CAPM Project Procurement Management 2

Question 1

In a Cost Plus Incentive Fee (CPIF) contract, what happens if the seller beats the target cost?

Accepted Answer

The seller and buyer share the savings according to a pre-agreed formula

Answer

In a CPIF contract, cost savings below the target are shared between buyer and seller according to a pre-set sharing ratio, incentivizing the seller to control costs.

Question 2

Which tool or technique used in Conduct Procurements allows buyers to gather early information from the market before issuing formal procurement documents?

Accepted Answer

Market Research

Answer

Market research involves collecting information about industry capabilities, pricing trends, and potential sellers before issuing formal solicitation documents.

Question 3

What is the purpose of a Bidder Conference in procurement?

Accepted Answer

To ensure all prospective sellers have a clear and equal understanding of the procurement requirements

Answer

Bidder conferences (also called contractor conferences) ensure all prospective sellers receive the same information and have equal opportunity to clarify requirements.

Question 4

Which contract type is most appropriate for projects where the scope is well-defined and risks of cost overruns are low?

Accepted Answer

Firm Fixed Price (FFP)

Answer

FFP contracts work best when scope is well-defined and stable, allowing both parties to agree on a set price with minimal uncertainty.

Question 5

What is a Teaming Agreement in the context of project procurement?

Accepted Answer

A legal agreement between two potential sellers to combine capabilities to bid on a contract

Answer

Teaming Agreements are legal agreements that allow two companies to combine their capabilities and bid together on a procurement opportunity.

CAPM - Certified Associate in Project Engineering Practice Test

CAPM - Certified Associate in Project Engineering Practice Test

CAPM Project Procurement Management 2