CAPM Procurement & Contract Management 2 — Questions and Answers
Question 1: Which document formally authorizes a vendor to begin work on a procurement?
- Request for Proposal
- Purchase Order (Correct answer)
- Statement of Work
- Bid Document
Correct answer: Purchase Order
A Purchase Order (PO) is the formal document that authorizes a seller to provide goods or services at a specified price.
Question 2: A project manager wants the seller to bear most of the cost risk. Which contract type is most appropriate?
- Cost Plus Fixed Fee
- Time and Material
- Firm Fixed Price (Correct answer)
- Cost Plus Incentive Fee
Correct answer: Firm Fixed Price
A Firm Fixed Price (FFP) contract places maximum cost risk on the seller because the price does not change regardless of actual costs.
Question 3: What is the primary purpose of a Source Selection Criteria in procurement?
- To define the scope of work for sellers
- To evaluate and rank seller proposals objectively (Correct answer)
- To specify payment terms for the contract
- To identify potential procurement risks
Correct answer: To evaluate and rank seller proposals objectively
Source Selection Criteria provide a structured basis for rating and scoring seller proposals to select the best vendor.
Question 4: During contract execution, the seller requests a change to the delivery schedule. What should the project manager do first?
- Approve the change immediately to maintain the relationship
- Evaluate the impact through the integrated change control process (Correct answer)
- Reject the request to enforce contract terms
- Escalate the request to senior management
Correct answer: Evaluate the impact through the integrated change control process
All contract changes must be processed through integrated change control to assess impact on scope, schedule, cost, and risk before approval.
Question 5: What is a 'Teaming Agreement' in project procurement?
- An internal agreement between project team members
- An agreement between two sellers to jointly bid on a contract (Correct answer)
- A contract that covers multiple projects over time
- A document listing approved vendor qualifications
Correct answer: An agreement between two sellers to jointly bid on a contract
A Teaming Agreement is a legal arrangement where two or more sellers partner to respond to a procurement opportunity together.
Question 6: Which procurement document is used when the buyer needs detailed technical and management information from sellers?
- Request for Quote (RFQ)
- Request for Information (RFI)
- Request for Proposal (RFP) (Correct answer)
- Invitation for Bid (IFB)
Correct answer: Request for Proposal (RFP)
An RFP requests detailed proposals including technical approach, management plan, and pricing from prospective sellers.
Question 7: A contract includes a clause allowing the buyer to end the contract for any reason with 30 days' notice. This is known as termination for:
- Default
- Convenience (Correct answer)
- Cause
- Breach
Correct answer: Convenience
Termination for Convenience allows the buyer to end a contract without the seller being at fault, typically with notice and partial payment.
CAPM Procurement & Contract Management 2
Which document formally authorizes a vendor to begin work on a procurement?