PMP · Question #62
A third-party supplier demands payment for the services provided for a project. The agreement was that payment would be made after the organization receives payment from the client. The third-party su
The correct answer is A. Explain the third-party supplier situation to the client and request payment.. The project manager should communicate the critical situation of the third-party supplier to the client and request early payment to prevent the supplier from withdrawing resources and impacting the project.
Question
A third-party supplier demands payment for the services provided for a project. The agreement was that payment would be made after the organization receives payment from the client. The third-party supplier lacks the capital to meet their payroll and has informed the project manager that if they do not receive payment quickly, they will withdraw team members from the project. What should the project manager do?
Options
- AExplain the third-party supplier situation to the client and request payment.
- BInform the client that the project must be delayed until payment is received.
- CReassign resources from other projects to pay the third-party supplier.
- DProcess a bank loan to pay the payroll of the third-party supplier.
How the community answered
(33 responses)- A76% (25)
- B12% (4)
- C3% (1)
- D9% (3)
Why each option
The project manager should communicate the critical situation of the third-party supplier to the client and request early payment to prevent the supplier from withdrawing resources and impacting the project.
The contract stipulates payment after the organization receives payment from the client, but the supplier's critical financial situation threatens project delivery. The project manager's best course of action is to communicate this risk transparently to the client, explaining the potential impact on the project, and collaboratively seek an expedited payment solution to mitigate the risk and ensure project continuity.
Informing the client of a project delay is a reactive measure that doesn't address the underlying payment issue and might escalate the problem unnecessarily before attempting a resolution.
Reassigning resources from other projects to pay a supplier is an inappropriate and likely unauthorized use of company funds and resources.
Processing a bank loan for a third-party supplier is an extreme and unauthorized financial action for a project manager to undertake.
Concept tested: Managing supplier payment and project risk
Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok/procurement-management
Topics
Community Discussion
7
Hiroshi T.Jan 9, 2026A is the correct answer per the PMI mindset. The agreement ties payment to client receipt of funds, so the appropriate next step is to engage the client, explain the third-party supplier situation, and request payment to keep the project on track. Options B, C, and D all introduce unilateral or escalatory actions that are outside the project manager authority and do not address the root payment issue.
Orla P.Jan 9, 2026Agreed on A, and on top of the payment issue, document the client conversation and the third-party supplier context in your issue log so you have a clean paper trail if the payment delay drags on.
Olusegun A.Dec 14, 2025First leaned toward B because the supplier pulling people feels like a schedule crisis that justifies escalation, but the real issue is the pay-when-paid clause and the supplier's cash flow problem, not a delay the client caused. A is the right call because the PMBOK wants you to engage the client proactively and protect stakeholder value rather than issuing ultimatums or doing side deals.
Zlatan X.Dec 9, 2025Leaned toward B first but pay-when-paid means escalate to client for early payment, which is A.
Lena V.Dec 10, 2025A is right but the key test point is that pay-when-paid shifts payment risk to the subcontractor, not that it expedites client payment.
Lena V.Dec 21, 2025Leaned toward B but the supplier risk needs client action, not threats.
Orla P.Jan 3, 2026A is correct here. The PMI mindset is to escalate the issue to the client and request early payment rather than violating the pay-when-paid terms of the supplier agreement or taking on financial arrangements outside your authority.