CMO Procurement & Contract Administration 3 — Questions and Answers
Question 1: A Qualified Products List (QPL) is PRIMARILY used to:
- Rank vendors by past performance scores
- Pre-approve products that have met testing requirements before solicitation (Correct answer)
- List vendors who are debarred from public contracts
- Identify emergency sole-source suppliers
Correct answer: Pre-approve products that have met testing requirements before solicitation
A QPL identifies products pre-tested and approved as meeting specifications, streamlining procurement by eliminating per-purchase testing.
Question 2: Which document establishes the legal authority, duties, and limitations of a procurement officer in a municipality?
- The contract's scope of work
- The purchasing ordinance or procurement code (Correct answer)
- The vendor registration form
- The budget appropriation resolution
Correct answer: The purchasing ordinance or procurement code
A municipal purchasing ordinance or procurement code defines the procurement officer's legal authority, thresholds, and responsibilities.
Question 3: When a contract requires the contractor to obtain a performance bond, the bond PRIMARILY protects the municipality against:
- Workplace injuries on the job site
- The contractor's failure to complete the work as specified (Correct answer)
- Subcontractor payment disputes
- Material price escalation
Correct answer: The contractor's failure to complete the work as specified
A performance bond guarantees that a surety will complete the project or compensate the owner if the contractor defaults on performance obligations.
Question 4: The term 'piggybacking' in public procurement refers to:
- Adding unauthorized items to an existing purchase order
- Using another government entity's competitively awarded contract (Correct answer)
- Splitting purchases to avoid bid thresholds
- Awarding multiple contracts for the same service
Correct answer: Using another government entity's competitively awarded contract
Piggybacking allows a municipality to purchase under another public agency's competitively solicited contract, satisfying competition requirements without conducting its own bid.
Question 5: A 'materially unbalanced bid' is MOST problematic because it:
- Contains math errors in unit prices
- Front-loads high prices on early items to accelerate cash flow at the owner's expense (Correct answer)
- Omits required alternates from the pricing schedule
- Uses prices below the engineer's estimate
Correct answer: Front-loads high prices on early items to accelerate cash flow at the owner's expense
A materially unbalanced bid artificially inflates early-work unit prices and deflates later items, imposing excess costs on the municipality regardless of final quantities.
Question 6: Which of the following BEST describes 'reverse auction' procurement?
- The municipality sells surplus assets to the highest bidder
- Vendors compete by lowering their prices in real time until the lowest price wins (Correct answer)
- Contracts are awarded based on reverse seniority of submission time
- The municipality negotiates price reductions after a low bid is received
Correct answer: Vendors compete by lowering their prices in real time until the lowest price wins
In a reverse auction, sellers compete by reducing their prices in real time, driving the purchase price down; it is the opposite of a traditional auction.
Question 7: A municipality wishes to award a multi-year service contract. The MAIN budget risk it must address is:
- Vendor turnover during the contract period
- The lack of annual appropriation authority beyond the current fiscal year (Correct answer)
- The absence of a performance bond requirement
- The inability to issue change orders after year one
Correct answer: The lack of annual appropriation authority beyond the current fiscal year
Most municipal governments cannot legally obligate funds beyond the current fiscal year without specific legislative authority, making multi-year contracts contingent on future appropriations.
CMO Procurement & Contract Administration 3
A Qualified Products List (QPL) is PRIMARILY used to: