Welcome to the Procurement Management Questions for PMP examination. These questions here have been collected from various sources. Please check the sources given with each of the question for any further information. The answers are given at the bottom of the page
Ques. 1.
PTA (Point of Total Assumption) is not applied on which contract type
A. Time & Material
B. Fixed
C. Cost Reimbursable
D. Firm Fixed Price
Source
PTA (Point of Total Assumption) is not applied on which contract type
A. Time & Material
B. Fixed
C. Cost Reimbursable
D. Firm Fixed Price
Source
Ques. 2.
The PM is running a project for a customer based on a cost-reimbursable contract with the following terms: TC - $ 1,000,000, Fixed fee: $ 100,000, Benefit/cost sharing: 80-2%, Price ceiling: $ 1,200,000. Find PTA
A. $1,300,000
B. $1,500,000
C. $80,000
D. $1,125,000
Source
The PM is running a project for a customer based on a cost-reimbursable contract with the following terms: TC - $ 1,000,000, Fixed fee: $ 100,000, Benefit/cost sharing: 80-2%, Price ceiling: $ 1,200,000. Find PTA
A. $1,300,000
B. $1,500,000
C. $80,000
D. $1,125,000
Source
PMP Questions according to Knowledge Area
Ques. 3.
Which of the following contracts has the MOST risk for the buyer?
A. Cost plus fixed fee (CPFF)
B. Time and Materials (T&M)
C. Cost plus award fee (CPAF)
D. Fixed price (FP)
Source
Which of the following contracts has the MOST risk for the buyer?
A. Cost plus fixed fee (CPFF)
B. Time and Materials (T&M)
C. Cost plus award fee (CPAF)
D. Fixed price (FP)
Source
Ques. 4.
Your seller performed some change requests that were not approved by you. You and the seller cannot reach an agreement on compensation for the changes. In this case, which of the following is the best method to use to resolve the dispute?
A. Begin court litigation
B. Engage Third Party Resolution
C. Pay outstanding amount due to seller
D. Get your project team's advice
Source
Your seller performed some change requests that were not approved by you. You and the seller cannot reach an agreement on compensation for the changes. In this case, which of the following is the best method to use to resolve the dispute?
A. Begin court litigation
B. Engage Third Party Resolution
C. Pay outstanding amount due to seller
D. Get your project team's advice
Source
Ques. 5.
Project Procurement Management includes all of the following EXCEPT:
A. Administer Procurement.
B. Plan Procurement
C. Stakeholder analysis
D. Close Procurement
Source
Project Procurement Management includes all of the following EXCEPT:
A. Administer Procurement.
B. Plan Procurement
C. Stakeholder analysis
D. Close Procurement
Source
Ques. 6.
Many organizations favor fixed-price contracts because the performance of the project is the responsibility of the seller. Which of the following is very important for a firm fixed price contract?
A. The buyer must precisely specify the number of resources to be used for procurement
B. The buyer must precisely specify the service or product to be procured
C. The buyer must precisely specify the time for completing the contract
D.The buyer must precisely specify the price of the contract
Source
Many organizations favor fixed-price contracts because the performance of the project is the responsibility of the seller. Which of the following is very important for a firm fixed price contract?
A. The buyer must precisely specify the number of resources to be used for procurement
B. The buyer must precisely specify the service or product to be procured
C. The buyer must precisely specify the time for completing the contract
D.The buyer must precisely specify the price of the contract
Source
Ques. 7.
To assist with the selection of a supplier for a large procurement on your project, you have hired a consultant. The consultant has prepared an independent estimate to be used as a benchmark while reviewing bids on the RFP. The independent estimate is confidential and is not shared with any bidders. When the sealed bids are opened, you discover that only one supplier has submitted a quote lower than the independent estimate. All other quotes are 45% to 70% higher than the benchmark. While discussing this development with members of the project team, you learn that the company with the lowest bids is owned by a distant relative of the consultant you hired to create the benchmark. What is the best course of action?
A. Confirm that the lowest bidder has understood the requirements and award them the contract`.
B. Since one of the supplier knows more than others, you must disclose the independent estimate to all others to be fair.
C. Disqualify the lowest bidder.
D. Review the RFP specifications and requirements.
Source
To assist with the selection of a supplier for a large procurement on your project, you have hired a consultant. The consultant has prepared an independent estimate to be used as a benchmark while reviewing bids on the RFP. The independent estimate is confidential and is not shared with any bidders. When the sealed bids are opened, you discover that only one supplier has submitted a quote lower than the independent estimate. All other quotes are 45% to 70% higher than the benchmark. While discussing this development with members of the project team, you learn that the company with the lowest bids is owned by a distant relative of the consultant you hired to create the benchmark. What is the best course of action?
A. Confirm that the lowest bidder has understood the requirements and award them the contract`.
B. Since one of the supplier knows more than others, you must disclose the independent estimate to all others to be fair.
C. Disqualify the lowest bidder.
D. Review the RFP specifications and requirements.
Source
Ques. 8.
You are involved as project manager in a fairly large-sized project. You are in the process of making a procurement decision and plan to go with a simple purchase order. However, you are doubtful whether this is the correct thing to do and decide to find out more details about the process to be followed. Based on your findings, which of the following would be correct?
A. A simple purchase order is not appropriate for project. The project manager should always use the Request for Proposal (RFP) route.
B. Organizational process assets are guidelines available to the project. As project manager you have the final decision making authority and can decide whether to go in for a simple purchase order or not.
C. The value of the project is immaterial. As project manager, you have the final decision making authority to go in for a simple purchase order as long as you are contracting with an approved vendor
D. You would need to verify the policy constraints that form part of the Organizational process assets. Many organizations have policies that constrain procurement decisions and require use of a longer form of contract for projects above a certain value.
Source
You are involved as project manager in a fairly large-sized project. You are in the process of making a procurement decision and plan to go with a simple purchase order. However, you are doubtful whether this is the correct thing to do and decide to find out more details about the process to be followed. Based on your findings, which of the following would be correct?
A. A simple purchase order is not appropriate for project. The project manager should always use the Request for Proposal (RFP) route.
B. Organizational process assets are guidelines available to the project. As project manager you have the final decision making authority and can decide whether to go in for a simple purchase order or not.
C. The value of the project is immaterial. As project manager, you have the final decision making authority to go in for a simple purchase order as long as you are contracting with an approved vendor
D. You would need to verify the policy constraints that form part of the Organizational process assets. Many organizations have policies that constrain procurement decisions and require use of a longer form of contract for projects above a certain value.
Source
Ques. 9.
Which of the following is an advantage of centralized contracting?
A. Gives easier access to contracting expertise
B. Increases company expertise in contracting
C. Gives more loyalty to the project
D. Allows a contracts person to work on a single project
Source
Which of the following is an advantage of centralized contracting?
A. Gives easier access to contracting expertise
B. Increases company expertise in contracting
C. Gives more loyalty to the project
D. Allows a contracts person to work on a single project
Source
Ques. 10.
"Oligopoly" refers to which of these
A. There is only one qualified seller in the market.
B. There are no sellers in the market, so you have to build the product in-house.
C. There are few sellers and action of one seller will have impact on other sellers prizes.
D. Your company prefers to contract with only one seller.
Source
"Oligopoly" refers to which of these
A. There is only one qualified seller in the market.
B. There are no sellers in the market, so you have to build the product in-house.
C. There are few sellers and action of one seller will have impact on other sellers prizes.
D. Your company prefers to contract with only one seller.
Source
Ques. 11.
Following project data are given to you
a) Target price = $90000
b) Ceiling price = $100000
c) Customer's share of cost overruns = 70%
d) Target cost = $80000
You are requested to and out point at which the seller will assume all subsequent costs:
A. $ 104286
B. $ 80000
C. $ 14286
D. $ 94280
Source
Following project data are given to you
a) Target price = $90000
b) Ceiling price = $100000
c) Customer's share of cost overruns = 70%
d) Target cost = $80000
You are requested to and out point at which the seller will assume all subsequent costs:
A. $ 104286
B. $ 80000
C. $ 14286
D. $ 94280
Source
Ques. 12.
Which of the following statement is true regarding contract life cycles?
A. The requirement phase is the first contract life cycle phase and is performed during the Plan Procurements process. The buyer prepares the SOW during this phase.
B. The award phase is the fourth contract life cycle phase and is performed during the Conduct Procurements process. The buyer awards the contract in this phase.
C. The solicitation phase is the third contract life cycle phase and is performed during the Conduct Procurements process. This phase receives the bids and proposals and applies evaluation criteria to each in order to score or rank the responses.
D. The requisition phase is the second contract life cycle phase and is performed during the Plan Procurements process. The buyer prepares the SOW during this phase.
Source
Which of the following statement is true regarding contract life cycles?
A. The requirement phase is the first contract life cycle phase and is performed during the Plan Procurements process. The buyer prepares the SOW during this phase.
B. The award phase is the fourth contract life cycle phase and is performed during the Conduct Procurements process. The buyer awards the contract in this phase.
C. The solicitation phase is the third contract life cycle phase and is performed during the Conduct Procurements process. This phase receives the bids and proposals and applies evaluation criteria to each in order to score or rank the responses.
D. The requisition phase is the second contract life cycle phase and is performed during the Plan Procurements process. The buyer prepares the SOW during this phase.
Source
Answers:
1: A
2: D
3: B
4: B
5: C
6: B
7: D
8: D
9: B
10: C
11: D
12: A
1: A
2: D
3: B
4: B
5: C
6: B
7: D
8: D
9: B
10: C
11: D
12: A
