CIPS Commercial Contracting L4M3 Exam Questions

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Total 233 questions
Question 1

Maximum Score 1

The Bravo Engineering Company is negotiating a maintenance contract with Express Deliveries Ltd. This large logistics company uses modern robotic storage and picking warehouse machinery to identify, sort, and facilitate over 200,000 orders each day. The volatile nature of the business means that the parties should build maximum flexibility into the performance management aspects of the contract.

Which of the following would be most appropriate to set out the parties' obligations under the maintenance contract?



Answer : A

Performance obligations are best captured in a formal appendix (schedule) to the main contract, ensuring flexibility while remaining legally binding.

A non-binding or post-issued SLA would lack enforceability.


Question 2

Which of the following should include in the service level agreement that is an appendix of a contract?

1. How often the service is measured

2. Minimum qualification of supplier staffs

3. Remedies to resolve dispute

4. On time service delivery



Answer : D

When the SLA is a schedule or an appendix to the contract, it should clearly state the following:

1. KPIs: how they are to be measured, who measures them and how often

2. How the measurements convert into scores

3. Any other service level standards, which may be of lesser importance than the KPIs

4. Minimum acceptable standards or scores in each case

5. Range of scores both above and below the minimum acceptable

6. Any mitigating factors which might apply in the event of poor performance

7. Any time period permitted in which to remedy a situation or poor performance.

In this question, '2. Minimum qualification of supplier staffs' and '4. On time service delivery' are the KPIs, while '1. How often the service is measured' is the frequency in which the KPIs are measured.

The remedies available in the event of poor performance should be set out in the body of the contract, along with those for any other contractual breach. These clauses should be cross-referenced in the SLA.


LO 2, AC 2.2

Question 3

Information assurance protects information systems and...?



Answer : B

Information Assurance (IA) is the practice of managing information-related risks and the steps involved to protect information systems such as computer and network systems. The IA transformation is a partnership that stretches across the Department of Defense (DoD), Office of National Intelligence, Committee on National Security Systems, National Institute of Science and Technology (NIST), and the Office of Management and Budget.

The US Government's definition of information assurance is:

''measures that protect and defend information and information systems by ensuring their availability, integrity, authentication, confidentiality, and non-repudiation. These measures include providing for restoration of information systems by incorporating protection, detection, and reaction capabilities.''


- What is Information Assurance (IA)?

- CIPS study guide page 99-100

LO 2, AC 2.1

Question 4

Rochdale Ltd is looking for a new IT system to automate some of its operations. In designing the specification, procurement manager supposes that it should be done solely by the IT department who have deep expertise on this matter. Is procurement manager's opinion appropriate?



Answer : A

Procurement professionals have a role in challenging specifications. Technical experts can get things wrong and asking naive questions can be useful in bringing these to light. The challenging may include:

- Does the organisation really need these features/functions?

- With this specification, are there many available suppliers in the market?

- How many does the organisation really need?

etc


LO 1, AC 1.1

Question 5

If a false statement of material fact is made by one of the contracting parties, the misled party will have remedies for:



Answer : B

A false statement that induces a party to enter a contract constitutes misrepresentation. This provides the misled party with remedies that may include rescission (cancellation of the contract) and, depending on the type of misrepresentation (fraudulent, negligent), possibly damages as well.


Question 6

Which of the following is an agreement between service provider and user that quantifies the minimum quality of service?



Answer : C

A service-level agreement (SLA) is a commitment between a service provider and a client. Particular aspects of the service -- quality, availability, responsibilities -- are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract.

A customer service charter is a document that outlines how an organization promises to work with its customers along with providing insights into how an organization operates.

A service guarantee is a marketing tool service firms have increasingly been using to reduce consumer risk perceptions, signal quality, differentiate a service offering, and to institutionalize and professionalize their internal management of customer complaint and service recovery.


LO 2, AC 2.2

Question 7

Maximum Score 1

Which of the following would you expect to see in an Invitation to Tender (ITT)?



Answer : D

An ITT specifies what the buyer requires --- including delivery milestones, scope, and evaluation criteria.

Supplier rates and BAFOs are part of supplier responses, not ITT content.


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