Contract Types

Once signed, a contract is legally binding unless

• One party is unable to perform

• One party is unable to finance its part of the work

• It is in violation of applicable law

• IT is declared null and void by either party's legal counsel

With a clear procurement statement of work, a seller completes work as specified, but the buyer is not pleased with the results. The contract is considered to be:

• Null and void

• Incomplete

• Complete

• Waived

All of the following statements concerning procurement documents are incorrect except:

• Well-designed procurement documents can simplify comparison of responses

• Procurement documents must be rigorous with no flexibility to allow consideration of seller suggestions

• In general, procurement documents should not include selection criteria

• Well-designed procurement documents do not include a procurement statement of work

A project manager for the seller is told by her management that the project team should do whatever possible to be awarded incentive money. The primary objective incentive clauses in a contract is to:

• Reduce costs for the buyer

• Help the seller control costs

• Synchronize objectives

• Reduce risk for the seller by shifting risk to the buyer

A routine audit of a cost reimbursable (CR) contract determines that overcharges are being made. If the contract does not specify corrective action, the buyer should:

• Continue to make project payments

• Halt payments until the problem is resolved

• Void the contract and start legal action to recover overpayments

• Change the contract to require more frequent audits

A seller is working on a cost reimbursable contract when the buyer decides to expand the scope of work and change to a fixed price contract. All of the following are the seller's options EXCEPT

• Completing the original work on a cost reimbursable contract basis and then negotiating a fixed price contract for the extra work.

• Completing the original work and rejecting the additional work

• Negotiating a fixed price contract that includes the work

• Starting over with a new contract

Bidder conferences are part of

• Plan procurement

• Administer procurements

• Conduct procurements

• Communications management

All of the following MUST be present to have a contract EXCEPT

• An SOW

• Acceptance

• Offer

• Consideration

An advantage of the fixed price contract for the buyer is:

• Cost risk is lower

• Cost risk is higher

• There is little risk

• Risk is shared by all parties

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

• Firm fixed price

• Firm fixed price plus incentive

• Cost reimbursement

• Time and materials