13/12_chap12

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.

You are preparing procurement documents for the building of a community center. There will be government standards, guidelines, and possibly regulations involved. You need to structure the procurement documentation in order to get proposals from qualified prospective sellers interested in doing business on a particular project. All the following statements concerning procurement documents are incorrect except:

• Well-designed procurement documents can simplify comparison of responses.

• Procurement documents must be rigorous with little 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.

You are advising another project manager who is starting his first agile project. In addition to the development team, he would like to use subcontractors for some parts of the work, but he isn't sure how to define the acceptance criteria. Which statement would you advise him to include in the contracts?

• "The completed deliverables must be fit for business purpose."

• "The delivery date may vary as long as all the required scope is completed."

• "The completed deliverables must match the original specification."

• "The quality of the completed deliverables must pass testing."

Your organization is transitioning to an agile approach. You have been asked to review the company's existing standard procurement contracts and revise them as needed to reflect the new project approach. What is one of the key adjustments you want to make?

• Reduce the time allowance for meetings and planning activities with the team

• Add more flexibility for adjusting the iterative delivery deadlines

• Increase the customer's involvement in prioritizing and reviewing the deliverables

• Improve the standards for providing clear, detailed specifications

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 the buyer.

• Help the seller control costs.

• Synchronize objectives.

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

All the following statements about change control are incorrect except:

• A fixed-price contract will minimize the need for change control.

• Changes seldom provide real benefits to the project.

• Contracts should include procedures to accommodate changes.

• More detailed specifications eliminate the causes of changes.

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 corrected.

• Void the contract and start legal action to recover overpayments.

• Change the contract to require more frequent audits.

Buyers and sellers have many common goals, but some goals of the buyer will not benefit the seller. Likewise, the seller will sometimes have goals that conflict with those of the buyer. These could negatively affect the project if contracts are not negotiated appropriately. The primary objective of contract negotiations is to:

• Get the most from the other side.

• Protect the relationship.

• Get the highest monetary return.

• Define objectives and stick to them.

A seller is working on a cost-reimbursable (CR) contract when the buyer decides he would like to expand the scope of services and change to a fixed-price (FP) contract. All the following are the seller's options except:

• Completing the original work on a cost-reimbursable basis and then negotiating a fixed price for the additional work

• Completing the original work and rejecting the additional work

• Negotiating a fixed-price contract that includes all the work

• Starting over with a new contract

You are working to plan procurements for a project that will develop a prototype cruise ship. The prototype will be tested, perfected, and then used to create a small fleet. In addition to creating a procurement management plan, you must put together bid documents describing the project needs and the criteria that will be used to select a seller. Which of the following will occur during this Plan Procurement Management process?

• Make-or-buy decisions

• Answering sellers' questions about the bid documents

• Advertising

• Proposal evaluation