CPPB Risk Management in Procurement

Question 1

What is the first step in a formal procurement risk management process?

Accepted Answer

Identifying potential risks that could affect procurement outcomes

Answer

Purchasing insurance for the agency

Answer

Issuing a solicitation with risk-transfer clauses

Answer

Contacting the agency's legal counsel

Question 2

In public procurement, which bond guarantees that a contractor will complete a project according to contract terms?

Accepted Answer

Performance bond

Answer

Bid bond

Answer

Payment bond

Answer

Fidelity bond

Question 3

Which risk response strategy involves shifting the financial impact of a risk to a third party?

Accepted Answer

Transfer

Answer

Avoidance

Answer

Acceptance

Answer

Mitigation

Question 4

A public agency requires a 5% bid bond from all construction bidders. What is the primary purpose of this requirement?

Accepted Answer

To discourage low-quality bids and ensure the winning bidder will execute the contract

Answer

To fund project contingencies if costs overrun

Answer

To pay subcontractors if the prime contractor defaults

Answer

To satisfy prevailing wage requirements under Davis-Bacon

Question 5

Which of the following is an example of a 'supply chain risk' in public procurement?

Accepted Answer

A geopolitical event disrupting the delivery of critical components

Answer

A vendor submitting a non-responsive bid

Answer

A procurement officer violating the code of ethics

Answer

An agency exceeding its annual procurement budget

Question 6

What does a risk register document in a procurement risk management plan?

Accepted Answer

Identified risks, their likelihood, impact, owner, and planned response actions

Answer

The list of all approved suppliers for a commodity

Answer

The audit history of all past procurements

Answer

Financial reserves set aside for emergency purchases