PM - Chapter 10

The contractual statement-of-work document is:

• A. A non-binding legal document used to identify the responsibilities of the contractor

• B. A definition of the contracted work for government contracts only

• C. A narrative description of the work/deliverables to be accomplished and/or the resource skills required

• D. A form of specification

A written or pictorial document that describes, defines, or specifies the services or items to be procured is:

• A. A specification document

• B. A Gantt chart

• C. A blueprint

• D. A risk management plan

The “order of precedence” is:

• A. The document that specifies the order (priority) in which project documents will be used when it becomes necessary to resolve inconsistencies between project documents

• B. The order in which project tasks should be completed

• C. The relationship that project tasks have to one another

• D. The ordered list (by quality) of the screened vendors for a project deliverable

In which type of contract arrangement is the contractor least likely to want to control costs?

• A. Cost plus percentage of cost

• B. Firm-fixed price

• C. Time and materials

• D. Purchase order

In which type of contract arrangement is the contractor most likely to want to control costs?

• A. Cost plus percentage of cost

• B. Firm-fixed price

• C. Time and materials

• D. Fixed-price-incentive-fee

In which type of contract arrangement is the contractor at the most risk of absorbing all cost overruns?

• A. Cost plus percentage of cost

• B. Firm-fixed price

• C. Time and materials

• D. Cost-plus-incentive-fee

In which type of contract arrangement is the customer at the most risk of absorbing excessive cost overruns?

• A. Cost plus percentage of cost

• B. Firm-fixed price

• C. Time and materials

• D. Fixed-price-incentive-fee

What is the primary objective the customer’s project manager focuses on when selecting a contract type?

• A. Transferring all risk to the contractor

• B. Creating reasonable contractor risk with provisions for efficient and economical performance incentives for the contractor

• C. Retaining all project risk, thus reducing project contract costs

• D. None of the above

Which type of contract arrangement is specifically designed to give a contractor relief for inflation or material/labor cost increases on a long-term contract?

• A. Cost plus percentage of cost

• B. Firm-fixed price

• C. Time and materials

• D. Firm-fixed price with economic price adjustment

Which of the following is not a factor to consider when selecting a contract type?

• A. Type/complexity of the requirement

• B. Urgency of the requirement

• C. Extent of price competition

• D. All are factors to consider