Procurement Management Flashcards
7 cards from real CAPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Procurement Management flashcards as text
Which document formally authorizes a seller to begin work on a project?
Answer: Contract
A contract is the legally binding document that authorizes the seller to begin performing work for the buyer.
In a Fixed-Price-Incentive-Fee (FPIF) contract, the fee is adjusted based on what factor?
Answer: The relationship between final costs and target costs
In FPIF contracts, the incentive fee is adjusted by comparing final negotiated costs to the target cost using a predetermined share ratio.
What is the purpose of a procurement audit?
Answer: To review the procurement process for lessons learned
A procurement audit is a structured review of the procurement process to identify successes and failures for use in future projects.
Which of the following is an example of a Time and Material (T&M) contract?
Answer: The seller is paid $75/hour plus materials at cost
T&M contracts combine a fixed rate per unit of time with reimbursement for actual material costs, making them hybrids of fixed-price and cost-reimbursable contracts.
A project manager receives competing bids from multiple vendors. What process does evaluating these bids belong to?
Answer: Conduct Procurements
Conduct Procurements is the process where seller responses are received, sellers are selected, and contracts are awarded.
What is a 'make-or-buy' analysis used to determine in procurement management?
Answer: Whether to produce something internally or purchase it externally
A make-or-buy analysis evaluates whether it is more cost-effective and strategic to produce goods/services internally or procure them from external vendors.
Which procurement document is most appropriate when the buyer wants maximum flexibility in how the seller solves a problem?
Answer: Request for Proposal (RFP)
An RFP solicits proposals that include the seller's approach, methodology, and solution, giving sellers flexibility in how they address the buyer's needs.