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Flashcards in 11) Procurement Management Deck (57)
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1

What is the process of procurement management?

  • Plan Procurement Management
  • Conduct Procurements
  • Control Procurements
  • Close Procurements

2

What are the inputs to the Plan Procurement Management process?

  • Project management plan
  • Requirements documentation
  • Activity resource requirements
  • Enterprise environmental factors
  • Organizational process assets
  • Risk register
  • Stakeholder register
  • Any procurements already in place
  • Project schedule
  • Initial cost estimates for work to be procured

3

What are the key outputs of the Plan Procurement Management process?

  • Make-or-buy decisions
  • Procurement management plan
  • Procurement statements of work
  • Procurement documents
  • Source selection criteria
  • Change requests

4

What are the key outputs of the Conduct Procurements process?

  • Selected sellers
  • Signed contracts
  • Resource calendars
  • Change requests
  • Updates to project management plan and project documents

5

What are the key outputs of the Control Procurements process?

  • Substantial completion of contract requirements and deliverables
  • Work performance information
  • Change requests
  • Updates to project management plan and project documents

6

What are the key outputs of the Close Procurements process?

  • Formed acceptance
  • Closed procurements
  • Updates to lessons learned and records (part of organizational process assets)

7

What is an agreement?

Agreement: A document or communication that outlines internal or external relationships and their intentions

8

What is a contract?

Contract: A type of written or verbal agreement, typically created with an external entity, where there is some exchange of goods or services for some type of compensation (usually monetary); a contract forms the legal relationship between the entities

9

What is the difference between centralized and decentralized contracting?

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

10

What are the advantages and disadvantages of centralized contracting:

Advantages:

  • Higher level of procurement expertise
  • Standardized 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 contracting help when needed

11

What are the advantages and disadvantages of decentralized contracting?

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 contracts person after the project
  • Difficult to maintain a high level of contracting expertise
  • Duplication of expertise/inefficient use of procurement resources
  • Contracting processes aren't standardized
  • No career path as a procurement manager in the company

12

What is required for a legal contract?

  • Offer
  • Acceptance
  • Consideration
  • Legal capacity
  • Legal purpose

13

What is included in a contract?

  • Legal terms
  • Business terms regarding payments
  • Reporting requirements
  • Marketing literature
  • Proposal
  • Procurement statement of work

14

Describe the project manager's role in procurement.

  • Understand the procurement process
  • Make sure the contract contains all the scope of work and project management requirements
  • Incorporate mitigation and allocation of risks into the contract
  • Help tailor the 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 manage changes to the contract

15

What is a procurement management plan?

A plan that documents how procurements will be planned, executed, controlled, and closed.

16

What is make-or-buy analysis?

Deciding whether the performing organization should do the project work itself or outsource some or all of the work

17

What are the three broad categories of contracts?

  • Cost-reimbursable (CR)
  • Fixed price (FP)
  • Time and material (T&M)

18

What is a cost-reimbursable contract?

All the seller's costs are reimbursed by the buyer

19

What is a fixed-price contract?

There is one set fee for accomplishing all the work

20

What is a time and material contract?

The buyer pays on a per-hour or per-item basis

21

What is a cost plus fixed fee (CPFF) contract?

All the seller's costs are reimbursed by the buyer, and a fixed fee is negotiated for the seller's profit

22

What is cost plus percentage of cost (CPPC) contract?

All the seller's costs are reimbursed by the buyer, and the buyer also pays a specified percentage of those costs as a fee or profit.

23

What is a cost plus incentive fee (CPIF) contract?

The seller's costs are reimbursed by the buyer, and the buyer and seller share any cost savings or overruns

24

What is a cost plus award fee (CPAF) contract?

All the seller's costs are reimbursed by the buyer, and the buyer pays a base fee plus an award amount (a bonus) based on performance

25

What is a fixed price incentive fee (FPIF) contract?

The buyer pays a fixed price plus an additional fee if the seller exceeds performance criteria stated in the contract

26

What is a fixed price award fee (FPAF) contract?

The buyer pays a fixed price plus an award (paid in full or in part) based on the seller's performance level

27

What is a fixed price economic price adjustment (FPEPA) contract?

A fixed-price contract with a built-in economic price adjustment to cover cost increases due to future economic conditions

28

What is a purchase order?

  • A unilateral contract typically used for buying commodities
  • Purchase orders become contracts once they are "accepted" by the seller's fulfillment of the contract

29

What do incentives accomplish?

They align the seller's motivations with the buyer's objectives

30

What might incentives be used for?

  • Time
  • Cost
  • Quality
  • Scope