NIGP Exam Questions with Correct Answers

NIGP Exam Questions with Correct Answers A+B Bidding - Answer-A cost-plus-time bidding procedure that selects the low bidder based on a monetary combination of the contract bid items (A) and the time (B) needed to complete the project or a critical portion of the project. It is used to motivate the contractor to minimize the overall time on high priority and high usage projects. This encourages contractors to finish early by (1) offering bonuses for early completion and (2) assessing fines for late completion. ABA Model Procurement Code for State and Local Government - Answer-Developed by the American Bar Association (ABA) and adopted in 1979, it is a collection of statutory principles and policies that provides guidance to public policy managers who wish to responsibly manage public procurement. State and larger local governments have individually codified it into procurement law and policy to effectively guide their procurement organizations. The code was updated in 2000 and contained enhancements in the following areas: Electronic Commerce, Cooperative Purchasing, Flexibility in Purchasing Methods and Processes for Delivery of Infrastructure Facilities and Services. Also called Model Procurement Code. ABA Model Procurement Ordinance for Local Governments - Answer-A code similar to the ABA Model Procurement Code, but intended for use by small local jurisdictions. ABC Inventory Classification - Answer-A means in which to categorize inventory that is applicable to any size business, regardless of industry. (e.g. government, manufacturing, services etc.) ABC classification allows for a review of the inventory based on the business' approach to the management or review of its inventory. For some agencies, the ABC of categories is based on the dollar value of the items. "A" in this application would be the top 10% of the inventory items and would account for approximately 70% of the annual inventory dollar volume. "B" would be the next 20% and would account for approximately 20% of the annual dollars in the inventory and "C" the remaining 70% of the annual inventory items with 10% of the overall monetary value of the annual inventory. The use of the terms "A", "B", and "C" may also be used to classify the need for accurate inventory records (tolerance) for various items, (very accurate, moderate accuracy), how often cycle counts are needed (weekly, monthly, or quarterly), or even to note who may be responsible for the inventory itself (i.e.: "A" is controlled by fleet, "B" is by purchasing and "C" by parks and recreation). Further, "A" may denote the items in the inventory that have the longest lead times (i.e.: JIT extended lead times), how the items are purchased (term contract, spot buy) or levels of safety stock required (highest turn-over, slow movers). Location of specific items in the inventory may also be denoted by the ABC Classification system. (Janson, 1987) Absolute Advantage - Answer-The ability of a country to produce a specific good with fewer resources per unit of output than other countries. The ability to produce something with fewer resources than other producers would use to produce the same thing. A monopoly that exists when a country is the only source of an item, the only producer of an item, or the most efficient producer of an item. Also see Comparative Advantage. (Schiller, 2000) Acceptance of Offer - Answer-The agreement of the vendor to deliver the goods ordered for the price offered. Acceptance - Answer-1. Indication that an offeree is bound by the terms of the offer. 2. An indication by one party of a willingness to act in accordance with the contract or offer. 3. The assumption of a legal obligation by a party to a contract to the terms and conditions of that contract. 4. The act of receiving by an authorized representative with the intention of retaining. Acceptable Quality Level (AQL): - Answer-The specified minimum performance that must be achieved by a product or service to assure the buyer that the goods or services will perform as per the specifications or stipulations contained within the statement of work. The maximum allowable number of defects or defective units. A predetermined quality level which has been deemed as being acceptable; generally used in the manufacturing of material items. Example: AQL of 1% defective rate is acceptable for this item. Also see Acceptance Sampling. Acceptable Products List (APL): - Answer-A pre-approved list of commodities/products, usually grouped by manufacturer, which have proven to be in conformance with developed specifications and standards. The list may result from performance testing of the product or as a result of field testing or laboratory analysis. Also see Qualified Products List (QPL) and Approved Brands List (ABL). Accept without Consideration of Non-conforming Goods - Answer-Terminology used to describe the process that occurs when a supplier ships non-conforming goods and the buyer accepts them knowingly or unknowingly. Example: Buyer contracts for 3 mil plastic garbage bags but the supplier mistakenly ships 2 mil gauge thickness bags instead. When the buyer accepts, knowingly or unknowingly, the non-conforming goods and uses them, it is done without any further consideration from the supplier to offset the lower quality of the plastic garbage bags that was sent to the buyer. Accept with Consideration of Non-conforming Goods - Answer-Terminology that describes the process that occurs after non-conforming goods have been rejected by the buyer. The vendor offers a discount or other incentive to encourage the buyer to accept the non-conforming goods and when the buyer then accepts them, it is done with consideration of non-conforming goods. Example: Buyer contracts for black color garbage bags and the vendor ships clear garbage bags in error. Buyer notifies vendor of the nonconforming goods and the vendor offers to reduce the price of this shipment in order to entice the buyer to keep and use the non-conforming goods.