Posted: November 25th, 2014

Multiplechoice & Short Essay Questions – Project Procurement Managment

Multiplechoice & Short Essay Questions – Project Procurement Managment

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Multiple Choice Questions

1. Project Manager Mary Ann is not a member of PMI but has applied for PMI certification. She has a meeting with Seller A and gets into an argument with Seller A. Mary Ann loses her cool and yells at Seller A and tells them to “get out of her office.” Which of the following is a true statement about Mary Ann’s conduct?
A. It is a violation of PMI’s Code of Ethics and Professional Conduct.
B. Since Mary Ann is not a member of PMI, she is not subject to the Code of Ethics and
Professional Conduct.
C. While not a per se violation of PMI’s Code of Ethics and Professional Conduct, Mary Ann
should aspire to a better standard of conduct.
D. It is not a violation of the Institute for Supply Management’s Principles and Standards of
Ethical Supply Management Conduct.

2. Project Manager Bob’s old college roommate owns a company, Services R Us, which sells the services that Bob needs for his project. He decides to include Services R Us as a prospective seller for the project’s procurement requirements. In reality Bob is just doing this as a favor to his old roommate, and has no intention of awarding the business to Services R Us nor does he have financial interest in Services R Us. Is Bob’s decision in violation of PMI’s Code of Ethics and Professional Conduct?
A. No, because Bob has no financial interest in the old roommate’s company Bob’s decision
is therefore not an actual conflict of interest under PMI’s Code of Ethics and Professional Conduct.
B. Yes, while there may not be an actual conflict of interest, PMI’s Code of Ethics and
Professional Conduct consider an appearance of a conflict of interest as a violation.
C. No, because Bob does not intend on awarding the business to his old roommate’s
company.
D. Yes, because despite Bob’s intentions to the contrary, he probably will select Services R
Us as the winning seller.

3. Project Manager John Boy has a policy of only using experienced, dependable, and proven sellers versus selecting sellers through open competition as a means to manage procurement risk. What risk management technique is John Boy using here?
A. Risk Acceptance.
B. Risk Mitigation.
C. Risk Transfer
D. Risk Avoidance.

4. Project Procurement Management ________ (select ONE).
A. Describes the processes required to procure products, services, or results from outside
the performing organization.
B. Involves processes to ensure that the project procures products, services, or results at
the lowest possible cost.
C. Includes the processes to procure products, services, or results, but does not include the
ongoing performance management of the selected seller(s).
D. Is not used by the seller of the product, service, or results under a contract.

5. Project Manager Billie Ray is coordinating a conference to allow sellers to obtain clarification on the services that need to be performed. Under what process of Project Procurement Management would this occur?
A. Confidential Clarification Sessions.
B. Plan Procurement Management
C. Plan Purchases and Acquisitions.
D. Conduct Procurements

6. Which document would Alex, a computer programmer, sign in order to protect his Intellectual Property rights prior to starting a consulting project?
A A contract to not engage in unfair business practices
B No agreement needed
C A nondisclosure agreement
D A right to work agreement
E None of the above.

7. In PMBOK terms, when sellers are requested to provide responses, the specific means by which the buyer requests the responses is contained as part of the _____.
A. Request for Proposal.
B. Solicitation.
C. Procurement Document Package.
D. Request Seller Responses.

8. Which of the following is included as a part of a procurement management plan?
A. Make-or-buy decision.
B. List of pre-qualified selected sellers.
C. Contract statement of work.
D. All of the above.

9. Project Manager Daisy Duke works at a Fortune 100 company and acknowledges that there are some “unknowns” in her procurement statement of work and specifications. Which contract type should Daisy Duke not use?
A. Time and Materials.
B. Cost-Plus-Percentage of Cost.
C. Fixed-Price
D. Cost-Reimbursable.

10. Which of the following would not normally be a contract boilerplate item?
A. Warranty
B. Insurance clause
C. Governing law clause
D. Price adjustment for currency fluctuations
E. Tax clause

11. Project Managers need to have an understanding of Project Procurement Management because the ________.
A. Project Manager procures the products, services, or results required by the project.
B. Project Manager must ensure that products, services, or results are procured at the
lowest possible cost.
C. Project Manager is responsible for defining the needs of the project and for managing
the schedule activities of the buyer, who is a part of the project team.
D. Project Manager is responsible for the creation of the procurement management plan,
which is then turned over to the buyer, who then initiates the Request Seller Responses.

12. During what process of Project Procurement Management does the buyer of inspect and verify whether or not the products, services, or deliverables provided by the seller meet the buyer’s acceptance criteria?
A. Close Procurements
B. Change Control.
C. Acceptance Plan and Verification Process.
D. Conduct Procurements

13. Project Manager Billie Jo is purchasing 100 laptops and 20 desktop computers for her project, and the delivery of the computers is time-critical. Billie Jo would like to provide an incentive to the seller for the timely delivery of the computers. Billie Jo, along with the buyer on the project team, has agreed that the selected seller will be paid the cost of the computers plus a 10% fee. Which contract type is being used in this case?
A. Cost plus a percentage of cost contract
B. T&M with incentive
C. Cost plus a fixed fee
D. Fixed Cost.

14. Identify the document that is developed from the project scope statement, the project work breakdown structure (WBS) and the WBS dictionary.
A. Contract Management Plan.
B. Make-or-Buy Analysis.
C. Organizational Process Assets.
D. Statement of Work.

15. A project manager for a large manufacturing company is working on a project that calls for a new building to be constructed to house a new clean system manufacturing process that is critical to the success of the project. Construction is not a core competency of his company. His team has the ability to create a detailed SOW with liquidated damages if specific statements of work deliverables are not met. He is in the Plan Procurement Management phase of the project, and needs to select a contract type for this work. Which of the following is the best type of contract for this situation?
A. FP (Fixed price)
B. CPFF (Cost plus fixed fee)
C. CPIF (Cost plus incentive fee)
D. T&M (Time and materials)

16. Bubba is a sales representative for Shrimp Boats R Us company, which is a prospective seller of shrimp boats for your project. Bubba has offered you a great end-of-the year deal that is substantially below the current prices for the desired boats. Other than meeting Bubba at the sellers pre-response (bidders) conference and seeing his business card, you know nothing other of Bubba’s employment with Shrimp Boats R Us. In offering you the special pricing, what form of agency is Bubba operating under?
A. Intended Authority
B. Express Agency
C. Sale Agency Authority
D. Apparent Authority

17. The objective of the _____ is to identify successes and failures that warrant recognition in the preparation or administration of other procurement contracts in a project.
A. Lessons Learned Analysis.
B. Procurement Audit.
C. Procurement Documents.
D. SWOT Analysis.

18. What is an oral or written act by an authorized agent which can be construed to have the same effect as a written change order?
A. A Constructive Change.
B. Claims Administration.
C. Implied Change Order.
D. Agent-authorized Change Order.

19. Project Manager Buddy Lee has elected to use a Firm Fixed-Price contract type for his procurement. Which type of Procurement Document(s) are correct for Buddy Lee to use?
A. RFP, RFI, or RFQ
B. RFP or FFP
C. RFP or RFQ
D. RFI or RFQ

20. Which of the following is a method / are methods to transfer risk from the buyer to the seller?
A. The Delphi Technique.
B. Risk Management Plan.
C. Contract.
D. All of the above.

21. Which of the following is a true statement about Procurement Documents?
A. Procurement Documents should be structured to facilitate accurate and complete responses from prospective sellers.
B. Procurement Documents are used to solicit responses from prospective sellers.
C. Procurement Documents may include a copy of the contract type.
D. All of the above.

22. A project manager has just reached the end of a project. Which of the following documents will the project manager need for closure of the project?
A. Change requests.
B. Documents that describe the product of the project.
C. Documents that describe the project status.
D. Trend analyses.

23. A contract between buyer and seller specifies that a seller must pay $1,000 per day if the seller fails to deliver the materials according to the project schedule. What form of contract remedy is the seller agreeing to here?
A. Liquidated Damages.
B. Bond.
C. Equitable Relief.
D. Remedial Payment.

24. Which of the following is a true statement concerning evaluation criteria found in an RFP?
A. They can often be found in a Procurement Document.
B. They can be objective or subjective.
C. They may be limited to purchase price if the product, service, or result is readily available from a significant number of sellers.
D. None of the above
E. All of the above.

25. Which of the following is a method for quantifying qualitative data in order to minimize the effect of personal prejudice on seller selection?
A. Weighting System.
B. Screening System.
C. Rating System.
D. All of the above.

Short Essay Questions
26 You are the Project Manager on a project where a seller is not performing to contract. The products, services, and results delivered by the seller do not adhere to the acceptance testing requirements described in the contract. To make matters worse, despite negotiations, the seller is not motivated to substantially correct the issues and your procurement is at a standstill. Explain your some of your options in resolving this matter before you have to resort to litigation or ADR.

27 The PMBOK describes 6 “competing project constraints.” Select three of those constraints and explain their potential effect on project procurements.

28 A prospective seller, Seller XYZ, calls you to discuss the pricing contained in the response they previously provided to you. Seller XYZ is also a large customer of your company, and has been a long-time supplier to your company with superb performance. You would really like to see XYZ win the business for your project. As the Project Manager, you have visibility to all of the pricing provided by other prospective sellers. During the discussion, Seller XYZ asks you for “guidance” on their pricing so that they can be competitive with the other prospective sellers. How do you respond to Seller XYZ? Explain your thought process in formulating your response and, if appropriate, reference one or more relevant codes of ethics that may apply to this situation.

29 Project Manager Harley Davidson has developed an RFP to request responses from sellers. Based on the requirements and specifications associated with the procurement, Harley believes the sellers will likely be niche technology start-up companies that will be called upon to produce a significant quantity of the products to meet the needs of Harley’s government customer. What key Source Selection Criteria (that’s plural!) should Harley include to rate or score the sellers’ responses?

30 Project Manager Betty Boop is involved in managing two different sellers, one of whom is performing under a fixed-price contract type and the other which is performing under a cost-reimbursable contract type. Describe (a) which phase of the Project Procurement process Betty is in, and (b) what tools and techniques that Betty could use to manage each seller’s performance under their respective contracts.

31 Describe the role of the Project Manager in Project Procurement Management, including what the Project Manager is and is not responsible for.

32 Describe the PMBOK’s recommended process by which a buyer prepares to request seller responses for any given procurement, and some of the documents that may result from that process.

33 Buyer Bobbie Sue and Seller Billy Bob are disputing the delivery of products called for under their contract. Bobbie Sue says that the products that she pre-paid for do not conform to the requirements of the contract, but Billy Bob refuses to refund the payment or replace the products. Bobbie Sue and Billy Bob have tried to work out their differences through negotiation, but cannot come to an agreement. This has resulted in a contract dispute. Explain the dispute resolution options available to Bobbie Sue and Billy Bob, and the primary benefits of each option.

34 Project Manager Bobbie Sue is evaluating whether to have her company’s IT department develop the software needed by her project. Following the PMBOK’s “Plan Procurement Management” process, describe how Bobbie Sue should approach making her decision.

35 Name the contract type that cannot legally be used for US Government procurements, and why that contract type cannot be used in US Government procurements.

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