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Ethics & Legal Compliance in Purchasing Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Which law requires U.S. public companies to disclose whether their products contain tin, tantalum, tungsten, or gold sourced from the DRC region?

    Answer: Dodd-Frank Act Section 1502

    Dodd-Frank §1502 requires SEC disclosure of conflict minerals sourced from the Democratic Republic of the Congo and neighboring countries.

  2. A supplier offers a buyer free use of its vacation home during a contract renewal negotiation. The main ethical concern is:

    Answer: It creates a real or perceived obligation that could influence the award

    Valuable personal benefits during an active negotiation create an appearance of impropriety and possible undue influence.

  3. Under the federal Anti-Kickback Act (41 U.S.C. §§8701-8707), a subcontractor that gives a prime contractor's employee money to win a subcontract has:

    Answer: Committed an illegal kickback

    The Anti-Kickback Act prohibits giving anything of value to improperly obtain or reward favorable treatment on government contracts and subcontracts.

  4. Under the UCC, when goods do not conform to the contract, the buyer's right to reject all of them, accept all of them, or accept some commercial units and reject the rest is known as the:

    Answer: Perfect tender rule

    UCC §2-601's perfect tender rule lets a buyer reject goods that fail to conform to the contract in any respect.

  5. Which practice best protects procurement integrity during a competitive solicitation?

    Answer: Sending the same information to all bidders at the same time

    Giving every bidder the same information at the same time keeps the competition fair and defensible.

  6. Two competing suppliers agree to divide customers by territory so they won't compete. Under antitrust law this is:

    Answer: Market allocation, a per se Sherman Act violation

    Horizontal agreements among competitors to allocate customers or territories are per se illegal under Sherman Act Section 1.

  7. An employee reports suspected supplier fraud through the company hotline and is then demoted. The company's main exposure is a claim of:

    Answer: Whistleblower retaliation

    Laws such as Sarbanes-Oxley and the False Claims Act protect whistleblowers from retaliation for good-faith reports.