CFM CFM - Certified Facility Manager Procurement and Contract Management 1

Question 1

Which procurement method is BEST suited when price is the primary selection criterion and the scope of work is well-defined?

Accepted Answer

Invitation for Bid (IFB)

Answer

An Invitation for Bid (IFB) is used when specifications are clear and award goes to the lowest responsive, responsible bidder.

Question 2

In a facility management contract, an indemnification clause primarily serves to:

Accepted Answer

Protect one party from financial losses caused by the other party's negligence

Answer

An indemnification clause shifts liability so that the indemnifying party covers losses or claims arising from its own actions or negligence.

Question 3

A facility manager uses a Total Cost of Ownership (TCO) analysis during procurement to:

Accepted Answer

Evaluate all costs over the asset's lifecycle, not just purchase price

Answer

TCO captures acquisition, operating, maintenance, and disposal costs to provide a complete financial picture over the asset's life.

Question 4

Which contract type places the MOST financial risk on the facility management service provider?

Accepted Answer

Lump-sum (fixed-price) contract

Answer

A lump-sum contract fixes the price, so the provider absorbs any cost overruns, placing maximum risk on the contractor.

Question 5

A 'hold harmless' agreement in a facilities service contract is most closely related to which concept?

Accepted Answer

Indemnification

Answer

A hold harmless agreement is a form of indemnification where one party agrees not to hold the other liable for certain claims or losses.

CFM - Certified Facility Manager Practice Test