NIGP CPPO CERTIFICATION EXAM ACTUAL EXAM 130
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES
Surety - ANSWER: a pledge or guarantee by an insurance company, bank, individual
or corporation on behalf of a bidder or offeror which protects against default or
failure of the principal to satisfy the contractual obligations.
accountability - ANSWER: The principle that employees who accept an assignment
and the authority to carry it out are answerable to a superior or a higher authority
for the outcome.
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 contract to the terms and
conditions of that contract.
4. The act of receiving by an authorized representative with the intention or
retaining.
competitive sealed bidding - ANSWER: Preferred method for acquiring goods,
services and construction for public use in which award is made to the lowest
responsive and responsible bidder, based solely on the response to the criteria set
forth in the invitation for bud; does not include discussions or negotiations with
bidders.
force majeure - ANSWER: Unexpected or uncontrollable events including those
caused by nature that can impact the contract price, terms and conditions. these
events are not due to contractor negligence and may excuse contractor
performance during the events and under certain conditions caused by them. Acts
of God or disruptive conditions for which a contractor or carrier will not be held
responsible.
specification - ANSWER: A precise description of he physical or functional
characteristics of a product, good or construction item. A description of goods
and/or services. A description of what the purchaser seeks to buy and what a
bidder must be responsive to in order to be considered for award of a contract.
Specifications generally fall under the following categories: design, performance,
combination (design and performance), brand name or approved equal, qualified
products list and samples. May also be known as a purchasing description.
bid bond - ANSWER: An insurance agreement, accompanied by a monetary
commitment, by which a third party (the surety) accepts liability and guarantees
that the bidder will not withdraw the bid.
, warranty - ANSWER: A promise made by a seller to a buyer that is legally
enforceable. The promise may be expressed or implied and is legally binding.
best practice - ANSWER: A business process, activity or operation that is considered
outstanding, innovative or exceptionally creative by a recognized peer group. It
may be considered as a leading-edge activity that has been successfully adopted or
implemented and has brought efficiency and effectiveness to an organization. It
may result in improved productivity, quality, reduced costs and increased
customer service.
return on investment or ROI - ANSWER: A calculation used in business to determine
whether a proposed investment is a wise business decision and how well it will
repay the investor. It is calculated as the ratio of the amount gained or loss relative
to the basis. The analysis takes the form of a dynamic model or statistical model.
estoppel - ANSWER: A legal principal that prevents a person from asserting a
position that is inconsistent with his or her prior conduct, if injustice would
thereby result to a person who has changed position in justifiable reliance upon
that conduct. For example, a landlord informs a tenant that there was construction
or a lapse in utility services. If the tenant relies on this statement in choosing to
remain on the premises, the landlord could be barred under the principle from
collecting full rent.
performance based contract - ANSWER: A results-oriented contracting method that
focuses on the outputs, quality or outcomes that may tie at least a portion of a
contractor's payment, contractor extensions, or contract renewals to the
achievement of specific, measurable performance standards and requirements.
These contract may include monetary and non-monetary incentives as well as
specific remedies.
fiduciary duty - ANSWER: An individual's obligation to serve the best interests of
selected stakeholders, especially those of their employer.
sampling - ANSWER: A technique used to avoid examination of each item in a
population, yet will still be able to determine whether the entire population shall
be accepted as complying with the acceptable quality level or stated requirements.
value analysis - ANSWER: An organized effort directed at analyzing the functions of
a product or service including specifications, standards, practices, and procedures
with intent to satisfy the required function at the lowest possible cost without
impacting functional need and suitability.
drayage - ANSWER: A charge for hauling something between various locations by a
transportation company.
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES
Surety - ANSWER: a pledge or guarantee by an insurance company, bank, individual
or corporation on behalf of a bidder or offeror which protects against default or
failure of the principal to satisfy the contractual obligations.
accountability - ANSWER: The principle that employees who accept an assignment
and the authority to carry it out are answerable to a superior or a higher authority
for the outcome.
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 contract to the terms and
conditions of that contract.
4. The act of receiving by an authorized representative with the intention or
retaining.
competitive sealed bidding - ANSWER: Preferred method for acquiring goods,
services and construction for public use in which award is made to the lowest
responsive and responsible bidder, based solely on the response to the criteria set
forth in the invitation for bud; does not include discussions or negotiations with
bidders.
force majeure - ANSWER: Unexpected or uncontrollable events including those
caused by nature that can impact the contract price, terms and conditions. these
events are not due to contractor negligence and may excuse contractor
performance during the events and under certain conditions caused by them. Acts
of God or disruptive conditions for which a contractor or carrier will not be held
responsible.
specification - ANSWER: A precise description of he physical or functional
characteristics of a product, good or construction item. A description of goods
and/or services. A description of what the purchaser seeks to buy and what a
bidder must be responsive to in order to be considered for award of a contract.
Specifications generally fall under the following categories: design, performance,
combination (design and performance), brand name or approved equal, qualified
products list and samples. May also be known as a purchasing description.
bid bond - ANSWER: An insurance agreement, accompanied by a monetary
commitment, by which a third party (the surety) accepts liability and guarantees
that the bidder will not withdraw the bid.
, warranty - ANSWER: A promise made by a seller to a buyer that is legally
enforceable. The promise may be expressed or implied and is legally binding.
best practice - ANSWER: A business process, activity or operation that is considered
outstanding, innovative or exceptionally creative by a recognized peer group. It
may be considered as a leading-edge activity that has been successfully adopted or
implemented and has brought efficiency and effectiveness to an organization. It
may result in improved productivity, quality, reduced costs and increased
customer service.
return on investment or ROI - ANSWER: A calculation used in business to determine
whether a proposed investment is a wise business decision and how well it will
repay the investor. It is calculated as the ratio of the amount gained or loss relative
to the basis. The analysis takes the form of a dynamic model or statistical model.
estoppel - ANSWER: A legal principal that prevents a person from asserting a
position that is inconsistent with his or her prior conduct, if injustice would
thereby result to a person who has changed position in justifiable reliance upon
that conduct. For example, a landlord informs a tenant that there was construction
or a lapse in utility services. If the tenant relies on this statement in choosing to
remain on the premises, the landlord could be barred under the principle from
collecting full rent.
performance based contract - ANSWER: A results-oriented contracting method that
focuses on the outputs, quality or outcomes that may tie at least a portion of a
contractor's payment, contractor extensions, or contract renewals to the
achievement of specific, measurable performance standards and requirements.
These contract may include monetary and non-monetary incentives as well as
specific remedies.
fiduciary duty - ANSWER: An individual's obligation to serve the best interests of
selected stakeholders, especially those of their employer.
sampling - ANSWER: A technique used to avoid examination of each item in a
population, yet will still be able to determine whether the entire population shall
be accepted as complying with the acceptable quality level or stated requirements.
value analysis - ANSWER: An organized effort directed at analyzing the functions of
a product or service including specifications, standards, practices, and procedures
with intent to satisfy the required function at the lowest possible cost without
impacting functional need and suitability.
drayage - ANSWER: A charge for hauling something between various locations by a
transportation company.
