Pass L4M3 Exam – Real Test Engine PDF with 198 Questions [Q49-Q72]

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Pass L4M3 Exam – Real Test Engine PDF with 198 Questions

Get New L4M3 Certification Practice Test Questions Exam Dumps

The Chartered Institute of Procurement and Supply (CIPS) is a globally recognized professional body that provides training and certification in procurement and supply management. One of the most popular courses offered by CIPS is the CIPS Commercial Contracting course, which enables professionals to develop their skills and knowledge to become effective negotiators and contract managers. The CIPS Commercial Contracting course is accredited by CIPS and it is an internationally recognized qualification in procurement and supply chain management.

NEW QUESTION 49
Which of the following are likely to be advantages of using invitation to tender? Select TWO that apply:
Short turnaround times

Quick implementation

Driving forward planning culture

Lower administration costs

Reducing risks of bribery and corruption

Advantages of using invitation to tender may be as below:
No Nepotism: Tenders or bids are evaluated on the basis of certain predetermined criteria, such as price, quality and value for money. In other words, the firm offering the highest quality product or service at the lowest price point would win the contract. As most tender documents are opened and evaluated in a public process, I think that there remains little room for nepotism or favoritism of any kind.
Value for Money: From the perspective of the client, tenders offer the greatest value for the amount of money spent. This is due to the fact that the client can choose from a wide pool of potential suppliers to select the ones that can produce the highest quality product or service at the lowest price point. This allows the company, establishment or organization to save money without having to compromise on quality. Therefore, despite being quite time consuming, tendering is, in my opinion, a profitable long-term process from an organization’s point of view.
Encourages Competition: The process of tendering helps promote a competitive market. This is because a number of potential contractors, firms or suppliers get a chance to bid for every project. And because selection depends on quality and price, every bidder tries to reduce operational inefficiencies and redundancies as much as possible in order to lower expenses and improve quality. This entire process encourages healthy competition in the market and prevents complacency and laziness, which in turn provides a boost to innovation and new ideas.
Easier Entry: The system of tendering makes it easier and simpler for new firms to enter the market or even a particular industry. This is due to the fact that contracts under this system are awarded on the basis of predetermined, objective criteria. As a result, even a firm that is a new entrant to the market, having no connections or contacts in the industry, can win a prestigious and lucrative contract by providing the highest value for the client’s money. This process therefore helps new firms to quickly get a foothold in the market or industry, thus significantly lowering the traditional barriers to entry.
Reference:
– Characteristics and Benefits of the Tendering Process
– CIPS study guide page 6-8
LO 1, AC 1.1

NEW QUESTION 50
A service contract is going to be expired, which data source is good to create specifications for ITT?
1. Incumbent supplier
2. Maintenance services
3. Alternative supplier
4. User’s knowledge

1, 2 and 3

1, 3 and 4

1, 2 and 4

2, 3 and 4

NEW QUESTION 51
Streaming Ltd is a music streaming provider based in the UK. The company is looking for extending its presence in the US. To achieve this, the company needs to outsource the data centre service to a local company. To monitor the performance, the procurement manager would like to introduce a service level agreement (SLA) to the data centre service provider. Which of the following should be included in the SLA?
1. System availability
2. The mean time to recover from system failure
3. The actual number of on-time service delivery
4. Dispute resolution procedure

1, 3 and 4 only

1, 2 and 4 only

1, 2 and 3 only

2, 3 and 4 only

NEW QUESTION 52
CMS Corp goes into a gainshare agreement with the contractor, EIP Ltd. Both parties agree that the final fee will be calculated on target cost – target fee basis. Which of the following will affect the final fee payable in this gainshare agreement? Select TWO that apply:

Accrual expense

Final price

Purchaser goodwill

Supplier share

Actual cost

NEW QUESTION 53
Which of the following statements is FALSE on contracts for the leasing of assets?

The party responsible for maintenance, insurance and taxes is subject to negotiation

In lease agreement, the possession and right of use of an asset are transferred to the lessee

The ownership of leased asset is transferred to the lessee at the end of the period

The lessee may bear some risks of ownership, such as the liability to insure the asset

NEW QUESTION 54
Royal Naval Hospital at Rockstown, Anyport manages a fleet of nine ambulance vehicles. During busy periods, it becomes very difficult to keep track of the location of each ambulance (and the nature of their journey). Continual problems lead to the proposal for a new control system (ERNS).
For this ERNS project, the procurement department has drafted a specification in which only a bullet point list of basic requirements was written down. The procurement manager understands that the specification should be developed more specifically but a cross functional team from the Hospital could not do that. A senior buyer suggests that some of Hospital’s pre-qualified suppliers could support them in developing the specification.
Which of the following should be a priority approach of procurement department in developing dialogue with those suppliers about specification development?

Internal discussion

General networking

One-to-one meeting with the suppliers

Request for quotation from the suppliers

NEW QUESTION 55
A senior procurement specialist in UK is preparing a specification in which ISO standards are used to send to global suppliers. Is this action appropriate?

No, the procurement specialist must use BSI standards instead

Yes, evert specification must have ISO standards

Yes, ISO standards are globally recognisable

No, ISO standards are unfamiliar to global suppliers

NEW QUESTION 56
Which of the following contracts would be best suited to a ‘variable pricing’ arrangement?

A contract for the supply of 100 printing machines to be delivered next month

A contract for road building estimated to take five years to complete

A contract for window cleaning during the next three months

A contract for the supply of lubricating oil for immediate delivery

NEW QUESTION 57
A procurement manager is setting KPIs measurement for user satisfaction. He also wants to encourage users to share the reason why they feel the way they do. Which of the following types of KPI should the procurement manager apply?

Quantitative measure

Numerical measure

Binary measure

Qualitative assessment

NEW QUESTION 58
Company A sends a purchase order complete with a set of conditions of contract for the provision of professional services to Company B. Company B responds with an invoice complete with a set of its own conditions of contract. Company A pays the invoice. Whichconditions of contract take legal precedence?

Company A’s

Company B’s

Neither Company A’s nor Company B’s

Both Company A’s and Company B’s

NEW QUESTION 59
Danielle buys a car from Aaron. Not long after, she receives an proposal from Brian, who is interested in buying the car but his budget is very constraint. Then, Brian decides to sign a hire purchase agreement with Danielle which lasts 4 years. Brian lives very far from Danielle, so he hires Charlie to deliver the car to his place. During the transport, Charlie has an accident and the car is written off. At the time of accident, who has the title of the car?

Charlie

Aaron

Brian

Danielle

NEW QUESTION 60
Which of the following are advantages of using a model form contract in negotiations between buyer and seller?
These contracts can save time in negotiations
Each contract is approved by the courts
These contracts are appropriate for all complexities
The contracts are well-known to both parties

1 and 2

2 and 3

3 and 4

1 and 4

NEW QUESTION 61
A school has a contract for the supply of fruit for break time. The school needs the fruit delivered by 10am every morning to be served at 10:30am. How would this best be covered in a commercial agreement?

Note on each purchase order

Pricing schedule

Sales of Goods Act 1974

Contractual term

NEW QUESTION 62
Which of the following is an agreement between service provider and user that quantifies the minimum quality of service?

Service charter

Service guarantee

SLA

Service standard

NEW QUESTION 63
Which of the following is used to detail the complex matter that may be verbiage to the main document?

Contract variation

Schedule

Subcontracting

Standard terms and conditions

NEW QUESTION 64
CMS Corp goes into a gainshare agreement with the contractor, EIP Ltd. Both parties agree that the final fee will be calculated on target cost – target fee basis. Which of the following will affect the final fee payable in this gainshare agreement? Select TWO that apply:

Accrual expense

Final price

Purchaser goodwill

Supplier share

Actual cost

NEW QUESTION 65
In the UK, Unfair Contract Terms Act 1977 regulates which of the following?

Validity of a contract when it is formed on the basis of misrepresentation

Rules regarding battle of the forms

Effectiveness of contract terms in the standard terms and conditions

Rule of offer and acceptance

NEW QUESTION 66
Blakenall District Hospital (BDH) is a large hospital that is a major part of the government’s health service. Purchasing staff are in the habit of placing many long-term contracts with suppliers and sub-contractors. Whilst these contracts are usually carried out successfully, prices are often paid that are well over budget. The purchasing manager is concerned to find that, in some cases, members of staff are forcing suppliers to accept fixed price contracts. The policy has caused several problems such as some suppliers refusing to deal with BDH and a few going out of business mid-way through performing a contract with BDH. This is due to fluctuating market prices of materials. The procurement manager suggests supplier to adopt variable pricing arrangement with price index. Is this a right course of action?

No, variable pricing would only benefit the suppliers

Yes, this type of arrangement would provide absolute certainty when budgeting

Yes, this pricing arrangement would reimburse the fluctuation of material prices

No, price adjustment should be applied to short-term supply contract only (3-month duration or less)

NEW QUESTION 67
When a supplier signs an insurance policy with an insurance company, which of the following is transferred to insurance company?

Right

Risk

Legal responsibility

Contractual obligation

NEW QUESTION 68
If service level agreement is used as a schedule that makes up the contract, it will be most likely to be a part of…?

Pricing arrangement

Performance management framework

Exclusion of liabilities

Specifications

NEW QUESTION 69
Which of the following is the best definition of “ultra vires”?

Beyond powers

In good faith

From one party

Let the buyer beware

NEW QUESTION 70
Which of the following is the contract provision that relieves the parties from performing their contractual obligations when certain circumstances like natural disasters, terrorist attacks, etc arise?

Indemnity clause

Liquidated damage clause

Insurance clause

Exclusion clause

NEW QUESTION 71
XYZ Ltd and Engineer Corp signed a long-term supply contract in which both parties had agreed on performance targets. Recently, due to increased customer demands, XYZ Ltd realises that they should make changes to the contract with Engineer Corp with regards to performance management. These changes are approved and signed by both the buyer and seller. The changes to the contract are known as…?

An amendment to the prime contract

A stand-alone subcontract to the prime contract

An appendix to the prime contract

A separate counter-offer to the supplier

NEW QUESTION 72
Cleveland Insurance (Cleveland) offers a range of insurance services. The main software used in the call centre is a customer relationship management (CRM) system. Cleveland perceived an urgent need to replace the existing CRM system to deal with the increasing number of customers and services.
Urgent Digital Ltd (Digital) is one of the bidders of Cleveland’s ITT. Its bid team is led by Hank Irvine, its technical director. Hank realises that winning the Cleveland contract (valued at approximately £50M) will enhance his career. During discussions with Cleveland, Hank offers certain assurances regarding timescales for the project. He has not carried out any investigations into the viability of the timescales. Hank has little idea whether the timescales can be met.
Cleveland decides that Digital’s bid meets with its requirements, especially given the assurances in timescale offered by Hank, and decides to proceed with it, subject to a formal contract. Eventually, a formal contract is signed by both parties. The initial assurances given by Hank about the timing of the project are never going to be achieved and are at best grossly exaggerated.
Hank’s pre-contractual assurance is most likely to be an example of which of the following?

Inaccuracy in communication

Threat

Initial impossibility

Fraudulent misrepresentation