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You are the project manager of the GHY Project for your organization. A portion of this project includes dangerous work; although members of the project team could likely complete the work, your sponsor doesn’t want to accept the risk. In this situation, which of the following may be used as a risk mitigation tool?
A. A vendor proposal
B. A contract
C. A quotation
D. Project requirements
B. A contract can be used as a risk mitigation tool. Procurement of risky activities is known as transference—the risk does not disappear, but the responsibility for the risk is transferred to the vendor.
A, C, and D are all incorrect. A vendor proposal, a quotation, and project requirements do nothing to serve as risk mitigation tools.
As a PMP candidate you must understand the provisions of project procurement even if your typical projects do not include procurements. Based on the information in this chapter, a contract cannot have provisions for which one of the following?
A. A deadline for the completion of the work
B. Illegal activities
C. Subcontracting the work
D. Penalties and fines for disclosure of intellectual rights
B. A contract cannot include provisions for illegal activities.
A is incorrect because a contract can stipulate a deadline for the project work. C is incorrect because contracts can specify rules for subcontracting the work. D is also incorrect because a contract can assess a penalty and fines for disclosing intellectual rights and secret information.
You are the project manager for the 89A Project. You have created a contract for your customer. The contract must have what two things?
A. An offer and consideration
B. Signatures and the stamp of a notary public
C. The value and worth of the procured item
D. A start date and an acceptance of the start date
A. Of all the answers presented, A is the best. Contracts have an offer and a consideration.
B is incorrect because not all contracts demand signatures and notary public involvement. C is also incorrect. A contract may not explicitly determine what the value and worth of the procured product or service is. D is incorrect because a contract may specify a start date, but the acceptance of the start date is vague and not needed for all contracts.
The WBS and the WBS dictionary can help a project manager plan for purchases and acquisitions. Which one of the following best describes this process?
A. The WBS defines the specific contracted work.
B. The WBS defines the requirements for the specific contracted work.
C. The WBS defines the specific contracted work, which must support the requirements of the project customer.
D. Both parties must have and retain their own copy of the WBS.
C. The WBS defines the details and requirements for acceptance of the project. This information also serves as valuable input to the process of determining what needs to be procured. The WBS defines what the end result of the project will be. In dealing with vendors to procure a portion of the project, the work to be procured must support the requirements of the project’s customer.
A is incorrect because the WBS defines the project scope as a whole, not just the contracted work, which may be just a portion of the project. B is incorrect because the WBS does not define the requirements for the contract work. D is incorrect because the vendor likely will not have a copy of the WBS.
Yolanda has outsourced a portion of the project to a vendor. The vendor has discovered some issues that will influence the cost and schedule of its portion of the project. How must the vendor and Yolanda update the agreement?
A. As a new contract signed by Yolanda and the vendor
B. By submitting the change request to the contract change control system
C. As a memo and SOW signed by Yolanda and the vendor
D. By submitting the change request to the cost change control system
B is the best answer. Because the question is asking for the vendor to update the agreement, the change should follow the details of the contract change control system.
A, although feasible, is not the best answer to the question. A new contract does not update the original agreement and may cause delays because the contract may have to be resubmitted, reapproved, and so on. C and D are not viable answers.
You are the project manager of the HHQ Project for your company. You have hired a vendor to complete a portion of the project, but the vendor doesn’t seem to have met the project requirements as defined in the contract. You have tried alternative dispute resolutions to no avail and you think the claims administration may have to be escalated. The United States backs all contracts through which of the following?
A. Federal law
B. State law
C. Court system
D. Lawyers
C. All contracts in the United States are backed by the U.S. court systems.
A, B, and D are incorrect. Often the county and state court systems will make determinations of contract disputes if the need arises. The best answer is simply the court system, not federal law, state law, or lawyers.
Terry is the project manager of the MVB Project. She needs to purchase a piece of equipment for her project. The accounting department has informed Terry she needs a unilateral form of contract. Accounting is referring to which of the following?
A. The SOW
B. A legally binding contract
C. A purchase order
D. An invoice from the vendor
C. A unilateral form of a contract is simply a purchase order.
A is incorrect because an SOW is a statement of work. B is incorrect because a legally binding contract does not fully answer the question. D, an invoice from the vendor, is not what the purchasing department is requesting.
Bonnie is the project manager for the HGH Construction Project. She has contracted a portion of the project to the ABC Construction Company and has offered a bonus to ABC if they complete their portion of the work by August 30. This is an example of which one of the following?
A. A project requirement
B. A project incentive
C. A project goal
D. A fixed-price contract
B. A bonus to complete the work by August 30 is an incentive.
A is incorrect because the question does not specify August 30 as a deadline. C is incorrect because “project goal” does not fully answer the question. D is incorrect because the contract details are not disclosed in this question.
You are a project manager for your organization and are progressing through the procurement management processes. Who should receive the procurement document package?
A. Your client
B. Your project sponsor
C. Your accounting/finance department
D. Each seller that will participate in the bidding
D. Each vendor that participates in the bidding will need to receive the procurement document package.
A, B, and C are all incorrect because these parties do not need the procurement document package.
You are the project manager for a company that completes the installation of electrical fixtures in manufacturing environments. Part of your typical contractual agreement included coverage of intellectual rights and privity. Privity is what?
A. The relationship between the project manager and a known vendor
B. The relationship between the project manager and an unknown vendor
C. The contractual, confidential information between the customer and the vendor
D. The professional information regarding the sale between the customer and the vendor
C. Privity is a confidential agreement between the buyer and the seller.
A, B, and D are incorrect because they do not fully answer the question.
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