Chapter 12 Procurement Management

The make-or-buy analysis in Procurement Management should consider which of the following costs while making the make-or-buy determination?

• Only the Direct Costs
• Both the Direct and Indirect Costs
• Only the indirect Costs
• Only the Cost of Quality

Meetings conducted with all prospective sellers and buyers prior to submittal of a bid or proposal are called?

• Responses
• Bidder Conferences
• Group Meetings
• Team Meetings

In project procurement management, regardless of the document complexity, a contract is:

• A procurement document
• A project document
• A mutually binding legal agreement
• A statement of proposal

Zip Cars Inc. is working on building a low-cost automobile, which is targeted at lower economic groups. The research engineers overshoot their budget and schedule when designing the engine and the rest of the structure of the automobile. However, the design is ready and now Zip Cars Inc. is ready to conduct procurements. To compensate for the money and time lost due to the delay in the design phase, the head of engineering has called all of his trusted advisors for brainstorming session to generate ideas for reducing the costs of the project from now on. The following are some suggestion made during the brainstorming session: (I). Give more weight to the cost element while negotiating with the vendors for the plastic spares which are less critical. (II). Give more weight to preferred vendors while negotiation with the vendors for all spares. (III). Offer a percentage of profit to the vendors instead of payments for the spares. In which phase of the project and knowledge area of the PMBOK Guide will these ideas be implemented?

• Project Planning/Procurement Management
• Project Monitoring and Controlling/procurement Management
• Project Execution/Procurement Management
• Project Monitoring and Controlling/Cost Management

Which of the following is a tool or technique of the Close Procurement process?

• Make-or-Buy Analysis
• Internet Research
• Procurement Audits
• Advertising

Brittany has been chosen as the project manager for a project that will supply specialized furniture to all of the hospitals in the state of Nevada. She decides that Cost Plus Incentive Fee contracts would best suit the organizational requirements. In addition, it is decided that if the total project cost is less than the original estimated cost, then the cost savings would be shared with the sellers on an 80/20 basis. As part of the execution phase of the procurement process, which of the following activities will Brittany NOT perform?

• Deciding on sellers for the procurements
• Bidder conferences
• Procurement negotiations
• Reporting seller performance

You are managing a construction project and are planning to contract out some work packages from your WBS to another company because your team lacks the expertise to perform this work. This work is critical to the success of your project and you want to retain tight control of the outsourced project activities. Which of the following would best help you to retain control and maintain your influence on the outsourced work?

• Maintaining good relations with the contractor company
• Negotiating an appropriate type of contract
• Micro-management of the contractor company project management processes
• Not interfering with the project work during the execution phase

Which of the following documents usually requires the most extensive approval process?

• Charter
• Contract
• Scope Statement
• Budget

You are the project manager dealing with the setup of 100 telecom towers across major parts of your city. As part of the project, you will need to identify vendors who will be building the base for each tower. Although there are vendor details in your organizational database, the data is not good enough for you to go ahead and select potential vendors. You are part of the vendor selection committee and you call for a pre-bid conference. After the conference each vendor submits their individual bids, which are then scrutinized against the evaluation criteria. The process helps you and the evaluation committee selects potential vendors who are able to produce the deliverables according to the requirements. Which of the following have you demonstrated have you demonstrated by performing these steps?

• Your ability to abide by the Respect section of the PMI Code of Ethics and Professional Conduct
• Transparency in the vendor selection decision-making process
• Your organization inability to support vendor selection through the process repository
• An understanding of the PDCA cycle

You are administering a contract on your project. Your sponsor asks you to give him a list of invoices paid to the seller. He wants a report containing information about the total dollar amount collected by the seller as part of project execution. What documentation would you review to gather this information?

• Performance Reports
• Work Performance Data
• Project Management Plan
• Contract Statement of Work