CPPB - DOMAIN 1 PROCUREMENT
ADMINISTRATION EXAM QUESTIONS
WITH COMPLETE ANSWERS
Value Engineering (VE) is: - ANSWER-A technique by which contractors may (1)
voluntarily suggest methods for performing more economically and may share in any
resulting savings or (2) be required to establish a program or identify and submit
methods for performing more economically. * usually applied to construction projects
* may be part of request for proposals or action taken by contractor after
Total cost of ownership (TCO) - ANSWER-A measure of all of the cost components
associated with the procurement of a product or service. The sum of all fixed and
variable costs attributed to a product or service.
Life Cycle Costing: - ANSWER-The total cost of ownership over the life span of the
asset.
Total cost of Ownership and Life Cycle Costing: - ANSWER-Used synonymously.
Both techniques provide the true cost of a product rather than just the purchase price
and allow for better cost cutting decisions. Two approaches to cutting cost: cost
reduction and cost avoidance.
Cost Reduction occurs: - ANSWER-when the current price to be paid by the buyer is
lower than the previous price paid under similar procurement conditions.
Cost Avoidance: - ANSWER-Actions take to avoid having to pay some sort of cost.
Requirements Analysis: - ANSWER-is applied to the writing of specifications to
eliminate products or services that are not cost effective.
Audit: - ANSWER-Detailed review and examination of records, documents and the
business processes with the confirmation by outside experts
Four types of audits: - ANSWER-Financial and compliance, Economy and efficiency,
Program audits or evaluations, and Performance
Financial and compliance audits: - ANSWER-Normally performed by an independent
accounting firm. Determines if financial transactions are recorded and to verify their
accuracy.
Economy and efficiency audits: - ANSWER-Management and operational audits.
They examine a governmental unit's managerial and administrative practices for
economy and cost efficiency
Program audits or evaluations: - ANSWER-Monitor results to determine the extent to
which a governmental unit has achieved program objectives.
, Performance audits: - ANSWER-Reviews all the operations of a governmental unit
Three phases to any evaluation process: - ANSWER-Planning, data collecting and
decision making based on findings
Three kinds of audit reports: - ANSWER-Intradepartmental, interdepartmental and
higher level management
Post procurement audits: - ANSWER-Another way to safeguard against unethical
buying practices.
Automated Procurement Systems: - ANSWER-In-house computerized systems to
facilitate transactions between procurement and client organizations
Electronic Procurement (eProcurement) - ANSWER-Conductions procurements on
the internet for increased efficiency and effectiveness
Electronic Commerce (eCommerce): - ANSWER-Integration of electronic data
interchange, electronic funds transfer and similar techniques into a comprehensive
electronic bases system of procurement functions.
Electronic Sourcing (eSourcing): - ANSWER-Process of obtaining bids from different
suppliers via a single online portal
Procurement Cards (pCards): - ANSWER-Fast, flexible purchasing and payment tool
that provides an extremely efficient and effective method for acquiring goods and
services.
Smart Cards: - ANSWER-Use to make small purchases but is considered a
electronic wallet. Embedded with a chip that stores data for a variety of uses.
Supplier Diversity Programs: - ANSWER-Small, disadvantaged, minority-owned,
women-owned, socioeconomic business progras
Reduce: - ANSWER-The amount of waste by requiring certain commodities to be
made with recycled content and reducing the amount of packaging.
Reuse: - ANSWER-Those commodities that can be repurposed
Recycle: - ANSWER-Commodities that cannot be reused in their present form
(paper, cans, toner cartridges)
Substitute: - ANSWER-The use of less hazardous, more environmentally preferable
commodities whenever possible
Post-consume - ANSWER-Materials are from commodities that have been used by
consumers, recycled and reprocessed back into a consumer product.
Pre-consume - ANSWER-Materials are those that are left over in manufacturing
processes and then reused in a consumer product.
ADMINISTRATION EXAM QUESTIONS
WITH COMPLETE ANSWERS
Value Engineering (VE) is: - ANSWER-A technique by which contractors may (1)
voluntarily suggest methods for performing more economically and may share in any
resulting savings or (2) be required to establish a program or identify and submit
methods for performing more economically. * usually applied to construction projects
* may be part of request for proposals or action taken by contractor after
Total cost of ownership (TCO) - ANSWER-A measure of all of the cost components
associated with the procurement of a product or service. The sum of all fixed and
variable costs attributed to a product or service.
Life Cycle Costing: - ANSWER-The total cost of ownership over the life span of the
asset.
Total cost of Ownership and Life Cycle Costing: - ANSWER-Used synonymously.
Both techniques provide the true cost of a product rather than just the purchase price
and allow for better cost cutting decisions. Two approaches to cutting cost: cost
reduction and cost avoidance.
Cost Reduction occurs: - ANSWER-when the current price to be paid by the buyer is
lower than the previous price paid under similar procurement conditions.
Cost Avoidance: - ANSWER-Actions take to avoid having to pay some sort of cost.
Requirements Analysis: - ANSWER-is applied to the writing of specifications to
eliminate products or services that are not cost effective.
Audit: - ANSWER-Detailed review and examination of records, documents and the
business processes with the confirmation by outside experts
Four types of audits: - ANSWER-Financial and compliance, Economy and efficiency,
Program audits or evaluations, and Performance
Financial and compliance audits: - ANSWER-Normally performed by an independent
accounting firm. Determines if financial transactions are recorded and to verify their
accuracy.
Economy and efficiency audits: - ANSWER-Management and operational audits.
They examine a governmental unit's managerial and administrative practices for
economy and cost efficiency
Program audits or evaluations: - ANSWER-Monitor results to determine the extent to
which a governmental unit has achieved program objectives.
, Performance audits: - ANSWER-Reviews all the operations of a governmental unit
Three phases to any evaluation process: - ANSWER-Planning, data collecting and
decision making based on findings
Three kinds of audit reports: - ANSWER-Intradepartmental, interdepartmental and
higher level management
Post procurement audits: - ANSWER-Another way to safeguard against unethical
buying practices.
Automated Procurement Systems: - ANSWER-In-house computerized systems to
facilitate transactions between procurement and client organizations
Electronic Procurement (eProcurement) - ANSWER-Conductions procurements on
the internet for increased efficiency and effectiveness
Electronic Commerce (eCommerce): - ANSWER-Integration of electronic data
interchange, electronic funds transfer and similar techniques into a comprehensive
electronic bases system of procurement functions.
Electronic Sourcing (eSourcing): - ANSWER-Process of obtaining bids from different
suppliers via a single online portal
Procurement Cards (pCards): - ANSWER-Fast, flexible purchasing and payment tool
that provides an extremely efficient and effective method for acquiring goods and
services.
Smart Cards: - ANSWER-Use to make small purchases but is considered a
electronic wallet. Embedded with a chip that stores data for a variety of uses.
Supplier Diversity Programs: - ANSWER-Small, disadvantaged, minority-owned,
women-owned, socioeconomic business progras
Reduce: - ANSWER-The amount of waste by requiring certain commodities to be
made with recycled content and reducing the amount of packaging.
Reuse: - ANSWER-Those commodities that can be repurposed
Recycle: - ANSWER-Commodities that cannot be reused in their present form
(paper, cans, toner cartridges)
Substitute: - ANSWER-The use of less hazardous, more environmentally preferable
commodities whenever possible
Post-consume - ANSWER-Materials are from commodities that have been used by
consumers, recycled and reprocessed back into a consumer product.
Pre-consume - ANSWER-Materials are those that are left over in manufacturing
processes and then reused in a consumer product.
