Which of the following is the best definition of "ultra vires"?
Correct Answer: A
Ultra vires is a Latin phrase, meaning "beyond the powers." Describes actions taken by government bodies or corporations that exceed the scope of power given to them by laws or corporate charters. When referring to the acts of government bodies (e.g., legislatures), a constitution is most often the measuring stick of the proper scope of power. Reference: LO 1, AC 1.2
Question 27
Which of the following would be useful tools to incentivise supplier innovation over the duration of the contract? 1. Gainshare arrangement 2. Liquidated damages 3. Service credits 4. Fixed bonus payments
Correct Answer: C
Gainshare is an incentive for cost control Liquidated damage is common type of disincentive for late completion Service credit is a remedy for not achieving targets set out in an SLA Fixed bonus payment is an incentive for early completion Reference: LO 3, AC 3.3
Question 28
Which of the following should be specially noticed in market dialogue with suppliers in specification development?
Correct Answer: A
Being clear on your objectives helps you to design the best approach to the dialogue. There are some notices in developing dialogue with suppliers: - All meetings should be documented - Respect commercial confidentiality. Although insights gained from one conversation lead to questions in another, you must be very careful not to allow this to happen in a way that breaches the confidentiality of the first conversation. Reference: LO 2, AC 2.1
Question 29
Which of the following may be a benefit for purchaser in using call off contract?
Correct Answer: C
Benefits for the purchaser in using call off contract are as below: - The benefit of a call off contract is that they allow the supply of materials, goods and services to be secured over multiple delivery dates across the length of a project. - Agreed prices, either fixed or pre-agreed mechanism for adjustment. This helps with setting and controlling budgets. - Simple order mechanisms at the point of need - Schedules of rates pricing enables electronic procure-to-pay systems, which gives greater control and visibility of spend - The value of spend ad length of contract justify the cost of proper market engagement and tender or negotiation processes resulting in better value for money - The longer the contract, the greater the opportunities for aligning working practices to create joint efficiency. Reference: - Call Off Contracts - What are they and how are they used? - CIPS study guide page 63-64 LO 1, AC 1.3
Question 30
Which of the following is the model form of contract for construction which is recommended by World Bank?
Correct Answer: D
FIDIC is the International Federation of Consulting Engineers (or Federation Internationale des Ingenieurs Conseils in French). FIDIC has produced many publications, including the model form contracts, best practice guidances, research on sustainability, integrity and risk management. FIDIC model form contracts have been developed by this organisation since 1999, now they consist of several different books which are marked by colours. Thus, FIDIC model contracts also have the nickname "Rainbow suite of contracts". Basically, the "Rainbow Suite" include the following books: * Yellow book: Plant and Design-Build Contract (2 editions: 1999 and 2017) * Silver book: EPC/Turnkey Contract (2 editions: 1999 and 2017) * Red book: Construction Contracts (2 editions: 1999 and 2017) * Emerald book: Conditions of Contract for Underground Works (1st Ed 2019) * Blue-Green book: Dredgers Contract (2 editions: 2006 and 2016) * Gold book: Design, Build and Operate Contract Guide * Pink book: Construction Contract Multilateral Development Bank Harmonised Ed (2 editions: 2005 and 2010) This type of model contract is commonly used around the world because its author, International Federation of Consulting Engineers, collaborates closely with development banks such as World Bank, Africa Development Bank, Asia Development Bank, etc. Every construction project that is financed by these institutions must adopt the FIDIC contracts. The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations. ITC (International Trade Centre) produces contracts specifically designed for small companies doing international business, covering the sale of goods, distribution, services and joint ventures. Many small companies are now engaged in international trade, but don't have access to the necessary contract forms to protect themselves. ITC and leading legal experts developed eight generic contract templates that incorporate internationally recognized standards and laws for most small business situations. CIPS has several model forms of contract designed specifically for IT buying and servicing. Reference: LO 3, AC 3.1
