PMP Mock Questions

Subject: Project Procurement Management

No of Questions: 49

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Questions Question - 1

During what part of Procurement Management process does procurement

negotiations happened ?
A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
B is the correct answer.

In Conduct Procurements process negotiations occurs.

Question - 2

You are project manager and now in middle of creating RFP(Request for
proposal). RFP(Request for proposal) is done in _______.
A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
A is the correct answer.

RFP(Request for proposal) is done in Plan Procurements process,

Question - 3

Create Procurement document is done in _______.

A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
A is the correct answer.

Create Procurement document is done in Plan Procurements process.

Question - 4

Make-or-Buy Analysis is done in _______.

A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
A is the correct answer.

Make-or-Buy Analysis is done in Plan Procurements process.

Question - 5

You are project manager and now you are middle of comparing proposals
received from sellers . Comparing proposals received from sellers done in
_______ .
A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
B is the correct answer.

Comparing proposals received from sellers done in Conduct Procurements.

Question - 6

Make payment to seller is done in _______ .

A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
C is the correct answer.

Make payment to seller is done in Administer Procurements.

Question - 7

Procurements audits is done in _______ .

A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
D is the correct answer.

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

Question - 8

Complete final contract performance reporting and verify product is done in

_______ .
A.Plan Procurements
B.Conduct Procurements
C.Administer Procurements
D.Close Procurements

Answer :
D is the correct answer.

Complete final contract performance reporting and verify product is done in Close
Procurements.

Question - 9

___________ 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.
A.Procurement Management
B.Planning Management
C.Scope Management
D.Control Management
Answer :
A is the correct answer.

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.

Question - 10

The buyer and seller are bound by the ________.

A.contract
B.responsibilities
C.WBS
D.identification

Answer :
A is the correct answer.

The buyer and seller are bound by the contract.

Question - 11

PMI discusses procurement focusing on the ______ relationship .

A.buyer or seller
B.Vendor or seller
C.Purchasing
D.All of the above

Answer :
A is the correct answer.

PMI discusses procurement focusing on the buyer or seller relationship

Question - 12

In PMBOK, the buyer is ________ to the project team.

A.Internal
B.External
C.Outside
D.Assigned

Answer :
A is the correct answer.
In PMBOK, the buyer is Internal to the project team.

Question - 13

In PMBOK, the seller is ________ to the project team.

A.Internal
B.External
C.Outside
D.Assigned

Answer :
B is the correct answer.

In PMBOK, the seller is External to the project team.

Question - 14

A Risk Register is a part of the ________.

A.Project Scope Statement
B.Project management plan
C.Project scheduling plan
D.Project Charter

Answer :
B is the correct answer.

The Risk Register is detailed part of the project management plan.

Question - 15

Delivery dates and availability of resources can be found in the details of the
__________.
A.Work Breakdown Structure
B.SOW
C.Project Charter
D.Project Scope Statement

Answer :
A is the correct answer.

Delivery dates and availability of resources can be found in the details of the WBS.
Question - 16

Market conditions are a part of ________.

A.Enterprise environmental factors
B.Project management concerns
C.Organizational process assets
D.None

Answer :
A is the correct answer.

Market conditions will influence all factors of procurement.

Question - 17

Make-or-buy decisions measure the costs of both options. What are both two
options ?
A.Direct, indirect
B.Tactical, strategic
C.Management, project
D.None

Answer :
A is the correct answer.

Make-or-buy decisions measure the costs of both options. When doing this analysis, it
should include both direct and indirect costs so that the final decision is based on
comparisons that are equal.

Question - 18

What are common types of cost-reimbursable contracts ?

A.CPF
B.CPFF
C.CPIF
D.All of the above

Answer :
D is the correct answer.

Three common types of cost-reimbursable contracts are CPF, CPFF, and CPIF Cost-
Plus-Fee (CPF), Cost-Plus-Fixed-Fee (CPFF) and Cost-Plus-Incentive-Fee (CPIF).

Question - 19
A contract cannot contain :
A.illegal activities
B.A deadline for the completion of the work
C.Penalties and fines for disclosure of intellectual rights
D.All of the above

Answer :
A is the correct answer.

A contract cannot contain illegal activities. A contract can contain other options
available.

Question - 20

You are the project manage and you have created a contract for your customer.
The contract must have _____ .
A.Offer and consideration
B.Start date and acceptance of start date
C.Signatures and the stamp of a notary public
D.All of the above

Answer :
A is the correct answer.

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

Question - 21

The product description of a project can help to create procurement details.

Which one of the following best describes product description?
A.The product description defines the contracted work, based on the requirements of
the project customer.
B.The product description defines the contracted work.
C.The product description defines the requirements for the contract work.
D.All of the above

Answer :
A is the correct answer.

The product description defines the contracted work, based on the requirements of the
project customer.
Question - 22

You are project manager of a project and decided portion of the project to be
oursourced to vendor. The vendor has discovered some issues that will influence
the cost and schedule of its portion of the project. How the vendor update the
agreement?
A.A new contract signed by your company and the vendor
B.A contract addendum signed by your company and the vendor
C.A SOW signed by you and the vendor
D.None

Answer :
A is the correct answer.

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

Question - 23

You are the project manager of the MKTG Project. You need to purchase some
equipments for your project. The Accounting department need a unilateral form
of contract from you. Accounting is referring to a which of the following.
A.Legal binding contract
B.Purchase Order
C.Statement of Work
D.WBS

Answer :
B is the correct answer.

A unilateral form of a contract is simply a purchase order.

Question - 24

You are project manager of a project and decided portion of the project to be
oursourced to vendor. You have offered a bonus to vendor if they complete their
portion of the work in two months. This is an example of _______.
A.Project incentive
B.Project goal
C.Fixed price contract
D.None

Answer :
A is the correct answer.
This is an example of Project incentive.

Question - 25

The purpose of a contract is to distribute between the buyer and seller a

reasonable amount of which of the following:
A.Risk
B.Responsibility
C.Reward
D.None

Answer :
A is the correct answer.

A fair contract shares a reasonable amount of risk between the buyer and the seller.

Question - 26

What is Privity ?
A.Contractual, confidential information between customer and vendor
B.Relationship between the project manager and a known vendor
C.Relationship between the project manager and an unknown vendor
D.None

Answer :
A is the correct answer.

Privity is a confidential agreement between the buyer and seller.

Question - 27

A contract between an organization and a vendor may include a clause that

penalizes the vendor if the project is late. Penalty should be enforced based on
______________.
A.Who caused the delay and what is the reason for delay.
B.If the project manager knew the delay was likely.
C.If the project manager could have anticipated the delay.
D.None of the above

Answer :
A is the correct answer.

The party that caused the delay is typically the party responsible for the delay.
Question - 28

A single source seller is ____________.

A.There is only one seller the company wants to do business with.
B.There is only one qualified seller.
C.There is only one seller in the market.
D.None

Answer :
A is the correct answer.

A single source seller is only one seller the company wants to do business with.

Question - 29

Which is not a valid evaluation criterion for source selection?

A.Technical ability of the seller
B.Age of the contact person at the seller
C.Contract requirements
D.Price

Answer :
B is the correct answer.

Age of the contact person at the seller should not be considered a evaluation criterion
for source selection.

Question - 30

Tom has sent the ABC Company a letter of intent. What is this means ?
A.Tom intends to sue to the ABC Company.
B.Tom intends to buy from the ABC Company.
C.Tom intends to fire the ABC Company.
D.None

Answer :
B is the correct answer.

Tom intends to buy from the ABC Company.

Question - 31
You are the project manager of the MKTG Project. You want a vendor to offer
you one price to do all of the detailed work. Which type of document you are
looking for?
A.IFB
B.Proposal
C.RFI
D.RFP

Answer :
A is the correct answer.

An IFB a sealed document that lists the seller's firm price to complete the detailed
work.

Question - 32

Which is true about procurement documents?

A.ensure receipt of complete proposals.
B.The project manager creates and selects the bid.
C.inform the performing organization why the bid is being created.
D.None

Answer :
A is the correct answer.

Procurement documents detail the requirements for the work to ensure complete
proposals from sellers.

Question - 33

In which phase does source selection happen?

A.Initiation
B.Planning
C.Closing
D.Execution

Answer :
D is the correct answer.

Source selection happens during the Execution phase.

Question - 34

You have an emergency on your project. You have hired a vendor to start work
immediately. What contract is needed now?
A.Letter contract
B.Fixed fee
C.Incentive contract
D.None

Answer :
A is the correct answer.

For immediate work, a letter contract may be sufficient.

Question - 35

Which statement is true about Fixed price or lump-sum contracts ?

A.The seller assumes the greatest risk because the price is fixed.
B.If the time it takes to deliver the service or product expands, the seller cannot
charge for the extra time and price.
C.The seller cannot charge for the extra materials because the price for the contract is
already fixed.
D.All of the above

Answer :
D is the correct answer.

Fixed price or lump-sum contracts: The seller assumes the greatest risk because the
price is set. If the time it takes to deliver the service or product expands, the seller
cannot charge for the extra time and extra price. The seller cannot charge for the extra
materials because the price for the contract is already fixed. Incentives can be used
with a fixed price contract based on meeting project deliverables or exceeding them.

Question - 36

There are three general types of contracts: Fixed Price, time and materials, and
________.
A.cost reimbursable
B.Simple cost
C.time reimbursable
D.All of the above

Answer :
D is the correct answer.

Three general types of contracts: Fixed Price, time and materials, and cost
reimbursable. Time and Material contract - Seller is paid a preset amount per unit of
service, and the total value of the contract is a function of the quantities needed to
complete the work. Fixed price - A fixed total price for a well-defined product. May
include incentives for meeting or exceeding selected project objectives. Cost
reimbursable contacts - Payment to the seller of actual costs.

Question - 37

Which type of contract has the highest risk for the buyer?
A.Reimbursed time
B.Time and materials
C.Fixed price
D.None

Answer :
B is the correct answer.

In a time and materials contract, the buyer agrees to pay for time used by the seller,
which creates the risk. Time and Material contract - Seller is paid a preset amount per
unit of service, and the total value of the contract is a function of the quantities needed
to complete the work.

Question - 38

Which type of contract has the highest risk for the seller?
A.Reimbursed time
B.Time and materials
C.Fixed price
D.None

Answer :
C is the correct answer.

In Fixed price contract, the seller assumes the greatest risk because the price is fixed
and not going to change. Fixed price - A fixed total price for a well-defined product.
May include incentives for meeting or exceeding selected project objectives.

Question - 39

CPFF stands for :

A.Cost-Plus-Fixed-Fee
B.Cost-Plus-Fine-Fee
C.Both
D.None

Answer :
A is the correct answer.
Cost-Plus-Fixed-Fee (CPFF): The seller is reimbursed for allowable costs and then
receives a fee that is agreed upon before beginning the work.

Question - 40

The seller is reimbursed for costs that are incurred for performing the contract
work, and then the seller receives a percentage of the cost that is agreed upon
before beginning work. Which type of contract is it?
A.CPPC
B.CPFF
C.CPIF
D.None of the above

Answer :
A is the correct answer.

Cost-Plus-Percentage of Cost (CPPC) or CPF (Cost plus fee) : The seller is

reimbursed for costs that are incurred for performing the contract work, and then the
seller receives a percentage of the cost that is agreed upon before beginning work.
Which type of contract is it? Cost-Plus-Fixed-Fee (CPFF): The seller is reimbursed
for allowable costs and then receives a fee that is agreed upon before beginning the
work.

Question - 41

Which type of contract where the buyer and seller share in the savings is ______.
A.Cost reimbursable with incentive fee
B.Cost reimbursable with fixed fee
C.Fixed Price
D.Time and materials

Answer :
A is the correct answer.

Cost reimbursable with incentive fee: It is a predetermined fee that is paid if certain
conditions of the contract are met. Both parties, buyer and seller, will benefit from
producing above expectations.

Question - 42

The seller is reimbursed for allowable costs and then receives a fee that is agreed
upon before beginning the work. Which type of contract is it ?
A.Cost reimbursable with incentive fee
B.Cost reimbursable with fixed fee
C.Fixed Price
D.Time and materials

Answer :
B is the correct answer.

Cost-Plus-Fixed-Fee (CPFF): The seller is reimbursed for allowable costs and then
receives a fee that is agreed upon before beginning the work.

Question - 43

The contract statement of work describes the various procurement items in

sufficient detail to give prospective sellers a guideline to see whether they can
provide the item or items. Which is called______.
A.WBS
B.SOW
C.CSOW
D.None

Answer :
C is the correct answer.

This contract statement of work (CSOW) is a subset of the SOW. The contract
statement of work describes the various procurement items in sufficient detail to give
prospective sellers a guideline to see whether they can provide the item or items

Question - 44

The evaluation criteria are determined by the _______.

A.Seller
B.Buyer
C.Sponsor
D.Project Mnagager

Answer :
B is the correct answer.

The evaluation criteria will often determine whether a seller is even eligible to
participate in the proposal process.

Question - 45

___________is to get information from the seller as to how the requirements of

the project can be met through purchasing.
A.procurement document
B.SOW
C.WBS
D.Scope statement

Answer :
A is the correct answer.

procurement document is to get information from the seller as to how the

requirements of the project can be met through purchasing.

Question - 46

Risk management plan should include:

A.Results of the Identify Risks and risk quantification processes .
B.Who is responsible for managing various areas of risk.
C.How contingency plans will be implemented.
D.All of the above

Answer :
D is the correct answer.

Risk management plan should include: Results of the Identify Risks and risk
quantification processes . Who is responsible for managing various areas of risk. How
the initial identification and quantification outputs will be maintained. How
contingency plans will be implemented. How reserves will be allocated.

Question - 47

Monitor and Control Risks activities include:

A.Identifying risk changes and their trends.
B.Verifying compliance with Risk Management policies.
C.Updating and modifying contingency reserves as needed.
D.All of the above

Answer :
D is the correct answer.

Monitor and Control Risks activities include: Testing project assumptions. Identifying
risk changes and their trends. Verifying compliance with Risk Management policies.
Updating and modifying contingency reserves as needed.

Question - 48
Which statement is true about Contingency Plans?
A.Pre defined action steps to be taken if an identified risk event should occur
B.Provision in the project plan to mitigate cost and schedule risk
C.Both of the above are true
D.None of the above

Answer :
A is the correct answer.

Contingency Plans - Pre defined action steps to be taken if an identified risk event
should occur Reserves (Mitigation) - Provision in the project plan to mitigate cost and
schedule risk

Question - 49

Which statement is true about Mitigation Plans?

A.Pre defined action steps to be taken if an identified risk event should occur
B.Provision in the project plan to mitigate cost and schedule risk
C.Both of the above are true
D.None of the above

Answer :
B is the correct answer.

Contingency Plans - Pre defined action steps to be taken if an identified risk event
should occur Reserves (Mitigation) - Provision in the project plan to mitigate cost and
schedule risk

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