PROCUREMENT

Your organization has recently been informed that several of the regulations related to how your products manufactured will change in six months. In planning for work to change certain design and production processes, you determine you will need to work with several external organizations to do the work. Wich type of contract do you not want to use if you do not have enough help to audit invoices?

• Cost plus fixed fee (CPFF)

• Time & material (T&M)

• Fixed price (FP)

• Fixed price incentive fee (FPIF)

A seller is awarded a contract to build a pipeline. The contract terms and conditions require a work plan to be issued for the buyer's approval prior to commencing work, but the seller fails to provide one. Wich of the following is the best thing for the buyer's project manager to do?

• File a letter of intent.

• Develop the work plan and issue it to the seller to move things along.

• Issue a default letter.

• Issue a stop work order to the seller until a work plan is prepared.

The project manager, the procurement manager, and the project sponsor are discussing the project costs and whether it is better to have their own company to do some of the project work or hire another company to do all the work. Generally, it would be better for the organization to do the work internally if:

• There is a lot of proprietary data.

• You have the expertise, but you do not have the available manpower.

• You do not need control over the work.

• Your company resources are limited.

Your program manager has advised that you need to protect the organization from financial risk. In planning a new project, you realize there is limited scope definition related to the work needed to fulfill the contract. What is the best type of contract to choose?

• Fixed-price (FP)

• Cost plus percentage of cost (CPPC)

• Time & material (T&M)

• Cost plus fixed fee (CPFF)

The project team is assessing the responses of prospective sellers who have submitted proposals. One team member argues for a certain seller while another team member wants the project to be awarded to a different seller. What part of the procurement process is the team in?

• Plan Procurement Management

• Conduct Procurements

• Control Procurements

• Negotiate Contracts

Which of the following is an advantage of centralized contracting?

• Increased expertise

• Easier access

• The project manager doesn't have to be involved

• More loyalty to the project

The sponsor and the project manager are discussing what type of contract the project managers plans to use on the project. The sponsor points out that the performing organization paid a design team a lot of money to come up with the design. The project manager is concerned that the risk for the buyer be as small as possible, and recommends a fixed-price contract. An advantage of a fixed-price contract for the buyers is:

• Cost risk is lower

• Cost risk is higher

• There is little risk

• Risk is shared by all parties

Which of the following is the best thing for a project manager to do in the Conduct Procurements process?

• Evaluate risks

• Select contract type

• Perform market research

• Anwer sellers' questions about the procurement documents

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 of incentive clauses in a contract is to:

• Reduce costs for teh buyer

• Synchronize objectives

• Help the seller control costs

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

Once signed, a contract is legally binding unless:

• It is in violation of applicable law

• One party is unable to perform

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

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