PMP Procurement Management 5 — Questions and Answers
Question 1: A project manager receives a change request from the seller claiming scope was unclear in the original SOW. What is the FIRST step?
- Approve the change and issue a contract modification
- Deny the claim since the contract has already been signed
- Review the original SOW and contract to assess if the claim is valid (Correct answer)
- Escalate to senior management for a decision
Correct answer: Review the original SOW and contract to assess if the claim is valid
Reviewing the original SOW and contract terms is the first step to determine whether the claimed ambiguity actually exists before taking any action.
Question 2: Which of the following is an example of a NON-competitive procurement method?
- Invitation for Bid issued to a pre-qualified list
- Request for Proposal distributed to multiple vendors
- Sole source procurement from a single vendor (Correct answer)
- Two-stage sealed bidding process
Correct answer: Sole source procurement from a single vendor
Sole source procurement bypasses competition by directly selecting a single vendor, typically justified by unique expertise, urgency, or proprietary requirements.
Question 3: What does 'privity of contract' mean in project procurement?
- The confidentiality clause protecting trade secrets in the contract
- The direct legal relationship between the contracting parties, excluding third parties (Correct answer)
- The buyer's right to audit the seller's financial records
- The seller's obligation to maintain project confidentiality
Correct answer: The direct legal relationship between the contracting parties, excluding third parties
Privity of contract means only the parties directly named in the contract have legal rights and obligations under it, which is why PMs manage vendor-to-vendor interfaces.
Question 4: A contract includes a clause that allows either party to terminate the agreement with 30 days written notice. This is BEST described as:
- A force majeure clause
- A termination for convenience clause (Correct answer)
- An indemnification clause
- A liquidated damages clause
Correct answer: A termination for convenience clause
Termination for convenience allows either party to end the contract without cause by providing the required notice period.
Question 5: A project manager is using a weighting system to evaluate proposals. Vendor A scores 85 on technical merit and 70 on price; Vendor B scores 70 on technical merit and 90 on price. Technical merit is weighted 60% and price 40%. Which vendor scores higher overall?
- Vendor A with a score of 79 (Correct answer)
- Vendor B with a score of 78
- Vendor A with a score of 77
- Both vendors score equally
Correct answer: Vendor A with a score of 79
Vendor A: (85×0.6)+(70×0.4)=51+28=79; Vendor B: (70×0.6)+(90×0.4)=42+36=78; Vendor A scores higher at 79.
Question 6: Which document formally records that the buyer has accepted the seller's deliverable and signals that the contract work is complete?
- Contract Change Order
- Procurement Audit Report
- Formal Acceptance Document (Correct answer)
- Final Invoice Approval
Correct answer: Formal Acceptance Document
A Formal Acceptance Document (or letter of acceptance) is the buyer's written confirmation that deliverables meet requirements and formally initiates the contract closure process.
Question 7: When should a project manager consider using a Cost Plus Award Fee (CPAF) contract?
- When the scope is well-defined and performance criteria are easily measurable
- When work quality is subjective and the buyer wants to incentivize exceptional performance beyond minimum requirements (Correct answer)
- When the buyer wants to transfer maximum risk to the seller
- When the project timeline is short and deliverables are standardized
Correct answer: When work quality is subjective and the buyer wants to incentivize exceptional performance beyond minimum requirements
CPAF is ideal when performance quality is somewhat subjective, allowing the buyer to award a fee based on their satisfaction with the seller's performance above baseline.
PMP Procurement Management 5
A project manager receives a change request from the seller claiming scope was unclear in the original SOW.
What is the FIRST step?