Project Procurement & Contracts Flashcards

A Time and Material (T&M) contract is best suited for:

Answer: Work where scope is not fully defined and must be flexible to evolve

T&M contracts pay for labor at agreed rates plus actual material costs, making them flexible when exact scope is uncertain.

A project coordinator is administering a vendor contract and notices the vendor is consistently missing deliverable deadlines. The FIRST step should be to:

Answer: Issue a formal notice to the vendor documenting the breach and requesting a corrective action plan

A formal written notice creates a documented record of the breach and gives the vendor an opportunity to correct performance.

Which contract type provides the seller with an incentive fee for meeting or exceeding performance targets?

Answer: Fixed Price Incentive Fee (FPIF)

FPIF contracts reward sellers with additional fees when they meet defined performance or cost targets, aligning incentives.

Procurement audits are conducted to:

Answer: Review the procurement process for successes and failures to capture lessons learned

Procurement audits identify what worked and what didn't in the procurement process so future procurements can be improved.

A change to an existing contract must be handled through:

Answer: A formal contract amendment or change order approved by both parties

Contract changes must be documented in a formal amendment signed by authorized representatives of both parties.

Contract closure differs from project closure in that contract closure:

Answer: Verifies all deliverables were accepted and all payments settled before the project closes

Contract closure verifies contractual obligations are fully met and provides a formal record that the vendor relationship is concluded.