Ch 12 - Project Procurement Management

A document used to solicit quotes or bids from prospective suppliers is known as a(n) _____. A. RFQ B. WBS C. SOW D. RFP

A. RFQ

The _____ is a description of the work required for a procurement. A. RFQ B. SOW C. RFP D. WBS

B. SOW

Which of the following is an output of the contract closure process? A. Resource calendar B. Work performance info C. Procurement statements of work D. Updates to organizational process assets

D. Updates to organizational process assets

True or false? Buyers absorb lesser risk with cost-reimbursable contracts than they do with fixed-price contracts.

False

True or false? In project procurement management, a main output of the controlling process is a source selection criteria.

False

What is the cost at which contractor assumes total responsibility for each additional dollar of contract cost?

Point of Total Assumption (PTA)

True or false? A key factor in evaluating bids, particularly for projects involving information technology, is the past performance record of the bidder.

True

True or false? A single contract can include all three categories of contracts.

True

True or false? Contents of the procurement management plan vary with project needs.

True

True or false? If an organization has no need to buy any products or services from outside the organization, then it has no need to perform any of the procurement management processes.

True

True or false? Make-or-buy analysis involves comparing the internal costs of providing a product with the cost of outsourcing.

True

True or false? Procurement audits are often done during contract closure to identify lessons learned in the entire procurement process.

True

True or false? Reviewing performance records reduces the risk of selecting a supplier with a poor track record.

True

True or false? Suppliers are those organizations or individuals who provide procurement services.

True

True or false? While outsourcing, organizations should protect strategic information because it can become vulnerable in the hands of suppliers.

True

What are the 3 main tools/techniques to help in planning procurement management?

make-or-buy analysis, expert judgement, market research

In project procurement management, an output of the _____ monitoring and controlling process. A. Change requests B. Make-or-buy decisions C. Selected sellers D. Resource calendars

A. Change requests

After planning for procurement management, which of the following does the next process involve? A. Sending appropriate documentation to potential sellers B. Developing procurement statements of work C. Using expert judgement in planning purchases and acquisitions D. Determining the evaluation criteria for the contract award

A. Sending appropriate documentation to potential sellers

In project procurement management, which of the following processes involve completion and settlement of each contract, including resolution of any open items? A. Planning procurement management B. Closing procurements C. Conducting procurements D. Controlling procurements

B. Closing procurements

In project procurement management, the process of conducting procurements is part of the _____ process. A. closing B. executing C. planning D. monitoring and controlling

B. executing

A drawback of outsourcing is that: A. it cannot increase accountability of suppliers through a written contract. B. it can make an organization become overly dependent on particular suppliers. C. it invariably results in an increase in both fixed and recurrent costs. D. it does not provide access to specific skills or technologies.

B. it can make an organization become overly dependent on particular suppliers

Which of the following is true of lump-sum contracts? A. They incur a high degree of risk for the buyer. B. They consist of a fee based on the satisfaction of subjective performance criteria. C. They involve a fixed total price for a well-defined product or service. D. They are also known as cost-reimbursable contracts.

C. They involve a fixed total price for a well-defined product or service

The first step in project procurement management is: A. conducting procurements B. controlling procurements C. closing procurement management D. planning procurement management

D. planning procurement management

True or false? Indirect costs are those costs can be traced back to a project in a cost-effective way.

False

True or false? Project procurement management consists primarily of two processes: assessing procurements and controlling procurements.

False

True or false? Risk registers and stakeholder registers are outputs of the planning procurement process.

False

What type of contract involves a fixed total price for a well-defined product or service.

Fixed-price/lump-sum

Name at least 2 reasons to turn to outsourcing.

access skills and technologies, reduce both fixed and recurrent costs, allow the client organization to focus on its core business, provide flexibility, increase accountability

_________________ - document prepared by sellers to provide pricing for standard items that buyer has clearly defined

bid

What can be identified as a meeting with prospective sellers prior to preparation of their proposals/bids; helps ensure that everyone has a clear, common understanding of buyer's desired products or services

bidders' conference

Which of the 4 main processes of project procurement management do the following outputs belong to? Closed procurements, organizational process assets updates

closing procurements

Which of the 4 main processes of project procurement management is the following? Completion and settlement of each contract or agreement, including resolution of any open items.

closing procurements

Which of the 4 main processes of project procurement management do the following outputs belong to? Selected sellers, agreements, resource calendars, change requests, updates to project management plan and other project documents

conducting procurements

Which of the 4 main processes of project procurement management is the following? Obtaining seller responses, selecting sellers, and awarding contracts

conducting procurements

_________________ - oral or written acts or omissions by someone with actual or apparent authority that can be construed to have the same effect as a written change order

constructive change orders

_______________ - mutually binding agreement that obligates the seller to provide specified products or services and obligates the buyer to pay for them

contract

If SOW is used to describe only the work required for a particular contract, it's called a __________________________.

contract statement of work

Which of the 4 main processes of project procurement management do the following outputs belong to? Work performance info, change requests, updates to project management plan, project documents, organizational process assets

controlling procurements

Which of the 4 main processes of project procurement management is the following? Managing relationships with sellers, monitoring contract performance, making changes as needed.

controlling procurements

What type of contract involves the buyer pays supplier for allowable performance costs plus award fee based on satisfaction of subjective performance criteria.

cost plus award fee contract

What type of contract involves the buyer pays supplier for allowable performance costs and fixed fee payment that's usually based on a percentage of estimated costs.

cost plus fixed fee contract

What type of contract involves the buyer pays supplier for allowable performance costs along with predetermined fee and incentive bonus.

cost plus incentive fee contract

What type of contract involves the buyer pays supplier allowable performance costs with predetermined percentage based on total costs.

cost plus percentage of costs contract

What are the 4 types of cost-reimbursable contracts?

cost plus: incentive fee, fixed fee, award fee, percentage of costs

What type of contract involves a payment to the supplier for direct and indirect actual costs.

cost-reimbursable contract

_________________ - various procurement functions that are now done electronically

e-procurement

What are the 3 broad categories of contracts?

fixed-price/lump-sum, cost reimbursable, time and material

What is a general management technique used to determine whether an organization should make a product or perform a service inside the organization or buy it from someone else?

make-or-buy analysis

__________________ - organization decides whether it should make certain products and perform certain services inside the organization, or if it's better to buy those products and services from an outside organization

make-or-buy decisions

Suppliers, vendors, contractors, subcontractors, and sellers are all examples of what?

organizations/individuals who provide procurement services

Which of the 4 main processes of project procurement management do the following outputs belong to? procurement management plan, procurement statements of work, procurement documents, source selection criteria, make-or-buy decisions, change requests, project document updates

planning procurement management

Which of the 4 main processes of project procurement management is the following? Determining what to procure and when and how to do it; decide what to outsource, type of contract, and the work for potential sellers

planning procurement management

Name the 4 main processes of project procurement management.

planning procurement management, conducting procurements, controlling procurements, closing procurements

_______________ - acquiring goods and services from an outside source

procurement

Name 3 tools to assist in closing procurements.

procurement audits, negotiated settlements, records management system

What can be identified as a document that describes how the procurement processes will be managed, from developing documentation for making outside purchases or acquisitions to contract closures?

procurement management plan

What involves processes required to acquire goods and services for a project from outside the performing organization.

project procurement management

_________________ - document prepared by seller when there are different approaches to meeting buyer needs

proposal

What can be identified as a document used to solicit proposals from prospective suppliers?

request for proposal (RFP)

What are 2 common examples of procurement documents?

request for proposal (RFP), request for quote (RFQ)

What can be identified as a document used to solicit quotes/bids from prospective suppliers?

request for quote (RFQ)

_______________ - providers, contractors, suppliers who provide goods and services to other organizations

sellers

What can be identified as the description of the work required for the procurement?

statement of work (SOW)

What's the name of the contract clause that allows the buyer or supplier to end the contract?

termination clause

What type of contract is a hybrid of fixed-price and cost-reimbursable contracts?

time and material contracts

What requires the buyer to pay the supplier a predetermined amount per unit of product or service?

unit pricing

Name the 7 types of e-procurement.

web-based ERP, e-MRO, e-sourcing, e-tendering, e-reverse auctioning, e-informing, e-marketsites