Exam

1. A traditional procurement method for selecting sellers is "lowest cost." What is the PMBOK's term for this method of seller selection?

A. Minimum cost possible

B. Least cost

C. Cheapest alternative to no seller

D. Dirt cheap price

2. Project Manager Ichabod Crane's old college roommate owns a company, Services R Us, that sells services Ichabod needs for his project. Ichabod decides to include Services R Us as a prospective seller in the project's RFP process as a favor to his old roommate. Ichabod has no financial interest in Services R Us. Is Ichabod's decision in violation of PMI's Code of Ethics and Professional Conduct?

A. No, because Ichabod has no financial interest in the old roommate's company.

B. Yes, while there may not be an actual conflict of interest, PMI's Code of Ethics consider an appearance of a conflict of interest as a violation.

C. No, because Ichabod does not intend on awarding the business to the old roommate's company.

D. Yes, because despite Ichabod's intentions to the contrary, he probably will select Services R Us as the winning seller.

3. To manage procurement risk, John, your procurement manager, has a policy of preferring experienced and dependable sellers instead of bothering to select sellers through open competition. What do we call this type of risk management technique?

A. Risk Acceptance

B. Risk Mitigation

C. Risk Transfer

D. Risk Avoidance

4. Project Procurement Management ________ (select ONE).

A. Describes the processes required to procure products, services, or results from outside the project organization.

B. Involves processes to ensure that the project procures products, services, or results only at the lowest possible cost.

C. Includes the processes to procure products, services, or results, but does not include the ongoing performance management of the selected seller(s).

D. Is never used by the seller of the product, service, or results under a procurement contract.

5. Procurement Manager Ray is coordinating a bidders' conference to allow prospective sellers to obtain clarification on the goods that Ray's company needs to buy. During what process of Project Procurement Management would such a conference occur?

A. Plan Procurement Management

B. Conduct Procurements

C. Control Procurements

D. Close Procurements

6. Which document should a buyer normally require prospective sellers to sign prior to participating in an RFP?

A. A contract to not engage in unfair business practices

B. A non-compete contract

C. A nondisclosure agreement

D. A work agreement

7. Before a buyer can issue a Request for Proposal, it must first identify potential sellers that sell the product or service required for the project. What is another term used to describe the process of identifying such sellers?

A. Seller qualification research

B. Regression analysis

C. Statistical qualification

D. Sourcing

8. Based on PMBOK guidance, a key output of the Plan Procurement Management process is the ____________?

A. Procurement management plan

B. List of pre-qualified selected sellers

C. Project statement of work.

D. All of the above.

9. Procurement Manager Daisy works for a US Government agency, and acknowledges that there are some "unknowns" in her procurement statement of work and specifications. Which contract type does federal law prohibit Daisy from using for her procurement?

A. Time and Materials.

B. Cost-Plus-Percentage of Cost Fee

C. Fixed-Price Incentive.

D. Cost-Reimbursable.

10. Which one of the following types of contracts provides for potential price increases under conditions specified in the contract?

A. Time and materials

B. Cost-plus a fixed fee

C. Cost-plus an incentive fee

D. Fixed price with economic price adjustments

E. None of the above

11. Project Managers need to have an understanding of Project Procurement Management because the ________.

A. Project Manager directly procures the products, services, or results required by the project.

B. Project Manager must ensure that products, services, or results are procured at the lowest possible cost.

C. Project Manager is responsible for defining the needs of the project and for managing the scheduled activities of the procurement group which is a part of the project team.

D. "Project Manager is responsible for the creation of the procurement management plan, which is then turned over to Procurement,

which then initiates the RFx process."

12. Verification by the buyer of whether final deliverables provided by the seller meet the buyer's acceptance criteria often occurs at what point in the Project Procurement Management process?

A. Control Procurements as part of closing seller contracts

B. Change Control.

C. Acceptance Plan and Verification Process.

D. Plan Procurement Management

"

13. Project Manager Michelle is purchasing 100 laptops and 20 desktop computers for her project, and the delivery of the computers is time-critical. She would like to provide an incentive to the seller for the timely delivery of the computers. Paula and her procurement partner have agreed that the selected seller will be paid the cost of the computers plus a 10% fee. Which contract type is being used in this case?

"

A. Cost plus a percentage of cost contract

B. T&M with incentive

C. Cost plus a fixed fee

D. Fixed Cost.

In discussing procurement, we have emphasized the distinction between schedule-driven project procurements and ongoing ________ procurements.

A. Operational

B. Everyday

C. Future

D. Support

15. As a procurement manager, you are preparing for a procurement of 100 tons of speciality steel for a commercial project. In reviewing the contract to be used for your procurement, you know that all commercial procurements are governed by a specific state's version of what law?

A. Civil law

B. The UCC

C. Federal common law

D. The laws of physics

16. Your work on the Tacoma Narrows Bridge case provided illustrations of many facets of project procurement management and procurement risk mitigation. Which one of these procurements proved to be the most disruptive to the project?

A. Wind tunnel study procurement

B. Human resources procurement

C. Barge services procurement

D. Road deck procurement

17. While project procurements may require complex "widgets" and a complicated procurement effort, COTS procurements are usually quicker and carry lower risk. What does COTS stand for?

A. Commonly ordered tools and supplies

B. Commercial off the shelf

C. Nothing - that's a word

D. Custom ordered technology simplified

18. What is an oral approval by an authorized buyer agent that can be construed to have the same effect as a written change order?

A. A Constructive Change.

B. Claims Administration.

C. Implied Change Order.

D. Agent-authorized Change Order.

19. Project Manager Frank Sinatra has decided to use a Firm Fixed-Price contract type for his complicated procurement, and has qualified 5 sellers for that procurement. Which type of procurement document would be best for Frank to use here?

A. RFD

B. RFQ

C. RFP

D. RFU

20. Which of the following is a key method to transfer risk from the buyer to the seller?

A. The Delphi Technique

B. Risk Management Plan

C. Contract

D. All of the above

21. In closing out a procurement contract, the buyer must make one key determination to ensure that there are no potential claims. That is:

A. The seller is happy with the deliverables.

B. All payments made to the seller were accurate.

C. The contract file is organized and final.

D. All deliverables called for under the contract have been officially accepted by the buyer.

22. We discussed acceptance test criteria and procedures in some detail. Such requirements are normally included in the buyer-seller contract. From the seller's perspective, getting the buyer to accept one or more deliverables is critical because:

A. It's evidence that the seller is doing its job under the contract.

B. Acceptance by the buyer normally triggers the buyer's legal obligation to pay for that deliverable.

C. The buyer can't sue the seller for deliverables that are accepted.

D. None of the above

23. A contract between buyer and seller specifies that a seller must pay $1,000 per day if the seller fails to deliver the materials according to the project schedule. What form of contract remedy is the seller agreeing to here?

A. Liquidated Damages

B. Bond

C. Equitable Relief

D. Remedial Payment

24. Which of the following is a true statement concerning evaluation criteria found in an RFP?

A. The criteria are always objective and fair.

B. The criteria can be objective or subjective.

C. The criteria cannot be limited to purchase price if the product, service, or result is readily available from a significant number of sellers.

D. All of the above.

25. Which of the following is a method for quantifying qualitative data in order to minimize the effects of personal bias on seller selection?

A. Weighting System.

B. Factoring System.

C. Rating System.

D. All of the above.

26. Very Big Company, Inc. and Smaller Company, LLC are locked in a dispute over the delivery of products called for under their contract. Very Big says that the products delivered by Smaller do not conform to the requirements of the contract, but Smaller Company refuses to replace the defective products. Despite negotiations, the seller refuses to admit that it has a problem or to correct the issues. Your procurement is at a standstill, and this standstill threatens to delay the entire project. Explain two options you have available under the Uniform Commercial Code before you have to resort to litigation or ADR.

27 Claims administration is a key step involved in closing procurement contracts. Briefly describe the PMBOK's guidance on (a) the general types of claims that may be involved in the process, and (b) the preferred method of resolving such claims.

28 A prospective seller participating in your RFP, Acme Anvils, calls you to discuss the pricing contained in its proposal. Acme is also a large customer of your company as well as a long-time supplier to your company with superb performance in the past. You would really like to see Acme win the business for your project. As the Procurement Manager, you have visibility to all of the pricing provided by other prospective sellers. During the discussion, Acme asks you for "guidance" on their pricing so that it can be competitive with the other sellers. How do you respond to Acme's representative? If there's an issue, identify that, too.

29 Dr. Suess has developed an RFP for a complex procurement. Based on the requirements and specifications associated with the procurement, Dr. Suess believes that the most qualified sellers will be small startup technology companies that will be called upon to produce a significant quantity of the products to meet the needs of the procurement. Briefly describe three key source selection criteria that Dr. Suess should use to rate the sellers' proposals.

30 Buster Keaton is involved in managing two different seller procurement contracts. One of the sellers is performing under a fixed-price contract, and the other is performing under a cost-plus contract. Specify (a) which phase of the Project Procurement process Buster is working in, and (b) three tools or techniques that Buster could use to manage each seller's performance.

31 The course materials have periodically contrasted procurements by commercial and government entities. Commercial entities have far more leeway in the methods they employ to procure goods and services, including skipping competitive processes such as an RFP. Briefly describe the legal reason that requires government entities to almost always fully compete procurements.

32 Describe the PMBOK's recommended process by which a buyer prepares to request seller responses for any given procurement, and three of the documents that may result from that process.

33 As mentioned in a prior question, Very Big Company, Inc. and Smaller Company, LLC are locked in a dispute over the delivery of products called for under their contract. Very Big says that the products delivered by Smaller do not conform to the requirements of the contract, but Smaller Company refuses to replace the defective products.The parties have tried to work out their differences through negotiation, but have reached a stalemate. This has resulted in a contract dispute. Briefly discuss (a) one alternate dispute resolution (ADR) option available to these parties, and (b) three primary benefits of that option.

34 As the Project Manager, you are evaluating whether to have your company's IT department develop a new software system needed for a project. Briefly describe the PMBOK's guidance on how you should approach making your decision, including the type of key decision(s) you need to make here, and one risk inherent in your decision.

35 We studied three basic contract types: fixed price, cost-plus, and time-and-materials. Select one of those contract types, and briefly describe an advantage and a drawback, if any, to a buyer using that type of contract.