NO.75 Maximum Score 6
An urgent component requirement needs to be purchased to meet the timescales of a project. A supplier proposes using its standard terms and conditions. What risk to the buying organisation could this bring?

NO.76 In the application of price adjustment formulae, which of the following would be acceptable for a supplier to increase its selling price?

NO.77 A procurement manager is preparing a long-term contract with a major supplier. She decides to use the variable pricing arrangement using price indices. The payment terms describe the circumstances and mechanism where the price is allowed to change. In order to successfully manage this type of contract, the buying organisation should have…?

NO.78 To expand its operation, Steel Co. decides to build a new plant. Despite of excitement, the senior management is very concerned about the complexity and risks of such project. Hugo, the procurement manager, suggests that the company can adopt a model form of contract. What is the advantage of using model form of contract?

NO.79 A procurement professional is drafting payment terms for a commercial contract. He is considering about payment method if defective products are found. Which of the following should be embedded in payment terms to control this issue?

NO.80 A procurement manager is setting KPIs measurement for user satisfaction. He also wants to encourage users to share the reason why they feel the way they do. Which of the following types of KPI should the procurement manager apply?

NO.81 Maximum Score: 1
Where a supplier is incentivised to deliver improvements that create added value for the buyer, this is described as what type of outcome?

NO.82 Maximum Score 1
A service contract for cleaning is due for expiry after a five-year duration. Which of the following are good sources of data to create a specification for the new invitation to tender?
* Incumbent supplier
* Maintenance services
* Alternative suppliers
* Management information

NO.83 Which of the following are always included within a framework agreement? Select TWO that apply:

NO.84 Which of the following would be useful tools to incentivise supplier innovation over the duration of the contract?
1. Gainshare arrangement
2. Liquidated damages
3. Service credits
4. Fixed bonus payments

NO.85 Social and environmental criteria are often incorporated into which of the following type of specification?

NO.86 Which of the following is the model form of contract for construction which is recommended by World Bank?

NO.87 Sally places a purchase order to the supplier for some components that her company requires. The supplier delivers the goods as she asks, but the quality assurance team finds that these components are defective and unfit for the company’s operations. Which document is the ground to decide whether the goods received are fit for purpose?

NO.88 Which of the following are likely to be advantages of using invitation to tender? Select TWO that apply:
Short turnaround times

NO.89 MWB operates serviced offices in central London. Rock entered a contractual licence with MWB to occupy office space in Marble Arch and had accumulated licence fees in arrears. The original licence agreement contained a ‘No Oral Modification’ clause that said: ‘All variations to this licence must be agreed, set out in writing and signed on behalf of both parties before they take effect’.
After 6 months, Rock director re-negotiated to extend payment period over phone call and MWB credit controller agreed his proposal. Is this agreement considered as an effective variation to the original licence agreement?

NO.90 If service level agreement is used as a schedule that makes up the contract, it will be most likely to be a part of…?

NO.91 Foodstuffs may arrive from an overseas supplier in a deteriorated state. Is this covered under the implied term of ‘satisfactory quality’?

NO.92 Why would you use a non-disclosure agreement?

NO.93 Misrepresentation can be defined as a false statement of material fact made by one of the contracting parties which was intended to (and did) induce the other party to make the contract. What remedies are available in this instance to the innocent party?

NO.94 A senior procurement specialist in UK is preparing a specification in which ISO standards are used to send to global suppliers. Is this action appropriate?

NO.95 What are five essential elements of a legally binding contract?

NO.96 Under a price adjustment agreement, which of the following would be supplier’s justification for increasing unit price?

NO.97 Which of the following is the procedure that makes no further competition under a framework agreement?

NO.98 Which of the following indicates the ratio between profit and costs?