1. (TCO A) The four phases of the procurement process includes the following: (Points : 6)
Plan, conduct, control and award
Plan, bid, control and close
Plan, award, conduct and close
Plan, conduct, control and close
2. (TCO C) Which has more cost risk to the seller, a fixed-price contract or a cost-reimbursable
contract? Why? How might that risk be mitigated? (Points : 12)
3.
(TCO D) Compare and contrast sole source and single source approaches to procurement.
(Points : 12)
4.
(TCO F) You are preparing for contract negotiations for a job opportunity. To achieve your desired
contract negotiation results, as part of your preparation, you need to understand what is your
BATNA (Best Alternative To a Negotiation Agreement). Your are the HR manager and need to hire
one of the 2 finalist for this position. The position is a level 3 Project Manager which offers a
$80,000 starting salary. The candidate you will be interviewing today is the prefer candidate for
the hiring department. As the HR manager, you know that the range for this position is from
80,000 to 140,000. Your previous candidate, has mentioned that he is looking for a 6 figure job of
about $150K. You also know that the hired individual will need to go into training immediately to
prepare for a project that is about to start.
Your answer to each of the following points below should be justified.
What will your negotiation bargaining strategy be?
1st) Going into this deal, tell us, what is your BATNA, status quo, and risks?
2nd) What is your bottom line or reservation offer? (based on what)
3rd) What would your dream accepted offer by the candidate be? (based on what)
4th) How will you plan for this negotiation?
5th) What tactics and counter-tactics will you use?
Use what you have learned in class (Points : 25)
5.
(TCO B) You are a potential seller for a large project. You have just exited the bidder’s meeting.
What are some items you would likely consider before making your bid or no-bid decision?
(Points : 20)
6.
(TCO C) Given the following, answer the below questions.
Target Cost: $65,000
Target Fee: $15,000
Target Price: $80,000
Ceiling Price: $105,000
Buyer-Seller Share Ratio: 70:30
1.- What is the Point of Total Absorption (PTA)? (5pts)
2.- What will the cost overrun be at the PTA ? (5pts)
3a.- Based on buyer-seller share ratio formula what will be the BUYER
contribution to the overrun? (2.5 pts)
3b.- Based on buyer-seller share ratio what will be the SELLER contribution
to the overrun? (2.5 pts)
4.- How much does the buyer pay when the actual cost reaches PTA? (5pts)
5.- How much profit/loss does the seller make when actual cost reaches
PTA? (5pts) (Points : 25)
7.
(TCO G) Often in the procurement closeout process, a procurement audit is done. What is a
procurement audit, and what is the purpose of a procurement audit? (Points : 20)
