Procurement Management

1. A unilateral contract under which the seller is paid a C. Contract Administration

preset amount per unit of service is called:
D. Solicitation
A. A cost reimbursable contract
E. Solicitation Planning
B. A lump sum contract
5. Which of the following is true about procurement
C. A unit price contract documents?

D. A fixed price contract A. Procurement documents are used to solicit

proposals from prospective sellers.
E. b or d
B. Invitation for Bid and Request for Proposal are
two examples of procurement documents

2. Which of the following is considered during the C. Procurement documents should be structured to
Procurement Planning Process? facilitate accurate and complete responses from
prospective sellers
A. Whether to procure
D. b and c
B. How to procure and how much to procure
E. all of the above
C. What and when to procure
6. Which of the following is a method for quantifying
D. b and c qualitative data in order to minimize the effect of
personal prejudice on source selection?
E. all of the above
A. Weighting system

B. Screening system
3. From a buyer's standpoint, which of the following is
true? C. Selecting system

A. Procurement planning should include D. none of the above

consideration of potential subcontracts
E. all of the above
B. Procurement planning does not include
consideration of potential subcontracts since this is the 7. Which of the following is true concerning evaluation
duty of the contractor. criteria?

C. Subcontractors are first considered during the A. Can often be found in procurement documents
Solicitation Process
B. Can be objective or subjective
D. none of the above
C. Used to rate or score proposals
4. Which of the following processes involves obtaining
information (bids and proposals) from prospective D. May be limited to purchase price if procurement
sellers? item is readily available from number of sources

A. Procurement Planning E. all of the above

B. Source Selection
8. Which of the following are inputs to the Source 12. In which of the following contract types is the
Selection Process? seller's profit limited?

A. Evaluation criteria A. Cost-plus-percentage-cost contract

B. Organizational policies B. Cost-plus-fixed-fee contract

C. Procurement documents C. Fixed-price-plus-incentive

D. a and b D. b and c

E. all of the above E. none of the above

9. A significant difference between independent 13. A cost-plus-percentage-cost (CPPC) contract has an

estimates and proposed pricing could mean that: estimated cost of $120,000 with an agreed profit of 10%
of the costs. The actual cost of the project is $130,000.
A. The independent estimates are most likely What is the total reimbursement to the seller?
incorrect and the proposed pricing correct
A. $143,000
B. The SOW was not adequate
B. $142,000
C. The prospective seller either misunderstood or
failed to respond fully to the SOW C. $140,000

D. b or c D. $132,000

E. a or c 14. A cost-plus-incentive-fee (CPIF) contract has an

estimated cost of $150,000 with a predetermined fee of
10. Which of the following are examples of indirect $15,000 and a share ratio of 80/20. The actual costs of
costs? the project is $130,000. How much profit does the seller
make?
A. Salaries of corporate executives
A. $31,000
B. Salaries of full-time project staff
B. $19,000
C. Overhead costs
C. $15,000
D. a and b
D. none of the above
E. a and c
15. A fixed-price-plus-incentive-fee (FPI) contract has a
11. Which of the following contract types places the target cost of $130,000, a target profit of $15,000, a
greatest risk on the seller? target price of $145,000, a ceiling price of $160,000,
and a share ratio of 80/20. The actual cost of the project
A. Cost-plus-fixed-fee contract was $150,000. How much profit does the seller make?

B. Cost plus-incentive-fee contract A. $10,000

C. Fixed-price-incentive contract B. $15,000

D. Firm-fixed-price contract C. $0

D. $5,000
16. Under what circumstances is it better for a
contractor to subcontract?
A. The subcontractor possesses special technical
and engineering skills that the contractor does not have
20. Which type of warranty is enacted if a service or
product does not meet the level of quality specified in
the contract?
A. Implied warranty of merchantability

B. The work to be subcontracted represents almost B. Implied warranty of specified quality

all of the overall work effort
C. Express warranty
C. The subcontractor can perform the work at a
lower cost than the contractor D. none of the above

D. all the above 21. Which is not an element of procurement

management?
E. a and c
A. Purchasing
17. Which type of bilateral contract is used for high
dollar, standard items? B. Expediting

A. Purchase order C. Acquisition

B. Request for proposal (RFP) D. Marketing

C. Invitation for bid (IFB) E. C and D

D. Request for quotation (RFQ)

E. all of them are appropriate 22. The purchasing cycle consists of all the following
elements except?
18. Which of the following are characteristics of a
purchase order? A. Defined need

A. A bilateral contract used for low dollar items B. Transmit Need

B. A unilateral contract used when routine, C. Inspection

standard cost items are required
D. Price and Terms
C. A bilateral contract used for high dollar, standard
items

D. a and c 23. The cost of corrective action taken by the purchaser

and chargeable to the supplier under the terms of the
19. In which stage of the negotiation meeting are points contract is:
of concession identified?
A. Payment authorization
A. probing
B. Bid cost considerations
B. closure
C. Release payment
C. agreement
D. Back charge
D. scratch bargaining
24. __________ is a narrative description of the work to 28. __________ is a request for interim stoppage of
be accomplished or resource to be supplied. work due to non conformance, funding or technical
considerations.
A. Purchase order
A. Bid protest
B. Level of effort work
B. Stop work order
C. Scope of work
C. Notice to proceed
D. Contract stipulation
D. Supplier default notice

25. By which means is a contractor able to control costs

overruns due to changing requirements? 29. The process that may be used by an unsuccessful
supplier to seek remedy for a non award of work is:
A. Project data review
A. Bid protest
B. Change order
B. Stop work order
C. Change control
C. Back charge
D. Contract negotiations
D. Contract dispute

26. __________ is a written order directing the

contractor to make changes according to the provisions 30. The __________ specification describes, defines or
of the contract documents. specifies the goods / services to be supplied.

A. Change order / purchase order amendment A. Performance

B. Contract order modifications B. Functional

C. Contractor claim C. Technical

D. Owner directive D. Bid

E. General Requirements

27, __________ defines when the work is ready for or is

being used for the purpose intended and is so certified.
31. The Bid Evaluation process is characterized by all of
A. Final completion the following activities except?

B. Substantial completion A. Evaluation of suppliers financial resources

C. Final acceptance B. Ability to comply with technical specifications

D. Mechanical completion C. Delivery schedule and cost factors

D. Performance record A. Procurement invitation

E. Competitors method of sourcing B. Bid list

C. Resource identification

32. Which is not a consideration in a make or buy D. Supplier's rankings

decision?

A. Cost factors
36. __________ is a formal invitation to submit a price
B. Sales volume for goods and / or services as specified.

C. Existence of sufficient administrative / technical A. Request for quotation

personnel
B. Bid response
D. Political and social factors with the organization
C. Intention to bid

D. Invitation for bid

33. There are four methods of government
procurement. Which is not one of these methods? E. Request for proposal

A. Assistance

B. Sealed bidding 37. Which contract type should be used by the owner
on a high risk project?
C. Competitive proposals
A. Cost plus percentage of cost
D. Acquisition
B. Cost plus incentive fee
E. Small purchases
C. Lump sum

D. Fixed price plus incentive fee

34. A purchasing operation does not contain this
classification of work? E. C and D

A. Management

B. Buying 38. Cost reimbursable contracts are equivalent to:

C. Follow-up and expedition A. Progress payment contracts

D. Marketing B. Extra work order contracts

E. Clerical C. Cost plus contracts

D. Fixed price contracts

35. __________ is a register of suppliers invited to

submit bids for goods / services as specified.
39. Fixed price and incentive type contracts place E. Pre-award phase for fixed cost contracts, and
responsibility for performance and financial risks award phase for cost plus contracts
associated with delay or non-performance on the:

A. Contractor
43. A bilateral RFP is preferred to an invitation to bid
B. Owner when:

C. Lending institution A. Supplier and terms are specified

D. Project manager B. The product or service is relatively low value and

readily available

C. The product or service has high value and is

40. __________ is based on information gathered and unique
analyzed about demand and supply. this forecast
provides a prediction of short and long term prices and D. The product or service has high value, but is easy
the underlying reasons for those trends. to obtain

A. Sales forecast

B. Consumer price index 44. PMI suggests which of the following behaviors as
part of contract negotiations?
C. Production forecast
A. Probing, scratching, and small bites
D. Price forecast
B. Sniffing and smelling (olfactory)

C. Touching and caressing (tactile)

41. The contract is signed at the end of the:
D. Mind-reading and extra-sensory perception
A. Pre-award phase
E. None of the above
B. Award phase

C. Post-award phase
45. The bid package is developed in the:
D. Solicitation
A. Requirements phase
E. Award cycle
B. Requisition cycle

C. Solicitation cycle
42. Definitive contract terms are spelled out in the:
D. Award cycle
A. Pre-award phase
E. Award phase
B. Award phase

C. Post-award phase
46. The award phase includes the:
D. Purchasing phase
A. Requirements, requisition, and award cycles
 C. Cost plus
B. Award and contractual cycles
D. Overseas
C. Requisition and solicitation cycles

D. Solicitation cycle
50. In the area of contracting, there are two basic types
E. Cycles required for the contract of contracts that reflect how the total price is
determined. The __________ contract has an objective
of a pre-determined end price while the __________
contract has an objective of a target end price.
47. To relieve pressure on the project schedule, Richard
decided to fast-track and hire a contractor to do part of A. Full value; Partial value
the work. Which form of contract(s) should he
consider? B. Definitive; undefined

A. None. Fast-tracking is a very poor time to C. Incentive fee; award fee

consider a contractor
D. Fixed price; Cost-plus
B. Fixed lump sum
E. End price; target price
C. Cost plus incentive

D. Cost plus percentage of cost

51. A contract is a promise to provide goods and / or
E. C and D services to one party in return for something of value
from that party. To define the goods, services, and
something of value in a legal document, the contract
must be comprised of __________:
48. Which is not a factor in choosing a contractor?
A. An explicit work and product description
A. Complexity of requirements
B. A generic statement of the requirements
B. Price competition
C. A basic contract, a statement of work, a
C. Competency specification, and a list of documentation requirements

D. Capacity D. Statements of the requirements using language

that describes the physical characteristics and the
E. None of the above amount of money to be paid for the delivered products

E. None of the above

49. Requirements and specifications are always

changing in the systems integration business. Therefore,
the best form of contract for this environment would 52. The selection of the type of contract is important
be: because of the cost risk involved. In most cases, the
buyer (owner) will attempt to transfer the risk to the
A. The form of contract required to get the best seller (project sponsor). The buyer, therefore, will
contractor always attempt to award a(n) __________ contract to
the seller.
B. Fixed price
A. Fixed price
 A. Issued by the project procurement section
B. Cost-plus
B. Received by the vendor
C. Time and materials
C. Filled by the vendor
D. Definitive
D. Accepted and signed by the vendor
E. Incentive fee
E. Completed through delivery of the products by
the vendor

53. The buyer has not completely defined all the

requirements for the project but has enough definition
to start. The type of contract that will most likely be
awarded while additional requirements are being
finalized is the __________ contract.
A. Letter
56. The marketplace data often dictates the price of
products and services through competitive or
noncompetitive supply situations, which will vary from
many suppliers to one suppliers. However, __________
is not a market condition.

B. Cost-plus A. Mixed competition

C. Fixed price B. Pure competition

D. Variable price C. Monopolistic competition

E. Temporary D. Oligopoly

E. Monopoly

54. Contracts may be written in any form that is

understandable and enforceable, and often project
personnel attempt to be "creative" in developing the
document. Given a choice, it is best to __________ to
meet the requirements of the project.
A. Prepare a unique contract
57. The contracting process for the negotiation and
legal execution is divided into pre-award, award, and
post-award phases and five cycles that describe the
activities under the phases. the first cycle under the pre-
award phase is the __________ cycle.

B. Tailor an old contract A. Requisition

C. Use standard clauses in contracts B. Requirement

D. Avoid using contractual documents C. Solicitation

E. Mix standard and unique clauses D. Award

E. Contractual

55. A purchase order can be considered a contract with

a vendor to provide a number of parts or components
that will be used in project implementation. The
purchase order becomes a "contract" when it is
__________.
58. Project management, as an integration function, has
the need to either make or buy components of the
system. The decision to make or buy is based on all the
following but __________.
 61. Changes to a contract are approved and signed by
A. Availability of people both the buyer and seller as the desired performance
requirements. These changes are __________.
B. Availability of funds
A. Separate contracts between the customer and
C. Technology / know-how the project

D. Availability of contractors / manufactures B. Stand-alone subcontracts to the prime contract

E. Price C. An integral part of the prime contract as an

amendment

D. Secondary in legality to the prime contract

59. A contract is a stand-alone legal document and must
be individually managed to ensure the proper E. Primary in legality and the prime contract
performance. Many projects have several contracts to becomes secondary
be initiated and executed throughout the life of the
project. Therefore, it is best to have a __________ that
anticipates and describes the types of contracts
required for the project. 62. The concept of warranty is based upon one party's
assurance that the product or service will meet certain
A. Responsibility matrix standards of quality, including __________.

B. Listing of contracts A. Function, performance, durability, and

desirability
C. Contracting manual
B. Appearance, desirability, reliability, and
D. Project contract management plan maintainability

E. Project configuration management plan C. Desirability, reliability, durability, and

maintainability

D. Reliability, maintainability, function, and

60. Contracts for projects require revisions to meet the reparability
project needs as those needs evolve. The correct
method of initiating a change to the contract is to E. Condition, reliability, description, and function /
prepare a __________ for submission to the customer performance
(buyer).

A. Change notice
63. Warranties are given in two manners, either implied
B. New contract or expressed. The implied warranty differs from the
expressed warranty in that the implied warranty
C. Change order __________.

D. Proposal A. Is always given by a sales person

E. Plan B. Is always written at the time of sale

C. Gives specific descriptions of the product's

qualities
D. Is not a recorded statement of the
characteristics of the product B. 50

E. None of the above C. 75

D. 100

64. A project manager may issue a "waiver" on items E. None of the above
received from a vendor because the items are less than
the purchase order specified. If the project manager
knowingly accepts faulty material, the vendor is usually
__________ any damages that the material may cause. 67. Payment bonds are often required by the contract
and require specific actions under the stated conditions.
A. Held responsible for Payment bonds are specifically designed to ensure
payment of __________ by the prime contractor.
B. Relieved of responsibility for
A. Insurance premiums
C. Made to pay a percentage of
B. Weekly payrolls
D. Willing to repair / correct
C. Incremental earned value charges
E. Not paid in the amount of
D. Subcontractors, laborers, and materials

E. Damages for accidents caused

65. A contract may include a clause that imposes a
penalty on the project for late delivery of the completed
system. Although the contract specifies a specific
monetary penalty for delays, the key(s) to the issue is / 68. Some contracts are not completed because the
are __________. contractor fails or refuses to complete the contractual
conditions. This situation is called a __________ for
A. Whether the delays were necessary for safety which damages can be assigned.

B. Whether the delay could be anticipated by the A. Breech

project manager
B. Stop-work
C. Who caused the delay (buyer or seller) and the
nature of the interruption C. Flawed contract

D. Why the delay affected the delivery of the D. Contract in situ

system
E. None of the above
E. All of the above

69. The time of delivery for a contract is often specified

66. Performance bonds are required by some contracts
to ensure the project is completed and the system
functions as specified. A performance bond should
never be less than __________ percent of the contract
price.
to ensure that both parties, the buyer and seller,
understand the need for the product, service, or system
on or before that date. When a time is not specified in a
contract, it is assumed that performance must be
completed __________.

A. 25 A. At the same pace as other work

B. Sooner than contracts of a lesser dollar value

C. In the order in which the work (contract) was

accepted
73. The language of contracts does not preclude
D. As soon as possible, but without causing the misunderstanding and situations that adversely affect
seller any additional expense project completion. Therefore, a contract should always
have a method of removing the obstacles to progress.
E. Within a reasonable time One method is to form a __________ committee to
address matters that the project manager and the
customer's representative cannot handle.

70. The project manager is responsible for all the A. Top management
activities within a project and interfaces with external
functions, all of which consume his time. Therefore, B. Disputes resolution
when a contract administrator is assigned to the
project, the project manager __________ the contract. C. Problem processing

A. Does not need to manage D. Steering

B. Can transfer all responsibility to the contract E. None of the above

administrator for matters related to

C. Must still manage all major aspects of

74. It is important to review the performance of
D. Must know only the general contents of subcontractors during post-contract evaluations. This
review establishes the baseline for __________.
E. Is not concerned with the management of
A. Payment of current bills and incentive bonuses

B. Demonstrated performance and future potential

71. The final step on a project is the close-out phase
where all activities are to be terminated in a business- C. Future pricing and costs
like fashion. From a contractual point of view, the prime
consideration is to determine __________. D. Work measurement and work standards

A. The profit made on this project E. None of the above

B. Who must be notified that the contract is

completed
75. Project contracts can be separated into two broad
C. The degree to which the project met the categories: cost reimbursable and fixed price. In a fixed
provisions of the contract price contract the owner (buyer) must be specific in
__________ and minimize __________.
D. What reports are required to terminate the
contract A. How the work is to be performed; who will
perform the work
E. How many changes were made in the course of
the project and whether all the changes are accounted B. What procedures are to be used; how the work
for will be performed
C. When the work is to be performed; what E. Tell the owner that the individuals will be
performance standards will be used replaced and ignore the situation (the owner is not
responsible for personnel selection)
D. What the contractor (seller) is to provide; how
the work is to be performed

E. Who may be used to perform the work; the

procedures to be used
78. The contractor (seller) accepts all liability for
engineering errors, poor workmanship, and
consequential damages under a(n) __________
76. In a cost-reimbursable contract, the owner (buyer) contract.
accepts most of the __________. therefore, the owner
has more input as to how the work is accomplished as A. Letter
compared to a fixed price contract.
B. Incentive fee
A. Risk and exercises more control over the project
C. Cost-plus
B. Cost and has a greater interest in the schedule
D. Fixed price
C. Design work and influences the end product
E. Variable production
D. Project management and daily direction of the
work force

E. Planning function and cost disbursements for the
project
77. During the proposal and bidding phase, the owner
(buyer) must assess the capability of the contractor
(seller) to perform the work. For example, if the owner
believes the proposed team consists of some individuals
who do not have the requisite qualifications and
suggests that these individuals be replaced, the
contractor should __________.
A. Disregard the owner's suggestions unless it
precludes the contractor from obtaining the contract
B. Immediately make changes to follow the owner's
suggestions although the contractor believes the
replacements are less qualified
79. Contracting for project work follows a set sequence
of activities that ensures a favorable contracting
strategy. The sequence of contracting activities includes
the following: develop a contracting plan; screen
contractors; select bidders; prepare invitations for bid;
issue invitations for bid; __________; and award
contract.
A. Receive invitation for bid; review invitation for
bid; submit bid
B. Prepare proposals; submit proposals; select
bidder
C. Prepare proposals; receive proposals; review
proposals
D. Prepare proposals; review proposals, submit
proposals

C. Discuss the suggestions with the owner and E. Receive proposals; evaluate proposals; select
clarify the qualifications of individuals priors to making a winner
change

D. Tell the owner that personnel working on the

contract are not his responsibility and make no changes 80. Contractor screening is important to ensure that
candidates are capable of performing the work and the
number is neither excessive, which will make the
proposal evaluation process difficult, nor too few, which B. The list of terms and conditions
will minimize the competition. The four key items to be
used in contractor screening are __________. C. The signature of a corporate officer

A. Capacity, experience, capability, and interest D. A statement of work that describes how the
work will be accomplished
B. Capital, capacity, experience, and location
E. A price for the complete work to be performed
C. Experience, interest, financial stability, and skills

D. Facilities, capital, capacity, and capability

E. Industry, experience, risk, and cost
81. When invitations for bid are issued to the
contractors, the bids (proposals) must be submitted in a
standard format because __________.
83. The most critical aspect of selecting a contractor and
awarding a contract is the proposal evaluation (or bid
review) process. The evaluators must be aware of the
need to balance fact versus judgment, objective versus
subjective reasoning, work tasks versus costs, time
versus price, and __________.
A. Certainty versus uncertainty

A. The owner (buyer) has a format that he routinely B. Quality versus cost
uses and wants to force the contractors to meet his
requirements C. Quality versus price

B. The Uniform Commercial Code specifies that all D. Risk versus opportunity
proposals will comply with the law and the standard
format E. None of the above

C. The government has specified that proposals

must meet the requirements of contract law and this
assures the incorporation of all items
D. The Association of Contractors has prescribed
the format to which all bidders must comply to meet a
legal proposal
E. It gives the greatest assurance that all items are
covered and the proposals can be evaluated in a
uniform manner
84. Contracting is a means of obtaining required goods
and / or services that are required to meet the needs of
a project. The contract defines the legal relationship
between the participants and what each participant is
expected to do before the contract can be concluded.
The contract also forms a __________ in which the
participants strive to work toward the common goal of
successfully completing the legal obligations in the most
efficient manner.

A. Union

B. Partnership

82. Submission of proposals to perform work is the C. Consortium

avenue for acquiring most projects. The proposals,
when submitted, must contain specific items to obligate D. Single team
or bind the tendering organization. the most important
item is __________. E. Situation of opposition

A. The complete description of the work to be

performed
85. The proposal preparation is in itself a short-term
project that requires intense effort to be completed in
the owner's (buyer's) format and time frame, while
being responsive to the requirements of the formal
invitation for bid. A company bidding for projects can
ease the workload and enhance the potential for
successfully "winning" contracts by __________.
A. Appointing the proposal manager early in the
process
B. Identifying a proposal staff early in the process
C. Having a technical information data base
D. Having standard scopes of services
E. All of the above
86. Similar to a small project, the proposal preparation
process is started by a __________ meeting where the
technical, legal, and compensation considerations are
reviewed and assignments of responsibility are made.
A. Preliminary proposal
B. Planning and approval
C. Kick-off
D. Technical assessment
E. Staff assignment
87. When entering into a contract, it is often assumed
that the performance of the work will be as specified
and no disputes will be raised during the performance
period. On the contrary, it is better to assume that
there will be disputes and include a procedure in the
contract as to the means for dispute resolution because
__________.
A. It is more economical to resolve disputes as soon
as claims are made and before time and effort are
wasted
B. The tracking of claims is important for the best
"win" position during the subsequential litigation
C. Disputes must be brought before the National
Contract Arbitration Board to obtain equitable
resolution
D. There will be a hostile relationship between the
contract participants once the contract is signed
E. Contracts by their very nature, create situations
where disputes will arise, but they can be easily
resolved with good procedures
88. A contract is a promise to do or not do something in
exchange for some form of consideration. A negotiated
contract is one where both participants agree on the
basis for principal considerations: __________.
A. The period of performance and the specifications
for the project
B. How the work will be performed, at what time,
and for what price
C. The services to be rendered by one party and the
price to be paid by the other party
D. Who will perform the work and who will pay for
the work
E. The description of services to be rendered and
the description of the payment and payment schedule.
89. In abstract theory, a contract is not essential to the
performance of a project. Contracts are, however,
useful when the performance involves __________,
particularly when they are interdependent.
A. Personnel, money, and material
B. Cost, schedule, and quality
C. New, unique, and complex work
D. Substantial, complex, and extended
commitments
E. Subcontractors, vendors, and suppliers 24 C -

25 C -

1 C - 26 A -

2 E - 27 B -

3 A particularly if buyer wishes to exercise 28 B -

some degree of influence or control over subcontracting
decisions 29 A -

4 D - 30 C -

5 E - 31 E -

6 A - 32 B -

7 E - 33 D -

8 D proposals is the other input. procurement 34 D -

documents are input into the Solicitation Process
35 B -
9 D -
36 A -
10 E -
37 C -
11 D -
38 C -
12 D -
39 A -
13 A -
40 D -
14 B -
41 E -
15 A is implied
42 C -
16 E -
43 C -
17 C -
44 A ???
18 B -
45 B -
19 D -
46 D -
20 C -
47 E -
21 E -
48 E -
22 C -
49 C -
23 D -
50 D -
 77 C -
51 C -
78 D -
52 A -

53 B -

54 C -

55 D -

56 A -

57 B -

58 B -

59 D -

60 D -

61 C -

62 D -

63 D -

64 B -

65 C -

66 D -

67 D -

68 A -

69 E -

70 C -

71 C -

72 anulada

73 B -

74 B -

75 D -

76 A -