PMP Question #1238: Real Exam Question with Answer & Explanation

Question

A company is moving its headquarters to another city. The project manager responsible for the assignment has been using a predictive approach during the transition. However, the information systems will be migrated using an agile approach. The project manager needs to decide which kind of contract to sign with the vendor responsible for migrating the systems. The project manager is concerned about controlling finances while delivering results. How should the project manager address this situation?

Options

• ASign a single agreement for the whole project.
• BConfirm payment after each project retrospective.
• CNegotiate payment after all project migration is completed.
• DUse fixed-price increments as user stories are completed.

Explanation

For an agile IT migration project with financial control and delivery concerns, the project manager should opt for a contract that uses fixed-price increments tied to the completion of user stories.

Common mistakes.

• A. Signing a single agreement for the entire project in an agile context limits flexibility, makes it difficult to adapt to changes, and provides less granular financial control.
• B. Confirming payment after each retrospective does not directly link payment to delivered value or specific increments; retrospectives are primarily for process improvement, not financial milestones.
• C. Negotiating payment only after all project migration is completed is a lump-sum approach that offers little financial control or early visibility into progress for an agile, iterative project.

Concept tested. Agile contracting for value delivery

Reference. https://www.pmi.org/disciplined-agile/agile-at-a-glance/agile-contracting

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