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NEW QUESTION 28
Streaming Ltd is a music streaming provider based in the UK. The company is looking for extending its presence in the US. To achieve this, the company needs to outsource the data centre service to a local company. To monitor the performance, the procurement manager would like to introduce a service level agreement (SLA) to the data centre service provider. Which of the following should be included in the SLA?
1. System availability
2. The mean time to recover from system failure
3. The actual number of on-time service delivery
4. Dispute resolution procedure

A. 1, 3 and 4 onlyB. 1, 2 and 4 onlyC. 2, 3 and 4 onlyD. 1, 2 and 3 only

Answer: B

Explanation:
A service-level agreement (SLA) defines the level of service you expect from a vendor, laying out the metrics by which service is measured, as well as remedies or penalties should agreed-on service levels not be achieved.
According to CIPS L4M3 study guide, SLA should cover the following:
- KPIs
- How the measurements convert into scores
- Any other service level standards
- Minimum acceptable standards or scores in each case
- Range of scores both above and below the minimum acceptable
- Any mitigating factors which might apply in the event of poor performance
- Any time period permitted in which to remedy a situation of poor performance
- Remedies available
- Dispute settlement
- How to deal with inconsistencies or conflicts between KPIs and any other documents.
In IT service (such as in the scenario), the SLA often covers:
- Uptime
- Call metrics
- Customer satisfaction
- Turn around time
- Quality
- Mean time to recovery
- Mean time between failure
- Backlog
- Business results
You can read the details of above indicators here.
Reference:
- CIPS study guide page 112-115
- 9 Examples of SLAs
- What is an SLA? Best practices for service-level agreements
LO 2, AC 2.2

 

NEW QUESTION 29
Which of the following are examples of conformance specification? Select TWO that apply:

A. Technical drawingB. Output-focused specificationC. Statement of workD. Outcome-focused specificationE. Product sample

Answer: A,E

Explanation:
There are two main types of specification: performance specification and conformance specification (sometimes called prescriptive or technical specifications).
A conformance specification establishes the characteristics a commodity must possess, including details of how the commodity will be manufactured; engineering plans, drawings, or blueprints may be included. The design specification states in prescriptive terms what the potential offeror must provide to the buyer.
Conformance specifications have following features:
- Focus on inputs
- Give specific method, processes and materials
- May identify specific manufacturers or components
- The 'how' as well as the 'what'
- Ties supplier to set details
Reference:
- Public Procurement Practice: SPECIFICATIONS
- CIPS study guide page 8-10
LO 1, AC 1.1

 

NEW QUESTION 30
A retailer prefers to display its best selling products and promotion programme on the building windows. According to rule of contract formation, this act will generally constitute...?

A. A mailbox ruleB. An invitation to treatC. A legal capacityD. An offer

Answer: B

Explanation:
Fisher v Bell [1960] and Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] identified that the courts will generally consider goods advertised in shop windows or those with a price tag attached to constitute an invitation to treat. An invitation to treat is a concept in contract law. It refers to an invitation for a party to make an offer enter into contractual negotiations.
Invitations to treat can be anything displayed to a large number of people, as long as there is no defined way to choose who can accept. Items on display in a shop, advertisements, and catalogues are all common examples of invitations to treat.
However, there are cases in the US shows that under some circumstances an advertisement can become an offer (see Leftkowitz v Great Minneapolis Surplus Stores [1957]).
Reference:
- What is an Invitation to Treat in Contract Law?
- CIPS study guide page 29
LO 1, AC 1.2

 

NEW QUESTION 31
Consequences and actions that arise from certain KPI scores must be...? Select TWO that apply.

A. DocumentedB. Deliberately omittedC. Mutually agreedD. TerminatedE. Unilaterally imposed by the purchaser

Answer: A,C

Explanation:
Supplier performance management and monitoring is a fundamental part of contract management. It starts with setting KPIs, targets and consequences or actions that arise from KPI scores. The measures, objectives and targets used in the monitoring of the supplier's performance must reflect those that were agreed when the contract was let. That is why it is important to specify a commitment to continuous improvement at the outset. It would be unfair to the supplier to suddenly introduce a range of measures after the contract had begun - however if such an introduction mid-term through the contract is unavoidable then it should be negotiated and agreed in a professional manner and not merely imposed on the supplier.
In conclusion, the details of how KPIs will be monitored and the actions or consequences resulting from scores achieved must be documented and agreed between the parties. This details may be embedded in the specification or the main body of the contract or it may be set out in a SLA.
Reference:
- Performance Monitoring of Suppliers - CIPS Knowledge summary
- CIPS study guide page 101-109
LO 2, AC 2.2

 

NEW QUESTION 32
Which of the following is the set of principles that enables courts to determine exactly what the written contract says and what that must mean, then the court will uphold that?

A. Unfair Contract Act 1977B. Order of precedenceC. Rules of interpretationD. Rules of contract formation

Answer: C

Explanation:
Courts may be called upon to interpret a statute due to disputes over the meaning of a word or phrase contained within a statute. These disputes may arise through a variety of reasons. It has long been held that words are an imperfect means of communication. Omissions may have occurred at the drafting stage, word or phraseology ambiguity, etymological change through time, oversight on specific points, or a failure to adapt legislation to new developments. This may result in the judiciary providing a role in statutory interpretation. Statutory interpretation in its broadest sense is the process of determining the true meaning of a written document. In UK, the Interpretation Act 1978 provides limited scope to assist judges with statutory interpretation in that it only provides standard definitions to common provisions such as a rebuttable presumption that terminology in the masculine gender also include the feminine, and that the singular includes plural.
An order of precedence clause sets out the order in which the contract documents take precedence in the event of an inconsistency.
The Unfair Contract Terms Act 1977 (c 50) is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of disclaimers of liability. The terms extend to both actual contract terms and notices that are seen to constitute a contractual obligation.
Reference:
- Rules of Statutory Interpretation
- CIPS study guide page 43-46
LO 1, AC 1.2

 

NEW QUESTION 33
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