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Contract Management & Procurement Flashcards

7 cards from real CCC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Contract Management & Procurement flashcards as text

  1. Which contract type places the greatest financial risk on the contractor?

    Answer: Firm Fixed Price (FFP)

    In a Firm Fixed Price contract, the contractor bears all cost risk because the price is set regardless of actual costs incurred.

  2. A cost controller notices a vendor's invoice includes charges outside the agreed contract scope. This is best addressed through which process?

    Answer: Contract change order review

    Out-of-scope charges require a formal change order review to determine if the scope change was authorized and properly priced.

  3. What is the primary purpose of a procurement audit in cost control?

    Answer: To verify that procurement processes were followed and costs are legitimate

    A procurement audit verifies compliance with procurement procedures and confirms that expenditures are justified and properly authorized.

  4. Which procurement method is most appropriate when the project scope is not fully defined?

    Answer: Request for Proposal (RFP)

    An RFP is used when scope is uncertain, allowing vendors to propose both technical solutions and pricing, giving flexibility to negotiate.

  5. In contract cost management, 'should-cost' analysis is used to:

    Answer: Estimate what a product or service reasonably ought to cost based on labor, materials, and overhead

    Should-cost analysis independently estimates what a product should cost using cost engineering principles, helping buyers negotiate fair prices.

  6. A contract includes a ceiling price and a target cost with shared savings above target. This describes which contract type?

    Answer: Cost Plus Incentive Fee (CPIF)

    CPIF contracts set a target cost and fee, with a ceiling price and a sharing ratio where both parties benefit when actual costs are below target.

  7. When evaluating contract bids, a cost controller should use which document to verify that all bid submissions are comparable?

    Answer: Basis of Estimate (BOE)

    A Basis of Estimate documents the assumptions, methods, and data sources behind each bid, enabling apples-to-apples comparisons between proposals.