CIPS L4M3 LO1 UPDATED ACTUAL Exam
Questions and CORRECT Answers
what is an estimate? - CORRECT ANSWER - a supplier best guess at what the price will
be. it has no legal standing
what is a tender? - CORRECT ANSWER - a bid obtained via a formal process
what is a quotation? - CORRECT ANSWER - sometimes called a quote, this is a firm
price offer obtained via a formal or informal process; normally it only relates to price on the
basis of indicated quality
what is a framework agreement? - CORRECT ANSWER - a formal agreement between
two organisations that is intended to become legally binding in the event that a contract is created
what situations should you use a quotation? - CORRECT ANSWER - - low value, low risk
purchases
- the spec and delivery times are fixed
- suppliers are pre-qualified
- a framework or dynamic purchasing system has locked down the contract terms and price is the
only variable
what situations should you use a tender? - CORRECT ANSWER - - complex projects
- high-value or high-risk purchases
- projects where quality and price need to be assessed
- access to unknown suppliers is required, and there is no need to either pre-qualify them or to
assess their suitability as part of a single-stage open tender process
what is bribery? - CORRECT ANSWER - the promise, offer or giving of financial
advantage to someone in the expectation that they will improperly perform their functions, or to
reward them for having done so; also accepting such a promise, offer or advantage
, what is corruption? - CORRECT ANSWER - includes any improper performance of a
function in return for some kind of advantage which may or may not be financial, e.g facilitation
payments, nepotism, or career promotion. both the providing and receiving of the advantage are
corrupt practices
what is collusion? - CORRECT ANSWER - where two or more potential suppliers secretly
co-operate to undermine the competitiveness of a tender process
why are audit trails important? - CORRECT ANSWER - - they reduce bribery, corruption
and collusion by increasing the likelihood of being caught
- they provide solid evidence in the event of such activity occurring
- they improve accountability
- they help trace errors
what is a waiver? - CORRECT ANSWER - a considered and deliberate decision to not
apply normal rules
what issues can occur as a result of misunderstanding in the specification? - CORRECT
ANSWER - - poor bids being received
- claims for extensions of time or additional payments
- administration costs resulting from contract clarification orders
what are the main characteristics of a performance specification? - CORRECT ANSWER -
- focus on outputs
- sets out result to be achieved
- the 'what', not the 'how'
- gives the supplier flexibility to present solutions that the buyer may not have considered
what are the main characteristics of a conformance specification? - CORRECT
ANSWER - - focus on inputs
Questions and CORRECT Answers
what is an estimate? - CORRECT ANSWER - a supplier best guess at what the price will
be. it has no legal standing
what is a tender? - CORRECT ANSWER - a bid obtained via a formal process
what is a quotation? - CORRECT ANSWER - sometimes called a quote, this is a firm
price offer obtained via a formal or informal process; normally it only relates to price on the
basis of indicated quality
what is a framework agreement? - CORRECT ANSWER - a formal agreement between
two organisations that is intended to become legally binding in the event that a contract is created
what situations should you use a quotation? - CORRECT ANSWER - - low value, low risk
purchases
- the spec and delivery times are fixed
- suppliers are pre-qualified
- a framework or dynamic purchasing system has locked down the contract terms and price is the
only variable
what situations should you use a tender? - CORRECT ANSWER - - complex projects
- high-value or high-risk purchases
- projects where quality and price need to be assessed
- access to unknown suppliers is required, and there is no need to either pre-qualify them or to
assess their suitability as part of a single-stage open tender process
what is bribery? - CORRECT ANSWER - the promise, offer or giving of financial
advantage to someone in the expectation that they will improperly perform their functions, or to
reward them for having done so; also accepting such a promise, offer or advantage
, what is corruption? - CORRECT ANSWER - includes any improper performance of a
function in return for some kind of advantage which may or may not be financial, e.g facilitation
payments, nepotism, or career promotion. both the providing and receiving of the advantage are
corrupt practices
what is collusion? - CORRECT ANSWER - where two or more potential suppliers secretly
co-operate to undermine the competitiveness of a tender process
why are audit trails important? - CORRECT ANSWER - - they reduce bribery, corruption
and collusion by increasing the likelihood of being caught
- they provide solid evidence in the event of such activity occurring
- they improve accountability
- they help trace errors
what is a waiver? - CORRECT ANSWER - a considered and deliberate decision to not
apply normal rules
what issues can occur as a result of misunderstanding in the specification? - CORRECT
ANSWER - - poor bids being received
- claims for extensions of time or additional payments
- administration costs resulting from contract clarification orders
what are the main characteristics of a performance specification? - CORRECT ANSWER -
- focus on outputs
- sets out result to be achieved
- the 'what', not the 'how'
- gives the supplier flexibility to present solutions that the buyer may not have considered
what are the main characteristics of a conformance specification? - CORRECT
ANSWER - - focus on inputs
