MIS 4310 Ch 12

With a(n) _____ contract, the buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based on a percentage of estimated costs. CPAF CPIF CPFF FPIF

CPFF With a cost plus fixed fee (CPFF) contract, the buyer pays the supplier for allowable performance costs plus a fixed fee payment that is usually based on a percentage of estimated costs. This fee does not vary unless the scope of the contract changes.

_____ contracts involve payment to the supplier for direct and indirect actual costs and often include fees. Fixed-price incentive fee Firm-fixed-price Cost-reimbursable Lump sum

Cost-reimbursable Cost-reimbursable contracts involve payment to the supplier for direct and indirect actual costs. Such contracts often include fees, such as a profit percentage or incentives for meeting or exceeding selected project objectives.

T/F? In an FPI contract, all of the risk is borne by the buyer.

False A firm-fixed-price (FFP) contract has the least amount of risk for the buyer, followed by a fixed-price incentive fee (FPIF) contract.

T/F? Buyers absorb lesser risk with cost-reimbursable contracts than they do with fixed-price contracts.

False Cost-reimbursable contracts often include fees, such as a profit percentage or incentives for meeting or exceeding selected project objectives. Buyer absorb more of the risk with cost-reimbursable contracts than they do with fixed-price contracts.

T/F? In project procurement management, a main output of controlling procurements is a source selection criteria.

False The main outputs of this process include closed procurements, work performance information, procurement documentation updates, change requests, project management plan updates, project documents updates, and organizational process assets.

A(n) _____ is a document used to solicit proposals from prospective suppliers. RFQ WBS RFP SOW

RFP A Request for Proposal (RFP) is a document used to solicit proposals from prospective suppliers.

T/F? Reviewing performance records reduces the risk of selecting a supplier with a poor track record.

True A key factor in evaluating bids, particularly for projects involving IT, is the past performance record of the bidder. Reviewing performance records and references reduces the risk of selecting a supplier with a poor track record.

T/F? Make-or-buy analysis involves comparing the internal costs of providing a product with the cost of outsourcing.

True Make-or-buy analysis involves estimating the internal costs of providing a product or service and comparing the estimate to the cost of outsourcing.

T/F? Suppliers are those organizations or individuals who provide procurement services.

True Organizations or individuals who provide procurement services are referred to as suppliers. Suppliers are also known as vendors, contractors, subcontractors, or sellers.

T/F? The closing procurements process involves updating records to reflect final results and archiving information for future use.

True The final process in project procurement management is closing procurements. This process involves determining if all work required in each contract was completed correctly and satisfactorily. The team should also update records to reflect final results and archive information for future use.

T/F? In unit pricing, the total value of the contract is a function of the quantities needed to complete the work.

True Unit pricing can be used in various types of contracts to require the buyer to pay the supplier a predetermined amount per unit of product or service. The total value of the contract is a function of the quantities needed to complete the work.

T/F? While outsourcing, organizations should protect strategic information because it can become vulnerable in the hands of suppliers.

True While outsourcing, organizations should be careful to protect strategic information that could become vulnerable in the hands of suppliers.

In project procurement management, obtaining seller responses, selecting sellers, and awarding contracts is part of the _____ process. conducting procurements closing controlling planning

conducting procurements Conducting procurements is part of the executing process of project procurement management. It involves obtaining seller responses, selecting sellers, and awarding contracts.

In project procurement management, which process involves completion and settlement of each contract, including resolution of any open items? planning procurement management conducting procurements controlling procurements negotiating procurements

controlling procurements The process of controlling procurements involves closing and completion and settlement of each contract or agreement, including resolution of any open items.

Most organizations are not in business to provide information technology services, yet many have spent valuable time and resources on information technology functions when they should have instead worked on important competencies such as marketing, customer service, and new product design. Outsourcing helps tackle this problem. Which benefit does outsourcing primarily provide in such a scenario? helps focus on an organization's core business reduces fixed and recurrent costs increases accountability even without a written contract protects strategic information from being accessible to external suppliers

helps focus on an organization's core business By outsourcing many IT functions, employees can focus on jobs that are critical to the success of the organization.

What is the first step in project procurement management? closing procurement management planning procurement management conducting procurements controlling procurements

planning procurement management The process of planning procurement management involves determining what to procure and when and how to do it. This is the first step of project procurement management.

A shortage of qualified personnel is one of the main reason that companies outsource. A project may require experts in a particular field for several months and planning for this procurement ensures that the needed services will be available for the project. Which benefit does this characteristic of outsourcing provide an organization? increases control over all aspects of projects that suppliers carry out reduces focus on its core business provides access to specific skills reduces dependency on suppliers

provides access to specific skills Organizations can gain access to specific skills and technologies by using outside resources

Outsourcing suppliers can often provide economies of scale, especially for hardware and software, that may not be available to the client alone. Which benefit does this offer an organization? access to specific skills increased flexibility increased accountability reduction in costs

reduction in costs Companies can use outsourcing to reduce labor costs on projects by avoiding the costs of hiring, firing, and reassigning people to projects or paying their salaries when they are between projects. Outsourcing suppliers often can provide economies of scale that may not be available to the client alone, especially for hardware and software.

After planning for procurement management, the next process involves ____. determining the evaluation criteria for the contract award sending appropriate documentation to potential sellers developing procurement statements of work using expert judgement in planning purchases and acquisitions

sending appropriate documentation to potential sellers After planning for procurement management, the next process involves deciding whom to ask to do the work, sending appropriate documentation to potential sellers, obtaining proposals or bids, selecting a seller, and awarding a contract.

The process of choosing suppliers or sellers is known as _____. a bid a change order WBS source selection

source selection Selecting suppliers or sellers is called source selection. The process involves evaluating proposals or bids from sellers, choosing the best one, negotiating the contract, and awarding the contract.