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PMI Exam PgMP Topic 2 Question 94 Discussion

Actual exam question for PMI's PgMP exam
Question #: 94
Topic #: 2
[All PgMP Questions]

You are the program manager of the NQA Program. In this program you're planning which contract types you'll allow into the program and which ones you will not. One contract type you won't accept is the cost plus percentage of cost contract. Which of the following is a valid reason you would not allow this contract type into your program?

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Suggested Answer: C

by Sylvie at Dec 09, 2024, 10:41 AM

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Eric
25 days ago
Ah, the cost plus percentage of cost contract - the vendor's golden ticket to endless profits! Or the buyer's nightmare, depending on how you look at it.
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Sheron
1 months ago
A) The contract type requires the vendor to provide a fee for the time invested and the materials used. That's not the reason to avoid this contract type. The issue is that the vendor's fee is a percentage of the overall cost, which incentivizes them to increase costs.
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Nelida
15 days ago
B) The contract type allows the vendor to change the price of the work he's completed.
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Coral
1 months ago
D) The contract type requires the vendor to provide a fixed price for the work. Nope, that's not correct. The cost plus percentage of cost contract is the opposite of a fixed-price contract.
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Elroy
11 days ago
B) The contract type allows the vendor to change the price of the work he's completed.
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Colton
18 days ago
A) The contract type requires the vendor to provide a fee for the time invested and the materials used.
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Dorian
1 months ago
C) The contract type allows is the most dangerous for the buyer. Absolutely right! This contract type puts the buyer at the most risk, as the vendor's fee is directly tied to the total cost of the project.
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Maryanne
1 months ago
B) The contract type allows the vendor to change the price of the work he's completed. This is a valid reason to not allow this contract type, as it can lead to cost overruns and a lack of cost control for the buyer.
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Delisa
13 days ago
B) The contract type allows the vendor to change the price of the work he's completed.
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Mari
14 days ago
A) The contract type requires the vendor to provide a fee for the time invested and the materials used.
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Margarett
1 months ago
I see your point, but I think another valid reason is that this contract type requires the vendor to provide a fee for the time invested and materials used.
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Kaitlyn
2 months ago
I agree with Dominga. It's risky for the buyer if the vendor can just increase the price whenever they want.
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Dominga
2 months ago
I think the reason we wouldn't allow cost plus percentage of cost contract is because it allows the vendor to change the price of the work.
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