This document provides an overview of project procurement management processes and concepts for PMP certification preparation. It begins with an introduction to the 10 project management knowledge areas and the 4 procurement management processes from the PMBOK Guide. For each process, it outlines the inputs, tools and techniques, and outputs. It also includes examples of contract types, source selection criteria, and sample exam questions related to procurement management. The document aims to help participants understand the structure and approach of the session and benefit from the certification preparation material.
1. Presented by:
Vladimir Vujović, PMP
PMI Certification Preparation: PMP / CAPM
- Project Procurement Management -
Project Management Institute, Inc. All rights reserved.
December 2017
2. • Presenter
• Participants: profile, background, expectations
• Session: structure, approach and benefits
Introduction to the session
9. • Cost Plus Fixed Fee Contracts (CPFF)
• Cost Plus Incentive Fee Contracts (CPIF)
• Cost Plus Award Fee Contracts (CPAF)
Cost-reimbursable contracts
10. • Understanding of need
• Overall or life-cycle cost
• Technical capability
• Risk
• Management approach
• Technical approach
• Warranty
• Financial capacity
• Production capacity and interest
• Business size and type
• Past performance of sellers
• References
• Intellectual property rights
• Proprietary rights
Source selection criteria
12. Conduct Procurements: Data Flow
Conduct
Procurements
Plan
Procurement
Management
Develop Project
Management
Plan
Enterprise /
Organization
Project Procurement Management
• OPA
Control
Procurements
Project documents
• Agreements
• Resource calendars
• Project
documents
• Seller proposals
Estimate
Activity
Resources
Estimate
Activity
Durations
Develop
Schedule
Determine
Budget
Develop Project
Team
Perform
Integrated
Change Control
Develop Project
Charter
Project documents
Sellers
• Selected sellers
• Procurement management plan
• Procurement documents
• Source selection criteria
• Make-or-buy decisions
• Procurement statement of work
• Project documents
updates
• Project management
plan updates
• Resource calendars
• Resource calendars
• Resource calendars
• Resource calendars
• Change requests
• Agreements
13. Risk to Buyer and Seller According to Contract Types
100%
Risk
0%
Buyer
Seller
CPPC CPAF T&M FPIF
CPFF CPIF FPEPA FP
CPPC: Cost Plus Percentage of Costs
CPFF: Cost Plus Fixed Fee
CPAF: Cost Plus Award Fee
CPIF: Cost Plus Incentive Fee
T&M: Time and Material
FPEPA: Fixed Price Economic Price Adjustment
FPIF: Fixed Price Incentive Fee
FP: Fixed Price
14. Control Procurements
Inputs
• Project management plan
• Procurement documents
• Agreements
• Approved change requests
• Work performance reports
• Work performance data
Tools and Techniques
• Contract change control
system
• Procurement performance
reviews
• Inspections and audits
• Performance reporting
• Payment systems
• Claims administration
• Records management system
Outputs
• Work performance
information
• Change requests
• Project management plan
updates
• Project documents updates
• Organizational process assets
updates
15. Control Procurements: Data Flow
Control
Procurements
Plan
Procurement
Management
Perform
Integrated
Change Control
Project Procurement Management
• Project communications
• Work performance
reports
Perform
Integrated
Change Control
Direct and
Manage Project
Work
Develop Project
Management
Plan
Project documents
• Work performance
data
• Project
Management Plan
• OPA updates
• Project documents
updates
• Change requests
• Approved change
requests
• Work performance information
Monitor and
Control Project
Work
Conduct
Procurements
Enterprise /
Organization
• Project Management Plan updates
• Procurement documents
• Agreements
16. Close Procurements
Inputs
• Project management plan
• Procurement documents
Tools and Techniques
• Procurement audits
• Procurement negotiations
• Records management system
Outputs
• Closed procurements
• Organizational process assets
updates
17. Close Procurements: Data Flow
Close
Procurements
Plan
Procurement
Management
Enterprise /
Organization
Project Procurement Management
• Procurement documents
Develop Project
Management
Plan
• Project
Management
Plan
• Closed
procurements
• OPA updates
18. • The risk shared between the buyer and the seller is determined by
which of the following?
A. The Scope of Work
B. The Teaming Agreement
C. The Contract Type
D. The Project Charter
Sample question #1
19. • The risk shared between the buyer and the seller is determined by
which of the following?
A. The Scope of Work
B. The Teaming Agreement
C. The Contract Type
D. The Project Charter
Sample question #1
20. • You are trying to decide whether to lease or buy an item for your
project. The daily lease cost is $120. To purchase the item, the
investment cost is $1,000 and the daily maintenance cost is $20. How
long will it take for the lease cost to be the same as the purchase cost?
A. 10 days
B. 12 days
C. 120 days
D. 100 days
Sample question #2
21. • You are trying to decide whether to lease or buy an item for your
project. The daily lease cost is $120. To purchase the item, the
investment cost is $1,000 and the daily maintenance cost is $20. How
long will it take for the lease cost to be the same as the purchase cost?
A. 10 days
B. 12 days
C. 120 days
D. 100 days
Sample question #2
22. • You are managing a complex project and some of the project work needs to be
outsourced. You have prepared a procurement statement of work document and
you are about to advertise the job to obtain vendor proposals. However, you need
to have a benchmark document against which you can later compare the vendor
proposals. Your primary focus for this activity is to have control over the quoted
prices. You will also need this document later to compare whether or not your
vendors properly understood the scope of the work required. Which technique
should you use to develop this benchmark document?
A. Bidder Conferences
B. Independent Estimates
C. Internet Search
D. Procurement Negotiations
Sample question #3
23. • You are managing a complex project and some of the project work needs to be
outsourced. You have prepared a procurement statement of work document and
you are about to advertise the job to obtain vendor proposals. However, you need
to have a benchmark document against which you can later compare the vendor
proposals. Your primary focus for this activity is to have control over the quoted
prices. You will also need this document later to compare whether or not your
vendors properly understood the scope of the work required. Which technique
should you use to develop this benchmark document?
A. Bidder Conferences
B. Independent Estimates
C. Internet Search
D. Procurement Negotiations
Sample question #3
24. • 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 order to make a selection is the:
A. Procurement documents
B. Procurement audits
C. Source selection criteria
D. Procurement management plan
Sample question #4
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 to be awarded to a
different seller. The best thing the project manager should remind the
team to focus on in order to make a selection is the:
A. Procurement documents
B. Procurement audits
C. Source selection criteria
D. Procurement management plan
Sample question #4
26. • During which procurement processes does procurement negotiation
occur?
A. Plan Procurement Management and Close Procurements
B. Control Procurements and Close Procurements
C. Conduct Procurements and Control Procurements
D. Conduct Procurements and Close Procurements
Sample question #5
27. • During which procurement processes does procurement negotiation
occur?
A. Plan Procurement Management and Close Procurements
B. Control Procurements and Close Procurements
C. Conduct Procurements and Control Procurements
D. Conduct Procurements and Close Procurements
Sample question #5
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, and you have limited scope definition. What is the
best type of contract to choose?
A. Fixed Price (FP)
B. Cost Plus Percentage of Cost (CPPC)
C. Time and Material (T&M)
D. Cost Plus Fixed Fee (CPFF)
Sample question #6
29. • 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, and you have limited scope definition. What is the
best type of contract to choose?
A. Fixed Price (FP)
B. Cost Plus Percentage of Cost (CPPC)
C. Time and Material (T&M)
D. Cost Plus Fixed Fee (CPFF)
Sample question #6
30. • Close procurements is different from Close Project or Phase in that
Close Procurements
A. Occurs before Close Project or Phase
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
Sample question #7
31. • Close procurements is different from Close Project or Phase in that
Close Procurements
A. Occurs before Close Project or Phase
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
Sample question #7
32. • 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
their own decisions
B. The procurement statement of work should be general to allow for clarification later
C. The procurement statement of work should be detailed to allow for clarification later
D. The procurement statement of work should be as detailed as necessary for the type of
project
Sample question #8
33. • 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
their own decisions
B. The procurement statement of work should be general to allow for clarification later
C. The procurement statement of work should be detailed to allow for clarification later
D. The procurement statement of work should be as detailed as necessary for the type of
project
Sample question #8
34. • 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)
Sample question #9
35. • 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)
Sample question #9
36. • 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
Sample question #10
37. • 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
Sample question #10
38. Vladimir VUJOVIĆ, PMP E-mail: vladimir.vujovic@gmail.com
PMO and BCM Manager
Delhaize Serbia
Sources used:
PMBOK Guide, 5th Edition
Rita Mulcahy’s PMP Exam Prep, 8th Edition
Good Luck!
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