Appendix 7: Answers to Reinforcement Quizzes
Answers to Reinforcement Quiz ñ Section I, Chapter 4
A state transportation department receives four bids to construct six miles
of highway. Each bid is for a different price. Which of the following best
describes the contractor who should be awarded the contract?
the company that built a nearby state highway
the most experienced builder of state highways
the lowest responsible bidder
the bidder with the greatest financial capacity
Answer: (c). The contract should be awarded to the lowest
responsible bidder. By coincidence, the lowest responsible bidder may
also happen to be the most experienced or the one with the greatest
financial capacity.
As a result of a severe storm, emergency repairs are needed to repair
washed-out segments of several key roadways. How should the village
seek a contractor to do the repairs, estimated to cost $75,000?
contract with the first contractor listed in the telephone book
b. get proposals from three contractors who have been pre-qualified
to do repair work
add a change order to a contract currently held by a contractor
d. prepare detailed specifications of work needed, place an invitation
for bids in the local newspaper, and allow 30 days to submit bids
Answer: (b). Laws or regulations generally provide criteria for
obtaining contractors to perform emergency work. The objective of
these laws or regulations is generally to get the work done as quickly
as possible and, at the same time, seek competition among competent
contractors to get reasonable prices. Answers (a) and (c) do not
provide competition, and answer (d) will not get the work done
A large school district advertises for bids to supply the district with its
paper requirements for the year. It receives bids from six commercial
vendors. What type of contract is most appropriate for this procurement?
a. fixed price
cost, plus a fixed fee
time and materials
cost sharing
Answer: (a). A fixed price contract is generally the most desirable
type of contract and should be used when appropriate specifications
can be prepared, leading to advertising for bids and effective price
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AGA Study Guide 3, 2016 Edition

Appendix 7: Answers to Reinforcement Quizzes
Which of the following approaches to procurement is most likely to result
in negotiation with the prospective providers of services, based on the
best approach to providing the service?
when the agency purchases from a statewide contract or catalog
when the agency issues an invitation for bids (IFB)
when the agency purchases from a blanket purchase agreement
when the agency issues a request for proposals (RFP)
Answer: (d). A request for proposals is generally used to obtain
proposals leading to negotiation of a contract based on a variety of
factors, in addition to price, such as the contractor that proposes the
best approach to providing the service. The procedures in answers (a),
(b), and (c) are not used when there is need for negotiation based on
which contractor provides the best approach.
Which of the following best describes the basic objective of the acquisition
process when acquiring goods and services?
to obtain the highest quality product or service available
to obtain at least three competitive proposals
to obtain the best price considering quality and delivery
to ensure that all contractors on the bidders list have an opportunity
to submit bids or proposals
Answer: (c). The basic objective of any procurement is to get the best
price, considering quality and delivery requirements. Answer (a) may
be ìnice to haveî but may cost far more than is necessary to satisfy
user needs. Answers (b) and (d) are desirable goals, but do not
describe the basic objective of procurement.
Online version, for personal use only
AGA Study Guide 3, 2016 Edition

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AGA CGFM Study Guide 3: Governmental Financial Management and Control