CAPM Procurement & Contract Management 5

Question 1

Which PMBOK process involves obtaining seller responses, selecting a seller, and awarding a contract?

Accepted Answer

Conduct Procurements

Answer

Conduct Procurements is the process of receiving seller bids, applying selection criteria, negotiating, and awarding the contract.

Question 2

What does 'Point of Total Assumption' (PTA) refer to in procurement?

Accepted Answer

The cost point in an FPIF contract above which the seller bears all cost overruns

Answer

The PTA in a Fixed Price Incentive Fee contract is the cost ceiling beyond which the seller assumes 100% of additional costs with no further fee.

Question 3

A Statement of Work (SOW) should be written in enough detail to allow sellers to:

Accepted Answer

Provide accurate pricing and understand what is required

Answer

A well-written SOW gives sellers sufficient clarity about deliverables, standards, and requirements to submit accurate and complete proposals.

Question 4

During contract negotiations, what is the purpose of establishing a 'Best Alternative to a Negotiated Agreement' (BATNA)?

Accepted Answer

To clarify your walk-away position if negotiations fail

Answer

BATNA defines the best outcome you can achieve if negotiations break down, strengthening your negotiating position and clarifying when to walk away.

Question 5

What is a 'Warranty' in the context of a procurement contract?

Accepted Answer

A seller's guarantee of performance for a specified period after delivery

Answer

A warranty is a contractual commitment by the seller to repair or replace defective goods or services within a defined period after acceptance.

CAPM Practice Test