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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. Under the federal Buy American Act, a product generally qualifies as domestic when it is manufactured in the U.S. and:

    Answer: Its domestic component cost exceeds a set percentage threshold

    The Buy American Act requires U.S. manufacture plus domestic component content above a threshold that rises over time under FAR rules.

  2. A buyer is asked by a manager to split a $60,000 purchase into three $20,000 orders to avoid the competitive bid threshold. This is:

    Answer: Improper order splitting that evades procurement controls

    Splitting requirements to dodge bid thresholds circumvents internal controls and is an ethical and often legal violation.

  3. A supplier offers a buyer a personal discount on a car from the supplier's dealership that isn't available to the public. The buyer should:

    Answer: Decline, since it is a personal benefit tied to the business relationship

    Personal discounts not offered to the public are gifts that create conflicts of interest and should be declined.

  4. Which UCC warranty is implied when a seller knows the buyer's particular purpose and that the buyer is relying on the seller's skill to choose suitable goods?

    Answer: Implied warranty of fitness for a particular purpose

    UCC §2-315 creates a fitness-for-purpose warranty when the seller knows the purpose and the buyer relies on the seller's expertise.

  5. Under the U.S. Export Administration Regulations, a buyer reselling controlled technology abroad must first check:

    Answer: The item's Export Control Classification Number and license requirements

    Under the EAR, the item's ECCN, destination, end user, and end use determine whether an export license is needed.

  6. Section 307 of the Tariff Act of 1930 lets U.S. Customs bar imports of goods made with:

    Answer: Forced or indentured labor

    Section 307 prohibits importing goods mined, produced, or manufactured wholly or partly with forced labor, and CBP enforces it through Withhold Release Orders.

  7. A procurement professional finds out after award that the winning supplier's owner is a former coworker they never disclosed. The best next step is to:

    Answer: Promptly disclose the relationship to management or the ethics officer

    Late disclosure is still required so the organization can assess and manage any conflict of interest.