L3M3 Contract Administration Questions and Answers

Explanation

A mini-competition may be held to select a supplier, depending on the wording in the framework arrangement documentation and circumstances at the time.

Explanation

Essentially the contract is now between two different parties because one party has assigned the contract to someone else.

It's always a good idea to check whether this is permitted under a contract, otherwise you might finish up doing business with someone you didn't plan to do business with.

Explanation

English law, with Scots and European law being different.

In many Commonwealth countries, the legal system used is based on historic English law, thus many lawyers around the world are familiar with many of the fundamental concepts of English law, including the law of contract.

Contracts should state which legal system applies.

Explanation

Liquidated damages clause.

The QUESTION NO: is pretty much a definition of a liquidated damages clause.

Explanation

Outputs link to the concept of a performance (or 'output') specification, not a conformance specifi-cation.

Explanation

Selling price minus variable costs = contribution., or more accurately 'contribution towards fixed costs and making a profit'. I find this longer term for 'fixed costs' to be quite helpful in clarifying exactly what we are talking about here.

Explanation

1948 is the correct answer: the UN issued the UDHR in 1948, three years after the end of World War 2.

More than 70 years later, we know that in many supply chains, there are individuals' human rights being breached, for example, in modern slavery.

CIPS is strongly opposed to modern slavery, and we should do our utmost to eradicate such prac-tices within our supply chains.

Explanation

The best quotation is selected, which would meet the specification as well as meeting the other re-quired criteria; and in order to progress things round the procurement cycle, a purchase order would be issued.

Explanation

The Executive Summary summarises the situation for busy executives to save them working all the way through the detail.

The summary needs to be very well written, accurately reflective of the entire document, and in-clude the key points needed to make a balanced decision.

The executive summary should be written last of all the sections, and is often the only part of a document which will be read.

Explanation

'Invitation to treat' is less than an offer ie it is not capable of being accepted in any contractual sense.

A common example given of an invitation to treat are goods on display in a shop window.

Explanation

When a company's goals, resources, plans are aligned we should hope for better performance. And when the employee's values are also aligned, it just gets better.

Explanation

This is about risk, and the answer is 'treat'.

Risk management strategies can be classified into 'the 4 T's', which you need to know for your ex-am.

Treating the risk is essentially seeking to minimise the likelihood or impact of the risk. An example might be to carefully monitor key suppliers' ongoing financial performance to minimise the likeli-hood of their going into liquidation during the course of a contract with us. Etc.

Explanation

Both penetration pricing and promotional pricing begin with the market price. Marginal pricing and rate of return pricing both look at the costs of doing something, and base their calculations on cost. These last two are therefore cost-based approaches to pricing.

Explanation

'Five-Why Analysis' or 'Why-Why Analysis' is an approach to trying to determine the cause of an event. It can be used to link to / in conjunction with an Ishikawa diagram. The principle is thatone repeatedly (as often as necessary, not necessarily limited to five) asks 'why?', and eventually an un-derlying reason will emerge, which if addressed effectively, will successfully resolve the problem. This is something which can often be observed naturally in small children. 'Why, Daddy?'. 'But why, Daddy?. Etc. (Or Mummy)

Explanation

In English law, implied terms exist, even if you can't see them in the contract documents. They commonly derive from statute. An example is the Sale of Goods Act.

Explanation

Taking up suppliers' time if there is no intention to purchase from them is unethical.

Negotiating with suppliers is to be encouraged; following your line manager's instructions is general-ly regarded as being a good thing, although regarding ethical issues, one is encouraged to query.

Explanation

The answer is fixed costs. Their counterpart are variable costs, which do vary as business activity increases or decreases.

Direct and indirect costs are a different method of categorizing costs within an organisation.

Explanation

The business case will justify the expenditure.

Of the other answers offered, the only one which needs explanation presumably is 'cost analysis'. This needs to be distinguished from 'price analysis'.

Explanation

High level of power and a high level of interest.

You should hope that in your exam you get such an easy QUESTION NO: !

Explanation

Inability to touch something.

Services are intangible, which may present challenges when specifying / buying.

Explanation

Managed.

This an old management adage, which is intended to encourage managers to measure helpful indica-tors (not everything!).

Explanation

The answer is an Ishikawa Diagram.

Can be used in addressing quality problems, problems of under-performance, etc.

The other Japanese-sounding names shown as possible answers are spurious - two are novelists, and Fukushima was a serious environmental radioactive leak at a nuclear power station on the coast of Japan.

Explanation

Offer and acceptance together make up 'agreement'.

Explanation

Early supplier engagement - one of the assessment criteria for this course (3.1)