Project and Contract Management — 2021

KNEC Diploma in Supply Chain Management, Module III. Original examination questions with explained answers for revision. Answers are independently prepared for study and are not an official KNEC marking scheme.

July 2021

Paper codes: 2903/306; 3306
Time: Not shown in supplied scan
Instructions: Cover instructions not included in supplied scan.

Question 1(a) — 10 marks

Explain five challenges which an organization may experience when using the matrix structure in the management of its projects.

Answer

  1. Dual reporting can create conflicting instructions from project and functional managers.
  2. Authority and responsibility may be unclear when managers share control of staff.
  3. Competition for people and equipment can cause conflict between projects and departments.
  4. Coordination meetings and negotiation can increase management time and cost.
  5. Staff may experience stress when priorities, appraisals and accountability differ between their two reporting lines.

Question 1(b) — 10 marks

You have been tasked by XYZ Limited to implement the company’s project. As an expert in project management, outline five ways in which use of Information Communication Technology would help in the implementation of the project.

Answer

  1. Scheduling software helps sequence activities, allocate resources and monitor milestones.
  2. Shared communication platforms improve coordination between dispersed team members.
  3. Electronic records make drawings, contracts and changes easier to control and retrieve.
  4. Cost and progress systems provide faster information for corrective decisions.
  5. Collaboration and reporting tools help stakeholders review evidence and approve work promptly.

Question 2(a) — 10 marks

Explain five ways in which proper understanding of Project Life Cycle (PLC) concept would help an organization in the management of its project contracts.

Answer

  1. Clarifies the activities and decisions required at each project stage.
  2. Helps schedule procurement and contract commitments at the appropriate time.
  3. Identifies stage-specific risks and controls before resources are committed.
  4. Provides review points for deciding whether to proceed, modify or stop.
  5. Supports orderly commissioning, handover and closure rather than treating completion as construction alone.

Question 2(b) — 10 marks

A project director at Connect Limited has proposed certain modifications on the project currently under implementation. Outline five reasons that may have necessitated the modifications.

Answer

  1. User requirements or the required project output may have changed.
  2. Design errors or unforeseen site conditions may require technical correction.
  3. New legal or safety requirements may require revised methods or specifications.
  4. Cost, resource or schedule constraints may require a more feasible delivery approach.
  5. New technology or value-engineering opportunities may justify an approved improvement.

Question 3(a) — 10 marks

Describe five features that an appropriate project plan for an organization should exhibit.

Answer

  1. Clear objectives and scope make the required result understandable.
  2. Realistic activities, dependencies and timings provide a feasible work schedule.
  3. Defined responsibilities identify who must deliver each activity and decision.
  4. Adequate budgets and resource allocations support the planned work.
  5. Risk controls, progress measures and review arrangements support monitoring and adjustment.

Question 3(b) — 10 marks

Explain five circumstances under which an organization may use the Design and Build (DB) tendering method when sourcing for its project requirements.

Answer

  1. The client can state clear performance requirements while allowing the contractor to develop the detailed design.
  2. A single point of responsibility for design and construction is desirable.
  3. Early integration of design and construction can shorten the overall delivery period.
  4. Contractor expertise is needed to optimise constructability and technical solutions.
  5. The client seeks greater coordination and agreed cost certainty for a sufficiently defined scope, with the associated risk allocation understood.

Question 4(a) — 10 marks

Explain five issues that the finance department should verify when processing payments for a project contract.

Answer

  1. Confirm that the contract and expenditure were properly authorised and funded.
  2. Match the payment claim to certified work or the relevant agreed payment milestone.
  3. Verify quantities, rates, approved variations and arithmetic accuracy.
  4. Apply contractual retention, advance recovery, taxes and other required deductions correctly.
  5. Verify the payee, bank details, due date and prior payments to prevent diversion or duplication.

Question 4(b) — 10 marks

Jobi Limited has decided to install its manufacturing plant project in a certain region. Outline five social costs which the firm may incur by taking this move.

Answer

  1. Pollution-control and waste-treatment costs may be needed to protect the surrounding community.
  2. Compensation or resettlement support may arise where land acquisition displaces existing users.
  3. Traffic-management and road-safety measures may be needed because of additional heavy vehicles.
  4. Community facilities or local infrastructure may need support where the project increases pressure on services.
  5. Environmental restoration and community-relations measures may be needed to address noise, disturbance and other adverse impacts.

Question 5(a) — 10 marks

You have been incorporated in a team tasked to evaluate the performance of a certain construction project. Outline five aspects that the team would cover when performing the task.

Answer

  1. Time: compare completed activities and milestones with the approved schedule.
  2. Cost: compare verified expenditure and commitments with the budget.
  3. Quality: test work and materials against specifications and acceptance criteria.
  4. Scope: verify that the required outputs and approved changes are delivered.
  5. Compliance and stakeholder results: review safety, contractual obligations, risks and user acceptance.

Question 5(b) — 10 marks

Mrs. Suja has been appointed to lead a team tasked to implement a certain project in an organization. Explain five challenges that the team may experience when carrying out the task.

Answer

  1. Insufficient or late finance interrupts procurement and payment for work.
  2. Poor scope definition and repeated changes cause redesign and rework.
  3. Shortages of competent staff, materials or equipment delay planned activities.
  4. Weak coordination, decisions and communication leave interdependent tasks waiting.
  5. Unforeseen technical problems, approvals or external disruptions prevent the planned sequence being followed.

Question 6(a) — 8 marks

Namba Limited has been using the Programme Evaluation and Review Technique (PERT) when preparing its project plans. Explain four ways in which this technique may enhance efficiency in the project planning process.

Answer

  1. Maps activity dependencies so work can be sequenced and coordinated logically.
  2. Uses alternative duration estimates to reflect uncertainty in activity completion times.
  3. Identifies critical activities that require close attention to protect the completion date.
  4. Supports analysis of completion time and scheduling risk so resources and contingencies can be planned more effectively.

Question 6(b) — 12 marks

Describe six steps that a manager should follow in the project tendering process.

Answer

  1. Define the approved project requirement, procurement plan and available budget.
  2. Prepare clear tender documents, specifications and evaluation criteria.
  3. Advertise or invite qualified bidders using the applicable procurement method.
  4. Receive and open bids at the stated time under the prescribed controlled procedure.
  5. Evaluate responsive bids against the published criteria and verify the proposed contractor’s capability.
  6. Obtain authorised award approval, notify bidders and conclude the contract and performance arrangements.

Question 7(a) — 10 marks

Explain five advantages to an organization of using the Network Analysis technique in the management of its project operations.

Answer

  1. Shows activity relationships and the sequence required to complete the project.
  2. Identifies the critical path and activities that directly determine completion time.
  3. Shows available float for noncritical activities, supporting resource scheduling.
  4. Helps assess the effect of delays, acceleration and alternative work arrangements.
  5. Provides a clear basis for monitoring progress and focusing corrective action.

Question 7(b) — 10 marks

Outline five circumstances under which a client may terminate a contract being implemented by a contractor.

Answer

  1. Serious unremedied breach may justify termination under the contract’s default provisions.
  2. Abandonment or persistent failure to progress may make continued performance unacceptable.
  3. Insolvency or incapacity may prevent the contractor from fulfilling its obligations.
  4. Unlawful conduct or loss of required authority may prevent lawful continuation.
  5. An agreed termination, qualifying prolonged event or valid convenience clause may apply, subject to required notices, procedures and settlement obligations.
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