1 You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is not true for this situation?

a It is the contractor's risk in this type of contract that their profit may vanish if costs have been underestimated.

b This form of contract should only be chosen when all the requirements for the building of the product are well-known by all parties involved.

c In a fixed-price contract, change requests can cause issues regarding additional time and extra costs for the changes to be applied.

d It is likely that your organization may have to assume any unexpected additional costs for the software development.

2 A review to determine whether of project activities comply with organizational and project policies, processes, and procedures is commonly called

a Quality auditing

b Inspection

c Quality testing

d Reject screening