IEM Chapter 19 Multiple Choice

____ source contracting is when multiple suppliers exist but only one is selected to receive the contract A. Preferred B. Sole C. Single D. Surety

c

Which of the following is part of the responsibility of a contract administrator? A. Inspections and audits B. Performance reporting (Documenting seller's performance) C. Approval of waivers D. All of the above

d

Fixed Price Incentive Fee FPIF Sharing 70/30 Target Cost 10000 Target Profit 850 Target Price 10850 Price Ceiling 11,500 Contractor Share 30% Buyer share 70% Negotiated Cost 10928

10928-(928X.30)+875=11500

18. In which type of incentive contract is there a maximum or minimum value established on the profits allowed for the contract? A. Cost-plus-incentive-fee contract B. Fixed-price-incentive-fee contract C. Time-and-material-incentive-fee contract D. Split-pricing-incentive-fee contract

a

Which type of contract has a point of total assumption? A. Cost-plus-incentive-fee B Fixed-price-incentive-fee C. Firm-fixed-price D. Cost-plus-award-fee

b

Fixed Price Incentive Fee FPIF Sharing 70/30 Target Cost 10000 Target Profit 850 Target Price 10850 Price Ceiling 11,500 Contractor Share 30% Buyer share 70% Negotiated Cost 9000

10150

Fixed Price Incentive Fee FPIF Sharing 70/30 Target Cost 10000 Target Profit 850 Target Price 10850 Price Ceiling 11,500 Contractor Share 30% Buyer share 70% Negotiated Cost 10000

10850

Fixed Price Incentive Fee FPIF Sharing 70/30 Target Cost 10000 Target Profit 850 Target Price 10850 Price Ceiling 11,500 Contractor Share 30% Buyer share 70% Negotiated Cost 11500

11500-(1500X.30)+850=11500

13. A contract entered into after following normal procedures (i.e., negotiation of terms, conditions, cost, and schedule) but prior to initiation of performance is known as a: A. Definitive contract B. Completed contract C. Letter contract/letter of intent D. Pricing arrangement

a

15. A fixed-price contract is typically sought by the project manager from the customer's organization when: A. The risk and consequences associated with the contracted task are large and the customer wishes to transfer the risk. B. The project manager's company is proficient at dealing with the contracted activities C. Neither the contractor nor the project manager understand the scope of the task. D. The project manager's company has excess production capacity.

a

2. A written or pictorial document that describes, defines, or specifies the services or items or be procured is: A. A specification document B. A Gantt chart C. A blueprint D. A risk management plan

a

25. Billing the cost of repairs against a financially closed out project is called _____. A. Back charging B. Refinancing C. Order of precedence D. Arbitration

a

3. The "order of precedence" is: A. The document that specities the order (priority) in which project documents will be used when it becomes necessary to resolve inconsistencies between project documents. B. The order in which project tasks should be completed C. The relationship that project tasks have to one another D. The ordered list (by quality) of the screened vendors for a project deliverable

a

4. In which type of contract arrangement is the contractor least likely to want to control costs? A. Cost plus percentage of cost B. Firm-fixed price C. Time and materials D. Purchase order

a

7. In which type of contract arrangement is the customer at the most risk of absorbing excessive cost overruns? A. Cost plus percentage of cost B. Firm-fixed price C.Time and materials D. Fixed-price-incentive-fee

a

Bidder conferences are used to: A. Answer questions about the project prior to submittal of proposals B. Answer questions about the project after contract award C. Debrief the bidder on their performance after completion of the contract D. Solicit pricing information from the bidders on proposed scope changes

a

Failure to exercise one's activity in such a manner that a reasonable person would do in a similar situation is: A. Negligence B. Liquidated damages C. Breach of contract D. Privity of contract

a

For long-term projects, such as weapon systems projects, contracted for by the Department of Defense, the type of contract can change from life cycle phase to life cycle phase. A. True B. False

a

In which of the following would the price of a possible contract not be included? * A. Request for information (RFI) B. Request for quotation (RFQ) C. Request for proposal (RFP) D. Invitation for bids (IFB)

a

Which of the following is generally not part of "Conducting the Procurements"? A. Perform a make-or-buy analysis B. Confirm qualified sources C. Review past performance of sources D. Produce a solicitation package

a

11. In a fixed-price-incentive-fee contract, the "point of total assumption" refers to the point in the project cost curve where: A.The customer assumes responsibility for every additional dollar that is spent in fulfillment of the contract. B. The contractor assumes responsibility for every additional dollar that is spent in fullfillment of the contract. C. The price ceiling is reached after the contractor recovers the target profit. D. None of the above

b

19. In which type of incentive contract is there a maximum or minimum value established on the final price of the contract? A. Cost-plus-incentive-fee contract B. Fixed-price-incentive-fee contract C.Time-and-material-incentive-fee contract D. Split-pricing-incentive-fee contract

b

21. Using the same data from Problem 20, and the same contract type, how much will the contractor be reimbursed if the cost of performing the work is $85,000. A. $97,000 B. $99,000 C. $112,000 D. $114,000

b

23. A fixed-price-incentive-fee contract has the following characteristics: e Sharing ratio: 70/30 • Target cost: $100,000 e Target fee: $8,000 e Price ceiling: $110,000 How much will the contractor be reimbursed if the cost of performing the work is $90,000 A. $91,000 B. $101,000 C. $103,000 D. $110,000

b

5. In which type of contract arrangement is the contractor most likely to want to control costs? A. Cost plus percentage of cost B. Firm-fixed price C. Time and materials D. Fixed-price-incentive-fee

b

6. In which type of contract arrangement is the contractor at the most risk of absorbing all cost overruns? A. Cost plus percentage of cost B. Firm-fixed price C.Time and materials D. Cost-plus-incentive-fee

b

8. What is the primary objective the customer's project manager focuses on when selecting a contract type? A. Transferring all risk to the contractor B. Creating reasonable contractor risk with provisions for efficient and economical performance incentives for the contractor C.Retaining all project risk, thus reducing project contract costs D. None of the above

b

A covenant providing restrictions on certain proprietary knowledge is called a: A. Non compete clause B. Non disclosure clause C. Non conformance clause D. Penalty clause

b

During contract negotiations, the goal of the buyer is to: A. Get the seller to accept the greatest risk B. Get the highest quality result for the lowest price C. Get the seller to agree to scope changes at no cost to the buyer D. Try to get the least amount of work done at the lowest price

b

The cost of renting a piece of equipment is $200 per day and the leasing cost is $5000 plus $100 per day. The breakeven cost between renting and leasing occurs at _____ days. A. 30 B. 50 C. 100 D. 200

b

The type of contract where all of the seller's costs are reimbursed and the seller will also receive a percentage of the profit pool based upon how well the buyer likes the end result is a _____ contract. A. Cost-sharing B. Cost-plus-award-fee C. Cost-plus-fixed-fee D. Cost-plus-incentive-fee

b

Which of the following contract types has the greatest risk with the buyer? A. Cost sharing B. Cost-Plus-Incentive-Fee C. Firm-Fixed-Price D. Fixed-Price-Incentive-Fee

b

Which of the following is generally not included in a solicitation package? A. Listing of qualified vendors B. Past bidding history of qualified vendors C. How changes will be managed D. Supplier payment plan

b

Which of the following is not one of the three types of specifications discussed in the text? A. Design specifications B. Material specifications C. Performance specifications D. Functional specifications

b

Which type of contract has a sharing ratio and a ceiling on the profit? A. Fixed price B. Cost-plus-incentive-fee C. Cost-plus-fixed-fee D. Cost-sharing

b

_____ source contracting is when there exists only one supplier in the market-place to satisfy the requirements of the contract. A. Preferred B. Sole C. Single D. Surety

b

"Hygiene Factors" refers to: A. How a contractor should respond to an RFP B. The type of proposal expected by the seller C. How and where contract negotiations will take place D. How many bidder conferences will be held

c

1. The contractual statement-of-work document is: A. A nonbinding legal document used to identify the responsibilities of the contractor B. A definition of the contracted work for government contracts only C. A narrative description of the work/deliverables to be accomplished and/or the resource skills required D. A form of specification

c

12 A written preliminary contractual instrument prepared prior to the issuance of a definitive contract that authorizes the contractor to begin work immediately, within certain limitations, is known as a: A. Definitive contract B. Preliminary contract C. Letter contract/letter of intent D. Purchase order

c

16. Which of the following are typical actions a customer would take if the customer received nonconforming materials or products and the customer did not have the ability to bring goods into conformance? A. Reject the entire shipment but pay the full cost of the contract B. Accept the entire shipment, no questions asked C. Accept the shipment on condition that the nonconforming products will be brought into conformance by the vendor at the vendor's expense. D. Accept the shipment and resell it to a competitor

c

17. If a project manager requires the use of a piece of equipment, what is the break-even point where leasing and renting are the same? Cost Categories Annual maintenance, renting costs 0 leasing costs $3,000.00; Daily operation, renting costs 0 leasing costs 70.00; Daily rental $100 Leasing Costs 0. A. 300 days B. 30 days C. 100 days D. 700days

c

20. A cost-plus-incentive-fee contract has the following characteristics: e Sharing ratio: 80/20 e Target cost: $100,000 e Target fee: $12,000 e Maximum fee: $14,000 e Minimum fee: $9,000 How much will the contractor be reimbursed if the cost of performing the work is $95,000 A. $98,000 B. $100,000 c. $108,000 D. $114,00

c

24. Using the same data from Problem 23, and the same contract type, how much will the contractor be reimbursed if the cost of performing the work is $102,000 A. $104,000 B. $107,400 c. $109,400 D. $110,00

c

25. Using the same data from Problem 23, and the same contract type, how much will the contractor be reimbursed if the cost of performing the work is $105,000? A. $105,000 B. $106,500 C. $110,000 D. $111,500

c

An intentional relinquishment of a legal right is a (n): A. Infringement B. Breach of contract C. Waiver D. Termination liability

c

Which of the following contract types has the greatest risk with the seller? A. Cost sharing B. Cost-Plus-Incentive-Fee C. Firm-Fixed-Price D. Fixed-Price-Incentive-Fee

c

Which type of cost-plus contract provides the seller with a guaranteed dollar-value profit rather than as a percentage? A. Cost-sharing B. Cost-plus-award-fee C. Cost-plus-fixed-fee D. Cost-plus-incentive-fee

c

10.Which of the following is not a factor to consider when selecting a contract type? A. Type/complexity of the requirement B. Urgency of the requirement C. Extent of price competition D. All are factors to consider.

d

14. Which of the following is not a function of the contract administration activity? A. Contract change management B. Specification interpretation C. Determination of contract breach D. Selection of the project manager

d

22. Using the same data from Problem 20. and the same contract type, how much will the contractor be reimbursed if the cost of performing the work is $120,000. A. $112,000 B. $119,000 C. $126,000 D. $129,000

d

9. Which type of contract arrangement is specifically designed to give a contractor relief for inflation or material/labor cost increases on a long-term contract? A. Cost plus percentage of cost B. Firm-fixed price C.Time and materials D. Firm-fixed price with economic price adjustment

d

Companies that give part of a procurement contract to multiple suppliers do so to: A. Promote and maintain competition B. Reduce reliance on just one supplier C. Minimize procurement risks D. All of the above

d

During contract negotiations, the goal of the seller is to: A. Get the buyer to accept the greatest amount of risk B. Get the largest possible profit margin regardless of the risk C. Get the largest possible price for the contract * D. Negotiate a contract where the profit margin is commensurate with the risk the contractor is expected to incur

d

Which of the following would be included in a scoring model for evaluating bidders? A. Overall bid price B. Financial strength (ability to stay in business) C. Intellectual property rights D. All of the above

d