Government Procurement Certification Government Procurement Risk Management & Mitigation 1 — Questions and Answers
Question 1: Which risk assessment technique assigns probability and impact scores to identify the highest-priority procurement risks?
- Risk probability-impact matrix (Correct answer)
- Root cause analysis
- Fishbone diagram
- SWOT analysis
Correct answer: Risk probability-impact matrix
A risk probability-impact matrix plots likelihood against consequence to prioritize which procurement risks require the most attention.
Question 2: Under the FAR, a Contracting Officer's Representative (COR) is primarily responsible for which risk-related duty?
- Monitoring contractor performance to catch early warning signs of risk (Correct answer)
- Approving contract modifications
- Setting contract ceiling prices
- Conducting source selection evaluations
Correct answer: Monitoring contractor performance to catch early warning signs of risk
The COR monitors day-to-day contractor performance so that emerging risks can be identified and escalated before they become serious problems.
Question 3: What is the primary purpose of a government procurement risk register?
- To document identified risks, their likelihood, impact, and mitigation strategies (Correct answer)
- To record all contract award decisions
- To track contractor past-performance ratings
- To store copies of signed contracts
Correct answer: To document identified risks, their likelihood, impact, and mitigation strategies
A risk register is a living document that captures each identified risk along with its probability, potential impact, owner, and planned response.
Question 4: Which mitigation strategy transfers financial risk from the government to the contractor by using a firm-fixed-price contract?
- Risk transfer (Correct answer)
- Risk avoidance
- Risk acceptance
- Risk sharing
Correct answer: Risk transfer
A firm-fixed-price contract shifts cost risk to the contractor because the government pays an agreed price regardless of the contractor's actual costs.
Question 5: Which contract type is best suited when the government wants to share cost risk with a contractor on a high-uncertainty development effort?
- Cost-plus-incentive-fee (Correct answer)
- Firm-fixed-price
- Fixed-price with economic price adjustment
- Indefinite-delivery indefinite-quantity
Correct answer: Cost-plus-incentive-fee
A cost-plus-incentive-fee contract reimburses actual costs and ties the fee to performance, sharing risk between the government and contractor on uncertain efforts.
Question 6: When a procurement risk is deemed too severe to accept or mitigate cost-effectively, the preferred risk response is to:
- Avoid the risk by changing the acquisition approach (Correct answer)
- Accept the risk with no action
- Transfer the risk to a subcontractor
- Ignore the risk and proceed
Correct answer: Avoid the risk by changing the acquisition approach
Risk avoidance means restructuring or canceling the procurement element so that the risk situation no longer exists.
Government Procurement Certification Government Procurement Risk Management & Mitigation 1
Which risk assessment technique assigns probability and impact scores to identify the highest-priority procurement risks?