Project Procurement Management Quiz

Tom is a project manager for a software company. He is contracting a long-term software project with an external company. That company charges him $20/hour per employee and $300 overhead per month. What kind of contract is he using?

• FP

• CPAF

• CR

• T&M

Which of the following is NOT true about bidder conferences?

• All potential sellers should meet separately with the buyer.

• Potential sellers should ask questions in an open forum so other sellers can hear the answers.

• Bidder conferences are a good way to make sure sellers are treated fairly.

• All sellers are given the same procurement documents.

You work for a seller that is bidding on a contract. Which type of contract has the MOST risk for your company?

• CPIF

• T&M

• FP

• CPAF

Which of the following BEST describes the “point of total assumption” for a contract?

• The point in a cost-plus contract where the buyer assumes that the seller will need to be paid

• The total cost of a T&M contract

• The point in a fixed-price contract where the seller has to assume all costs going forward

• The total number of resources required for a contract

You’re trying to decide whether or not to contract out a construction job. To do it within your company, you will have to hire an engineer for $35,000 and pay a construction team $15,000 per week. A contractor quotes you a price of $19,000 per week, and your expert agrees that you won’t find a lower price than that. The job will take 16 weeks. What’s the BEST way to proceed?

• Pay the contractor to do the job.

• Select a T&M contract.

• Don’t contract out the work; hire the engineer and pay the construction team to do the work.

• Make sure the contract has a force majeure clause.

You’re managing a project that might have to contract out work, and you’re comparing the relative advantages and disadvantages of finding a seller versus having your company do the work itself. Which process are you in?

• Plan Procurement Management

• Plan Contracting

• Conduct Procurements

• Request Seller Responses

You’re using a qualified seller list. Which process are you in?

• Plan Procurement Management

• Plan Contracting

• Conduct Procurements

• Request Seller Responses

You’ve been contracted by an industrial design firm to manage its contracting. Your client asks you to take over the negotiations for an important contract to design a new remote-control lighting system. You’ve narrowed it down to one seller, and now you’re working with the legal department at the buyer to negotiate the terms of the contract. Which of the following BEST describes your goal?

• You want to get the best deal for your client by making sure the seller’s price is as low as possible, no matter what it costs them.

• You want to get a fair deal for both the buyer and the seller.

• You want to make sure that the seller gets as much money as possible.

• You want to prolong the negotiation so that you earn a higher fee.

You’ve been contracted by a construction company to manage its contracting. It has a choice of either buying an excavator or renting it. To buy it, the company would have to pay $105,000, but owning it will require approximately $10,000 in maintenance costs per year. The price to rent the excavator is $5,000 per month, with a one-time service charge of $2,000. What’s the minimum number of months the company needs to use the excavator in order for it to make sense to buy it rather than rent?

• 8 months

• 16 months

• 21 months

• 25 months

Which of the following contracts has the MOST risk for the buyer?

• FP

• CPAF

• CPIF

• T&M