ExpertHard1 markMultiple Choice
PMP · Question 18 · Task 11: Plan and manage procurement
A project manager is conducting a procurement for a complex software component. The requirements are not fully defined and will likely evolve. Which contract type is MOST appropriate to share risk and allow for flexibility?
A project manager is conducting a procurement for a complex software component. The requirements are not fully defined and will likely evolve. Which contract type is MOST appropriate to share risk and allow for flexibility?
Answer options:
A.
Firm Fixed Price (FFP)
B.
Cost Plus Fixed Fee (CPFF)
C.
Time and Materials (T&M) with a Not-To-Exceed cap
D.
Fixed Price Incentive Fee (FPIF)
How to approach this question
Match Contract to Scope Stability. Unclear Scope = T&M or Cost Plus. Shared Risk/Flexibility = T&M.
Full Answer
C.Time and Materials (T&M) with a Not-To-Exceed cap✓ Correct
C
Time and Materials contracts are often used for agile/evolving scope projects. Adding a cap protects the budget.
Common mistakes
Choosing Fixed Price for unclear scope (recipe for change order disaster).
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