Chapter 12 - Project Procurement Management Part 4

Chapter 12 - Project Procurement Management KEYWORDS: Bloom's: Knowledge 51. Which of the following is an output of the contract closure process? a. procurement statements of b. open item resolution work c. resource calendars d. work performance information ANSWER: b RATIONALE: Feedback: Contract closure involves completion and settlement of contracts and resolution of any open items. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528 QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJE INFO.SCHW.14.90 - LO: 12-5 CTIVES: NATIONAL STANDUnited States - BUSPROG: - Comprehension ARDS: Closing Procurements TOPICS: Bloom's: Knowledge KEYWORDS: Completion52. _____ refers to the process of acquiring goodsand/or services from an outside source. ANSWER: Procurement POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.506 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.86 - LO: 12-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS: The Importance of Project Procurement Management Bloom's: Knowledge 53. A(n) _____ is a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them. Page 30 Chapter 12 - Project Procurement Management ANSWER: contract POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.509 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.86 - LO: 12-1 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: The Importance of Project Procurement Management Bloom's: Knowledge 54. _____ management includes the processes required to acquire goods and services for a project from outside the performing organization. ANSWER: Project procurement POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.510 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.86 - LO: 12-1 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension The Importance of Project Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: 55. Procurement statements of work are an output of the _____ process. ANSWER: planning procurement management POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.510 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.86 - LO: 12-1 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension The Importance of Project Procurement Management TOPICS: KEYWORDS: Bloom's: Knowledge 56. 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. Page 31 Chapter 12 - Project Procurement Management ANSWER: make-or-buy POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.512 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Planning Procurement Management Bloom's: Knowledge 57. A(n) _____ contract has the least amount of risk for the buyer. ANSWER: firm-fixed-price (FFP) firm-fixed-price FFP POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.512 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: 58. A(n) _____ contract includes a special provision for predefined final adjustments to the contract price due to changes in conditions such as inflation. ANSWER: fixed-price with economic price adjustment (FP-EPA) fixed-price with economic price adjustment FP-EPA POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.512 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: Page 32 Chapter 12 - Project Procurement Management 59. The cost at which the contractor assumes total responsibility for each additional dollar of contract cost is known as a(n) _____. ANSWER: point of total assumption (PTA) point of total assumption PTA POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.512 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Planning Procurement Management Bloom's: Knowledge 60. Three types of cost-reimbursable contracts include cost plus incentive fee, cost plus fixed fee, and _____. ANSWER: cost plus percentage of costs (CPPC) cost plus percentage of costs CPPC POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.513-514 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: 61. _____ contracts are a hybrid of fixed-price and cost-reimbursable contracts. ANSWER: Time and material (T&M) Time and material T&M POINTS: DIFFICULTY: REFERENCES: QUESTION TYPE: HAS VARIABLES: 1 Difficulty: Easy p.515 Completion False Page 33 Chapter 12 - Project Procurement Management LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: 62. A(n) _____ is a contract clause that allows the buyer or supplier to end the contract. ANSWER: termination clause POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.516 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Planning Procurement Management Bloom's: Knowledge 63. If an SOW is used as part of a contract to describe only the work required for that particular contract, it is called a(n) _____. ANSWER: contract statement of work POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.518 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: KEYWORDS: Bloom's: Knowledge 64. A contract statement of work is a type of _____ statement that describes the work in sufficient detail to allow prospective suppliers to determine if they can provide the required goods and services and to determine an appropriate price. ANSWER: scope POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.518 QUESTION TYPE: Completion Page 34 Chapter 12 - Project Procurement Management HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: 65. A(n) _____ is a document prepared by a seller when there are different approaches for meeting buyer needs. ANSWER: proposal POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.520 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Planning Procurement Management Bloom's: Knowledge 66. A(n) _____ is also known as a tender or quote, short for quotation. ANSWER: bid POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.520 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Planning Procurement Management TOPICS: KEYWORDS: Bloom's: Knowledge 67. All procurement documents should be in _____ form in order to facilitate accurate and complete responses from prospective sellers. ANSWER: written POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.521 QUESTION TYPE: Completion HAS VARIABLES: False Page 35 Chapter 12 - Project Procurement Management LEARNING OBJECTIVES: INFO.SCHW.14.87 - LO: 12-2 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Planning Procurement Management Bloom's: Knowledge 68. A(n)_____ conference helps ensure that everyone has a clear, common understanding of the buyer’s desired products or services. ANSWER: bidders’ supplier pre-bid POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.525-526 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.88 - LO: 12-3 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Conducting Procurements Bloom's: Knowledge 4/27/2018 3:53 PM 69. The process of source selection involves evaluating proposals from sellers, choosing the best one, negotiating, and awarding the _____. ANSWER: contract POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.526 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.92 - LO:12-3 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Conducting Procurements TOPICS: Bloom's: Knowledge KEYWORDS: 70. _____ 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. ANSWER: Constructive change orders POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528 Page 36 Chapter 12 - Project Procurement Management QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.89 - LO: 12-4 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Controlling Procurements Bloom's: Knowledge 71. In procurement management, evaluation of any change should include a(n) _____ analysis. ANSWER: impact POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.89 - LO: 12-4 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Controlling Procurements TOPICS: KEYWORDS: Bloom's: Knowledge 72. Controlling procurement also involves _____, which is sometimes referred to as contract closure. ANSWER: closing procurements POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.90 - LO: 12-5 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Closing Procurements TOPICS: Bloom's: Knowledge KEYWORDS: 73. Tools used in contract closure include procurement audits, _____, and a records management system. ANSWER: negotiated settlements POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528 QUESTION TYPE: Completion HAS VARIABLES: False Page 37 Chapter 12 - Project Procurement Management LEARNING OBJECTIVES: INFO.SCHW.14.90 - LO: 12-5 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Closing Procurements Bloom's: Knowledge 74. A(n) _____ system provides the ability to easily organize, find, and archive procurement-related documents. ANSWER: records management POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.528-529 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.90 - LO: 12-5 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension TOPICS: KEYWORDS: Closing Procurements Bloom's: Knowledge 75. A(n) _____ type of e-procurement that sends requests for information and prices to suppliers and receives the response of suppliers using Internet technology. ANSWER: e-tendering POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.530 QUESTION TYPE: Completion HAS VARIABLES: False LEARNING OBJECTIVES: INFO.SCHW.14.93 - LO:12-6 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Using Software To Assist In Project Procurement Management TOPICS: KEYWORDS: Bloom's: Knowledge 76. A(n) _____ type of e-procurement that identifies new suppliers for a specific category of purchasing requirements using Internet technology. ANSWER: e-sourcing POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: p.530 QUESTION TYPE: Completion HAS VARIABLES: False Page 38 Chapter 12 - Project Procurement Management LEARNING OBJECTIVES: INFO.SCHW.14.94 - LO: 12-6 NATIONAL STANDARDS: United States - BUSPROG: - Comprehension Using Software to Assist in Project Procurement Management TOPICS: Bloom's: Knowledge KEYWORDS: Essay 77. What are some of the advantages that outsourcing offers which is encouraging many companies to adopt it? ANSWER: Outsourcing provides several advantages. These include: (1) Access to skills and technologies: Organizations can gain access to specific skills and technologies by using outside resources. A project may require experts in a particular field for several months, or it might require specific technologies from an outside source. Planning for this procurement ensures that the needed skills and technologies will be available for the project. (2) Reduces both fixed and recurrent costs: Outsourcing suppliers often can use economies of scale that may not be available to the client alone, especially for hardware and software. It can also be less expensive to outsource some labor costs to other organizations in the same country or offshore. (3) Allows the client organization to focus on its core business: By outsourcing many IT functions, employees can focus on jobs that are critical to the success of the organization. 481 (4) Provides flexibility: Outsourcing to provide extra staff during periods of peak workloads can be much more economical than trying to staff entire projects with internal resources. Many companies cite better flexibility in staffing as a key reason for outsourcing. (5) Increases accountability: A well-written contract can clarify responsibilities and sharpen focus on key deliverables of a project. Contracts are legally binding and thus there is more accountability for delivering the work as stated in the contract. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.508-509 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.86 - LO: 12-1 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: The Importance of Project Procurement Management Page 39 Chapter 12 - Project Procurement Management KEYWORDS: Bloom's: Comprehension DATE CREAT ED: 78. List and briefly describe the main processes of project procurement management. ANSWER: The four main processes of project procurement management are as follows: (1) Planning procurement management involves determining what to procure, when, and how. In procurement planning, one must decide what to outsource, determine the type of contract, and describe the work for potential sellers. (2) Conducting procurements involves obtaining seller responses, selecting sellers, and awarding contracts. (3) Controlling procurements involves managing relationships with sellers, monitoring contract performance, making changes as appropriate, and closing out contracts. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.510-511 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.86 - LO: 12-1 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: The Importance of Project Procurement Management KEYWORDS: Bloom's: Comprehension 79. What are the four types of cost-reimbursable contracts? Briefly describe each type. ANSWER: The four types of cost-reimbursable contracts are as follows: (1) A cost plus incentive fee (CPIF) contract is one in which the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus. If the final cost is less than the expected cost, both the buyer and the supplier benefit from the cost savings, according to a negotiated share formula. (2) A cost plus fixed fee (CPFF) contract is one in which the buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based Page 40 Chapter 12 - Project Procurement Management on a percentage of estimated costs. This fee does not vary, however, unless the scope of the contract changes. (3) With a cost plus award fee (CPAF) contract, the buyer pays the supplier for allowable performance costs plus an award fee based on the satisfaction of subjective performance criteria. This type of contract is not usually subject to appeals. (4) With a cost plus percentage of costs (CPPC) contract, the buyer pays the supplier for allowable performance costs along with a predetermined percentage based on total costs. From the buyer’s perspective, this is the least desirable type of contract because the supplier has no incentive to decrease costs. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.513-514 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.87 - LO: 12-2 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: Planning Procurement Management KEYWORDS: Bloom's: Comprehension 80. How is a statement of work (SOW) different from a contract statement of work? What are some of the requirements for creating a contract SOW? ANSWER: The statement of work (SOW) is a description of the work required for the procurement. If a SOW is used as part of a contract to describe only the work required for that particular contract, it is called a contract statement of work. The contract SOW is a type of scope statement that describes the work in sufficient detail to allow prospective suppliers to determine if they are capable of providing the goods and services required and to determine an appropriate price. A contract SOW should be clear, concise, and as complete as possible. It should describe all services required and include performance reporting. It is important to use appropriate words in a contract SOW such as must instead of may. It should specify the products and services required for the project, use industry terms, and refer to industry standards. It should specify the location of the work, the expected period of performance, specific deliverables and when they are due, applicable standards, acceptance criteria, and special requirements. A good contract SOW gives bidders a better understanding of the buyer’s expectations. A contract SOW should become part Page 41 Chapter 12 - Project Procurement Management of the official contract to ensure that the buyer gets what the supplier bid on. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.518-519 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.87 - LO: 12-2 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: Planning Procurement Management KEYWORDS: Bloom's: Comprehension 81. How are RFPs different from RFQs? What are some of the requirements of writing an RFP? ANSWER: A Request for Proposal (RFP) is a document used to solicit proposals from prospective suppliers. On the other hand, A Request for Quote (RFQ) is a document used to solicit quotes or bids from prospective suppliers. Developing an RFP is often a time-consuming process. Organizations must plan properly to ensure that they adequately describe what they want to procure, what sellers to include in their proposals, and how they will evaluate proposals. To generate a good RFP, expertise is invaluable. It is thus important to consult with experts who know the contract planning process for particular organizations. Legal requirements are often involved in issuing RFPs and reviewing proposals, especially for government projects. To make sure that an RFP has enough information to provide the basis for a good proposal, the buying organization should try to put itself in the suppliers’ shoes. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.520 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.95 - LO:12-2 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: Planning Procurement Management KEYWORDS: Bloom's: Comprehension Page 42 Chapter 12 - Project Procurement Management 82. What are the four main capabilities of procure-to-pay suites for indirect procurements? What type(s) of organizations are they suitable for? ANSWER: The four main capabilities of procure-to-pay suites for indirect procurements include: E-purchasing functionality: This provides a self-service solution to requisition and order goods and services through the use of catalogs, e-forms, or free-text orders (for when users cannot find items in a structured format). Catalog management capabilities: Includes catalog content upload, content update evaluation tools, and catalog search tools. E-invoicing: Enables the interchange and storage of legally valid invoices in electronic format. Accounts Payable Invoice Automation (APIA): Allows approval and control of incoming invoices through either automatic or manual approvals by automatic workflows. At current software suite prices, organizations with annual revenues of $800 million or more usually realize a good return on investment from using these tools. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES p.530-531 : QUESTION TYEssay PE: HAS VARIABLFalse ES: LEARNING O INFO.SCHW.14.93 - LO:12-6 BJECTIVES: NATIONAL STUnited States - BUSPROG: Analytic ANDARDS: TOPICS: Using Software To Assist In Project Procurement Management KEYWORDS: Bloom's: Comprehension Page 43