CH 12: Project Procurement Management -- QUIZ 13

In project procurement management, which is one of the main outputs of the conducting procurement process?

Answers:

a. procurement management plan

b. selected seller

c. procurement statement of work

d. closed procurement

selected seller

In project procurement management, which process involves determining what to procure, when, and how?

Answers:

a. closing procurements

b. controlling procurements

c. conducting procurements

d. planning procurement mana

planning procurement management

A shortage of qualified personnel is one of the main reason that companies outsource. A project may require experts in a particular field for several months and planning for this procurement ensures that the needed services will be available for the project. Which benefit does this characteristic of outsourcing provide an organization?

Answers:

a. reduces focus on its core business

b. increases control over all aspects of projects that suppliers carry out.

c. provides access to specific skills

d. reduces dependency on suppliers

provides access to specific skills

While outsourcing, organizations should protect strategic information because it can become vulnerable in the hands of suppliers.

Answers:

True

False

True

The procurement statements of work are an output of the _____ process of project procurement management.

Answers:

a. planning

b. monitoring and controlling

c. executing

d. closing

planning

In a(n) _____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus.

Answers:

a. CPIF

b. FFP

c. CPPC

d. FPIF

CPIF

A key factor in evaluating bids, particularly for projects involving information technology, is the past performance record of the bidder.

Answers:

True

False

True

Which is true of lump-sum contracts?

Answers:

a. They are also known as cost-reimbursable contracts.

b. They involve a fixed total price for a well-defined product or service.

c. They incur a high degree of risk for the buyer.

d. They consist of a fee based on the satisfaction of subjective performance criteria.

They involve a fixed total price for a well-defined product or service

In project procurement management, which process involves completion and settlement of each contract, including resolution of any open items?

Answers:

a. controlling procurements

b. planning procurement management

c. negotiating procurements

d. conducting procurements

controlling procurements

A single contract can include all three categories of contracts.

Answers:

True

False

True

In project procurement management, obtaining seller responses, selecting sellers, and awarding contracts is part of the _____ process.

Answers:

a. closing

b. planning

c. conducting procurements

d. controlling

conducting procurements

In project procurement management, which process involves obtaining seller responses, selecting sellers, and awarding contracts?

Answers:

a. conducting procurements

b. planning procurement management

c. closing procurements

d. settling contracts

conducting procurements

Reviewing performance records reduces the risk of selecting a supplier with a poor track record.

Answers:

True

False

True

Make-or-buy analysis involves comparing the internal costs of providing a product with the cost of outsourcing.

Answers:

True

False

True

Buyers absorb lesser risk with cost-reimbursable contracts than they do with fixed-price contracts.

Answers:

True

False

False

The main sections of an RFP can include the statement of work and schedule information.

Answers:

True

False

True

In which contract does the buyer pay the supplier for allowable performance costs along with a predetermined percentage based on total costs?

Answers:

a. CPIF

b. CPAF

c. FPIF

d. CPPC

CPPC

Most organizations are not in business to provide information technology services, yet many have spent valuable time and resources on information technology functions when they should have instead worked on important competencies such as marketing, customer service, and new product design. Outsourcing helps tackle this problem. Which benefit does outsourcing primarily provide in such a scenario?

Answers:

a. reduces fixed and recurrent costs

b. protects strategic information from being accessible to external suppliers

c. increases accountability even without a written contract

d. helps focus on an organization's core business

helps focus on an organization's core business

Project procurement management consists primarily of two processes: assessing procurements and controlling procurements.

Answers:

True

False

False

Indirect costs are those costs can be traced back to a project in a cost-effective way.

Answers:

True

False

False

The _____ is a description of the work required for a procurement.

Answers:

a. RFP

b. WBS

c. SOW

d. RFQ

SOW

From the buyer's perspective, the _____ is the least desirable among all contracts because the supplier has no incentive to decrease costs.

Answers:

a. CPIF

b. CPAF

c. CPPC

d. CPFF

CPPC

Which process of project procurement management involves managing relationships with sellers, monitoring contract performance, making changes as needed, and closing contracts?

Answers:

a. deciding on the services to procure

b. controlling procurements

c. settling contracts

d. negotiating procurements

controlling procurements

The fee in a CPFF contract constantly varies even when the scope of a contract remains the same.

Answers:

True

False

False

An FP-EPA contract carries the least risk for a supplier.

Answers:

True

False

False

If an organization has no need to buy any products or services from outside the organization, then it has no need to perform any of the procurement management processes.

Answers:

True

False

True

A document used to solicit quotes or bids from prospective suppliers is known as a(n) _____.

Answers:

a. RFP

b. RFQ

c. WBS

d. SOW

RFQ

All contracts should include specific clauses that take into account issues unique to the project.

Answers:

True

False

True

In an FPI contract, all of the risk is borne by the buyer.

Answers:

True

False

False

Suppliers are those organizations or individuals who provide procurement services.

Answers:

True

False

True

What is one drawback of outsourcing?

Answers:

a. it does not provide access to specific skills or technologies

b. it invariably results in an increase in both fixed and recurrent costs

c. it can make an organization become overly dependent on particular suppliers.

d. it cannot increase accountability of suppliers through a written contract

it can make an organization become overly dependent on particular suppliers

After planning for procurement management, the next process involves ____.

Answers:

a. determining the evaluation criteria for the contract award

b. using expert judgement in planning

purchases and acquisitions

c. developing procurement statements of work

d. sending appropriate documentation to potential sellers

sending appropriate documentation to potential sellers

_____ contracts involve payment to the supplier for direct and indirect actual costs and often include fees.

Answers:

a. Firm-fixed-price

b. Fixed-price incentive fee

c. Lump sum

d. Cost-reimbursable

Cost-reimbursable

The closing procurements process involves updating records to reflect final results and archiving information for future use.

Answers:

True

False

True

Contents of the procurement management plan vary with project needs.

Answers:

True

False

True

With a(n) _____ contract, the buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based on a percentage of estimated costs.

Answers:

a. CPFF

b. CPIF

c. FPIF

d. CPAF

CPFF

A(n) _____ contract carries the least risk for suppliers

Answers:

a. CPPC

b. FFP

c. CPAF

d. FP-EPA

CPPC

A company is considering whether to purchase or lease a piece of equipment for an upcoming project. The cost to purchase is $10,000 plus $100 per day to operate or $500 per day to lease (including operating costs). If the company anticipates using the equipment for a total of 20 days, they will be indifferent as to whether or lease or purchase it.

Answers:

True

False

False

A(n) _____ is a document used to solicit proposals from prospective suppliers.

Answers:

a. RFQ

b. RFP

c. SOW

d. WBS

RFP

Outsourcing suppliers can often provide economies of scale, especially for hardware and software, that may not be available to the client alone. Which benefit does this offer an organization?

Answers:

a. reduction in costs

b. increased accountability

c. increased flexibility

d. access to specific skills

reduction in costs

In unit pricing, the total value of the contract is a function of the quantities needed to complete the work.

Answers:

True

False

True

The contractual relationship is a legal relationship, which means it is subject to state and federal contract laws.

Answers:

True

False

True

Procurement audits are often done during contract closure to identify lessons learned in the entire procurement process.

Answers:

True

False

True

In project procurement management, a main output of controlling procurements is a source selection criteria.

Answers:

True

False

False

In project procurement management, which is an output of the conducting procurements process?

Answers:

a. make-or-buy decisions

b. statements of work

c. source selection criteria

d. change requests

change requests

In project procurement management, which is an output of the planning process?

Answers:

a. selected sellers

b. change requests

c. resource calendars

d. make-or-buy decisions

make-or-buy decisions

The process of choosing suppliers or sellers is known as _____.

Answers:

a. a bid

b. a change order

c. WBS

d. source selection

source selection

Outsourcing to provide extra workers during periods of peak workloads can be much more economical than trying to fill entire projects with internal resources. Which advantages does this characteristic of outsourcing provide organizations?

Answers:

a. offers control over all aspects of projects that suppliers carry out

b. shifts accountability from external suppliers to internal staff

c. helps avoid any form of dependency on suppliers

d. provides flexibility

provides flexibility

Outputs of the _____ process consist of selected sellers and change requests.

Answers:

a. planning procurement management

b. conducting procurements

c. controlling procurements

d. closing procurements

.conducting procurements

Which of the following is an output of the contract closure process?

Answers:

a. procurement statements of work

b. open item resolution

c. work performance information

d. resource calendars

open item resolution

What is the first step in project procurement management?

Answers:

a. conducting procurements.

b. planning procurement management.

c. closing procurement management.

d. controlling procurements.

planning procurement management.