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| Question | Answer |
| Contract? | Created with external entity Form legal relationships Requires formality (formal written; can have verbal) Can be considered an agreement |
| Agreement | Broader term than Contract Outline the intentions Charter & pm plans are agreements |
| Sellers provide solutions or augment your project team with additional resources? | Both. For large project, seller provides full solutions. Assume this for the exam |
| Should procurement requirements documented in contract? | YES. It must be. |
| What if a procurement requirement is not in contract? | A formal change order to the contract must be issued Changes in contract must be approved in writing |
| What is one important benefit of contract in project management? | Reduce risks |
| Should the PM be included in the bidding and proposal process? | YES. |
| The 3 broad categories of contracts? | Fixed price (FP) Time & Material (T&M) Cost-reimbursable (CR) |
| How project control is different in a procurement environment? | The seller has different culture & structure Buyer and seller have different objectives |
| Can there be multiple procurement closures in a project? | YES. Since there can be many procurement |
| Procurement closure vs Project closure | Project closure: happens at each project phase or project completion Procurement closure: happens at contract completion |
| Primary usage of incentive in contract is? | Synchronize objectives (sellers' with buyers') |
| Can you halt payments while in a contract? | Generally NO. But if the answer include: "Halt payment on the disputed amount" then YES. |
| On a CR contract, should you change contract to request more audits when you found out a few overcharges made? | NO. It does not solve the problem. The best answer depends on the provided choices. Some times, you must continue making the payments |
| The primary objective of contract negotiations is to...? | Protect relationship (NOT get the most from the other side) (NOT define objectives & stick) |
| What can a seller do with a contract? | Negotiate a change Refuse a change or new request from the buyer |
| What can't a seller do with a contract? | Unilaterally decide to start over a new contract |
| What are needed to form a contract? | Procurement statement of work Acceptance (of both parties) |
| When does procurement negotiation occur? | Conduct & Close Procurement processes |
| Contract that limit fees for large projects with limited scope definitions? | Cost plus fixed fee (CPFF) |
| What PM does if seller does not perform contract terms? | The seller have defaulted 1. contact the seller and see what going on 2. send formal written notice (default letter) if required |
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