Project Risk Management Contract & Procurement Risk 2

Question 1

Which elements are typically included in a procurement risk register?

Accepted Answer

Vendor performance history, contract terms risks, and supply chain vulnerabilities

Answer

A procurement risk register tracks risks specific to vendor relationships, including performance history, contractual obligations, and supply chain vulnerabilities.

Question 2

What is the purpose of source selection criteria in project procurement?

Accepted Answer

To evaluate and rank vendor proposals objectively and consistently

Answer

Source selection criteria provide objective standards for evaluating vendor proposals, reducing the risk of biased or poor vendor selection decisions.

Question 3

A project manager learns a key vendor is experiencing significant financial difficulties. Which risk response is most appropriate?

Accepted Answer

Develop a contingency plan including an alternative qualified vendor

Answer

Developing a contingency plan with an alternative vendor is a proactive response that ensures project continuity if the primary vendor becomes unable to deliver.

Question 4

What does 'contract risk allocation' mean in project procurement management?

Accepted Answer

Assigning financial and performance responsibilities between the buyer and seller

Answer

Contract risk allocation defines which party bears specific risks, ensuring risks are assigned to the party best positioned to manage and absorb them.

Question 5

Which procurement strategy best reduces the risk of schedule delays caused by vendor non-performance?

Accepted Answer

Including liquidated damages clauses tied to milestone dates

Answer

Liquidated damages clauses impose pre-defined financial penalties for schedule delays, creating a strong financial incentive for vendors to deliver on time.

Project Risk Management Practice Test

Project Risk Management Practice Test

Project Risk Management Contract & Procurement Risk 2