PM - Procurement Management

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Elizabethrb
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  • 1/10 Questions

    Source selection criteria are an output of which process?

    • Plan quality
    • Plan Risk Response
    • Plan Procurements
    • Estimate Costs
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About This Quiz

This quiz focuses on Procurement Management within project management, assessing knowledge on contract types, procurement planning, and audit processes. It is designed to enhance understanding of procurement dynamics and decision-making in project environments.

PM - Procurement Management - Quiz

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  • 2. 

    An example of the contract price in a cost plus fixed fee (CPFF) contract is:

    • $10,000 plus fee

    • Costs, whatever they are, plus, $10,000 as fee

    • $10,000

    • $150 per hour

    Correct Answer
    A. Costs, whatever they are, plus, $10,000 as fee
    Explanation
    In a cost plus fixed fee (CPFF) contract, the contract price includes the costs incurred plus a fixed fee. This means that the total amount paid is based on the actual costs of the project, whatever they may be, plus an additional fixed fee of $10,000. This ensures that the contractor is reimbursed for their expenses and also receives a predetermined fee for their services.

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  • 3. 

    Which of the following activities occurs during Plan Procurements?

    • Make-or-buy decisions

    • Answering sellers' questions about the bid documents

    • Advertising

    • Proposal evaluation

    Correct Answer
    A. Make-or-buy decisions
    Explanation
    During the Plan Procurements process, one of the activities that occurs is making decisions regarding whether to make or buy certain components or services for the project. This involves evaluating the feasibility, cost, and benefits of producing the item internally or purchasing it from an external source. This decision is crucial as it can impact the project's budget, schedule, and overall success. Therefore, during Plan Procurements, the project team analyzes various factors and considerations to determine the most suitable approach for each component or service needed.

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  • 4. 

    Close Procurements is different from Close Project or Phase in that Close Procurements:

    • Occurs before Close Project or Phase

    • Is the only one to involve the customer

    • Includes the return of property

    • May be done more than once for each contract

    Correct Answer
    A. Occurs before Close Project or Phase
    Explanation
    Close Procurements occurs before Close Project or Phase because it specifically focuses on the closure of all procurement activities and contracts related to the project. This includes completing all necessary contractual obligations, settling any outstanding payments, and ensuring that all deliverables and property are returned as per the terms of the contracts. Close Project or Phase, on the other hand, encompasses the overall closure of the project or phase, including activities such as conducting final project reviews, documenting lessons learned, and transitioning project resources.

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  • 5. 

    You are executing a project for a client when they contact you to say they are terminating the contract for convenience. Because of this, the project is now in:

    • Negotiation

    • Execution

    • Closure

    • Procurement audit

    Correct Answer
    A. Closure
    Explanation
    The correct answer is Closure because when the client terminates the contract for convenience, it means that they are ending the project prematurely. Closure refers to the phase in project management where the project is formally completed and all activities, including documentation, handovers, and finalizing contracts, are done. In this case, the termination of the contract indicates that the project is now in the closure phase, as it needs to be wrapped up and closed out properly.

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  • 6. 

    A team is in the Plan Procurements process.  Which of the following are they working on?

    • Proposals received

    • Procurement contract award

    • Creation of a request for proposal

    • Procurement audit

    Correct Answer
    A. Creation of a request for proposal
    Explanation
    The team is in the Plan Procurements process, which involves determining what needs to be procured from external sources. During this process, the team would be working on the creation of a request for proposal (RFP). The RFP is a document that outlines the project requirements and invites potential vendors to submit proposals for providing the required goods or services. This step is crucial in ensuring that the project's needs are clearly communicated to potential vendors and that the procurement process is fair and transparent.

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  • 7. 

    With which type of contract is the seller MOST concerned about project scope?

    • Fixed price

    • Cost plus fixed fee

    • Time and material

    • Purchase order

    Correct Answer
    A. Fixed price
    Explanation
    The seller is most concerned about project scope with a fixed price contract because in this type of contract, the seller agrees to deliver the project for a predetermined price. Any changes or additions to the project scope can result in additional costs for the seller. Therefore, the seller needs to ensure that the project scope is well-defined and clearly understood to avoid any scope creep or unexpected expenses.

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  • 8. 

    What is one of the KEY objectives during contract negotiations?

    • Obtain a fair and reasonable price

    • Negotiate a price under the seller's estimate

    • Ensure that all project risks are thoroughly delineated

    • Ensure that an effective communications management plan is established

    Correct Answer
    A. Obtain a fair and reasonable price
    Explanation
    During contract negotiations, one of the key objectives is to obtain a fair and reasonable price. This means ensuring that the price agreed upon for the contract is reasonable and reflects the value of the goods or services being provided. By obtaining a fair and reasonable price, both parties involved in the contract can benefit and feel satisfied with the terms of the agreement.

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  • 9. 

    Which of the following is the BEST thing for a project manager to do in the Conduct Procurements process of procurement management?

    • Evaluate risks

    • Select a contract type

    • Update the project schedule

    • Answer sellers' questions about procurement documents

    Correct Answer
    A. Answer sellers' questions about procurement documents
    Explanation
    In the Conduct Procurements process of procurement management, the BEST thing for a project manager to do is to answer sellers' questions about procurement documents. This is important because it helps to clarify any doubts or concerns that sellers may have regarding the procurement process. By addressing their questions, the project manager ensures that all parties involved have a clear understanding of the requirements and expectations, which can help in selecting the most suitable sellers for the project. This step promotes effective communication and transparency, leading to a more successful procurement process.

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  • 10. 

    What is the main purpose of the procurement audit?

    • Validate that costs charged to the contract are valid and correct

    • Loosely review the project

    • Identify the successes to transfer to other procurements

    • Acknowledge substantial completion

    Correct Answer
    A. Identify the successes to transfer to other procurements
    Explanation
    The main purpose of the procurement audit is to identify the successes that can be transferred to other procurements. This means that the audit aims to analyze and evaluate the procurement process in order to determine what strategies, techniques, or practices have been successful and can be replicated in future procurement activities. It focuses on identifying best practices and lessons learned that can improve the efficiency and effectiveness of future procurements.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 02, 2010
    Quiz Created by
    Elizabethrb
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