SPM Chapter 12
An October 2005 Information Technology Association of America (ITAA)-sponsored report stated that total savings from offshore resources during the 2005-2010 period are estimated to grow from $8.7 billion to ____. a. $10.2 billion c. $50.4 billion b. $20.4 billion d. $107.9 billion
$20.4 billion
"Organizations can gain access to specific skills and technologies when they are required by using outside resources." refers to the ____ benefit of outsourcing. a. Reduce both fixed and recurrent costs b. Provide flexibility c. Access skills and technologies d. Allow the client organization to focus on its core business
Access skills and technologies
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. a. CPFF c. CPPC b. CPIF d. CPPF
CPFF
____ involves determining what to procure, when, and how. a. Planning contracting c. Conducting procurements b. Administrating procurements d. Planning procurements
Planning procurements
____________________ means acquiring goods and/or services from an outside source.
Procurement
____________________ are often done during contract closure to identify lessons learned in the entire procurement process.
Procurement audits
______________________________ includes the processes required to acquire goods and services for a project from outside the performing organization.
Project procurement management
Contents of the procurement management plan will vary with project needs.
True
A(n) ____________________ is a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer.
bid - tender - quote - quotation
A(n) ____________________ conference is a meeting with prospective sellers prior to preparation of their proposals or bids.
bidders' - bidders - supplier - pre-bid
A well-written ____________________—a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them—can clarify responsibilities and sharpen focus on key deliverables of a project.
contract
If a SOW is used as part of a contract to describe only the work required for that particular contract, it is called a(n) ____________________ statement of work.
contract
Experts in source selection highly recommend that buyers use formal proposal ____________________ sheets during source selection.
evaluation
Many organizations use samples and ____________________ to generate SOWs.
templates
A(n) ____________________ is a contract clause that allows the buyer or supplier to end the contract.
termination clause
Buyers typically develop a short list of the top ____ suppliers to reduce the work involved in selecting a source. a. one to two c. eight to ten b. three to five d. twelve to fifteen
three to five
An October 2005 Information Technology Association of America (ITAA)-sponsored report stated that spending for global sources of computer software and services is expected to grow at a compound annual rate of about ____ percent. a. 10 c. 30 b. 20 d. 40
20
____ involves managing relationships with sellers, monitoring contract performance, and making changes as needed. a. Closing procurements c. Requesting seller responses b. Selecting sellers d. Administering procurements
Administering procurements
"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 focused on core competencies such as marketing, customer service, and new product design." refers to the ____ benefit of outsourcing. a. Reduce both fixed and recurrent costs b. Provide flexibility c. Access skills and technologies d. Allow the client organization to focus on its core business
Allow the client organization to focus on its core business
With a(n) ____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus. a. CPFF c. CPPC b. CPIF d. CPPF
CPIF
From the supplier's perspective, there is the least risk with a(n) ____ contract. a. CPFF c. CPPC b. FFP d. CPFF
CPPC
With a(n) ____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined percentage based on total costs. a. CPFF c. CPPC b. CPIF d. CPPF
CPPC
____ involves completion and settlement of each contract, including resolution of any open items. a. Exiting procurements c. Closing procurements b. Closing out accounts d. Ending procurements
Closing procurements
____________________ involves completion and settlement of each contract, including resolution of any open items.
Closing procurements
Outputs to the ____ process include selected sellers, procurement contract awards, resource calendars, change requests, and updates to the project management plan and other project documents. a. Closing the contract c. Requesting seller responses b. Conducting procurements d. Administering the contract
Conducting procurements
____ involves obtaining seller responses, selecting sellers, and awarding contracts. a. Conducting procurements c. Requesting seller responses b. Selecting sellers d. Planning purchases and acquisitions
Conducting procurements
____ change orders are 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. a. Direct c. Destructive b. Constructive d. Instructive
Constructive COMPLETION
____ involve payment to the supplier for direct and indirect actual costs. a. CPFF contracts c. Cost-reimbursable contracts b. Lump sum contracts d. Time and material contracts
Cost-reimbursable contracts
A contract SOW should not specify the location of the work.
False
According to a 2008 report on IT outsourceing trends in the U.S. and Canada, application development is the least popular form of IT outsourcing and was used by only 25 percent of organizations surveyed.
False
Experts in source selection recommend that technical criteria should be given more weight than management or cost criteria.
False
Experts outside the company, including potential suppliers themselves, cannot provide expert judgment.
False
Few organizations use some form of outsourcing to meet their information technology needs.
False
It is always less effective to hire skilled consultants to perform specific tasks for a short period of time than to hire or keep employees on staff full time.
False
It is important to use appropriate words in a contract SOW such as may instead of must.
False
Lead times for purchases and acquisitions should not be included in a procurement management plan.
False
Many private companies use the term procurement instead of purchasing.
False
Most people view offshore outsourcing as being good.
False
The buyer absorbs less of the risk with cost-reimbursable contracts than they do with fixed-price contracts.
False
The main sections of an RFP never include the statement of work and schedule information.
False
The success of many information technology projects that use outside resources is often due to good project cost management.
False
"Outsourcing to provide extra staff during periods of peak workloads can be much more economical than trying to staff entire projects with internal resources." refers to the ____ benefit. a. Reduce both fixed and recurrent costs b. Provide flexibility c. Access skills and technologies d. Allow the client organization to focus on its core business
Provide flexibility
A(n) ____ is a document used to solicit proposals from prospective suppliers. a. RFQ c. COW b. RFP d. SOW
RFP
A(n) ____ is a document used to solicit quotes or bids from prospective suppliers. a. RFQ c. COW b. RFP d. SOW
RFQ
"Outsourcing suppliers are often able to use economies of scale that may not be available to the client alone, especially for hardware and software." refers to the ____ benefit of outsourcing. a. Reduce both fixed and recurrent costs b. Allow the client organization to focus on its core business c. Access skills and technologies d. Provide flexibility
Reduce both fixed and recurrent costs
The ____ is a description of the work required for the procurement. a. RFQ c. COW b. RFP d. SOW
SOW
______________________________ contracts are a hybrid of both fixed-price and cost-reimbursable contracts.
Time and material (T&M) - Time and material - T&M
A key factor in evaluating bids, particularly for projects involving information technology, is the past performance record of the bidder.
True
Any type of contract should include specific clauses that take into account issues unique to the project.
True
If there is no need to buy any products or services from outside the organization, then there is no need to perform any of the other procurement management processes.
True
It is customary to have contract negotiations during the source selection process.
True
Make-or-buy analysis involves estimating the internal costs of providing a product or service and comparing that estimate to the cost of outsourcing.
True
Many companies are realizing that they can use offshore outsourcing and create more jobs at home.
True
Some termination clauses state that the buyer can terminate a contract for any reason and give the supplier only 24 hours' notice.
True
The cost savings and use of offshore resources lower inflation, increase productivity, and lower interest rates.
True
The term "e-procurement" often describes various procurement functions that are now done electronically.
True
The total value of the contract is a function of the quantities needed to complete the work.
True
When an organization outsources work, it often does not have as much control over those aspects of projects that suppliers carry out.
True
____________________ 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.
Unit pricing
A(n) _________________________ contract has the least amount of risk for the buyer.
firm-fixed price (FFP) - firm-fixed price - FFP
There are ____ main processes of project procurement management. a. three c. five b. four d. six
four
A(n) ____________________ decision is one in which an organization decides if it is in its best interests to make certain products or perform certain services inside the organization, or if it is better to buy them from an outside organization.
make-or-buy
For many projects, properly ____ some information technology functions can be a great investment. a. outsourcing c. increasing b. scaling d. planning
outsourcing
____ contracts involve a fixed total price for a well-defined product or service. a. CPFF c. Cost-reimbursable b. Lump sum d. Time and material
outsourcing
The term ____________________ is widely used in government.
procurement
Tools to assist in contract closure include ____________________ , negotiated settlements, and a records management system.
procurement audits
A(n) ____________________ is a document prepared by a seller when there are different approaches for meeting buyer needs.
proposal
A(n) ____________________ system provides the ability to easily organize, find, and archive procurement-related documents.
records management
Many organizations use ____ and templates to generate SOWs. a. details c. plans b. outlines d. samples
samples
Selecting suppliers or sellers, often called ____________________ selection, involves evaluating proposals or bids from sellers, choosing the best one, negotiating the contract, and awarding the contract.
source
