1.

Once signed, a contract is legally binding unless:

A. One party is unable to perform.
B. One party is unable to finance its part of the work.
C. It is in violation of applicable law.
D. It is declared null and void by either party's legal counsel.

2.

With a clear contract statement of work, a seller completes work as specified, but the buyer is
not pleased with
the results. The contract is considered to be:
A. Null and void.
B. Incomplete.
C. Complete.
D. Waived.

3.

All of the following statements concerning bid documentation are incorrect EXCEPT?
A. Well-designed procurement documents can simplify comparison of responses.
B. Procurement documents must be rigorous with no flexibility to allow
consideration of seller
suggestions.
C. In general, bid documents should not include evaluation criteria.
D. Well-designed procurement documents do not include a procurement statement of
work.

4.

A project manager for the seller is told by her management that the project should do whatever
possible
to
be
awarded incentive money. The primary objective of incentive clauses in a contract is to:
A. Reduce costs for the buyer.
B. Help the seller control costs.
C. Synchronize objectives.
D. Reduce risk for the seller by shifting risk to the buyer.

5.

All the following statements about change control are incorrect EXCEPT?
A. A fixed price contract will minimize the need for change control.
B. Changes seldom provide real benefits to the project.
C. Contracts should include procedures to accommodate changes.
D. More detailed specifications eliminate the causes of changes.

6.

A routine audit of a cost reimbursable (CR) contract determines that overcharges are being made.
If
the
contract
does not specify corrective action, the buyer should:
A. Continue to make project payments.
B. Halt payments until the problem is corrected.
C. Void the contract and start legal action to recover overpayments.
D. Change the contract to require more frequent audits.

7.

The primary objective of contract negotiations is to:

A. Get the most from the other side.
B. Protect the relationship.
C. Get the highest monetary return.
D. Define objectives and stick to them.

8.

A seller is working on a cost reimbursable (CR) contract when the buyer decides he would like
to
expand
the
scope of services and change to a fixed price (FP) contract. All of the following are the
seller's
options
EXCEPT?
A. Completing the original work on a cost reimbursable basis and then negotiating a
fixed price for the
additional work

B. Completing the original work and rejecting the additional work

C. Negotiating a fixed price contract that includes all the work
D. Starting over with a new contract
9.

Bidder conferences are part of:

A. Plan Procurements.
B. Administrer Procurements.
C. Conduct Procurements.
D. Communications Mansgement.

10. All of the following MUST be present to have a contract EXCEPT?

A. Procurement statement of work
B. Acceptance
C. Address of the seller
D. Buyers' signatures
11. Which of the following BEST describes the project manager's role during the procurement
process?
A. Project manager has only minor involvement.
B. Project manager should be the negotiator.
C. Project manager should supply an understanding of the risks of the project.
D. Project manager should tell the contract manager how the contracting process should be
handled.

12. What is one of the KEY objectives during contrac negotiations?

A. Obtain a fair and reasonable price.
B. Negotiate a price under the seller's estimate.
C. Ensure that all project risks are thoroughly delineated.
D. Ensure that an effective communications management plan is established.
13. Which of the following activities occurs during the Plan Procurements process?
A. Make-or-buy decisions
B. Answering sellers' questions about the bid documents
C. Advertising
D. Proposal evalutation.
14. Which of the following is the BEST thing for a project manager to do in the Conduct
Procurements
process
of
procurement management?
A. Evaluate risks
B. Select a contract type.
C. Update the project schedule.
D. Answer sellers' questions about bid documents
15. The sponsor is worried about the seller deriving extra profit on the cost plus fixed fee (CPFF)
contract.
Each
month he requires the project manager to submit CPI calculations and an analysis of the cost to
complete.
The
project manager explains to the sponsor that extra profits should NOT be a worry on this project
because:
A. The team is making sure the seller does not cut scope.
B. All costs invoiced are being audited.
C. There can only be a maximum 10 percent increase if there is an unexpected cost
overrun.
D. The fee is only received by the seller when the project is completed.
16. In a fixed price (FP) contract, the fee or profit is:
A. Unknown.
B. Part of the negotiation involved in paying every invoice.
C. Applied as a line item to every invoice.
D. Determined with the other party at the end of the project.

17. A project performed under a cost reimbursable contract has finally entered the closing process.
What
must
the
buyer remember to do?
A. Decrease the risk rating of the project.
B. Audit seller's cost submittals.
C. Evaluate the fee he is paying.
D. Make sure that the seller is not adding resources.
18. The sponsor and the project manager are discussing what type of contract the project manager
plans
to
use
on
the project. The buyer points out that the performing organization spent a lot of money hiring a
design
team
to
come up with the design. The project manager is concerned that the risk for the buyer be as
small
as
possible.
An advantage of a fixed price contract for the buyer is:
A. Cost risk is lower.
B. Cost risk is higher.
C. There is little risk.
D. Risk is shared by all parties.
19. As part of the records management system, you are trying to make sure that all records from the
procurement
are documented and indexed. Which of the following do you NOT have to worry about?
A. Proposal
B. Procurement statement of work
C. Terms and conditions
D. Negotiation process
20. You are in the middle of a complex negotiation when the other party says, "We need to finish
in
one
hour
because I have to catch my plane." That person is using which of the following negotiation
strategies?
A. Good guy, bad guy
B. Delay
C. Deadline
D. Extreme demands

21. Which of the following is an advantage of centralized contracting?

A. Increased expertise.
B. Fasier access
C. No home.
D. More loyalty to the proyect.
22. With which type of contract is the seller MOST concerned about project scope?
A. Fixed price
B. Cost plus fixed fee
C. Time and material
D. Purchase order
23. Your company has an emergency and needs contracted work done as soon as possible.
Under
these
circumstances, which of the following would be the MOST helpful to add to the contract?
A. A clear contract statement of work
B. Requirements as to which subcontractors can be used
C. Incentives
D. A force majeure clause
24. During what part of the procurement process does procurement negotiation occur?
A. Plan Procurements.

B. Close
ProcurementsC. Administer
Procurements.
D. Conduct
Procurements.
25. The project team is arguing about the prospective sellers who have submitted proposals. One
team
member
argues for a certain seller while another team member wants the project awarded to a different
seller.
What
part
of the procurement process is the team in?
A. Plan Procurements.
B. Administer Procurements.
C. Negotiate Contract.
D. Conduct Procurements.
26. The project team seems to like to argue; they have argued about everything. Luckily the project
manager
has
set
in place a reward system and team building sessions that will help and encourage the team to
cooperate
more.
The latest thing they are arguing about is if they should complete a work package themselves or
outsource
the
work to someone else. What part of the procurement process must they be in?
A. Conduct Procurements.
B. Plan Procurements.
C. Administer Procurements.
D. Claims Administration
27. A project manager is in the middle of creating a request for proposal (RFP). What part of the
procurement
process is he in?
A. Conduct Procurements.
B. Plan Procurements.
C. Administer Procurements
D. Make-or-Buy Analysis.
28. Your program manager has come to you, the project manager, for help with a bid for her
newest
project.
You
want to protect your company from financial risk. You have limited scope definition. What is the
BEST
type
of
contract to choose?
A. Fixed price (FP)
B. Cost plus percent of cost (CPPC)
C. Time and material (T&M)
D. Cost plus fixed fee (CPFF)

29. Negotiations between two parties are becoming complex, so party A makes some notes that
both
parties
sign.
However, when the work is being done, party B claims that they are not required to provide an
item
they
both
agreed to during negotiations, because it was not included in the subsequent contract. In this
case, party B is:
A. Incorrect, because both parties must comply with what they agreed upon.
B. Correct, because there was an offer.
C. Generally correct, because both parties are only required to perform what is in the
contract.
D. Generally incorrect, because all agreements must be upheld.
30. Your project has just been fast tracked and you are looking at bringing in a subcontractor to

complete
networking quickly. There is no time to issue a request for proposal (RFP), so you choose to use
a
company
you
have used many times before for software development. A PRIMARY concern in this situation
is:
A. Collusion between subcontractors.
B. The subcontractor's qualifications.
C. The subcontractor's evaluation criteria.
D. Holding a bidder conference.
31. The project manager and project sponsor are discussing the project costs and whether it is
better
to
have
their
own company do part of the project or hire another company to do the work. If they asked for
your
opinion,
you
might say it would be better to do the work yourself if:
A. There is a lot of proprietary data.
B. You have the expertise but you do not have the available manpower.
C. You do not need control over the work.
D. Your company resources are limited.
32. After much excitement and hard work, the contract statement of work for the project is
completed.
Even
after
gaining agreement that the contract statement of work is complete, the project manager is still
concerned
whether it actually addresses all the buyer's needs. The project manager is about to attend the
bidder
conference.
He asks you for advice on what to do during the session. Which of the following is the BEST
advice
you
can
give him?
A. You do not need to attend this session. The contract manager will hold it.
B. Make sure you negotiate project scope.
C. Make sure you give all the sellers enough time to ask questions. They may not want to
ask questions
while their competitors are in the room.
D. Let the project sponsor handle the meeting so you can be the good guy in the
negotiation session.
33. A seller is awarded a contract to build a pipeline. The contract terms and conditions require that
a
work
plan
be
issued for the buyer's approval prior to commencing work, but the seller fails to provide one.
Which
of
the
following is the BEST thing for the buyer's project manager to do?
A. File a letter of intent.
B. Develop the work plan and issue it to the seller to move things along.
C. Issue a default letter.
D. lssue a stop work order to the seller until a work plan is prepared.
34. Close Procurements is different from Close Project or Phase in that Close Procurements:
A. Occurs before proyect closure.
B. Is the only one to involve the customer.
C. Includes the return of property.
D. May be done more than once for each contract.
35. You have just started administrating a contract when management decides to terminate the
contract.
What
should you do FIRST?
A. Go back to the Plan Proocurements process.
B. Go back to the Conduct Procurements process.
C. Finish the Adminster Procurements process.
D. Go to the Close Procurements process.

36. The project team is arguing about the prospective sellers who have submitted proposals. One
team
member
argues for a certain seller, while another team member wants the project to be awarded to a
different
seller.
The
BEST thing the project manager should remind the team to focus on in rder to make a selection
is the:
A. Procurement documents.
B. Procurement audits.
C. Evaluation criteria.
D. Procurement management plan.
37. The performing organization is trying to decide whether to split the contracts department and
assign
contracting
responsibilities to departments directly responsible for the projects. A contract professional
might
not
want
this
split to occur because they would lose _____ in a decentralized contracting environment.
A. Standardized company project management practices
B. Loyalty to the project
C. Experience
D. Access to others with similar expertise
38. During project executing, your project team member delivers a project deliverable to the buyer.
However,
the
buyer refuses the deliverable, stating that it does not meet the requirement on page 300 of the
technical
specifications. You review the document and find that you agree. What is the BEST thing to do?
A. Explain that the contract is wrong and should be changed.
B. Issue a change order.
C. Review the requirements and meet with the responsible team member to review the
MTBS dictionary.
D. Call a meeting of the team to review the requirement on page 300.
39. What type of contract do you NOT want to use if you do not have enough labor to audit
invoices?
A. Cost plus fixed fee (CPFF)
B. Time & material (T&M)
C. Fixed price (FP)
D. Fixed price incentive fee (FPIF)
40. A new project manager is about to begin creating the procurement statement of work. One
stakeholder
wants
to
add many items to the procurement statement of work. Another stakeholder only wants to
describe
the
functional requirements. The project is important for the project manager's company, but a
seller
will
do
the
work. How would you advise the project manager?
A. The procurement statement of work should be general to allow the seller to make his
own decisions.
B. The procurement statement of work should be general to allow clarification later.
C. The procurement statement of work should be detailed to allow clarification later.
D. The procurement statement of work should be as detailed as necessary for the type of
project.
41. A project manager must make a narrative description of the project. This narrative description
covers
the
items
that will be supplied under the contract with the client. It is called:
A. The project plan.
B. The statement of work.
C. The exception report.
D. The progress report.
42. A project manager discovers that there is a part of the project that contains some risk. His or

her
strategy
with
this risk is to subcontract the work to an outside supplier by using a firm fixed-price contract.
Which
of
the
following is true?
A. The supplier will include an allowance for the risk in the contracted price.
B. The supplier will lose money on the contract.
C. The project manager will have to compensate the supplier if the risk occurs.
D. The project manager will assist the supplier with the project team if the risk occurs.
43. A project manager discovers that there is a part of the project that contains some risk. His or
her
strategy
with
this risk is to subcontract the work to an outside supplier by using a firm fixed-price contract.
The
project
manager should:
A. Make certain that the project team does not reveal the risk to the supplier until the
contract is signed.
B. Make every effort to make sure that the supplier is made aware of the risk after the
contract is signed.
C. Make sure that the supplier understands the risk before the contract is signed.
D. Assign a member of the project team to monitor the activity of the supplier to make
sure that the
supplier deals with the risk properly if it occurs.

44. The project manager is considering contracting some of the work of the project to a service
bureau.
The
service
bureau has been used in the past by this project manager. The manager has several choices of
contracts
that
can
be used to subcontract this work. Which of the following is not a type of contract that the project
manager
might
choose?
A. Firm fixed price
B. Make or buy
C. Cost plus incentive fee
D. Unit price
45. A project manager is employed by a construction company and is responsible for the
furnishing
of
the
completed building. One of the first things that the project manager for this project should do is
to write a:
A. Work breakdown structure.
B. Budget baseline.
C. Project charter.
D. Project plan.
46. A contractor is working on a fixed price contract that calls for a single, lump sum payment
upon
satisfactory
completion of the contract. About halfway through the contract, the contractors project
manager
informs
the
contract administrator that financial problems are making it difficult for the contractor to pay
employees
and
subcontractors. The contractor asks for a partial payment for work accomplished. Which of
the
following
actions by the buyer is most likely to cause problems for the project?
A. Starting to make partial payments to the contractor
B. Making no payments to the contractor
C. Paying for work accomplished to date
D. Negotiating a change to the contract
47. Under a blanket order arrangement, which of the following is correct?

A. The cost of carrying the inventory is borne by the buyer.

B. The seller delivers all of the material ordered at one time.
C. Payments for all of the material are made at one time.
D. At the end of the blanket order, prices are adjusted for the actual amount of material
delivered.
48. Forward buying will:
A. Decrease storage costs.
B. Decrease capital investment.
C. Decrease transportation costs.
D. Decrease inventory.
49. Which of the following would not be a part of the procurement management process?
A. Purchasing
B. Contract negotiations
C. Inspection
D. Marketing
50. The equivalent of cost-reimbursable contracts is frequently termed:
A. Back-charge contracts.
B. Fixed-price contracts.
C. Progress payment contracts.
D. Cost-plus contracts.
51. The project team has delivered a deliverable to the customer. The deliverable contains defects
that
are
easily
correctable. There is a good relationship with the customer and the customer agrees to make
the
repairs
and
correct the defects on the item and invoice the supplier for the work that was done. This is
considered to be a:
A. Bid cost reduction.
B. Payment authorization.
C. Back charge.
D. Release payment.

52. A project manager decides to go out for bids on some of the project work that must be done as
part
of
a
contract
to do a project for another customer. The bids are received and evaluated, and the seller with
the
lowest
bid
is
selected. The cost of the contract to the project can further be reduced by what action?
A. Illegal methods
B. Procurement leverage
C. Selecting another seller
D. Contract negotiation
53. A buyer extends a formal invitation that contains a scope of work that seeks a response that will
describe
the
methodology and results that will be provided to the buyer. This is called:
A. Invitation to bid.
B. Request for information.
C. Request for proposal.
D. Request for bid.
54. A project manager wants to subcontract part of the project. This part of the project is quite
complicated,
and
there are many ways that the work can be done. What method of solicitation should be used
by
the
project
team?
A. a. Request for bid
B. b. Request for quotation

C. c. Request for proposal

D. d. Request for information
55. The project team is considering whether to purchase a service or do it themselves. One of the
items
that
should
not be considered in their analysis is:
A. The sellers price.
B. The cost and availability of floor space at the teams facility.
C. The sellers technical staff.
D. A competitors method of outsourcing.
56. A request for bid (RFB) differs from a request for proposal (RFP) in that:
A. The request for proposal is used when source selection will be price driven.
B. There is no difference.
C. The request for bid is used when source selection will be price driven.
D. The request for proposal disregards price considerations.
57. A project has subcontracted part of the work of the project to an outside vendor. The work
involves
writing
modules of software for the project. The first delivery of the subcontracted software has been
made,
and
it
is
found that the software will not perform the functions that were specified in the contract. The
vendor
says
that
the software cannot do what was specified in the contract and refuses to do the work. What
should
the
project
team do?
A. Cancel the contract and find another vendor.
B. Hold additional meetings with the vendor to determine the problem and the solution to
the problem.
C. Seek legal advice form the companys attorney.
D. Offer the vendor an additional incentive to finish the contract.
58. A project manager is about to request bids on a large part of the work that must be done on the
project.
This
work amounts to over $1 million. The best reason that the bid should be advertised is:
A. It is a legal requirement to do so.
B. Advertising will notify more companies that you are interested in contracting the work.
C. It will avoid criticism from other potential vendors.
D. It avoids having pressure from the public.
59. A project manager must have some work done by an outside contractor. This work has a great
deal
of
risk
associated with it, and it has become very difficult to find a contractor willing to take on the
job.
Which
of
the
following types of contract would offer the greatest incentive to the contractor?
A. Cost plus percentage of cost as an award fee
B. Cost plus fixed fee
C. Cost plus incentive fee
D. Firm fixed price

60. A project manager purchases 3,500 widgets for his project. The widgets are delivered on time,
but
there
are
many defects in the paint that is on the surface of the widgets. The project manager returns
the
parts
to
the
vendor for repair and rework. The vendor complains that the paint job quality was not specified
in
the
contract
and it is not his responsibility to repair the parts. It is likely that the parts will be repaired by the
vendor
because
of:

A.
B.
C.
D.

Expressed warranty.
Implied warranty.
Past business practices.
Threat of legal action by the project team.

61. A project is coming to a close, and the project manager is listing the things that must be done to
close
out
the
project. One of the things that must be done by the person responsible for contract
administration is:
A. Issue letters of recommendation for the project team.
B. Issue a formal written notice of project completion to the contractors.
C. Put a legal notice in the newspapers indicating that all invoices must be submitted.
D. Request final inspection reports for all vendor-supplied materials.
62. A project is engaged in making electronic devices. It is necessary for the company to
purchase
materials
to
make the printed circuit boards. All of the parts are common parts that are available from several
vendors.
The
most likely contract that should be issued for these parts is:
A. Unit price contract.
B. Firm fixed-price contract.
C. Cost-reimbursable contract.
D. Award fee contract.
63. A project is being managed by a project manager. A large portion of the work of the project
is
being
subcontracted to an outside vendor. During the project it is found that a significant change in
the
design
of
the
project is necessary. The project manager should:
A. Issue a change notice to the contractor immediately.
B. Issue a purchase order to investigate the change.
C. Notify the contractor of the design change possibility.
D. Rebid the contract.
64. An automotive design project is under way. The project is to design the new body style for
the
upcoming
season. Body styles are considered to be one of the more important items for competing in the
next
season.
The
completion date for the project is moved up to three months earlier than planned. Because of
this
change
in
the
project completion date, there is the possibility of having some of the work done by a design
bureau
in
town.
The project manager must make a decision as to whether or not to subcontract this work out
to
the
design
bureau. What is the most important consideration in making this decision?
A. Cost of work to the design bureau
B. Security of the design bureau
C. Communications between the project team and the design bureau
D. Ability of the design bureau to deliver on time
65. At the request of the project team for a large project, the companys purchasing department
advertises
that
they
intend to let a contract for construction work associated with the project. This is called:
A. Procurement planning.
B. Solicitation.
C. Advertising.
D. The procurement process.
66. An agreement between competent parties, for valid consideration, to accomplish some lawful
purpose
with
terms clearly set forth is called a:

A.
B.
C.
D.

Procurement.
Solicitation.
Contract.
Letter of intent.

67. A project manager is managing a project to design a software system for a client. She decides to
subcontract
the
work to a programming subcontractor. The subcontractor fails to deliver the work on time, and
the
project
manager invokes a penalty clause that was written into the contract. It is found that the person
signing
the
contract was under twenty-one years of age (the legal age where the contract was signed). What
can be done?
A. The company can invoke the penalty clause, and it must be honored.
B. The work must be completed by the subcontractor, and the penalty clauses must be
deducted from the
amount paid to the subcontractor.
C. The company should renegotiate the contract.
D. The contract is void for lack of competent parties, and no additional work should be
done.
68. A company wants to buy steel machine screws for a project it is working on. The screws are an
example
of
what
type of purchase?
A. On the shelf
B. Commodity purchase
C. Normal procurement
D. Blanket order
69. The procurement manager of a company decides to solicit bids on a contract. On the basis of
the
bid
the
company must clearly specify exactly what it intends to purchase. The selection of the vendor
will
be
on
the
basis of:
A. Price and features of the proposal.
B. Price alone.
C. Overall desirability of the products offered.
D. Comprehensive evaluation of the vendor and the proposal.
70. A trucking company expects to purchase 525 truck tires over the next year for its fleet. The
company
places
a
blanket order for the tires to a local tire vendor. At the end of a year the company has purchased
only
500
of
the
tires. What should be done to close the contract?
A. The trucking company should pay for the 25 tires and the tire vendor should deliver
them.
B. The total price of the blanket order should be adjusted.
C. The contract should be closed because the year is up and no adjustments are necessary.
D. A new blanket order should be negotiated