CPP Contracting & Negotiation Techniques 2

Question 1

A buyer needs a supplier to start work immediately, but the scope and final cost cannot yet be defined. Which contract type best fits this situation?

Accepted Answer

Time-and-materials contract

Answer

Time-and-materials contracts let work begin when scope and duration are uncertain, though they need close monitoring and a ceiling price.

Question 2

Under a cost-plus-percentage-of-cost arrangement, what is the main risk to the buyer?

Accepted Answer

The seller's profit rises as costs rise, which removes any reason to control costs

Answer

Because the fee grows with costs, the seller has no incentive to control spending, so U.S. federal procurement prohibits this contract type.

Question 3

A buyer wants to buy all of a plant's needs for a commodity from one supplier for a year, but the exact quantities are unknown. Which contract fits best?

Accepted Answer

Requirements contract

Answer

A requirements contract obligates the buyer to purchase all of its actual needs from the supplier during the term, without fixing quantities in advance.

Question 4

Which element is NOT required to form a legally enforceable contract?

Accepted Answer

A notarized signature

Answer

Valid contracts require offer, acceptance, consideration, capacity and a lawful purpose, but notarization is generally not required.

Question 5

Under UCC Article 2, a contract for the sale of goods priced at $500 or more generally must be:

Accepted Answer

In writing and signed by the party against whom enforcement is sought

Answer

The UCC statute of frauds (§2-201) requires a signed writing for sales of goods of $500 or more, with some exceptions.

CPP - Certified Procurement Professional Practice Test

CPP - Certified Procurement Professional Practice Test

CPP Contracting & Negotiation Techniques 2