facilities

A

C

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3
Q

For the examination, procurement is discussed using the ________ relationship.

A.
Technical

B.
Buyer/seller

C.
Vendor/seller

D.
Purchasing

A

B

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4
Q

In PMBOK, the buyer is ________ to the project team, and the seller is ________ to the project team.

A.
Assigned, allocated

B.
Important, secondary

C.
Related, outside

D.
Internal, external

A

D

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5
Q

Market conditions are a part of ________.

A.
Organizational process assets

B.
Project management concerns

C.
Enterprise environmental factors

D.
General management concerns

A

C

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6
Q

Formal or informal policies that pertain to procurement are part of the ________.

A.
Organizational process assets

B.
Project management concerns

C.
Enterprise environmental factors

D.
General management concerns

A

A

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7
Q

Needed delivery dates and availability of resources can be found in the details of the ________.

A.
WBS

B.
SOW

C.
Project Scope Statement

D.
Project Charter

A

A

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8
Q

A Risk Register is a detailed part of the ________.

A.
Project Scope Statement

B.
Project management plan

C.
Project scheduling plan

D.
Project Charter

A

B

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9
Q

When doing make-or-buy analysis, you should make sure that both ________ and ________ costs are included so that the comparisons are equal.

A.
Tactical, strategic

B.
Management, project

C.
Delayed, sunk

D.
Direct, indirect

A

D

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10
Q

Technical judgments made to assess inputs and outputs of the planning of purchases and acquisition are an example of using ________.

A.
Expert judgment

B.
External assets

C.
Internal assets

D.
Computers

A

A

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11
Q

There are three general types of contracts: cost reimbursable, time and materials, and ________.

A.
Cost required

B.
Fixed price

C.
Simple cost

D.
Reimbursed time

A

B

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12
Q

Which type of contract has the highest risk for the buyer?

A.
Fixed price

B.
Reimbursed time

C.
Time and materials

D.
Cost plus

A

C

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13
Q

In the cost plus contract with the initials CPFF, the FF stands for ________.

A.
Formula foundation

B.
Free fixed

C.
Founded fixed

D.
Fixed fee

A

D

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14
Q

Which type of contract has the highest risk for the seller?

A.
Fixed price

B.
Reimbursed time

C.
Time and materials

D.
Cost plus

A

A

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15
Q

The type of contract where the buyer and seller share in the savings is ________.

A.
Fixed Price

B.
Cost reimbursable with incentive fee

C.
Cost reimbursable with fixed fee

D.
Time and materials

A

B

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16
Q

Which type of contract uses a percentage of cost as a part of the agreed upon contract?

A.
T&M

B.
CPFF

C.
CPIF

D.
CPPC

A

D

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17
Q

A buyer negotiates a fixed-price incentive contract with the seller. The target cost is $200,000, the target profit is $35,000, and the target price is $250,000. The buyer negotiates a ceiling price of $280,000 and a share ratio of 70/30. If the contract is completed with actual costs of $180,000, how much profit will the buyer pay the seller?

A.
$49,000

B.
$41,000

C.
$38,000

D.
$29,000

A

The answer is B. This is how to work this problem out. The numbers that you need to be concerned with are the target cost, $200,000, the target profit, $35,000, the share ratio of 70/30, and the actual costs of $180,000. (In a share ratio, the first percentage goes to the buyer and the second number is the percentage that the seller will get.) Using these numbers, the calculation goes like this. You subtract the actual costs from the target cost, which gives you $20,000. Seventy percent of that goes to the buyer, whereas thirty percent goes to the seller. In this case, that would be 30% of $20,000 or $6,000. Add $6,000 to the target profit of $35,000, and you have your answer, which is $41,000.

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18
Q

Definition of contract types to be used, how to handle lead times for procurement, and metrics used to manage contracts are all found in the ________.

A.
SOW

B.
Procurement management plan

C.
WBS

D.
Scope Statement

A

B

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19
Q

The document that gives detail to prospective sellers concerning item or items to be purchased is the ________.

A.
SOW

B.
Charter

C.
WBS

D.
CSOW

A

D

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20
Q

The document that contains information such as identified risks and risk owners is called a ________.

A.
Risk Register

B.
SOW

C.
WBS

D.
Risk locator

A

A

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21
Q

The evaluation criteria are determined by the ________.

A.
Seller

B.
Project manager

C.
Buyer

D.
Sponsor

A

C

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22
Q

Procurement documents are documents seeking information from the ________.

A.
Seller

B.
Project manager

C.
Buyer

D.
Accountant

A

A

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23
Q

Meetings with prospective sellers to ensure they have a clear understanding of the requirements are known as ________.

A.
Bidder conferences

B.
Vendor conferences

C.
Contract conferences

D.
All of the above

A

D

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24
Q

The system that assigns a value to evaluation criteria is known as the ________.

A.
Weighting system

B.
Screening system

C.
Expert judgment

D.
Rating system

A

A

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25
Q

Risk control, quality control, and performance reporting are all used in ________.

A.
Project management

B.
Contract administration

C.
Reports

D.
Sponsor communication

A

B

26
Q

Contracts are administered by the ________.

A.
Buyer

B.
Seller

C.
Sponsor

D.
Buyer and seller

A

D

27
Q

Contracts can be amended prior to contract closure in accordance with the ________ of the contract.

A.
Requirements

B.
Change control terms

C.
Sponsor regulations

D.
Organizational requirements

A

B

28
Q

The buyer will conduct performance reviews that show differences between the ________ of the project and the actual performance.

A.
SOW

B.
Baseline

C.
Charter

D.
WBS

A

B

29
Q

The ________ will offer performance reports concerning the work done on the project.

A.
Seller

B.
Buyer

C.
Sponsor

D.
Project manager

A

A

30
Q

The ________ will conduct performance reviews that show differences between the baseline of the project and the actual performance.

A.
Sponsor

B.
Project manager

C.
Buyer

D.
Sponsor

A

C

31
Q

________ and ________ are both a type of buyer performance review.

A.
Inspections, audits

B.
Inspections, tours

C.
Questioning, tours

D.
Audits, tours

A

A

32
Q

The payment system controls payments to the seller and may be controlled by the ________ function of the buyer.

A.
Accounts receivable

B.
Payment processing

C.
Accounts payable

D.
Check writing

A

C

33
Q

________ involves verification that the work and deliverables of the project are acceptable.

A.
Contract closure

B.
Administrative closure

C.
Project schedule closure

D.
Management plan closure

A

A

34
Q

Contract closure usually involves ________ notice that the contract has been completed.

A.
Legal

B.
Management

C.
Formal written

D.
Oral

A

C

35
Q

Early termination of a contract is a unique type of ________.

A.
Legal requirement

B.
Contract closure

C.
Contract fulfillment

D.
Contract management

A

B

36
Q

A ________ is done to review all procurement processes done during the project.

A.
Project plan review

B.
Project management review

C.
Project performance review

D.
Procurement review

A

D

37
Q

As a PMP candidate you must understand the provisions of project procurement even if your typical projects don’t include procurements. Based on information in this chapter, a contract cant have provisions for which of the following?

A. A deadline for the completion of work
B. Illegal activities
C. Subcontracting the work
D. Penalties and fines for disclosure of intellectual rights

A

B

38
Q

You are the PM for the 89A project. You have created a contract for your customer. The contract must have what two things?

A. An offer and consideration
B. Signatures and stamp of a notary public
C. The value and worth of the procured item
D. A start date and an acceptance of the start date

A

A

39
Q

The WBS and the WBS dictionary can help a PM plan for purchases and acquisitions. Which one of the following best describes this process?

A. The WBS defines the specific contracted work
B. The WBS defines the requirements for the specific contracted work
C. The WBS defines the specific contracted work, which must support the requirements of the project customer
D. Both parties must have and retain their own copy of the WBS

A

C

40
Q

Yolanda has outsourced a portion of the project to a vendor. The vendor has discovered some issues that ill influence the cost and schedule of its portion of the project. How must the vendor and Yolanda update the agreement?

A. As a new contract signed by Yolanda and the vendor
B. By submitting the change request to the contract change control system
C. As a memo and the SOW signed by Yolanda and the vendor
D. By submitting the change request to the cost change control system

A

B

41
Q

You are the PM of the HHQ project for your co. you have hired a vendor to complete a portion of the project, but the vendor doesn’t seem to have met the project requirements as defined in the contract. You have tried alternative dispute resolutions to no avail and you think the claims administration may have to be escalated. The US backs all contracts through which of the following?

A. Federal law
B. State law
C. Court system
D. Lawyers

A

C

42
Q

Terry is the PM of the MVB project. She needs to purchase a piece of equipment for her project. The accounting department has informed her she needs a unilateral form of contract. Accounting is referring to which of the following?

A. The SOW
B. A legally binding contract
C. A purchase order
D. An invoice from the vendor

A

C

43
Q

Bonnie is the PM for the HGH Construction project. She has contracted a portion of the project to the ABC construction company and has offered a bonus to ABC if they complete their portion of the work by august 30. This is an example of which of the following?

A. A project requirement
B. Project incentive
C. Project goal
D. Fixed price contract

A

B

44
Q

You are a PM for your org and are progressing through the procurement management process. Who should receive the procurement document package?

A. Your client
B. Your project sponsor
C. Your accounting/ finance department
D. Each seller that will participate in the bidding

A

D

45
Q

You are the PM for a co. that completes the installation of electrical fixtures in manufacturing environments. Part of your typical contractual agreement includes coverage of intellectual rights and privity. Privity is what?

A. The relationship between the PM and a known vendor
B. The relationship between the PM and an unknown vendor
C. The contractual, confidential information between customer and the vendor
D. The professional information regarding the sale between the customer and the vendor

A

C

46
Q

Sammy is the PM of the DSA project. He is considering proposals and contracts presented by vendors for a portion of the project work. Of the following, which contract is least dangerous to the DSA project?

A. Cost plus fixed fee
B. Cost plus percentage of cost
C. Cost plus incentive fee
D. Fixed price

A

D

47
Q

Bennie is the PM for his co. and he is working with his project stakeholder to determine the pros and cons of the different contract types for a portion of his project. Of the following contract types, which one requires the seller to assume the risk of cost overruns?

A. Cost plus fixed fee
B. Cost plus incentive fee
C. Lump sum
D. Time and materials

A

C

48
Q

Benji is the PM of the PLP project. He has hired an independent contractor for a portion of the project work. The contractor is billing the project $120 per hour, plus materials. This is an example of which of the following?

A. Cost plus fixed fee
B. Time and materials
C. Unit price
D. Lump sum

A

B

49
Q

Mary is the PM of the JHG project. She has created a contract SOW for a vendor. All of the following should be included in the SOW except which one of the following?

A. The items being purchased
B. The signatures of both parties agreeing to the SOW
C. The expected quality levels
D. A description of the collateral services required

A

B

50
Q

You are the PM for a software development project for an accounting system that will operate over the Internet. Based on your research, you have discovered it will cost you $25,000 to write your own code. Once the code is written, you estimate you will spend $3000 per month updating the software with client information, government regulations and maintenance. A vendor has proposed to write the code for your company and charge a fee based on the number of clients using the program every month. The vendor will charge you $5 per user of the web-based accounting system. You will have roughly 1200 clients using the system each month. However, you will need an in-house accountant to manage the time and billing of the system, so this will cost you an extra $1200 per month. How many months can you use the system before it’s better for you to write your own code rather than hire the vendor?

A. 3 months
B. 4 months
C. 6 months
D. 15 months

A

C. Your monthly cost – Vendor monthly cost
7200 – 3000 = 4200
25,000/4200 = 5.95 months

51
Q

You are the PM of a project that will span six years in Columbus, Ohio. You are negotiating with your project customers for considerations for inflation, cost of utilities and other cost factors that will likely fluctuate over the course of the project. What type of contract should your project have?

A. Cost plus award fee
B. Fixed price with economic price adjustments
C. Lump sums
D. Fixed price incentive fee

A

B

52
Q

A contract between an org and a vendor may include a clause that penalizes the vendor if the project is late. The lateness of a project has a monetary penalty. Thus, the penalty should be enforced or waived based on which one of the following?

A. Whether the PM could have anticipated the delay
B. Whether the PM knew the delay was likely
C. Whether the delay was because of an unseen risk
D. Who caused the delay and the reason why

A

D

53
Q

A PM is considering the marketplace and how it may affect the pricing on the procured portion of her project. She determines that in her market, there is only a single-source seller. A single-source seller means what?

A. There is only one qualified seller
B. There is only one seller the co wants to do business with
C. There is a seller that can provide all aspects of the project procurement needs
D. There is only one seller in the market

A

B

54
Q

Thomas is the PM for his org, and he is preparing the procurement process for his project. Several enterprise environmental factors and organizational process assets assist Thomas in making vendor selection. In the enterprise environmental factors are several evaluation criteria that Thomas must consider when he chooses a vendor for the project. Which one of the following is not a valid criterion for source selection?

A. The age of the contact person at the seller
B. The technical capability of the seller
C. Financial capability
D. Price

A

A

55
Q

Henry has sent the ABN contracting co. a letter of intent. This means which of the following?

A. Henry intends to sue the ABN contracting co
B. Henry intends to buy from the ABN contracting co
C. Henry intends to bid on a job from the ABN contracting co
D. Henry intends to fire the ABN contracting co

A

B

56
Q

Martha is the PM of the MNB project. She wants a vendor to offer her one price to do all of the detailed work. Martha is looking for which type of document?

A. Request for proposal
B. Request for information
C. Proposal
D. Invitation for a bid

A

D

57
Q

Which of the following is true about procurement document packages?

A. They offer no room for bidders to suggest changes
B. They ensure the receipt of complete proposals
C. They inform the performing organization why the bid is being created
D. The PM creates and selects the bid

A

B

58
Q

From a PMP candidate’s perspective, in what process group does source selection happen?

A. Initiating
B. Planning
C. Executing
D. Closing

A

C

59
Q

Within your organization, all PM’s are required to document the performance quality ratings, delivery performance, and contractual compliance of each vendor with which they interact. This is known as what?

A. A requirement
B. A Seller rating system
C. Procurement selection
D. An incentive contract

A

B

60
Q

You are the PM for a seller, but you are managing another company’s project as well. Things have gone well on the project, and the work is almost done. There is still a significant amount of funds in the project budget. The buyer’s representative approaches you and asks that you complete some optional requirements to use up the remaining budget. You should do which one of the following?

A. Negotiate a change in the contract to take on the additional work
B. Complete a contract change for the additional work
C. Submit the proposed change through the contract change control system
D. Deny the change because it was not in the original contract

A

C

Project Management (4 decks)

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