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Procurement & SOW Development Flashcards

7 cards from real PMI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Procurement & SOW Development flashcards as text

  1. A project manager is writing a Statement of Work for a software system. Which section should describe the technical environment, hardware, and software the vendor must support?

    Answer: Environment and place of performance

    The environment and place of performance section defines the technical environment, location, and conditions under which work must be performed.

  2. A buyer issues a Request for Proposal (RFP). What distinguishes an RFP from a Request for Quotation (RFQ)?

    Answer: RFPs invite detailed technical proposals and pricing; RFQs focus primarily on price

    An RFP solicits comprehensive technical and management approaches along with pricing, whereas an RFQ focuses mainly on obtaining competitive price quotes.

  3. During contract negotiation, the seller proposes a higher price citing unforeseen risks. Which negotiation tactic should the buyer use to counter while preserving the relationship?

    Answer: Use an objective criteria approach referencing market benchmarks

    Referencing objective criteria such as market benchmarks supports principled negotiation and keeps discussions fact-based rather than adversarial.

  4. A project has a Fixed-Price Incentive Fee (FPIF) contract with a target cost of $500K, target fee of $50K, ceiling price of $600K, and a 70/30 share ratio. If actual cost is $550K, what is the seller's fee?

    Answer: $15,000

    Overrun of $50K is shared 70% buyer / 30% seller, so seller absorbs $15K, reducing fee from $50K to $35K — wait, seller fee = $50K - (30% × $50K) = $50K - $15K = $35K.

  5. Which document formally authorizes the procurement team to begin the solicitation process and identifies the project need?

    Answer: Procurement statement of work

    The procurement SOW establishes the specific need and authorizes solicitation by clearly defining what is being procured.

  6. A project manager discovers the seller is performing work not covered in the SOW without a formal change order. What is the most appropriate immediate action?

    Answer: Notify the seller to halt the unauthorized work and initiate a formal change request

    Unauthorized work outside the SOW should be stopped and addressed through the formal change control process to protect both parties.

  7. In a SOW for a construction project, the 'deliverables' section should primarily include:

    Answer: Tangible outputs, documents, or results the seller must provide

    The deliverables section lists the specific tangible outputs, products, or results the seller is contractually required to produce and submit.