CAPM Project Procurement Management 1 — Questions and Answers
Question 1: Which document formally authorizes a project and identifies the project manager?
- Project Management Plan
- Project Charter (Correct answer)
- Statement of Work
- Procurement Statement of Work
Correct answer: Project Charter
The Project Charter formally authorizes the project and grants the project manager authority to apply resources.
Question 2: What is the primary purpose of a Procurement Statement of Work (SOW)?
- To authorize payment to a vendor
- To describe the work to be done and deliverables expected from a seller (Correct answer)
- To formally close a contract
- To identify project stakeholders
Correct answer: To describe the work to be done and deliverables expected from a seller
A Procurement SOW defines the portion of project scope to be delivered by a seller, providing enough detail for prospective sellers to determine if they can provide it.
Question 3: Which contract type places the most financial risk on the buyer?
- Fixed-Price (FP)
- Time and Material (T&M)
- Cost Plus Fixed Fee (CPFF)
- Cost Plus Percentage of Cost (CPPC) (Correct answer)
Correct answer: Cost Plus Percentage of Cost (CPPC)
In a Cost Plus Percentage of Cost contract, the seller's profit increases as costs increase, giving the seller no incentive to control costs and placing maximum risk on the buyer.
Question 4: What is a Firm Fixed Price (FFP) contract?
- A contract where the buyer reimburses all costs plus a fixed fee
- A contract where the seller is paid a set price regardless of costs incurred (Correct answer)
- A contract where payment is based on time spent and materials used
- A contract that allows price adjustments based on market indices
Correct answer: A contract where the seller is paid a set price regardless of costs incurred
An FFP contract sets a fixed price that does not change regardless of the seller's actual costs, placing cost risk on the seller.
Question 5: Which process involves obtaining seller responses, selecting a seller, and awarding a contract?
- Plan Procurement Management
- Conduct Procurements (Correct answer)
- Control Procurements
- Close Procurements
Correct answer: Conduct Procurements
Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract.
Question 6: What document does a buyer send to potential sellers when the work can be quantified precisely and sellers compete primarily on price?
- Request for Proposal (RFP)
- Request for Information (RFI)
- Request for Quotation (RFQ) (Correct answer)
- Invitation for Bid (IFB)
Correct answer: Request for Quotation (RFQ)
A Request for Quotation (RFQ) is used when price is the primary selection factor and the work is well-defined and quantifiable.
Question 7: What is the primary output of the Plan Procurement Management process?
- Selected Sellers
- Signed Contracts
- Procurement Management Plan (Correct answer)
- Closed Procurements
Correct answer: Procurement Management Plan
The Procurement Management Plan is the primary output of Plan Procurement Management, documenting how procurement will be conducted throughout the project.
CAPM Project Procurement Management 1
Which document formally authorizes a project and identifies the project manager?