Project and Contract Management — Undated

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.

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Question 1(a) — 12 marks

Describe the steps that a project manager should follow in project planning.

Answer

  1. Define the project objectives, scope and measurable deliverables.
  2. Identify stakeholders, requirements, assumptions and constraints.
  3. Break the work into activities and establish their dependencies.
  4. Estimate durations, resource needs and costs, then prepare the schedule and budget.
  5. Identify risks and define quality, communication and procurement arrangements.
  6. Obtain approval, establish responsibilities and set progress-monitoring and change-control procedures.

Question 1(b) — 8 marks

One of the methods of awarding a project contract is through serial tenders. Outline the benefits of this method of tendering.

Answer

  1. Rates established through an initial competitive process can support pricing of later similar work.
  2. Repeated tender preparation and evaluation effort can be reduced.
  3. Continuity with a capable contractor can improve learning and working relationships.
  4. Earlier contractor availability and known pricing arrangements can speed mobilisation for comparable later phases.

Question 2(a) — 12 marks

Explain the responsibilities of a project manager in the execution of a project.

Answer

  1. Coordinate activities and ensure work follows the approved scope and schedule.
  2. Allocate and manage staff, materials, equipment and other project resources.
  3. Monitor expenditure and control commitments within authorised budgets.
  4. Verify quality and compliance with technical, safety and contractual requirements.
  5. Manage risks, issues, changes and relationships with contractors and stakeholders.
  6. Report progress and arrange acceptance, handover and closure of completed outputs.

Question 2(b) — 8 marks

Outline the demerits of single-sourcing as a method of awarding project contracts.

Answer

  1. Limited competition can lead to higher prices or less favourable terms.
  2. Dependence on one contractor increases exposure to failure or delay.
  3. Lack of alternative offers makes value-for-money comparison more difficult.
  4. Reduced transparency can create perceptions or risks of favouritism and weaken accountability.

Question 3(a) — 12 marks

A certain organization advertised for one of its project’s tender bids. Describe the types of documents that the firm should issue to contractors who respond to the advertisement.

Answer

  1. Instructions to tenderers explain submission, deadlines, clarification and evaluation procedures.
  2. Technical specifications and scope describe the required work and performance.
  3. Drawings and other design information clarify dimensions, interfaces and site requirements.
  4. Bills of quantities or pricing schedules provide a consistent basis for financial offers.
  5. Conditions and draft form of contract state responsibilities, payment, risk and dispute provisions.
  6. Tender and qualification forms request the bidder’s offer, capability evidence and required declarations or securities.

Question 3(b) — 8 marks

It is usually necessary to have a strong client-contractor collaboration when undertaking project work. Explain the reasons that may justify this requirement.

Answer

  1. Timely communication resolves unclear requirements before they cause rework.
  2. Joint coordination aligns access, approvals, supplies and work schedules.
  3. Early discussion of risks and changes supports practical solutions.
  4. Trust and transparent records reduce avoidable claims and improve acceptance and handover.

Question 4(a) — 10 marks

Highlight the factors that a firm should consider in determining the method of payment to a project contractor.

Answer

  1. Nature and measurability of the work determine whether milestones, quantities or reimbursable costs are appropriate.
  2. Allocation of cost and performance risk influences suitable payment incentives.
  3. Project duration and contractor cash-flow needs affect payment frequency.
  4. Available budget, financing and the client’s approval capability constrain feasible arrangements.
  5. Contract terms, verification requirements and relevant procurement obligations determine authorised payment conditions.

Question 4(b) — 10 marks

Explain the factors that may limit the effectiveness of the planning process for a project.

Answer

  1. Unclear objectives and incomplete scope make reliable activities and estimates difficult to define.
  2. Inaccurate information and unrealistic assumptions undermine schedules and budgets.
  3. Limited planning expertise, time or resources restrict the quality of analysis.
  4. Poor stakeholder participation can omit requirements and weaken commitment.
  5. Uncertainty and frequent external changes can invalidate the original plan.

Question 5(a) — 10 marks

There are certain factors that may trigger the need for a firm to undertake a project. Highlight these factors.

Answer

  1. New customer demand or an unmet market opportunity may require a new output.
  2. Operational inefficiency may justify process or equipment improvement.
  3. New technology may create an opportunity or a need to modernise.
  4. Legal, safety or environmental requirements may require a defined change.
  5. Corporate growth, replacement of ageing assets or response to disruption may require a temporary organised initiative.

Question 5(b) — 10 marks

One of the methods that a project manager may use in project planning is the Critical Path Analysis (CPA). Describe the types of information that the manager may obtain from the use of this method.

Answer

  1. A logical network shows the activities and their predecessor relationships.
  2. Earliest start and finish times show the soonest feasible activity schedule.
  3. Latest start and finish times show timing limits without delaying overall completion.
  4. The critical path identifies activities with no total float that determine project duration.
  5. Float for noncritical activities shows scheduling flexibility for resource allocation and delay management.

Question 6(a) — 10 marks

Highlight the typical cost components that should be considered in the planning stage of the project life cycle.

Answer

  1. Labour and professional-service costs cover the people needed to plan and deliver the work.
  2. Material and purchased-component costs cover items incorporated or consumed in the project.
  3. Plant, equipment and facility costs cover acquisition, hire, operation and maintenance.
  4. Administration, permits, insurance and other overheads support project execution.
  5. Contingency, commissioning and closure costs cover identified uncertainty and bringing the completed output into use.

Question 6(b) — 10 marks

Wavinya, a project manager is in the process of selecting project team members. Outline the factors that she should consider in selecting members to such a team.

Answer

  1. Relevant technical competence matches members to the project’s tasks.
  2. Experience with similar work improves practical judgement and problem-solving.
  3. Availability and workload determine whether members can meet the required commitment.
  4. Communication, cooperation and complementary skills support effective teamwork.
  5. Integrity, reliability and clear role representation support accountable project decisions.

Question 7(a) — 10 marks

One of the stages of a project life cycle is the feasibility analysis stage. Explain the issues that should be considered at this stage.

Answer

  1. Market or user demand indicates whether the proposed output meets a real need.
  2. Technical feasibility shows that suitable methods, skills and technology can deliver the output.
  3. Financial and economic appraisal compares expected benefits with investment and operating costs.
  4. Legal, environmental and social assessment identifies approvals, impacts and stakeholder acceptance.
  5. Resource, schedule and risk assessment tests whether the project can be implemented and sustained realistically.

Question 7(b) — 10 marks

Describe the activities that a contractor should undertake during the termination stage of a contract.

Answer

  1. Stop or complete work as directed under the valid termination arrangement and secure the site safely.
  2. Record completed work, materials, equipment and outstanding obligations.
  3. Prepare final accounts and resolve certified payments, claims and required deductions.
  4. Return client property and hand over relevant drawings, records, manuals and completed outputs.
  5. Demobilise staff and equipment, settle subcontract obligations and archive records while honouring any continuing contractual duties.
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