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CPSM Contract Management & Negotiation Flashcards

7 cards from real CPSM 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. A supplier submits a claim for additional compensation citing 'commercial impracticability' due to a raw material shortage. Under the UCC, which element is NOT required to support this defense?

    Answer: The party notified the other side within 30 days of discovering the contingency

    The UCC does not require notification within a specific 30-day window; it requires timely notification but sets no fixed deadline.

  2. In a cost-reimbursement contract, which cost is generally considered UNALLOWABLE under FAR Part 31?

    Answer: Lobbying and political contributions

    FAR 31.205-22 specifically identifies lobbying and political activity costs as unallowable under government cost-reimbursement contracts.

  3. A buyer wants to negotiate a most-favored-customer (MFC) clause. What is the PRIMARY benefit this clause provides to the buyer?

    Answer: It ensures the buyer receives pricing no less favorable than the supplier's best commercial price

    An MFC clause entitles the buyer to match the best pricing offered to any comparable customer, not a guarantee of frozen or lowest absolute prices.

  4. Which negotiation tactic involves deliberately making an extreme opening offer to anchor the other party's expectations?

    Answer: Anchoring

    Anchoring is the tactic of establishing an extreme initial position so that subsequent concessions still land near the anchoring party's target.

  5. A contract contains the clause: 'Time is of the essence.' A supplier delivers goods two days late. What is the MOST LIKELY legal consequence?

    Answer: The buyer may treat the late delivery as a material breach and reject the goods

    A 'time is of the essence' clause elevates delivery deadlines to material contract terms, entitling the non-breaching party to treat any delay as a material breach.

  6. During a negotiation, one party introduces a new, minor demand after the main terms are already agreed upon. This tactic is best described as:

    Answer: Nibbling

    Nibbling is adding small, last-minute demands after the principal agreement is reached, exploiting the other party's desire to close the deal.

  7. A supply agreement requires the buyer to purchase a minimum annual quantity or pay a shortfall fee. This is BEST characterized as a:

    Answer: Take-or-pay provision

    A take-or-pay provision obligates the buyer to either purchase a specified minimum quantity or compensate the supplier for the shortfall.