Procurement question

Discussion in 'PMP' started by _49203, Jul 31, 2019.

  1. _49203

    _49203 Active Member

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    Hi @tim jerome

    I initially selected answer B - FP with early completion incentive contract - because of the "risk of completing" which I assumed was time, as well as because it is a large construction project.


    Aren't time and material contracts mostly for short-term, smaller projects and for staff augmentation?

    You are managing a large construction project and are concerned about the risk of completing the framing for a project which requires the purchase of a lot of supplies. You decide to outsource this to a company that specializes in framing. Which type of contract would be best for this service?

    Fixed Price
    Fixed Price plus early completion incentive
    Time and Material
    Time and Material with a cap



    Correct answer: D
     
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  2. Arvind Shekhar

    Arvind Shekhar Well-Known Member

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    yes it is a large construction project but services being outsourced is only a part of project namely "framing work" where we are hiring services of experts agency. we also know that framing work involves lot of material supplies ( Not quantified) so option A and B are eliminated. out of C & D , D is better one.
    if we simplify the question as " you need services of an expert firm and also don't and to be involved in purchase lot of supplies what kind of contract you choose. from my experience in construction many time framing material is hired one.
     
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  3. tim jerome

    tim jerome Well-Known Member
    Trainer

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    Excellent example of determining the "real" question. Often times, the scenario is talking in one direction, and the question is pointing in another.

    Thanks, Arvind.
     
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  4. Arvind Shekhar

    Arvind Shekhar Well-Known Member

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    Thanks Tim.
     
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