Ch9 - The Commercial Interface Complete Test Bank

Chapter 09 - The commercial interface

Test Bank

Type: multiple choice question

Title: Chapter 09 Question 1

01) At which stage there is the principal commercial engagement by the owner with suppliers:

a. Appraise

b. Select

c. Define

d. Execute

Type: matching question

Title: Chapter 09 Question 2

02) Different aspects of contracting strategy are captured as the four forces:

Feedback:

Different aspects of contracting strategy are captured as the four forces:

• • Nature of transaction – transaction cost economics that analyses the preferred relationship between supplier and owner for a given package.
  • Structure of the supply – the questions for the owner revolve around how critical the task package is for project delivery and the technological complexity of the task package.
  • Economic cycle – capitalist economies are inherently cyclical and those cycles are reflected in the dynamics of supply sectors where the amplitude of the cycle at the macroeconomic level is amplified by the accelerator effect within project-based sectors.
  • Institutional force – projecting always takes place in a particular institutional context which is typically defined at the national level by the national business system in which project-based forms are structured into project-based sectors.

A-head reference: 8.3

a. Institutional force = capitalist economies are inherently cyclical and those cycles are reflected in the dynamics of supply sectors where the amplitude of the cycle at the macroeconomic level is amplified by the accelerator effect within project-based sectors.

b. Nature of transaction = projecting always takes place in a particular institutional context which is typically defined at the national level by the national business system in which project-based forms are structured into project-based sectors

c. Structure of the supply = transaction cost economics that analyses the preferred relationship between supplier and owner for a given package

d. Economic cycle = the questions for the owner revolve around how critical the task package is for project delivery and the technological complexity of the task package.

Type: true-false

Title: Chapter 09 Question 3

03) Contracts are central to the commercial relationship between organizations in SPO.

a. True

b. False

Type: matching question

Title: Chapter 09 Question 4

04) Three basic types of complex contracts:

Feedback:

Three basic types of complex contracts:

• • Reimbursable contracts – those whose goods and services are provided at an agreed rate as a function of an agreed parameter. These are used where it is possible to identify broadly the type of resources required, but not in enough detail to specify closely.
  • Fixed price contracts – those where the price is fixed for the supply of an agreed amount of work. They can either be a true lump sum, where the contract price is fixed, or be schedule of rates (bills of quantity) where the precise quantity of work to be done is not known in advance.
  • Incentive contracts – features af mix of contracts; there is a wide variety of such contracts add what unites them is the attempt to provide positive incentives within the contract to motivate collaborative relationships between parties.

A-head reference: 8.3

a. Fixed price contracts = features a mix of contracts; there is a wide variety of such contracts add what unites them is the attempt to provide positive incentives within the contract to motivate collaborative relationships between parties.

b. Reimbursable contracts = those where the price is fixed for the supply of an agreed amount of work.

c. Incentive contracts = those whose goods and services are provided at an agreed rate as a function of an agreed parameter. These are used where it is possible to identify broadly the type of resources required, but not in enough detail to specify closely.

Type: true-false

Title: Chapter 09 Question 5

05) Under the fixed price contracts, it is in the interests of the supplier to generate work to be done.

a. True

b. False

Type: true-false

Title: Chapter 09 Question 6

06) Those tendering for a fixed price contracts have an interest in maximising the contract value, subject to the constraint that they are competing with others for the contract.

a. True

b. False

Type: multiple choice question

Title: Chapter 09 Question 7

07) Who is typically responsible for the commercial interface in SPO:

a. Delivery organizations

b. Both owner and delivery teams.

c. Project accountants

d. Split between the owner project team and the owner commercial team.

Type: matching question

Title: Chapter 09 Question 8

08) The project lifecycle from the point of view of a supplier can be viewed as a sequence of generic phases:

Feedback:

The project lifecycle from the point of view of a supplier can be viewed as a sequence of generic phases:

• • Develop business – about business development through understanding the market and identifying those owners that are likely to be initiating projects.
  • Bid – the process of moving from invitation to tender negotiating a successful contract. It answers the question what is our offer to the owner and does the project fit our portfolio?
  • Deliver – the process of delivering the output specified in the owner’s scope. It answers the question have we delivered the outputs to the owner to the agreed schedule, budget, and quality level?
  • Support – is about ensuring the availability of the output through life to enable the owner to achieve the outcomes desired by the project mission.

A-head reference: 9.3

a. Support = the process of moving from invitation to tender negotiating a successful contract. It answers the question what is our offer to the owner and does the project fit our portfolio?

b. Develop business = the process of delivering the output specified in the owner’s scope. It answers the question have we delivered the outputs to the owner to the agreed schedule, budget, and quality level?

c. Bid = about business development through understanding the market and identifying those owners that are likely to be initiating projects.

d. Deliver = is about ensuring the availability of the output through life to enable the owner to achieve the outcomes desired by the project mission.

Type: multiple choice question

Title: Chapter 09 Question 9

09) How should the commercial interface be designed in order to incentivize collaborative behaviours and collaborative culture on the project:

a. Transactional

b. Transformational

c. Relational

d. Partnering

Type: true-false

Title: Chapter 09 Question 10

10) The development of collaborative relations greatly facilitates innovation.

a. True

b. False