Procurement Mgmt

Question 1

Procurement Mgmt

Answer 1

Set of processes that are used to obtain goods, services or scope from outside the organization

Question 2

Procurement mgmt processes

Answer 2

Initiating - none 
Planning - plan procurement mgmt 
Executing - conduct procurement s
Monitor & control - control procurements 
Closing - none

Question 3

Plan procurement mgmt outputs

Answer 3

Procurement mgmt plan, independent cost estimates, make or buy decisions, procurement strategy, bid documents, procurement statement of work, work selection criteria

Question 4

Conduct procurement outputs

Answer 4

Selected sellers, agreements

Question 5

Control procurement outputs

Answer 5

Closed procurements, work performance info, change requests

Question 6

Buyer

Answer 6

The org or party purchasing the goods or services from the seller

Question 7

Seller

Answer 7

The org or party providing or delivering the goods/services to the buyer

Question 8

Fixed price contract

Answer 8

Seller bears the risk

Cost overruns may not be passed to the buyer and must be borne by the seller

Question 9

Firm fixed price (FFP)

Answer 9

Price is fixed, no provisions for cost or performance overruns, risk is entirely shifted to the seller

Question 10

Fixed price incentive fee (FPIF)

Answer 10

Price is fixed with an incentive fee for meeting a target specified in the contract

Both parties agree to a price ceiling and all costs above the price ceiling must be covered by the seller

Question 11

Fixed price economic price adjustment (FP-EPA)

Answer 11

Popular in cases where fluctuation in the exchange rate or interest rate may impact the project

Economic stipulation may be added to protect the seller or the buyer

Question 12

Cost plus fixed fee (CPFF)

Answer 12

Buyer bears risk

Since all costs must be reimbursed to the seller, the buyer bears the risk of cost overruns

Question 13

Cost plus incentive fee (CPIF)

Answer 13

Buyer and seller bear risk

Buyer bears most of the risk, but incentive fee for the seller motivates the seller to keep costs down

Question 14

Cost plus award fee (CPAF)

Answer 14

The seller passes the costs back to the buyer, but the sellers award/profit comes from a decision made from whether or not to grant it based on the sellers performance

Question 15

Time and materials

Answer 15

Buyer bears risk

Buyer pays the seller for all time and materials the seller applies to the project

Question 16

Point of total assumption (PTA)

Answer 16

Cost point in the contract where a subcontractor assumes responsibility for all additional costs

Target cost + (ceiling price - target price) / ABC’s % share of cost overruns

Helps identify the point in the contract where the seller has the most motivation to bring things to completion

Question 17

Plan procurement mgmt

Answer 17

Involves looking at the project and determine which component or services of the project will be made or performed internally and which will be performed from an external source

Question 18

Source selection analysis

Answer 18

Deciding how you are going to select a seller

Least cost, qualifications only, quality, quality and cost, sole source, fixed budget

Question 19

Least cost

Answer 19

May work when quality is not in question

Question 20

Qualifications only

Answer 20

Small enough that it doesn’t require an elaborate procurement process, make a short list and make a selection based on qualifications

Question 21

Quality-based (technical score)

Answer 21

Value, best quality

Question 22

Quality and cost based

Answer 22

Quality and cost based

Question 23

Sole source

Answer 23

Unusual, buyer negotiates with one seller

Question 24

Fixed budget

Answer 24

Buyer discloses the budget to seller and negotiate on scope, quality and schedule

Doesn’t work well with scope changes

Question 25

Procurement mgmt plan

Answer 25

Defines what will be procured, how a seller will be selected, what type of contracts will be used, how risk will be managed, how sellers will be managed, including how their performance will be measured

Question 26

Procurement strategy

Answer 26

Defines how procurements will be organized, how the contracts will be structured, and which procurement phases will be carried out

Question 27

Bid documents

Answer 27

Written by the buyer and provided to the prospective sellers, provides a narrative description of work to be performed

Question 28

Procurement statement of work

Answer 28

Helps explain an section fo the scope to potential sellers in enough detail so they can decide whether or not they want to pursue the work in question Should focus on the outcome and not the steps

Question 29

Source selection criteria

Answer 29

Determined before the seller is selected

Question 30

Make or buy decisions

Answer 30

Made and documented with just enough info

Question 31

Independent cost estimates

Answer 31

May be created by outside companies or internally

Question 32

Conduct procurements

Answer 32

Carries out the procurement mgmt plan, selects one or more sellers, and awards the procurement, usually in the form of a contract Issues bid, hold bidder conferences, evaluate proposals and select seller

Question 33

Conduct procurement tools

Answer 33

Advertising, bidder conferences

Question 34

Selected sellers

Answer 34

The RFP is generated, sellers have submitted proposals, negotiations have taken place and now a seller is chosen

Question 35

Agreements

Answer 35

Often in the form of contracts, formal documents governing the relationship between the buyer and seller

Question 36

Control procurements

Answer 36

Buyer and seller review the contract and the work to ensure that the results match the work

Question 37

Claims administration

Answer 37

Defined in the contract itself, but disputes must be managed and ultimately resolved and that the process for doing so must be defined in advance of the claim Litigation is least preferred, last resort...mediation or arbitration instead

Question 38

Closed procurements

Answer 38

Closed contracts, formal notice that contract is complete

Question 39

Work performance info

Answer 39

Actionable info about sellers performance

Question 40

Procurement documentation updates

Answer 40

As change requests are reviewed, data is analyzed, inspection and audits are carried out, document will likely be updated