Project Procurement Questions

You are the project manager of the GHY Project for your organization. A portion
of this project includes dangerous work; although members of the project team
could likely complete the work, your sponsor doesn’t want to accept the risk. In
this situation, which of the following may be used as a risk mitigation tool?

A. A vendor proposal
B. A contract
C. A quotation
D. Project requirements

As a PMP candidate you must understand the provisions of project procurement

even if your typical projects do not include procurements. Based on the
information in this chapter, a contract cannot have provisions for which one of
the following?

A. A deadline for the completion of the work

B. Illegal activities
C. Subcontracting the work
D. Penalties and fines for disclosure of intellectual rights

You are the project manager for the 89A Project. You have created a contract for
your customer. The contract must have what two things?

A. An offer and consideration

B. Signatures and the stamp of a notary public
C. The value and worth of the procured item
D. A start date and an acceptance of the start date
Project Procurement Questions

The WBS and the WBS dictionary can help a project manager plan for purchases
and acquisitions. Which one of the following best describes this process?

A. The WBS defines the specific contracted work.

B. The WBS defines the requirements for the specific contracted work.
C. The WBS defines the specific contracted work, which must support the
requirements of the project customer.
D. Both parties must have and retain their own copy of the WBS.

Yolanda has outsourced a portion of the project to a vendor. The vendor has
discovered some issues that will influence the cost and schedule of its portion of
the project. How must the vendor and Yolanda update the agreement?

A. As a new contract signed by Yolanda and the vendor

B. By submitting the change request to the contract change control system
C. As a memo and SOW signed by Yolanda and the vendor
D. By submitting the change request to the cost change control system

You are the project manager of the HHQ Project for your company. You have
hired a vendor to complete a portion of the project, but the vendor doesn’t seem
to have met the project requirements as defined in the contract. You have tried
alternative dispute resolutions to no avail and you think the claims administration
may have to be escalated. The United States backs all contracts through which of
the following?
A. Federal law
B. State law
C. Court system
Project Procurement Questions

D. Lawyers

Terry is the project manager of the MVB Project. She needs to purchase a piece of
equipment for her project. The accounting department has informed Terry she
needs a unilateral form of contract. Accounting is referring to which of the
following?

A. The SOW
B. A legally binding contract
C. A purchase order
D. An invoice from the vendor

Bonnie is the project manager for the HGH Construction Project. She has
contracted a portion of the project to the ABC Construction Company and has
offered a bonus to ABC if they complete their portion of the work by August 30.
This is an example of which one of the following?

A. A project requirement
B. A project incentive
C. A project goal
D. A fixed-price contract

You are a project manager for your organization and are progressing through the
procurement management processes. Who should receive the procurement
document package?

A. Your client
Project Procurement Questions

B. Your project sponsor

C. Your accounting/finance department
D. Each seller that will participate in the bidding

You are the project manager for a company that completes the installation of
electrical fixtures in manufacturing environments. Part of your typical contractual
agreement included coverage of intellectual rights and privity. Privity is what?

A. The relationship between the project manager and a known vendor

B. The relationship between the project manager and an unknown vendor
C. The contractual, confidential information between the customer and the
vendor
D. The professional information regarding the sale between the customer and the
vendor

Sammy is the project manager of the DSA Project. He is considering proposals and
contracts presented by vendors for a portion of the project work. Of the
following, which contract is least dangerous to the DSA Project?

A. Cost plus fixed fee

B. Cost plus percentage of cost
C. Cost plus incentive fee
D. Fixed price
Project Procurement Questions

Bennie is the project manager for his company and he’s working with his project
stakeholder to determine the pros and cons of the different contract types for a
portion of his project. Of the following contract types, which one requires the
seller to assume the risk of cost overruns?

A. Cost plus fixed fee

B. Cost plus incentive fee
C. Lump sum
D. Time and materials

Benji is the project manager of the PLP Project. He has hired an independent
contractor for a portion of the project work. The contractor is billing the project
$120 per hour, plus materials. This is an example of which one of the following?

A. Cost plus fixed fee

B. Time and materials
C. Unit price
D. Lump sum

Mary is the project manager of the JHG Project. She has created a contract
statement of work (SOW) for a vendor. All of the following should be included in
the contract SOW except for which one?

A. The items being purchased

B. The signatures of both parties agreeing to the SOW
C. The expected quality levels
D. A description of the collateral services required
Project Procurement Questions

You are the project manager for a software development project for an
accounting system that will operate over the Internet. Based on your research,
you have discovered it will cost you $25,000 to write your own code. Once the
code is written, you estimate you’ll spend $3000 per month updating the software
with client information, government regulations, and maintenance. A vendor has
proposed to write the code for your company and charge a fee based on the
number of clients using the program every month. The vendor will charge you $5
per month per user of the web-based accounting system. You will have roughly
1200 clients using the system each month. However, you’ll need an in-house
accountant to manage the time and billing of the system, so this will cost you an
extra $1,200 per month. How many months can you use the system before it’s
better to write your own code rather than hire the vendor?

A. 3 months
B. 4 months
C. 6 months
D. 15 months

You are the project manager of a project that will span six years in Columbus,
Ohio. You are negotiating with your project customer for considerations for
inflation, cost of utilities, and other cost factors that will likely fluctuate over the
course of the project. What type of contract should your project have?

A. Cost plus award fee

B. Fixed price with economic price adjustments
C. Lump sum
D. Fixed-price incentive fee
Project Procurement Questions

A contract between an organization and a vendor may include a clause that

penalizes the vendor if the project is late. The lateness of a project has a
monetary penalty. Thus, the penalty should be enforced or waived based on
which one of the following?

A. Whether the project manager could have anticipated the delay

B. Whether the project manager knew the delay was likely
C. Whether the delay was because of an unseen risk
D. Who caused the delay and the reason why

A project manager is considering the marketplace and how it may affect the
pricing on the procured portion of her project. She determines that in her market,
there is only a single-source seller. A single-source seller means what?

A. There is only one qualified seller.

B. There is only one seller the company wants to do business with.
C. There is a seller that can provide all aspects of the project procurement needs.
D. There is only one seller in the market.

Thomas is the project manager for his organization, and he is preparing the
procurement process for his project. Several enterprise environmental factors
and organizational process assets assist Thomas in making the vendor selection.
In the enterprise environmental factors are several evaluation criteria that
Thomas must consider when he chooses a vendor for the project. Which one of
the following is not a valid evaluation criterion for source selection?

A. The age of the contact person at the seller

B. The technical capability of the seller
Project Procurement Questions

C. Financial capacity
D. Price

Henry has sent the ABN Contracting Company a letter of intent. This means which
one of the following?

A. Henry intends to sue the ABN Contracting Company.

B. Henry intends to buy from the ABN Contracting Company.
C. Henry intends to bid on a job from the ABN Contracting Company.
D. Henry intends to fire the ABN Contracting Company.

Martha is the project manager of the MNB Project. She wants a vendor to offer
her one price to do all of the detailed work. Martha is looking for which type of
document?

A. A request for proposal

B. A request for information
C. A proposal
D. An invitation for bid

In your organization, all project procurement must pass through a centralized

contracting office. All correspondence between you and the vendors must be
recorded and stored as part of the procurement records management system.
These rules also provide instructions for the project’s procurement document
packages from procurement planning through contract closure. Which one of the
following is true about procurement document packages?
Project Procurement Questions

A. They offer no room for bidders to suggest changes.

B. They ensure the receipt of complete proposals.
C. They inform the performing organization why the bid is being created.
D. The project manager creates and selects the bid.

A key component of the project procurement management knowledge is the

actual seller selection. Seller selection is based on many inputs and enterprise
environmental factors by which the project manager must abide. From a PMP
candidate’s perspective, in what process group does source selection happen?

A. Initiating
B. Planning
C. Executing
D. Closing

Within your organization, all project managers are required to document the
performance quality ratings, delivery performance, and contractual compliance of
each vendor with which they interact. This is known as what?

A. A requirement
B. A seller rating system
C. Procurement selection
D. An incentive contract
Project Procurement Questions

You are the project manager for a seller, but you are managing another
company’s project as well. Things have gone well on the project, and the work is
nearly complete. There is still a significant amount of funds in the project budget.
The buyer’s representative approaches you and asks that you complete some
optional requirements to use up the remaining budget. You should do which one
of the following?

A. Negotiate a change in the contract to take on the additional work.

B. Complete a contract change for the additional work.
C. Submit the proposed change through the contract change control system.
D. Deny the change because it was not in the original contract.