CCC Contract Management & Procurement 1

Question 1

Which contract type places the greatest financial risk on the contractor?

Accepted Answer

Firm Fixed Price (FFP)

Answer

In a Firm Fixed Price contract, the contractor bears all cost risk because the price is set regardless of actual costs incurred.

Question 2

A cost controller notices a vendor's invoice includes charges outside the agreed contract scope. This is best addressed through which process?

Accepted Answer

Contract change order review

Answer

Out-of-scope charges require a formal change order review to determine if the scope change was authorized and properly priced.

Question 3

What is the primary purpose of a procurement audit in cost control?

Accepted Answer

To verify that procurement processes were followed and costs are legitimate

Answer

A procurement audit verifies compliance with procurement procedures and confirms that expenditures are justified and properly authorized.

Question 4

Which procurement method is most appropriate when the project scope is not fully defined?

Accepted Answer

Request for Proposal (RFP)

Answer

An RFP is used when scope is uncertain, allowing vendors to propose both technical solutions and pricing, giving flexibility to negotiate.

Question 5

In contract cost management, 'should-cost' analysis is used to:

Accepted Answer

Estimate what a product or service reasonably ought to cost based on labor, materials, and overhead

Answer

Should-cost analysis independently estimates what a product should cost using cost engineering principles, helping buyers negotiate fair prices.

CCC Practice Test