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Procurement Management is a groups of processes required to to purchase or acquire the products, services, or results needed from outside the project team to perform the work.

Processes

There are following processes which are part of Project Procurement Management.

•Plan Procurements
•Conduct Procurements
•Administer Procurements
•Close Procurements

Few Important points

Request for Proposal (RFP): A type of procurement document used to request proposals from prospective sellers of products or services. In some application areas, it may have a narrower or more specific meaning.

Request for Quotation (RFQ): A type of procurement document used to request price quotations from prospective sellers of common or standard products or services.

Statement of Work (SOW): A narrative description of products, services, or results to be supplied.

War Room: A room used for project conferences and planning, often displaying charts of cost, schedule status, and other key project data.

Sole Source refers to a market condition in which only one qualified seller exists in the market.

Single Source refers to a market condition in which the company prefers to contract with only one seller.

Oligopoly refers to a market condition where very few sellers exist, and the action of one seller will have impact on other seller prizes.

Contract can be used as a risk management tool, as in transferring risk.

Centralized Contracting refers to a separate contracting office that handles contracts for all projects. In De-centralized Contracting a contract administrator is assigned for each project.

Force majeure is a powerful and unexpected event, such as hurricane or other disaster.

Privity is contractual information between customer and vendor.

The process of Close Procurement involves completing each procurement. The process involves verifying that all planned work as per the contract has been completed.

Contract Work Breakdown Structure (CWBS): A portion of the work breakdown structure for the project developed and maintained by a seller contracting to provide a subproject or project component


1. Plan Procurements


2. Conduct Procurements


3. Administer Procurements


4. Close Procurements


These questions are randomly taken from TechFaq360 PMP success kit



Question - 7

Procurements audits is done in _______ .
1.Plan Procurements
2.Conduct Procurements
3.Administer Procurements
4.Close Procurements

Correct Answers are : 4
Explanation :
D is the correct answer.

Procurements audits are done in Close Procurements. PMBOK page no 345.

Question - 20

You are the project manager and created a contract for your customer. The contract must have the___________.
1.Offer and consideration
2.Start date and acceptance of the start date
3.Signatures and the stamp of a public notary
4.All of the above

Correct Answers are : 1
Explanation :
A is the correct answer.

A contract must have the offer and consideration. Not all contracts demand signatures of public notary. Contract may specify a start date, but the acceptance of the start date is not needed for all contracts.

Question - 22

You are the project manager and decided to outsource a part of the project to a vendor. The vendor discovered some issues that impact the cost and schedule of its work. How does the vendor update the agreement?
1.A new contract to be signed by your company and the vendor
2.A contract addendum signed by your company and the vendor
3.An SOW signed by you and the vendor
4.None

Correct Answers are : 1
Explanation :
A is the correct answer.

A contract addendum signed by your company and the vendor. No need for new contract.

1600+ PMP Questions Fourth(4th) Edition



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