Public Contracting Overview (MCPPO 1) || 100% Accurate
Answers.
Best Value correct answers Means awarding contracts based on several factors, including:
-A vendor's ability to successfully complete the contract on time, at the quality level specified, at
the offered price
-Technical quality of the supplies or services offered, and
-Vendor's past performance on similar contracts
The principal objectives of public purchasing are to: correct answers -Obtain the materials,
services, and facilities required by public organizations
-When and where the materials, services, and facilities are needed
-At the best price reasonably available
-Through open, fair competition
-At a reasonable cost
Price= correct answers is the amount actually paid to a vendor for materials, services or facilities
Cost= correct answers to obtain materials, services or facilities is inevitably higher than the price
paid to the vendor. That cost included the cost of preparing specifications, advertising for bids or
proposals, dealing with vendor inquires, evaluating vendor's bids or proposals, dealing with any
bid protests, contracting and contract administration.
Competitive Marketplace: correct answers Pressures vendors to offer competitive quality at
competitive prices.
Open, fair competition: correct answers is very important purchasing objective to both the public
and private sectors.
,Affirmative Market Program correct answers reserves contracts or portions of contracts for
groups of vendors that historically have been disadvantaged through discrimination
Establishing Authority for Approval of Transactions correct answers The organization should
clearly establish and document which positions within the organization have the authority to
approve specific transactions.
Establishing Responsibility for Executing Transactions correct answers The organization should
clearly establish and document which positions within the organization are responsible for
carrying out specific transactions and should provide a detailed description of the procedures for
carrying out and documenting each type of transaction.
Segregation of Duties correct answers Segregation of duties means that no employee should be
in a position to carry out an improper transaction and then conceal it. In other words, a single
individual should not have the ability to authorize a transaction, carry out the transaction, record
the transaction, maintain custody of the assets resulting from the transaction, and control the
books and records relating to the transaction.
-Ex. in reading
Control of Access to Assets and Records correct answers A public organization should take
reasonable care to maintain physical security over assets. The term "assets" refers generally to
items, equipment and furnishings that are the property of the public organization. Inventories
should generally be maintained in locked storage areas accessible only to designated individuals.
The organization should establish a sign-out system to keep track of valuable items, such as tools
that are needed temporarily by employees. Items such as laptop computers can be assigned on a
long-term basis to employees who need them, and a designated individual should be responsible
for maintaining records pertaining to these assignments. The internal control system should
ensure that the organization can hold employees are held accountable for valuable equipment that
they use in connection with their jobs.
Monitoring correct answers A public or private organization should monitor its internal control
system. To do this, the organization should designate an individual to periodically review the
work of each employee involved in processing transactions as well as reviewing output reports.
Control activities require an ongoing investment of time and effort.
, Some key control activities related to procurement correct answers -Establishing Authority for
Approval of Transactions
-Establishing Responsibility for Executing Transactions
-Segregation of Duties
-Control of Access to Assets and Records
-Monitoring
Four elements of any contract: correct answers -Mutual assent
-Offer and acceptance
-Consideration,
-Definiteness of contract terms
Mutual Assent correct answers Mutual assent means that the parties to the contract agree or have
"a meeting of the minds" as to what it is that they agree to do or not do.
Offer and Acceptance correct answers The formation of a contract requires that one party make
an intentional offer to do or not do something and that another party intentionally accept that
offer. The offer reflects the intention or willingness of the offering party to enter into a bargain so
that the other party knows that agreeing to the bargain will be an acceptance of the offer
Consideration: correct answers To form an enforceable contract, something of value must be
exchanged. The giving up of something of value is called "consideration." Usually, money is the
form of consideration offered by one party in exchange for something offered by the other party.
In some cases, however, consideration takes a form other than money.
Definiteness of contract terms: correct answers Generally, a contract must include the names of
the parties, the specific subject matter and specifications, the price or consideration, and essential
terms and conditions of the contract, such as time and place for performance. If a contract is too
indefinite, it may be unenforceable because it is impossible to have a meeting of the minds if
each party has a different idea about what the contract requires.
Answers.
Best Value correct answers Means awarding contracts based on several factors, including:
-A vendor's ability to successfully complete the contract on time, at the quality level specified, at
the offered price
-Technical quality of the supplies or services offered, and
-Vendor's past performance on similar contracts
The principal objectives of public purchasing are to: correct answers -Obtain the materials,
services, and facilities required by public organizations
-When and where the materials, services, and facilities are needed
-At the best price reasonably available
-Through open, fair competition
-At a reasonable cost
Price= correct answers is the amount actually paid to a vendor for materials, services or facilities
Cost= correct answers to obtain materials, services or facilities is inevitably higher than the price
paid to the vendor. That cost included the cost of preparing specifications, advertising for bids or
proposals, dealing with vendor inquires, evaluating vendor's bids or proposals, dealing with any
bid protests, contracting and contract administration.
Competitive Marketplace: correct answers Pressures vendors to offer competitive quality at
competitive prices.
Open, fair competition: correct answers is very important purchasing objective to both the public
and private sectors.
,Affirmative Market Program correct answers reserves contracts or portions of contracts for
groups of vendors that historically have been disadvantaged through discrimination
Establishing Authority for Approval of Transactions correct answers The organization should
clearly establish and document which positions within the organization have the authority to
approve specific transactions.
Establishing Responsibility for Executing Transactions correct answers The organization should
clearly establish and document which positions within the organization are responsible for
carrying out specific transactions and should provide a detailed description of the procedures for
carrying out and documenting each type of transaction.
Segregation of Duties correct answers Segregation of duties means that no employee should be
in a position to carry out an improper transaction and then conceal it. In other words, a single
individual should not have the ability to authorize a transaction, carry out the transaction, record
the transaction, maintain custody of the assets resulting from the transaction, and control the
books and records relating to the transaction.
-Ex. in reading
Control of Access to Assets and Records correct answers A public organization should take
reasonable care to maintain physical security over assets. The term "assets" refers generally to
items, equipment and furnishings that are the property of the public organization. Inventories
should generally be maintained in locked storage areas accessible only to designated individuals.
The organization should establish a sign-out system to keep track of valuable items, such as tools
that are needed temporarily by employees. Items such as laptop computers can be assigned on a
long-term basis to employees who need them, and a designated individual should be responsible
for maintaining records pertaining to these assignments. The internal control system should
ensure that the organization can hold employees are held accountable for valuable equipment that
they use in connection with their jobs.
Monitoring correct answers A public or private organization should monitor its internal control
system. To do this, the organization should designate an individual to periodically review the
work of each employee involved in processing transactions as well as reviewing output reports.
Control activities require an ongoing investment of time and effort.
, Some key control activities related to procurement correct answers -Establishing Authority for
Approval of Transactions
-Establishing Responsibility for Executing Transactions
-Segregation of Duties
-Control of Access to Assets and Records
-Monitoring
Four elements of any contract: correct answers -Mutual assent
-Offer and acceptance
-Consideration,
-Definiteness of contract terms
Mutual Assent correct answers Mutual assent means that the parties to the contract agree or have
"a meeting of the minds" as to what it is that they agree to do or not do.
Offer and Acceptance correct answers The formation of a contract requires that one party make
an intentional offer to do or not do something and that another party intentionally accept that
offer. The offer reflects the intention or willingness of the offering party to enter into a bargain so
that the other party knows that agreeing to the bargain will be an acceptance of the offer
Consideration: correct answers To form an enforceable contract, something of value must be
exchanged. The giving up of something of value is called "consideration." Usually, money is the
form of consideration offered by one party in exchange for something offered by the other party.
In some cases, however, consideration takes a form other than money.
Definiteness of contract terms: correct answers Generally, a contract must include the names of
the parties, the specific subject matter and specifications, the price or consideration, and essential
terms and conditions of the contract, such as time and place for performance. If a contract is too
indefinite, it may be unenforceable because it is impossible to have a meeting of the minds if
each party has a different idea about what the contract requires.
