Term
| What is the process of procurement manaement? |
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Definition
Plan Procurement management
Conduct procurements
Control procurements
Close procurements |
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Term
| What are the inputs to the plan procurement management process? |
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Definition
Project management plan
Requirements documentations
Activity resource requirements
Enterprise environmental factors
organizational process assets
risk register
stakeholder
any procurements already in place
project schedule
initial cost estimate for work to be procured |
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Term
| What are the key are outputs of the plan procurement management process? |
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Definition
Make or buy decisions
Procurement management plan
Procurement statements of work
Procurement documents
Source selection criteria
Change requests |
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Term
| What are the key outputs of the conduct procurements process? |
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Definition
Selected sellers
Signed contracts
Resource calends
Change request
Updates to project management
plan and project documents |
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Term
| What are the key outputs of the control procurements process? |
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Definition
Substantial completion of contract
requirements and deliverable
Work performance information
Change request
Updates to project management
plan and project documents |
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Term
| What are the key outputs of close procurements process? |
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Definition
Formal acceptance
Closed procurements
Updates to lessons learned and records (parts of organizational process assets) |
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Term
What is an agreement?
What is a contract? |
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Definition
Agreement: A document or communication that outlines
internal or external relationships and their intentions
Contract: A type of written or verbal agreement, typically
crated with an external, where there is some exchange of
good or services for some type of compensation
(usually monetary); a contract forms the legal
relationship between the entities |
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Term
| What is the difference between centralized and decentralized contracting? |
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Definition
Centralized: there is one procurement department, and the procurement manager handles procurements for many projects
Decentralized: a procurement manager is assigned to one project full time and reports directly to the project manager |
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Term
| What are the advantages and disadvantages of centralized contracting? |
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Definition
Advantages:
Higher levels of procurements expertise
Standard practices provide efficiency
Clear career path in procurement management
Continuous improvement, training, and shared lessons learned
Disadvantages:
Procurement manager’s attention is divided among many projects
More difficult for the project manager to obtain contacting help when needed |
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Term
| What are the advantages and disadvantages of decentralized contracting? |
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Definition
Advantages:
Project manager has easier access to contracting expertise
Procurement manager has more loyalty to the project
Procurement manager has a better understanding
of the project needs
Disadvantages:
No home department for the contract person after the
project difficult to maintain a high level of contracting expertise
Duplication of expertise/ inefficiency’s use of procurement
resources
Contracting process aren’t standardized
No career path as a procurement manager in the company |
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Term
| What is required for legal contract? |
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Definition
Offer
Acceptance
Consideration
Legal capacity
Legal purpose |
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Term
| What is included in a contact? |
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Definition
Legal terms
Business terms regarding payments
Reporting requirements
Marketing literature
Proposal
Procurement statement of work |
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Term
| Describe the project manager’s role in procurement. |
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Definition
Understand the procurement process
Make sure the contract contains all the scope of work and
project management requirements
Incorporate mitigation and allocations of risk into the contract
Help tailor contract to the project
Be involved during contract negotiations to protect the relationship
with the seller
Make sure all the work in the contract is done, not just the technical scope
Work with the procurement manager to mage to the contract |
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Term
| What is a procurement management plan? |
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Definition
| A plan that documents how procurements will be planned, executed, controlled, and closed |
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Term
| What is make or buy analysis? |
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Definition
| Deciding whether the performing organization should do the project work itself or outsource some or all the work |
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Term
| What are the three broad categories of contracts? |
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Definition
Cost reimbursable (CR)
Fixed price (FP)
Time and material (T&M) |
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Term
| What is a cost reimbursable contract? |
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Definition
| All the seller’s costs are reimbursed by the buyer |
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Term
| What is a fixed price contract? |
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Definition
| There is one set fee for accomplishing all the work |
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Term
| What is a time and material contract? |
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Definition
| The buyer pays on a per hour or per item basis |
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Term
| What is cost plus fixed fee (CPFF) contract? |
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Definition
| All the sellers cost are reimbursed by the buyer, and fixed fee is negotiated for the seller’s profit |
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Term
What is a cost plus percentage of
cost (CPPC) contract? |
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Definition
| All the sellers cost are reimbursed by the buyer, and the buyer also pays a specified percentage of those costs as a fee or profit |
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Term
What is cost plus incentive fee
(CPIF) contract? |
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Definition
| The sellers costs are reimbursed by the buyer, and the buyer and seller share any cost saving or overruns |
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Term
| What is a cost plus award fee (CPAF) contract? |
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Definition
| All the sellers cost are reimbursed by the buyer, and the buyer pays a base fee plus an award amount (a bonus) based on performance |
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Term
| What is fixed price incentive fee (FPIF) contract? |
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Definition
The buyer pays a fixed price plus an additional fee if the seller exceeds
performance criteria stated in the contract |
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Term
| What is a fixed price award fee (FPAF) contract? |
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Definition
The buyer pays a fixed price plus an award (paid in full or in part) based
on the sellers performance level |
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Term
| What is a fixed price economic price adjustment (FPEPA) contract? |
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Definition
| A fixed price contract with a built in economic price adjustment to cover cost increase due to future economic conditions |
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Term
| What is a purchase order? |
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Definition
A unilateral contract typically used for buying commodities
Purchase order became contracts once they are “accepted” by the sellers fulfillment of the contract |
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Term
What do incentives accomplish?
What might incentives be use for? |
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Definition
They align the sellers motivations with the buyers objectives
Time
Cost
Quality
Scope |
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Term
Who has the cost risk in cost reimbursement contract?
Who has the cost risk in fixed price contract? |
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Definition
Cost-reimbursable: the risk is borne by the buyer
Fixed price: the risk is borne by the seller |
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Term
| What is the ceiling price? |
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Definition
The highest price the buyer will pay
It’s a condition of the contract that must be agreed to by both parties before signing |
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Term
| What is the point of total assumption? |
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Definition
| For fixed price incentives fee contacts, the amount above which the seller bears all the loss of cost over run |
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Term
| Describe the 3 different types of procurement statements of work. |
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Definition
Performance: conveys what the final product should accomplished
Functional: conveys the end purpose or result (the minimums essential characters of the product)
Design: Conveys exactly what works is to be done and how it should be completed |
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Term
| What are the procurement documents? |
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Definition
Request for proposal (RFP)
Invitation for bid (IFB)
Request for quotation (FRQ)
A request for information (RFI) is sometimes considered a procurement documentation, though it does not really belong in this category |
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Term
| What is a nondisclosure agreement? |
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Definition
| An agreement between the buyer and prospective sellers identifying the information or documents they will hold confidential and control, and who in the organization will have access to the confidential information |
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Term
What are standards contract terms and conditions?
What are special provisions? |
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Definition
Standard contract terms and conditions: Terms and conditions that are used for all contracts with the company
Special provisions: Terms and conditions created for the unique needs of the project |
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Term
| Name common terms and conditions that may be in a contract |
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Definition
| Please review the long list of items and conditions and what they mean in the procurement management chapter of the CAPM Exam prep or PMP exam prep |
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Term
| What is a letter of intent? |
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Definition
| A letter from the buyer, without legal binding, saying the buyer intends to hire the seller |
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Term
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Definition
| A contractual relationship between two or more companies |
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Term
| What does noncompetitive procurement mean? |
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Definition
| The work is awarded to single source or sole source without competition |
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Term
What are source selection criteria?
When are these criteria created, and when are they used? |
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Definition
The factors the buyer will use to evaluate (wright or score) responses form the sellers
They are created during the Plan procurement Management process, and are used during the Conduct Procurement process to pick a seller |
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Term
What is a bidder conference?
What should a project manager watch out for during a bidder conference? |
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Definition
A meeting with prospected sellers to make sure they all understand the procurement and have a chance to ask questions
Watch for:
Collusion
Sellers not making questions in front of the competition
Make sure all the questions and answers are documented and stributed to all the potential sellers |
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Term
| What is a qualified seller list? |
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Definition
| A list of sellers that have ben preapproved |
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Term
| What are the objectives of negotiations? |
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Definition
Obtain a fair reasonable price
Develop a good relationship with the seller |
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Term
| What are some examples of negotiation tactics? |
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Definition
Attacks
Personal insults
Good guy/Bad guy
Deadline
Lying
Limited authority
Missing man
Fair and responsible
Delay
Extreme demands
Withdrawal
Fait accompli |
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Term
| Why might there be conflict between the contract administrator and the project manager? |
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Definition
| The contract administrator is the only one with the power to change the contract |
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Term
| What is a contract change control system? |
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Definition
| A system created to control changes to the contract |
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Term
| What is the purpose of a procurement performance review? |
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Definition
Verify that the seller is performing as they should
Identify what the buyer can do to help the seller do the work
Determine if any changes are needed to improve the byer seller relationship and the process they are using |
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Term
| Define claims administration |
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Definition
| Managing claims (request by the seller for compensations from the buyer) |
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Term
| What is the key function of a records management system? |
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Definition
Marinating an index of contract documentation and records so that
they can be retrieved if necessary |
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Term
| What occurs during the close procurements process? |
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Definition
Product validation
Procurement negotiation
Financial closure
Procurement audit
Updates to records
Final contract performance reporting
Documentation of lessons learned
Creation of procurement file |
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Term
| What is a procurement audit? |
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Definition
| A structured review of the procurement process and identification of lessons learned to help future procurements |
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