L3M3 CIPS Contract Administration Free Practice Exam Questions (2025 Updated)

Explanation

Trading blocs eg EU, EFTA, ASEAN aim to free up trade within the bloc; the other answers of-fered will negatively affect free trade.

Explanation

A mini-competition may be held to select a supplier, depending on the wording in the framework arrangement documentation and circumstances at the time.

Explanation

Bidders compete against each other, reducing bid prices until one winner is found - this is the sub-mission of the lowest-priced bid (unless stated otherwise in the auction documentation).

Explanation

When profitability is spoken of as a % the selling price, the profit element is called the margin.

Explanation

Market conditions, determining demand and supply, and customer perceptions of value are external factors. One could argue that customer perceptions of value can be altered by the selling company, but in the short-term this is clearly external.

Explanation

Offer and acceptance together make up 'agreement'.

Explanation

English law, with Scots and European law being different.

In many Commonwealth countries, the legal system used is based on historic English law, thus many lawyers around the world are familiar with many of the fundamental concepts of English law, including the law of contract.

Contracts should state which legal system applies.

Explanation

When price is discussed as a % of costs to be added on, the term is 'mark-up'.

Explanation

Taking up suppliers' time if there is no intention to purchase from them is unethical.

Negotiating with suppliers is to be encouraged; following your line manager's instructions is general-ly regarded as being a good thing, although regarding ethical issues, one is encouraged to query.

Explanation

Since performance specifications are all to do with outputs, 'input-driven' leaps out as being the cor-rect answer here.

Explanation

It's a retrospective rebate, and can be a highly significant way of (often hidden) discounting for many businesses - sometimes a 'life-saver'. Something to think about in an open book costing situa-tion - are there rebates to suppliers which are 'forgotten' in discussions?

Explanation

'Invitation to treat' is less than an offer ie it is not capable of being accepted in any contractual sense.

A common example given of an invitation to treat are goods on display in a shop window.

Explanation

Even if you don't know what 'Epistemological' means, you should know it's the odd one out.

It relates to the philosophical study of knowledge.

Explanation

Milestone plan.

This is difficult, and if you opted for 'staged', that is understandable. 'Milestone' or 'gateway' are terms often used to describe a situation in which a particular point must be reached on a project, pri-or to release of funds. By this means, a close linkage can be made between outputs achieved and payments made. The idea of stages goes towards this, and 'progress payments' ie payment based on alleged progress or simply time, have been shown in many cases, to be ineffective in achieving value for money.

Explanation

Supplier liquidations are to be expected; workers' strikes likewise.

Cargo ships do sink, and your course creator has had cargo in at least two ships which have sunk on the high seas, one of them in The English Channel.

A global pandemic (Covid-19) was highly unlikely (2019), but arrived with devastating conse-quences for commerce and people. Low likelihood, huge impact.

Just because it seems unlikely doesn't mean it's not going to happen.

If you're seriously interested on the effect of apparently chance happenings in our lives, read Nassim Nicholas Taleb - you'll either love him or hate him.

Explanation

'Five-Why Analysis' or 'Why-Why Analysis' is an approach to trying to determine the cause of an event. It can be used to link to / in conjunction with an Ishikawa diagram. The principle is thatone repeatedly (as often as necessary, not necessarily limited to five) asks 'why?', and eventually an un-derlying reason will emerge, which if addressed effectively, will successfully resolve the problem. This is something which can often be observed naturally in small children. 'Why, Daddy?'. 'But why, Daddy?. Etc. (Or Mummy)

Explanation

Managed.

This an old management adage, which is intended to encourage managers to measure helpful indica-tors (not everything!).

Explanation

Both penetration pricing and promotional pricing begin with the market price. Marginal pricing and rate of return pricing both look at the costs of doing something, and base their calculations on cost. These last two are therefore cost-based approaches to pricing.

Explanation

Not only are the flowers a relatively short-term acquisition of low value, there are unlikely to be many whole life cost elements / possibilities.

The other suggestions however, contain a minefield of long-term cost possibilities.