Regulatory Compliance & Standards Flashcards

The Service Contract Act (SCA) applies to purchasing professionals primarily when they contract for:

Answer: Services performed by service employees on federal contracts over $2,500

The Service Contract Act requires federal service contracts over $2,500 to pay service employees prevailing wages and fringe benefits determined by the Department of Labor.

A purchasing professional finds that a supplier has received a Warning Letter from the FDA. The most appropriate response is to:

Answer: Assess the severity of the violations and determine their impact on purchased goods before deciding on action

An FDA Warning Letter signals significant violations, but the impact varies; a risk-based assessment of violations relative to purchased goods is necessary before taking action.

Under the Uniform Commercial Code (UCC) Article 2, when a buyer rejects non-conforming goods, the seller has the right to:

Answer: Cure the defect within the original contract time frame if it has not yet expired

UCC § 2-508 grants sellers the right to cure a defective tender if the contract time has not yet expired and the seller gives timely notice of their intent to cure.

When implementing a supplier code of conduct, which regulatory framework most directly requires U.S. public companies to address labor standards in their supply chains?

Answer: SEC disclosure requirements under Dodd-Frank and emerging ESG rules

SEC disclosure requirements under Dodd-Frank (conflict minerals, pay ratio) and emerging ESG climate/human capital rules require public companies to report on supply chain labor and social issues.

The FTC Guides for the Use of Environmental Marketing Claims (Green Guides) are most relevant to purchasing professionals when they:

Answer: Evaluate supplier claims such as 'eco-friendly,' 'recycled,' or 'carbon neutral' to avoid misleading marketing

The FTC Green Guides provide standards for evaluating the truthfulness of environmental claims, helping purchasing professionals avoid suppliers making misleading 'green' assertions.

Which data privacy regulation requires purchasing professionals to include Data Processing Agreements (DPAs) in contracts with suppliers who process personal data on their behalf?

Answer: EU General Data Protection Regulation (GDPR) Article 28

GDPR Article 28 requires that controllers (companies) only use processors (suppliers) who provide sufficient guarantees, formalized through a binding Data Processing Agreement.

A purchasing professional receives an unsolicited proposal from a supplier with pricing significantly below market rates for a government contract. Under the Procurement Integrity Act, the most critical concern is:

Answer: Whether the supplier may have obtained competitor bid information through improper means

The Procurement Integrity Act prohibits disclosure of contractor bid or proposal information and source selection information; unusually low pricing may indicate unauthorized access to competitors' proprietary bid data.