PMP® Study Notes

Project Procurement Management


Type of Contract

1. Fixed Price (FP)

2. Cost reimbursable (CR)

3. Time and Material (T&M)


FFP - Firm Fixed Price (hiring a subject matter expert) A construction project, to ensure all the base works completed before the construction works start.

FPIF - Fixed Price Incentive Fee (project is critical and must meet the tight schedule)

FPEPA - Fixed Price with Economic Price Adjustment

CPFF - Cost Plus Fixed Fee

CPIF - Cost Plus Incentive Fee

CPAF - Cost Plus Award Fee

CPPC - Cost Plus Percentage of Costs

CPFF - Cost plus fixed fee

CPIF - Cost plus incentive fee

FPI - Fixed price incentive

FFP - Firm fixed price

Contract Risk

SOW - Statement of Work. A Statement of Work (SOW) is a formal document that defines the entire scope of work involved for a vendor and clarifies deliverables, costs, and timeline. It is needed when a project involves vendors and external contributors in addition to the internal project team.

The statement of work should include:

1. All deliverables and due dates

2. The individual tasks that lead to the deliverable, and who these tasks are assigned to

3. The resources needed for the project including facilities, equipment, and QA procedures

4. The governance process for the project

3. Costs and deadlines for payment


RFQ - Request for Quote

RFP - Request for Proposal


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