Procurement

Question 1

What is project procurement management?

Answer 1

The processes required to develop and administer agreements such as contracts, purchase orders, memoranda of agreements, service level agreements

Question 2

Who are the parties involved in procurement processes?

Answer 2

The buyer and seller

Question 3

What is the role of the project manager in project procurement management?

Answer 3

Preparing requests for proposals, negotiating contracts, selecting a seller. Collaborate with legal, technical and financial departments.

Question 4

What is another name for sellers?

Answer 4

Bidders

Question 5

What are the processes in project procurement management?

Answer 5

Plan procurement management
Conduct procurements
Control procurements

Question 6

What are some trends and emerging practices in project procurement management?

Answer 6

Advances in tools
More advanced risk management
Changing contracting processes
Logistics and supply chain management
Technology and stakeholder relations
Trial engagements

Question 7

What are some tailoring considerations for project procurement management?

Answer 7

Complexity of procurement
Physical location
Governance and regulatory environment
Availability of contractors

Question 8

What are questions to ask when tailoring considerations for project procurement management?

Answer 8

“Is there one main procurement or multiple procurements at different times with different sellers?”
“Are the buyers and sellers in the same location? Are they in different time zones, countries or continents?”
“Are local laws and regulations integrated into the organizations procurement policies?”
“Are there available contractors who can perform the work?”

Question 9

What are considerations for agile environments for project procurement management?

Answer 9

The supplier might become part of the development team to respond quickly to the needs of the project. Collaborative working relationship can lead to a shared risk model.

Question 10

What is the purpose of the plan procurement management process?

Answer 10

Documents project procurement decisions, specifying the approach and identifying potential sellers. Determines whether to acquire goods or services from outside the project.

Question 11

What are the steps of procurement?

Answer 11

Prepare the procurement statement of work (SOW) or terms of reference (TOR)
Prepare a high level cost estimate
Advertise the opportunity
Identify a short list of qualified sellers
Prepare and issue bid documents
Prepare and submit proposals by the seller
Conduct a technical and quality based evaluation
Perform a cost evaluation
Prepare the final combined quality and cost evaluation to select the winning proposal
Finalize negotiations and sign a contract

Question 12

What is a statement of work?

Answer 12

A narrative description of products, services or results to be delivered by the project. Developed from the project scope baseline.

Question 13

What are bids?

Answer 13

Bid documents are used to solicit proposals from sellers. Used when the seller selection decision is based on price.

Question 14

What is a proposal?

Answer 14

Generally used when considerations other than price are important, such as technical capability or technical approach.

Question 15

What is a fixed price contract?

Answer 15

Involves setting a fixed price for a defined result.

Question 16

What is a firm fixed price?

Answer 16

The price for goods is set and is unlikely to change

Question 17

What is a fixed price incentive fee?

Answer 17

Allows for deviation of the price of the goods depending on the performance of the seller.

Question 18

What is a fixed price with economic price adjustments?

Answer 18

Allows for adjustments to the contract price due to changed conditions.

Question 19

What are cost-reimbursable contracts?

Answer 19

Involves payments to the seller for all costs incurred while completing the work, plus a fee representing seller profit.

Question 20

What is a cost plus fixed fee?

Answer 20

A seller is reimbursed for all costs and received a fixed fee payment

Question 21

What is a cost plus incentive fee?

Answer 21

A seller is reimbursed for all costs and receives a predetermined incentive fee

Question 22

What is a cost plus award fee?

Answer 22

A seller is reimbursed for all costs but the fee is based on satisfaction criteria

Question 23

What is a time and materials contract?

Answer 23

A hybrid type of contract with aspects of both cost reimbursable and fixed price contracts. Often used for the acquisition of experts and any other outside support when a precise statement of work cannot be quickly prescribed.

Question 24

What are some criteria used for source selection?

Answer 24

Capability and capacity
Product cost and life cycle cost
Delivery dates
Technical expertise and approach
Specific relevant experience

Question 25

What is a make or buy analysis?

Answer 25

The act of choosing between manufacturing a product in house or purchasing it from an external supplier

Question 26

What are some procurement strategies or delivery methods for professional services?

Answer 26

Buyer/seller provider with no subcontracting Buyer/seller provider with subcontracting allowed Joint venture between buyer and services provider Buyer/services provider acts as the representative

Question 27

What are some procurement strategies or delivery methods for industrial or commercial construction?

Answer 27

``` Turnkey Design build Design bid build Design build operate Build own operate transfer ```

Question 28

What are some types of contract payments?

Answer 28

``` Lump sum Firm fixed price Cost plus award fees Cost plus incentive fees Time and materials Target cost ```

Question 29

Describe information for procurement phases.

Answer 29

Sequencing or phasing of the procurement, a description of each phase and the objectives of each. Performance indicators and milestones Criteria for moving from phase to phase Monitoring and evaluation plan for tracking progress Process for knowledge transfer for use in subsequent phases

Question 30

What is the procurement management plan?

Answer 30

An output of the plan procurement management process. Contains activities to be undertaken during the procurement process.

Question 31

What are the inputs to the plan procurement management process?

Answer 31

``` Enterprise environmental factors Organizational process assets Project documents Project charter Project management plan Business documents ```

Question 32

What are the outputs to the plan procurement management process?

Answer 32

``` Organizational process assets updates Project documents updates Source selection criteria Procurement strategy Make or buy decision Procurement management plan Bid documents Independent cost estimate Procurement statement of work Change requests ```

Question 33

What are some tools and techniques used in the plan procurement management process?

Answer 33

``` Source selection analysis Expert judgement Data gathering Data analysis Meetings ```

Question 34

What is the conduct procurements process?

Answer 34

Involves obtaining responses to bids and proposals, selecting a vendor, and awarding the contract.

Question 35

What is the role of the project manager during the conduct procurement process?

Answer 35

Help the procurement department as a facilitator for the project and give recommendations, write the requirements (SOW) for the supplier, conducts site visits, get status reports,

Question 36

What is advertising for procurements?

Answer 36

Communicating with users or potential users of a product, service or result.

Question 37

What is procurement negotiation?

Answer 37

Clarifies the structure, rights and obligations of the parties and other terms of the purchases so that mutual agreement can be reached prior to signing the contract

Question 38

Who should lead procurement negotiations?

Answer 38

A member of the procurement team that has the authority to sign contracts.

Question 39

What are the inputs to the conduct procurements process?

Answer 39

``` Project management plan Seller proposals Project documents Procurement documentation Enterprise environmental factors Organizational process assets ```

Question 40

What are the outputs to the conduct procurements process?

Answer 40

``` Project management plan updates Selected sellers Agreements Organizational process assets updates Project documents updates Change requests ```

Question 41

What are tools and techniques used in the conduct procurements process?

Answer 41

``` Expert judgement Interpersonal and team skills Bidder conferences Data analysis Advertising ```

Question 42

What are bidder conferences?

Answer 42

Ensures that all prospective bidders have a clear understanding of the procurement and no bidders receive preferential treatment

Question 43

What is the control procurements process?

Answer 43

Managing procurement relationships, monitoring contract performance, making changes as appropriate, and closing out contracts

Question 44

What is the role of the project manager in the control procurements process?

Answer 44

``` Collect data and manage project records Refine procurement plans and schedules Set up for gathering, analyzing, and reporting procurement related project data Monitor procurement environment Pay invoices ```

Question 45

What are contested changes?

Answer 45

Requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred

Question 46

How are procurement contracts closed?

Answer 46

The buyer provides the seller with formal written notice that the contract has been completed.

Question 47

What are inputs to the control procurements process?

Answer 47

``` Procurement documentation Organizational process assets Agreements Project management plan Enterprise environmental factors Project documents Work performance data Approved change requests ```

Question 48

What are the outputs to the control procurements process?

Answer 48

``` Organizational process assets updates Change requests Work performance information Closed procurements Procurement documentation updates Project management plan updates Project documents updates ```

Question 49

What are tools and techniques used in the control procurements process?

Answer 49

``` Audits Inspection Data analysis Expert judgement Claims administration ```