Procurement & Contract Management Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Procurement & Contract Management flashcards as text
Which contract type transfers the MOST cost risk to the seller?
Answer: Firm-Fixed-Price (FFP)
Under a Firm-Fixed-Price contract, the seller bears all cost overrun risk because the price does not change regardless of actual costs incurred.
A project manager wants to procure custom software development but cannot fully define the requirements upfront. Which contract type is MOST suitable?
Answer: Time and Materials (T&M)
T&M contracts are appropriate for unclear or evolving scopes because they compensate the seller for actual time and materials used, providing flexibility.
What distinguishes a unilateral contract modification from a bilateral one?
Answer: Unilateral changes are issued by the buyer alone; bilateral require both parties to agree
A unilateral modification (change order) can be issued by the contracting officer alone under the Changes clause; a bilateral modification requires mutual agreement.
The make-or-buy analysis in procurement planning is used to determine which of the following?
Answer: Whether to produce goods internally or acquire them from external sources
Make-or-buy analysis evaluates the cost, capability, and strategic factors to decide whether the project team should produce something in-house or outsource it.
Which document formally authorizes a seller to begin work before a definitive contract is signed?
Answer: Letter Contract (Undefinitized Contract Action)
A letter contract or undefinitized contract action allows work to begin immediately while final contract terms are still being negotiated.
In a competitive procurement, the project manager notices that one bidder's price is significantly lower than all others. What should the PM do FIRST?
Answer: Request a price/cost analysis to understand the basis for the low bid
An unusually low bid warrants a price or cost analysis to determine if it is realistic, reflects missing scope, or indicates a risk of nonperformance.
Which of the following BEST describes a privity of contract issue in subcontracting?
Answer: The buyer has no direct contractual relationship with subcontractors
Privity of contract means only the parties to the contract have legal rights and obligations under it, so the buyer typically cannot enforce terms directly against subcontractors.