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1. PMP EXAM
SAMPLE Q & A

2. A major dispute arises with a vendor on a project. The project manager claims that the vendor has
failed to perform its contractual obligations, while the vendor complains that the project is behind
on payments.
What is the best course of action for the project manager in this situation?
A. Refer this issue to a third party for mediation or arbitration
B. File a contract claim and then work directly with the vendor to resolve the issue
C. Terminate the contract, document lessons learned, and find another vendor
D. Conduct a procurement audit
HINT: What is the tool used during Control Procurements to document, process, monitor, and
manage disputes between a buyer and seller?
Question

3. However, since mediation and arbitration can be costly, risky, and time-consuming, of the choices
provided, negotiation is the preferred method of settling disputes and is, therefore, the best course of
action in this situation.
The correct answer is B.
When disputes arise on a project, claims administration can be an effective tool to help buyers and
sellers reach an agreement and prevent damage caused by litigation and early contract termination.
Filing a contract claim and working with the vendor to reach an agreement is a more direct problem-
solving approach and therefore the 'best' answer choice. Claims administration also refers to using
alternative dispute resolution.
Answer

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