PMI Procurement & SOW Development 2 — Questions and Answers
Question 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?
- Scope of work
- Applicable standards
- Performance requirements
- Environment and place of performance (Correct answer)
Correct 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.
Question 2: A buyer issues a Request for Proposal (RFP). What distinguishes an RFP from a Request for Quotation (RFQ)?
- RFPs are only used for services, RFQs only for goods
- RFPs invite detailed technical proposals and pricing; RFQs focus primarily on price (Correct answer)
- RFPs require sealed bids; RFQs do not
- RFQs include a SOW; RFPs do not
Correct 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.
Question 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?
- Walk away immediately
- Use an objective criteria approach referencing market benchmarks (Correct answer)
- Accept the price to avoid conflict
- Threaten to cancel the procurement
Correct 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.
Question 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?
- $50,000
- $15,000 (Correct answer)
- $35,000
- $20,000
Correct 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.
Question 5: Which document formally authorizes the procurement team to begin the solicitation process and identifies the project need?
- Procurement management plan
- Make-or-buy decision log
- Procurement statement of work (Correct answer)
- Bid documents package
Correct answer: Procurement statement of work
The procurement SOW establishes the specific need and authorizes solicitation by clearly defining what is being procured.
Question 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?
- Allow the work to continue since it benefits the project
- Issue a stop-work order on all activities
- Notify the seller to halt the unauthorized work and initiate a formal change request (Correct answer)
- Terminate the contract for breach
Correct 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.
Question 7: In a SOW for a construction project, the 'deliverables' section should primarily include:
- Payment milestones and invoice schedules
- Tangible outputs, documents, or results the seller must provide (Correct answer)
- Names of subcontractors
- Risk mitigation strategies
Correct 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.
PMI Procurement & SOW Development 2
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?