PMP Question Series: Procument Management

(1) A PM for the seller is told by her management that the project should do whatever possible to be awarded incentive money. The primary objective of incentive clauses in a contract is to:
--> bring the objective of the seller in line with that of the buyer

(2) A Seller is working on a cost reimbersement contract when the buyer decides he would like to expand the scope of the services and change to a fixed price contract. All the following are the seller's options except:
-->(a) start over with a new contract (note, the seller has to fulfill the requirement of the existing contract. the seller does not have the option to avoid the completion of the existing project)

(3) All the following must be present to have a contract except:
-->address of the seller

(4) A seller is giving you so much trouble that your time available allocated to the project has gone from 20% to 80%. Most of the seller's deliverables are late and inadequate, and you have little confidence in his company's ability to complete the project. what should you do?

1) meet with the seller to discover the cause of the problem
2) Terminate the seller for convenience, and hire another seller

NOTE: choice 2) would have been done the first time there was a problem, not now.

(5) During the execution of the project, a new ISO version of standard 9000 is issued and the project team is meeting with quality department to determine how the standard will apply to the project. This is part of which quality process?
a) perform quality assurance
b) plan quality (x)

(4) Your program manager needs help from you with a bid for a new project. You want to protect your company from financial risk. You have limited scope definition. what is the best type of contract to choose?
--> cost plus fixed fee

(5) A seller is awarded a contract to build a pipeline. The contract terms and conditions require that a work plan be issued for the buyer's approval prior to commencing work, but the seller fails to provide one. which of the following is the best thing for the buyer's project manager to do?
--> issue a default letter

(6) close procurements is different from close project or phase in that close procurements:
-->occurs before close project or phase

(7) The performing organization is trying to decide whether to split the contracts department and assign procurement responsibilities to departments directly responsible for the projects. A procurement professional might not want this split to occur because they would lose ?? in a decentralized contracting environment
--> access to others with similar experiences



Terms:

Procurement audit:
This is not about auditing cost. It is about how the whole procurement process went. How can we handle negotiation better? how can we mae the bidding process easier for seller?

(8) You are the seller's PM. You discovered that you are working on work requested by the customer but not included in the contract. The customer spoke of being upset about the cost of several items she claims your company left out of the contract. No one in your company wants to discuss the change with the customer for fear of losing the contract. what is the best long-term course of action for the company?

(a) contact your senior management and procurement department to determine the options. Then schedule a meeting with management and the customer to discuss these options
(b) Renegotiate a new procurement statement of work and a new contract. (x)

NOTE: (a) is not a long-term solution. When a contract no longer serves the needs it was intended to serve, it can be renegotiated if the appropriate parties agree to this.

(9) from the seller's point of view, the procurement is considered closed when:
(a) final payment is made
(b) work is complete and formal acceptance received
(c) lesson learned are complete and final payment is received
(d) the archives, administrative closure, and closure requirements as stated in the contract are all completed (x)

(10) The project team has completed make-or-buy analysis. The scope could not be defined well enough for a fixed price contract, but the team had specific quality metrics for the project. The team decided to issue an RFP. All the work to be done was included in RFP and sent to the prequalified seller list. What is the most important thing the PM should make sure is in final contract?

-->requirements for a procurement performance review

(11) a project has a tight budget when you begin negotiation with a seller for an equipment. The seller has told you that the equipment price is fixed. However, your manager has told you to negotiate the cost with the seller. what is your best course of action?
a) postpone negotiations until you can convince your manager to change his mind
b) make a good faith effort to find a way to decrease the cost (x)

Note: there is always a way to decrease costs on the project by negotiation


(12) during the conduct procurement process, your objective is to obtain the best price possible. the tool that you will most heavily rely upon will be a(n) :
a) weighting system
b) screening system
c) independent estimate (x)

(13) your company is receiving a shipment of goods from the seller when you get a call from the procurement manager who tells you that the shipment does not meet the requirements of the contract. you look at the shipment yourself and determine that the shipment meets the needs of the project. what should you do?

a) accept the shipment
b) send the shipment back (x)

NOTE: the shipment should meet the business requirement

(14) a PM has a project team implementing a large project involving four large vendors. The PM struggled through every part of the procurement process since the company has a weak internal procurement department. what should be the most approriate thing to do to ensure the problems are resolved for future projects?

a) include an agenda item in the project closedown to discuss the these issues in a non-threatening manner
b) conduct a procurement audit (x)

(15) performance requirements describe:
a) the functionality desired by the customer
b) what the product of the project should be able to accomplish(x)

(16) during project execution, your project team member delivers a project deliverables to the buyer. however, the buyer refuses the deliverables, stating that it does not meet the requirement on page 300 of the technical specifications. you review the document and find that your agree. what is the best thing to do?
--> review the requirements and meet with the responsible team member to review the WBS dictionary

(17) during the conduct procurement process, your objective is to obtain the best price possible. the tool that you will most heavily rely upon will be:
a) weighting system
b) independent estimate(x)

(18) which planning output may be revised and refined as it moves through the procurement process?
a) procurement document
b) procurement statement of work (x)

(18) what is the difference between a contract change control system and a project change control system?
--> the contract change control system requires more documentation and sign-offs

(19) which of the following can be used to determine the type of contract to use on a project?
--> how complete the procurement statement of work is (and determine if you use a fixed price contract or not)

(20) you are assigned a $2,000.000 project with the standard deviation of 200.000. what type of contract do you recommend?
a) fixed price incentive fee
b) cost plus fixed fee (x)
NOTE: the range of budget : 1.8 millions to 2.2 millions. It implies the project is not very well defined and a fixed price contract is not suitable

(21) You receive 25 new computers from the seller, but were expecting only 20. In looing at the contract, you see that it says "seller to provide twenty (25) computers. What should you do first?

a) call the seller and ask for clarification
b) return the five extra computers (x)
Note: this is an example of a conflict in the contract. The intent of the contract can be determined by remembering that words are more binding than numbers.

(22) in the middle of the project, a seller tells you that he can not get the resources to complete the project. Generally, what is the best thing to do?

a) the contract has been breached. Contact your lawyer
b) Try to help uncover more resources, but continue the project (x)

NOTE: the seller has not breached the contract.

(23) resource-limited schedule
This is a schedule to accommodate the scenario that some resources are difficult to obtain

(24)