CIPS Exam L4M3 Topic 8 Question 7 Discussion

Actual exam question for CIPS's L4M3 exam

Question #: 7
Topic #: 8

Carillion Ltd is a major construction contractor in the UK. The company commits to continuous improvement and sets out a performance management program that is integrated across the organisational, individual, and supplier levels. To ensure that the suppliers acknowledge the program, every time negotiating the contract terms with suppliers, the procurement team of Carillion appends a performance management framework to the draft document as a schedule. Is the action of procurement team appropriate?

ANo, because the framework will increase the complexity of the contract

BNo, because the performance management should be solely developed by suppliers

CYes, because the framework should have legal standing as a part of contract

DYes, because Carillion wants to implement early supplier involvement

Show Suggested Answer

Suggested Answer: C

Performance management framework often consists of KPIs, targets and consequences that arise from achieved scores. To ensure that the framework has binding effect on contracting parties, it should be developed, appended to the main contract document and agreed by both parties. So the answer should be 'Yes, because the framework should have legal standing as a part of contract'.

LO 1, AC 1.1

by Vincenza at Oct 26, 2022, 04:51 AM

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