It Project Management 7Th Edition Chapter 12 Key Terms

Front 1

bid

Back 1

A document prepared by sellers to provide pricing for standard items that the buyer has
clearly defined; also called a tender or quote

Front 2

constructive change orders

Back 2

Oral or written acts or omissions by someone with actual or
apparent authority that can be construed to have the same effect as a written change order

Front 3

contract

Back 3

A mutually binding agreement that obligates the seller to provide specified products or services and obligates the buyer to pay for them

Front 4

cost plus award fee (CPAF) contract

Back 4

A contract in which the buyer pays the supplier for allowable performance costs plus an award fee based on the satisfaction of subjective performance criteria

Front 5

cost plus fixed fee (CPFF) contract

Back 5

A contract in which the buyer pays the supplier for allowable performance costs plus a fixed fee payment that is usually based on a percentage of
estimated costs

Front 6

cost plus incentive fee (CPIF) contract

Back 6

A contract in which the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus

Front 7

cost plus percentage of costs (CPPC) contract

Back 7

A contract in which the buyer pays the supplier
for allowable performance costs along with a predetermined percentage based on total costs

Front 8

cost-reimbursable contracts

Back 8

Contracts that involve payment to the supplier for direct and indirect actual costs

Front 9

fixed-price contract

Back 9

A contract with a fixed total price for a well-defined product or service; also called a lump-sum contract

Front 10

lump-sum contract

Back 10

A contract with a fixed total price for a well-defined product or service; also called a fixed-price contract

Front 11

make-or-buy decision

Back 11

An organization’s decision to make certain products and perform certain services inside the organization or to buy them from an outside organization

Front 12

Point of Total Assumption (PTA)

Back 12

The cost at which the contractor assumes total responsibility for each additional dollar of contract cost in a fixed-price incentive fee contract

Front 13

procurement

Back 13

Acquiring goods and services from an outside source

Front 14

project procurement management

Back 14

The processes required to acquire goods and services for a project from outside the performing organization

Front 15

proposal

Back 15

A document prepared by sellers when there are different approaches for meeting buyer needs

Front 16

Request for Proposal (RFP)

Back 16

A document used to solicit proposals from prospective suppliers

Front 17

Request for Quote (RFQ)

Back 17

A document used to solicit quotes or bids from prospective suppliers

Front 18

sellers

Back 18

Contractors, suppliers, or providers who provide goods and services to other organizations

Front 19

statement of work (SOW)

Back 19

A description of the work required for procurement

Front 20

termination clause

Back 20

A contract clause that allows the buyer or supplier to end the contract

Front 21

time and material (T&M) contracts

Back 21

A hybrid of fixed-price and cost-reimbursable contracts

Front 22

unit pricing

Back 22

An approach in which the buyer pays the supplier a predetermined amount per unit of service, and the total value of the contract is a function of the quantities needed to complete the work