📘Principles & Methods of Public Procurement 100 MCQs
🔹 Basic Principles of Public Procurement
Q1. The primary objective of public procurement is to:
A. Maximize profit
B. Ensure value for money
C. Reduce competition
D. Increase administrative control
Answer: B
Q2. “Value for Money” in procurement refers to:
A. Lowest cost
B. Best combination of cost and quality
C. Highest price
D. Fastest delivery
Answer: B
Q3. Transparency in procurement ensures:
A. Confidentiality only
B. Fairness and openness
C. Cost reduction
D. Risk elimination
Answer: B
Q4. Principle of competition requires:
A. Single vendor selection
B. Maximum participation of bidders
C. Closed bidding
D. Negotiation only
Answer: B
Q5. Accountability in procurement means:
A. Shared responsibility
B. Clear responsibility for decisions
C. No responsibility
D. Audit only
Answer: B
Q6. Fairness in procurement ensures:
A. Equal treatment of bidders
B. Preference to local vendors
C. Preference to lowest bidder only
D. Random selection
Answer: A
Q7. Economy in procurement refers to:
A. Cheapest purchase
B. Cost-effective procurement
C. Maximum expenditure
D. No cost control
Answer: B
Q8. Efficiency in procurement implies:
A. Delayed process
B. Timely procurement
C. High cost
D. Limited competition
Answer: B
Q9. Integrity in procurement ensures:
A. Profit
B. Ethical behavior
C. Speed
D. Competition
Answer: B
Q10. Public procurement is governed by:
A. Personal choice
B. Rules and regulations
C. Market demand
D. Vendor preference
Answer: B
🔹 Procurement Methods
Q11. Open tendering allows:
A. Limited bidders
B. All eligible bidders
C. Only registered vendors
D. Single vendor
Answer: B
Q12. Limited tendering is used when:
A. High competition needed
B. Limited suppliers available
C. Emergency procurement
D. No urgency
Answer: B
Q13. Single tender is justified when:
A. Many suppliers exist
B. Proprietary item
C. Open competition needed
D. Standard items
Answer: B
Q14. Two-stage bidding is used for:
A. Simple procurement
B. Complex technical requirements
C. Emergency purchase
D. Local purchase
Answer: B
Q15. E-procurement ensures:
A. Manual process
B. Transparency and efficiency
C. Limited access
D. Vendor monopoly
Answer: B
Q16. Reverse auction is used to:
A. Increase price
B. Reduce price
C. Fix price
D. Avoid bidding
Answer: B
Q17. Framework agreement is:
A. One-time contract
B. Long-term arrangement
C. Emergency contract
D. Informal agreement
Answer: B
Q18. Rate contract is used for:
A. Single purchase
B. Repeated purchases
C. Emergency purchase
D. Capital purchase
Answer: B
Q19. Direct procurement is allowed when:
A. Competition exists
B. Emergency or proprietary case
C. Large tender required
D. Open bidding
Answer: B
Q20. Global tendering is used when:
A. Local suppliers sufficient
B. International suppliers needed
C. Small purchase
D. Urgent purchase
Answer: B
🔹 Tendering Process
Q21. Tender document includes:
A. Scope of work
B. Terms and conditions
C. Specifications
D. All of the above
Answer: D
Q22. Bid security ensures:
A. Profit
B. Serious participation
C. Price reduction
D. Speed
Answer: B
Q23. Performance security ensures:
A. Bid submission
B. Contract performance
C. Tender issue
D. Evaluation
Answer: B
Q24. Pre-bid meeting is held to:
A. Finalize contract
B. Clarify doubts
C. Select vendor
D. Open bids
Answer: B
Q25. Technical bid evaluation checks:
A. Price
B. Compliance with specifications
C. Profit
D. Payment terms
Answer: B
Q26. Financial bid evaluation considers:
A. Quality
B. Price
C. Risk
D. Audit
Answer: B
Q27. L1 bidder means:
A. Highest bidder
B. Lowest bidder
C. Best bidder
D. Selected bidder
Answer: B
Q28. QCBS method considers:
A. Price only
B. Quality and cost
C. Quality only
D. Risk only
Answer: B
Q29. Bid opening should be:
A. Confidential
B. Transparent
C. Closed
D. Random
Answer: B
Q30. Tender validity period ensures:
A. Price stability
B. Contract completion
C. Risk control
D. Audit
Answer: A
🔹 Contract Management
Q31. Contract is awarded to:
A. Any bidder
B. Responsive and lowest bidder
C. Highest bidder
D. Random bidder
Answer: B
Q32. Liquidated damages apply for:
A. Early delivery
B. Delay in performance
C. High cost
D. Quality
Answer: B
Q33. Force majeure refers to:
A. Vendor delay
B. Uncontrollable events
C. Price increase
D. Audit issue
Answer: B
Q34. Contract amendment requires:
A. Verbal approval
B. Formal approval
C. Vendor decision
D. No approval
Answer: B
Q35. Payment terms should ensure:
A. Vendor profit
B. Fair payment
C. Delay
D. Risk
Answer: B
Q36. Inspection ensures:
A. Payment
B. Quality compliance
C. Audit
D. Contract closure
Answer: B
Q37. Warranty ensures:
A. Price reduction
B. Product performance
C. Risk elimination
D. Audit
Answer: B
Q38. Penalty clause ensures:
A. Compliance
B. Delay
C. Risk
D. Profit
Answer: A
Q39. Contract closure involves:
A. Payment only
B. Completion and acceptance
C. Audit only
D. Risk
Answer: B
Q40. Dispute resolution includes:
A. Negotiation
B. Arbitration
C. Litigation
D. All of the above
Answer: D
🔹 Advanced Concepts
Q41. Procurement planning ensures:
A. Random purchase
B. Systematic acquisition
C. Delay
D. Risk
Answer: B
Q42. Life cycle costing considers:
A. Initial cost
B. Total cost over life
C. Market price
D. Vendor cost
Answer: B
Q43. Vendor evaluation includes:
A. Technical capability
B. Financial strength
C. Past performance
D. All of the above
Answer: D
Q44. Conflict of interest should be:
A. Ignored
B. Disclosed
C. Encouraged
D. Hidden
Answer: B
Q45. Procurement audit ensures:
A. Profit
B. Compliance and efficiency
C. Delay
D. Risk
Answer: B
Q46. Ethical procurement requires:
A. Bias
B. Transparency
C. Favoritism
D. Monopoly
Answer: B
Q47. Blacklisting of vendor is done for:
A. Good performance
B. Fraud or misconduct
C. Low price
D. Delay
Answer: B
Q48. Negotiation is generally:
A. Allowed always
B. Restricted
C. Mandatory
D. Not allowed
Answer: B
Q49. Procurement cycle ends with:
A. Tendering
B. Contract closure
C. Planning
D. Evaluation
Answer: B
Q50. Public procurement ensures:
A. Private benefit
B. Public interest
C. Vendor interest
D. Audit only
Answer: B
Q51. A procurement process with limited competition due to urgency should ideally use:
A. Open tender
B. Limited tender
C. Single tender
D. Global tender
Answer: B
Q52. If only one supplier exists globally, procurement method should be:
A. Open tender
B. Limited tender
C. Single tender
D. Reverse auction
Answer: C
Q53. Splitting of demand to avoid tendering is:
A. Allowed
B. Encouraged
C. Prohibited
D. Optional
Answer: C
Q54. Procurement planning should be aligned with:
A. Vendor interest
B. Organizational objectives
C. Audit requirements only
D. Market trends
Answer: B
Q55. Conflict of interest arises when:
A. Vendor competes
B. Decision-maker has personal interest
C. Price is low
D. Bid is rejected
Answer: B
Q56. In QCBS, weightage is given to:
A. Price only
B. Quality only
C. Both quality and cost
D. Risk only
Answer: C
Q57. A technically non-responsive bid should be:
A. Evaluated financially
B. Rejected
C. Negotiated
D. Modified
Answer: B
Q58. Transparency requires:
A. Confidential evaluation only
B. Disclosure of relevant information
C. Hidden process
D. Vendor preference
Answer: B
Q59. Procurement ethics prohibit:
A. Competition
B. Bribery
C. Transparency
D. Audit
Answer: B
Q60. Procurement decisions should be based on:
A. Personal judgment
B. Defined criteria
C. Vendor relation
D. Market rumors
Answer: B
🔹 Tendering & Evaluation (Advanced)
Q61. Two-envelope system ensures:
A. Combined evaluation
B. Separate technical and financial evaluation
C. Faster process
D. Vendor selection
Answer: B
Q62. Pre-qualification criteria ensure:
A. All vendors participate
B. Only capable vendors participate
C. Price reduction
D. Delay
Answer: B
Q63. Bid validity extension requires:
A. Vendor consent
B. Audit approval
C. Government order
D. No approval
Answer: A
Q64. Unbalanced bid indicates:
A. Equal pricing
B. Disproportionate pricing
C. Low cost
D. High quality
Answer: B
Q65. Collusive bidding refers to:
A. Fair competition
B. Agreement among bidders
C. Open bidding
D. Reverse auction
Answer: B
Q66. Post-qualification is done:
A. Before tender
B. After bid evaluation
C. During planning
D. During closure
Answer: B
Q67. Negotiation is generally avoided in:
A. Single tender
B. Open tender
C. Emergency purchase
D. Proprietary purchase
Answer: B
Q68. EMD (Earnest Money Deposit) is used to:
A. Ensure contract performance
B. Ensure serious bidding
C. Reduce price
D. Increase cost
Answer: B
Q69. Bid rejection is justified when:
A. Minor deviation
B. Major deviation
C. Low price
D. High quality
Answer: B
Q70. Financial evaluation must follow:
A. Arbitrary method
B. Pre-defined criteria
C. Vendor choice
D. Audit decision
Answer: B
🔹 Contract & Risk Management
Q71. Risk allocation in contract should be:
A. Ignored
B. Balanced
C. Fully on buyer
D. Fully on vendor
Answer: B
Q72. Performance guarantee ensures:
A. Bid participation
B. Contract execution
C. Price stability
D. Audit
Answer: B
Q73. Escalation clause is used for:
A. Price reduction
B. Price variation
C. Risk elimination
D. Audit
Answer: B
Q74. Termination clause allows:
A. Contract extension
B. Ending contract
C. Price revision
D. Risk transfer
Answer: B
Q75. Insurance clause covers:
A. Price risk
B. Physical risk
C. Audit
D. Payment
Answer: B
Q76. Inspection at source ensures:
A. Delivery
B. Quality before dispatch
C. Payment
D. Audit
Answer: B
Q77. Delay damages are calculated based on:
A. Cost
B. Time delay
C. Quality
D. Risk
Answer: B
Q78. Arbitration clause helps in:
A. Procurement
B. Dispute resolution
C. Payment
D. Audit
Answer: B
Q79. Contract variation should be:
A. Informal
B. Documented
C. Ignored
D. Verbal
Answer: B
Q80. Final payment is released after:
A. Tender
B. Completion and acceptance
C. Planning
D. Evaluation
Answer: B
🔹 Public Procurement Compliance & Audit
Q81. Procurement audit checks:
A. Profit
B. Compliance
C. Vendor
D. Price
Answer: B
Q82. Non-compliance in procurement leads to:
A. Efficiency
B. Audit observations
C. Profit
D. Delay only
Answer: B
Q83. Documentation is essential for:
A. Coding
B. Audit trail
C. Payment
D. Risk
Answer: B
Q84. Procurement records should be:
A. Destroyed
B. Maintained
C. Hidden
D. Ignored
Answer: B
Q85. Internal control ensures:
A. Fraud
B. Efficiency and compliance
C. Delay
D. Risk
Answer: B
Q86. Vigilance in procurement aims to:
A. Increase cost
B. Prevent corruption
C. Delay process
D. Reduce competition
Answer: B
Q87. Blacklisting affects:
A. Buyer
B. Vendor participation
C. Audit
D. Payment
Answer: B
Q88. Procurement fraud includes:
A. Fair bidding
B. Collusion
C. Transparency
D. Audit
Answer: B
Q89. Audit observation may arise due to:
A. Compliance
B. Irregularity
C. Efficiency
D. Planning
Answer: B
Q90. Procurement transparency reduces:
A. Competition
B. Corruption
C. Efficiency
D. Quality
Answer: B
🔹 Case-Based / Practical Questions
Q91. If technical specs are vague, best action is:
A. Proceed with tender
B. Clarify specifications
C. Cancel procurement
D. Select vendor
Answer: B
Q92. If only one bid is received in open tender:
A. Reject
B. Evaluate and justify
C. Cancel always
D. Negotiate
Answer: B
Q93. If L1 bidder fails to perform:
A. Cancel contract
B. Go to next eligible bidder
C. Ignore
D. Re-tender always
Answer: B
Q94. If cartelization suspected:
A. Ignore
B. Investigate
C. Accept bid
D. Cancel procurement
Answer: B
Q95. Emergency procurement requires:
A. Open tender
B. Fast decision
C. Delay
D. Audit
Answer: B
Q96. If contract price is abnormally low:
A. Accept blindly
B. Seek justification
C. Reject always
D. Increase price
Answer: B
Q97. Procurement cycle starts with:
A. Tender
B. Planning
C. Evaluation
D. Contract
Answer: B
Q98. Procurement planning includes:
A. Budgeting
B. Requirement analysis
C. Scheduling
D. All of the above
Answer: D
Q99. Contract management ensures:
A. Execution
B. Compliance
C. Performance
D. All of the above
Answer: D
Q100. Ultimate goal of public procurement is:
A. Vendor benefit
B. Public interest and value for money
C. Profit
D. Audit
Answer: B
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