Module10 ProcurementManagement

PMPExamQuestions

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 Question1
Acompanyneedssomeworkdonebyanoutsidesupplier
duetothenatureofthework.Aroutineauditofacost
reimbursable(CR)contractdeterminesthatoverchargesare
beingmade.Ifthecontractdoesnotspecifycorrective
action,thebuyershould:
A. Haltpaymentsuntiltheproblemiscorrected.
B. Voidthecontractandstartlegalactiontorecover
overpayments.
C. Continuetomakeprojectpayments.
D. Changethecontracttorequiremorefrequentaudits.

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 Question2
Atacompanythatprovidessolutionstogasandelectricutilities,anew
projectmanagerisabouttobegincreatingtheprocurementstatement
ofwork.Onestakeholderwantstoaddmanyitemstothe
procurementstatementofwork.Anotherstakeholderonlywantsto
describethefunctionalrequirements.Theprojectisimportantforthe
projectmanagerscompany,butasellerwilldothework.Howwould
youadvicetheprojectmanager?
A. Theprocurementstatementofworkshouldbegeneraltoallow
thesellertomaketheirowndecisions.
B. Theprocurementstatementofworkshouldbegeneraltoallow
forclarificationlater.
C. Theprocurementstatementofworkshouldbedetailedtoallow
forclarificationlater.
D. Theprocurementstatementofworkshouldbeasdetailedas
necessaryforthetypeofproject.

Procurement Management
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 Question3
Inaprojectthatinvolves4vendorsandoneintegrator.Aseller
isworkingonacostreimbursable(CR)contractwhenthebuyer
decideshewouldliketoexpandthescopeofservicesand
changetoafixedprice(FP)contract.Allofthefollowingarethe
sellersoptionsexcept:
A. Completingtheoriginalworkonacostreimbursablebasis
andthennegotiatingafixedpricefortheadditionalwork.
B. Startingoverwithanewcontract.
C. Completingtheoriginalworkandrejectingtheadditional
work.
D. Negotiatingafixedpricecontractthatincludesthework.

Procurement Management
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 Question4
Yourcompanyisengagedinaprojectthatrequiresthe
selectionofasoftwaredevelopmentcompanyto
programakeycomponentofyourproduct.Whichof
thefollowingisthebestthingforaprojectmanagerto
dointheConductProcurementsprocess?
A. Answersellersquestionsabouttheprocurement
documents.
B. Evaluaterisks.
C. Selectacontracttype.
D. Performmarketresearch.
Procurement Management
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 Question5
Acompanyhasassignedaprojectmanagertomanagean
integrationprojectduetohisexperiencemanagingsuppliers.
Thesponsorisworriedaboutthesellerderivingextraprofiton
thecostplusfixedfee(CPFF)contract.Eachmonthherequires
theprojectmanagertosubmitCPIcalculationsandananalysisof
thecosttocomplete.Theprojectmanagerexplainstothe
sponsorthatextraprofitsshouldnotbeaworryonthisproject
because:
A. Theteamismakingsurethesellerdoesnotcutscope.
B. Therecanonlybeamaximum10percentincreaseifthereis
anunexpectedcostoverrun.
C. Thefeeisonlyreceivedbythesellerwhentheprojectis
completed.
D. Allcostsinvoicedarebeingaudited.

Procurement Management
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 Question6
Atashippingcompanythatneedsitssoftwaretracking
systemupgraded,thesponsorandtheprojectmanagerare
discussingwhattypeofcontracttheprojectmanagerplans
touseontheproject.Thesponsorpointsoutthatthe
performingorganizationspentalotofmoneyhiringa
designteamtocomeupwiththedesign.Theproject
managerisconcernedthattheriskforthebuyerbeassmall
aspossible.Anadvantageofafixedpricecontractforthe
buyeris:
A. Costriskishigher.
B. Costriskislower.
C. Thereislittlerisk.
D. Riskissharedbyallparties.
Procurement Management
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 Question7
Youhavejustcompletedaprojectthatinvolveda
supplierthatmetallofyouprojectrequirements.As
partoftherecordsmanagementsystem,youaretrying
tomakesureallrecordsfromtheprocurementare
documentedandindexed.Whichofthefollowingdo
younothavetoworryabout?
A. Proposal
B. Procurementstatementofwork
C. Negotiationsprocess
D. Termsandconditions
Procurement Management
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 Question8
Yourcompanyjustwonamajorcontractthatdidnot
expecttogetuntilnextyear.Yourcompanyhasan
emergencyandneedscontractedworkdoneassoonas
possible.Underthesecircumstances,whichofthe
followingwouldbethemosthelpfultoaddtothe
contract?
A. Aclearprocurementstatementofwork
B. Requirementsastowhichsubcontractorscanbe
used
C. Aforcemajeureclause
D. Incentives
Procurement Management
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 Question9
Yourpurchasingdepartmentwantstomakesureallthe
projectmanagersinthecompanyunderstandthebest
procurementpractices.Theheadoftheprocurement
departmentcallsyouandasksyouthefollowing
question.Duringwhichprocurementprocessesdoes
procurementnegotiationoccur?
A. PlanProcurementManagementandClose
Procurements
B. ControlProcurementsandCloseProcurements
C. ConductProcurementsandCloseProcurements
D. ConductProcurementsandControlProcurements
Procurement Management
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 Question10
Businessisgoodandyourcompanyisbusyresponding
tomanyinquiresfromyourcustomers.Youarethe
projectmanager,andyouareinthemiddleofcreating
arequestforproposal(RFP).Whatpartofthe
procurementprocessareyouin?
A. PlanProcurementManagement
B. ControlProcurements
C. NegotiateContracts
D. ConductProcurements

Procurement Management
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 Question11
Youworkforacompanythathasmanyprogramsunderway,your
programmanagerhascometoyou,theprojectmanager,for
helpwithabidforhernewestproject.Youwanttoprotectyour
companyfromfinancialrisk,andyouhavelimitedscope
definition.Whatisthebesttypeofcontracttochoose?
A. FixedPrice(FP)
B. Costplusfixedfee(CPFF)
C. Costpluspercentageofcost(CPPC)
D. Timeandmaterial(T&M)

Procurement Management
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 Question12
Atalargegovernmentprogramwithmanycontractorsand
subcontractors,negotiationsbetweentwopartiesarebecoming
complex,soPartyAlphamakessomenotesthatbothpartiessign.
However,whentheworkisbeingdone,PartyBetaclaimstheyarenot
requiredtoprovideanitemtheybothagreedtoduringnegotiations,
becauseitwasnotincludedinthesubsequentcontract.Inthiscase,
partyBetais:
A. Incorrect,becausebothpartiesmustcomplywithwhatthey
agreedon.
B. Correct,becausetherewasanoffer.
C. Generallyincorrect,becauseallagreementsmustbeupheld.
D. Generallycorrect,becausebothpartiesareonlyrequiredto
performwhatisinthecontract.

Procurement Management
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 Question13
Yourprojecthasjustbeenfasttrackedandyouare
lookingtoquicklybringinasubcontractortocomplete
thefiberopticswiringforthenetwork.Thereisnotime
toissuearequestforproposal(RFP),soyouchooseto
useacompanyyouhaveusedmanytimesbeforefor
softwaredevelopment.APRIMARYconcerninthis
situationis:
A. Collusionbetweensubcontractors.
B. Thesubcontractorsevaluationcriteria.
C. Holdingabidderconference.
D. Thesubcontractorsqualifications
Procurement Management
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 Question14
Youworkforahightechnologycompany,theproject
managerandprojectsponsorarediscussingtheproject
costsandwhetheritisbettertohavetheirowncompany
dopartoftheprojectorhireanothercompanytodothe
work.Iftheyaskedforyouopinion,youmightsayit
wouldbebettertodotheworkyourselfif:
A. Thereisalotofproprietarydata.
B. Youhavetheexpertisebutyoudonothavethe
availablemanpower.
C. Youdonotneedcontroloverthework.
D. Yourcompanyresourcesarelimited.
Procurement Management
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 Question15
Youworkforacompanythatrequirestheselectionofakeysupplier.
Aftermuchexcitementandhardwork,theprocurementstatementof
workfortheprojectiscompleted.Evenaftergainingagreementthat
theprocurementstatementofworkiscomplete,theprojectmanager
isstillunsureofwhetheritactuallyaddressesallthebuyersneeds.
Theprojectmanagerisabouttoattendthebidderconference.Heasks
youforadviceonwhattododuringthesession.Whichofthe
followingisthebestadviceyoucangivehim?
A. Makesureyougiveallthesellerstheopportunitytoask
questions.
B. Youdonotneedtoattendthissession.Theprocurementmanager
willholdit.
C. Makesureyounegotiateprojectscope.
D. Lettheprojectsponsorhandlethemeetingsoyoucanbethe
goodguyinthenegotiationsession.

Procurement Management
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 Question16
Animportantinfrastructureprojectisverymuchneededto
improvetheeconomyoftheregion.Asellerisawardeda
contracttobuildapipeline.Thecontracttermsand
conditionsrequireaworkplantobeissuedforthebuyers
approvalpriortocommencingwork,butthesellerfailsto
provideone.Whichofthefollowingisthebestthingforthe
buyersprojectmanagertodo?
A. Filealetterofintent.
B. Developtheworkplanandissueittothesellertomove
thingsalong.
C. Issueastopworkordertotheselleruntilaworkplanis
prepared.
D. Issueadefaultletter.
Procurement Management
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 Question17
Youhavejuststartedworkonaprocurementwhen
managementdecidestoterminatethecontract.What
shouldyoudofirst?
A. GobacktothePlanProcurementManagement
process.
B. GobacktotheConductProcurementsprocess.
C. FinishtheControlProcurementsprocess.
D. GototheCloseProcurementsprocess.

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 Question18
Atacompanywherethedesignofanewamplifierfora
telecommunicationsprojectneedstobeoutsourced.The
projectteamisarguingabouttheprospectivesellerswho
havesubmittedproposals.Oneteammemberarguesfora
certainsellerwhileanotherteammemberwantsthe
projecttobeawardedtoadifferentseller.Thebestthing
theprojectmanagershouldremindtheteamtofocusonin
ordertomakeaselectionisthe:
A. Procurementdocuments.
B. Procurementsaudits.
C. Procurementmanagementplan.
D. Sourceselectioncriteria.
Procurement Management
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 Question19
Youareinthemiddleofaprojectinacompanythatdesignsand
manufacturesprecisiontestingequipment.Yourprojectteam
memberdeliversaprojectdeliverabletothebuyer.However,the
buyerrefusesthedeliverable,statingitdoesnotmeetthe
requirementonpage259ofthetechnicalspecifications.You
reviewthedocumentandfindthatyouagree.WhatistheBest
thingtodo?
A. Reviewtherequirementsandmeetwiththeresponsible
teammembertoreviewtheWBSdictionary.
B. Explainthatthecontractiswrongandshouldbechanged.
C. Issueachangeorder.
D. Callameetingoftheteamtoreviewtherequirementon
page259.
Procurement Management
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 Question20
Yourcompanyusesmanysuppliersthatspecializein
differentcomponentsusedbyyourorganization.Your
managerisconcernedabouttheavailableresourcesto
managethemanysuppliersinyourproject.Whattype
ofcontractdoyounotwanttouseifyoudonothave
enoughlabortoauditinvoices?
A. Time&material(T&M)
B. FixedPrice(FP)
C. Costplusfixedfee(CPFF)
D. Fixedpriceincentivefee(FPIF)
Procurement Management
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