Deck 12: Project Procurement and Closure

Question 1

Time and material contracts are used on projects for work that is smaller in scope and has uncertainty or risk.

Answer 1

True

Question 2

Often contracts have a penalty clause if the work is not performed according to the contract.

Answer 2

True

Question 3

On smaller, less complex projects, the procurement team can consist of work teams within the procurement function with special expertise in contracting.

Answer 3

False

Question 4

The fixed price contract with price adjustment is used for short projects.

Question 5

Just as the project has a scope of work that defines what is included in the project and what work is outside the project, vendors and suppliers have a scope of work that defines what they will produce or supply to the company.

Question 6

The providers of commodities are suppliers.

Question 7

With a fixed unit price contract, if the estimate of units is not accurate, the contract has to be changed.

Question 8

While outsourcing work has both benefits and risks, self-performing work has benefits but no risks.

Question 9

In the case of vendors, instead of issuing a request for proposal RFP) for a list of commodities, the project team issues a request for quote RFQ).

Question 10

In partnerships, both parties benefit from the success of a project but the external partner assumes the costs of less successful projects.

Question 11

A request for quote focuses on meeting the project quality or schedule requirements.

Question 12

The project team typically develops a description of the work that will be outsourced.

Question 13

Work done by members of the organization rather than outsiders is work that is self-performed.

Question 14

Fixed price contracts require the availability of at least one supplier that has the qualifications and performance history that assures the needs of the project can be met.

Question 15

Cost reimbursable contracts are most often used when the scope of work or the costs for performing the work are well known.

Question 16

The process of obtaining goods and services from providers within the organization is procurement.

Question 17

On smaller projects, a procurement organization is established with expertise in purchasing.

Question 18

Vendors and suppliers usually require payments during the life of the contract.

Question 19

A cost reimbursable contract with a fixed fee is used to encourage performance in areas critical to the project.

Question 20

The project team develops an RFQ based on the quality and schedule needs of the project and sends the RFQ to the identified qualified suppliers.

Question 21

The fixed price contract _____.

A) requires developing a clear scope of work based on good information, creating a list of highly qualified bidders, and developing a clear contract that reflects that scope of work
B) will create lower total project costs than other forms of contracts when there are changes on the fixed price contract
C) requires the availability of at least one or more suppliers that have the qualifications and performance history that assures the needs of the project can be met
D) are not very effective in managing project costs.
E) offers a predictable cost for commodities and goods and services where the scope of work is very uncertain and likely to change

Question 22

_____ often provide a unique product or service that cannot be readily purchased in the marketplace.

A) Vendors
B) Suppliers
C) Bidders
D) Punters
E) Clients

Question 23

According to Luu, Ng, and Chen, which of the following selection priorities are the MOST important considerations in the decision to outsource activities?

A) Quality and risk
B) Complexity and flexibility
C) Schedule and complexity
D) Flexibility and budget
E) Budget and schedule

Question 24

A _____ requires a bidder to provide a price and additional information for a defined scope of work.

A) request for tender
B) request for quote
C) request for partnership
D) request for offer
E) request for information

Question 25

Which of the following is true about RFQs?

A) On smaller projects, a procurement organization is established with expertise in purchasing.
B) On larger projects, the parent purchasing organization usually processes all RFQs.
C) The project team develops an RFQ based on the quality and schedule needs of the project.
D) RFQs require a bidder to provide a price and additional information for a defined scope of work.
E) The project team sends the RFQ to new vendors to test their qualifications.

Question 26

If the number of items on the punch list is too large or the amount of work is significant, the project team continues to work the project.

Question 27

Bids:

A) are legally not enforceable.
B) can be verbal but not written.
C) cannot respond to a petition.
D) can be written but not verbal.
E) can be in response to a solicitation or unsolicited.

Question 28

The ending of a project is an opportunity to improve customer satisfaction and team member satisfaction.

Question 29

Items that can be bought off the shelf with no special modification for the project are called _____.

A) attributes
B) bins
C) commodities
D) resources
E) floats

Question 30

The method of purchasing products or services depends on the _____ of the product or service.

A) maintainability and reliability
B) creativity and innovation
C) scope and complexity
D) standardization and specialization
E) uniqueness and importance

Question 31

Which of the following is

A) A partnership is an informal arrangement to execute the project with each party contributing resources.
B) In most partnerships, one party benefits more than the other from the success of the project.
C) Building the relationship between major partners on the project is unlike building relationships with clients.
D) On a small, simple project, a partnership alignment session is often required to build the trust required for open communication channels.
E) In most cases, the parent organization is aware of weaknesses in the project resources and searches for a potential partner that has the needed resources.

Question 32

The logistics for the project can be managed by the project team, but cannot be included in the RFP or RFQ.

Question 33

Managing contractor performance on a project is not as important to the overall project outcomes as the work performed by the project team.

Question 34

The management of the vendor relationship is a project management priority because _____.

A) vendor investment in the project will equate to good savings
B) of the vendor's total involvement in the project
C) vendor performance is critical to the success of the project
D) vendor discretion has to be maintained
E) the vendor is trying to meet project requirements

Question 35

On larger, more complex projects, _____.

A) the contract development is typically managed through the parent company
B) the contract development is managed by a part-time person assigned to the project
C) the contract execution is typically managed through the parent company
D) the procurement team can consist of work teams within the procurement function with special expertise in contracting
E) the procurement team cannot consist of work teams

Question 36

The term for services or products provided by another company is _____.

A) open source
B) expediting
C) filtered
D) outsourced
E) logistics

Question 37

A general report includes the original goals and objectives and statements that show how the project met those goals and objectives.

Question 38

An) _____ defines the relationship between the project and the subcontractors, and also defines a process for making changes in the agreement.

A) risk mitigation plan
B) master plan
C) project execution plan
D) organization plan
E) contracting plan

Question 39

An) _____ is a person or organization supplying goods or services to the project that has a special relationship with the project or parent organization and might bypass the bidding process.

A) Kanban
B) key supplier
C) bidder
D) open source
E) project champion

Question 40

Long lead items are equipment or materials that will require a long time to acquire or build.

Question 41

A _____ is a contract used on small jobs with a high degree of uncertainty in which the contractor might charge an hourly rate for labor, plus the cost of materials, plus a percentage of the total costs.

A) labor-hour contract
B) service contract
C) supply contract
D) research and development contract
E) time and materials contract

Question 42

_____ is a contract type that provides an incentive for performing on the project above the established baseline in the contract.

A) Cost reimbursable contract with a percentage fee
B) Cost reimbursable contract with a fixed fee
C) Fixed price with incentive fee contract
D) Fixed price with price adjustment contract
E) Cost reimbursable contract with an incentive fee

Question 43

A _____ reimburses the contractor for all allowable costs plus a fee that is based on performance criteria.

A) cost reimbursable contract with a percentage fee
B) fixed price with an incentive fee
C) cost reimbursable contract with an incentive fee
D) cost plus contract with award fee
E) cost reimbursable contract with a fixed fee

Question 44

Which of the following is

A) It is used for short projects.
B) It provides an incentive for performing on the project above the adjusted baseline in the contract.
C) The most common use of this type of contract is the inflation adjusted price.
D) In this contract, the organization agrees to pay the contractor for the cost of performing the service.
E) It requires good documentation of the costs that occurred on the project.

Question 45

A _____ is a contract that covers all allowable expenses and pays the contractor for all allowable costs with an additional amount to cover the contractor's fee.

A) cost plus contract
B) fixed-price contract
C) no-bid contract
D) collateral contract
E) quasi-contract

Question 46

In a cost reimbursable contract, _____.

A) the contract usually details the quality of the goods or services, the timing needed to support the project, and the cost of delivering goods or service
B) the organization agrees to pay the contractor for the cost of performing the service or providing the goods plus a profit
C) the contract provides an incentive for performing on the project above the established baseline in the contract
D) the contractor assumes the risks for unexpected increases in labor and materials that are needed to provide the service or materials and in the quantity of time and materials needed
E) developing a clear scope of work, creating a list of highly qualified bidders, and developing a clear contract is critical

Question 47

What are the benefits of self-performing work rather than outsourcing it?

Question 48

An) _____ is the process of requesting a price and supporting information from bidders.

A) mission
B) alignment process
C) filtration
D) assignable cause
E) solicitation

Question 49

A cost plus contract with award fee is typically based on goals or objectives that are more _____.

A) subjective
B) objective
C) comparative
D) superlative
E) balanced

Question 50

_____ is a contract based on an agreed-on unit price for services or materials if the amount needed is not known accurately.

A) Cost reimbursable contract with a percentage fee
B) Cost reimbursable contract with a fixed fee
C) Fixed price with incentive fee contract
D) Fixed unit price contract
E) Fixed unit cost contract

Question 51

Which of the following is

A) The process of developing a quote in response to an RFP can be very expensive for the bidder.
B) The project team should not issue an RFP to a company that is not eligible to win the bid.
C) The type of materials or service is not well defined.
D) The bidder that can meet the project quality and schedule requirements usually wins the contract by quoting the lowest price.
E) It accounts for price but focuses on meeting the project quality or schedule requirements.

Question 52

A _____ is a cost reimbursable contract that includes an additional incentive payment if the contractor reduces costs below a target amount or completes the work ahead of schedule.

A) cost reimbursable contract with a percentage fee
B) fixed price with an incentive fee
C) cost reimbursable contract with an incentive fee
D) fixed price with price adjustment
E) cost reimbursable contract with a fixed fee

Question 53

Time and material contracts are used on projects _____.

A) for work that is greater in scope
B) for work that has no uncertainty
C) where the project rather than the contractor assumes the risk
D) where the fee is typically a percent of the fixed cost
E) where time is usually contracted on a day rate basis

Question 54

Discuss the role of suppliers.

Question 55

_____ involves managing procurement, distribution, maintenance, and replacement of goods and services.

A) Expediting
B) Benchmarking
C) Logistics
D) Solicitation
E) Physical distribution management

Question 56

In a _____, the service provider is allowed an adjustment for economic changes that affect costs such as changes in currency values or inflation.

A) cost reimbursable contract with a percentage fee
B) fixed price with price adjustment contract
C) fixed price with incentive fee contract
D) firm-fixed-price contract
E) cost reimbursable contract with a fixed fee

Question 57

A _____ is a list of all the items found by the owner that still remains to be done.

A) resource calendar
B) quality audit
C) spreadsheet
D) charter
E) punch list

Question 58

Describe a fixed total cost contract.

Question 59

Which type of manager develops detailed specifications and assures compliance to these specifications?

A) The manager of third party contracts
B) The manager of supplier contracts
C) The manager of vendor contracts
D) The manager of partnering arrangements
E) The manager of operations

Question 60

A _____ is a contract that reimburses the contractor for costs but the profit is a fixed amount.

A) cost reimbursable contract with a percentage fee
B) fixed price with an incentive fee
C) fixed total cost
D) fixed price with price adjustment
E) cost reimbursable contract with a fixed fee

Question 61

If the supplier has met all the _____ obligations, including fixing problems and making repairs as noted on the punch list, the project team signs off on the contract and submits it to the accounting department for final payment.

Question 62

Outsourcing decisions are sometimes called _____ decisions

Question 63

A credit check or a financial report from_____-a provider of financial information about individual companies-will provide the project with information about the potential bidder's financial status.

Question 64

_____ contracts are most often used when the scope of work or the costs for performing the work are not well known.

Question 65

Briefly explain a cost reimbursable contract.

Question 66

_____ are standardized financial disclosure documents that conform to the uniform commercial code.

Question 67

List the components of the procurement plan.

Question 68

_____ involves the work processes associated with shortening the time of delivering a product or service.

Question 69

What are the types of documents that should be archived?

Question 70

An) _____ typically provides a product or service that is designed for the project.