PMP · Question #955
In the execution phase of a large construction project, the contracted logistic company decided to increase their price as a result of unavailability of shipping containers. What should project…
The correct answer is A. Assess the impact of the price increase given by the logistic company and follow the contract and. Upon notification of a price increase from a contracted vendor, the project manager must first assess the impact on the project and then consult the existing contract to understand the contractual terms and options.
Question
In the execution phase of a large construction project, the contracted logistic company decided to increase their price as a result of unavailability of shipping containers. What should project manager do?
Options
- AAssess the impact of the price increase given by the logistic company and follow the contract and
- BAgree to absorb the price increase because the unavailability is beyond the control of the logistic
- CAbandon the contract with the logistic company and look for another company that has not
- DExplain to the logistic company that an increase in price is not acceptable because they signed a
How the community answered
(26 responses)- A81% (21)
- B12% (3)
- C4% (1)
- D4% (1)
Why each option
Upon notification of a price increase from a contracted vendor, the project manager must first assess the impact on the project and then consult the existing contract to understand the contractual terms and options.
The project manager's primary responsibility is to understand the implications of the price increase on the project's budget and schedule. Concurrently, they must review the contract to determine the legal and financial terms, including any clauses related to price escalation or force majeure, to guide the appropriate response.
Agreeing to absorb the increase without assessment or contractual review is fiscally irresponsible and could set a detrimental precedent.
Abandoning the contract prematurely without a thorough assessment of impact and contractual obligations can lead to greater costs, delays, and legal issues.
Simply refusing the increase without understanding contractual rights or market conditions is confrontational and may not align with the contract terms or viable alternatives.
Concept tested: Contract Management and Risk Response
Topics
Community Discussion
4
Wei W.Jul 4, 2026A is the correct answer here. In agile thinking, we face reality and inspect actual conditions before reacting, so the PM needs to assess what the price increase means for scope, schedule, and budget. Then the contract governs how to handle it, whether that involves change control, dispute resolution, or specific clauses about material price adjustments. B and D are knee-jerk reactions that ignore empirical analysis, and C throws away a working relationship without understanding the situation first.
Samuel O.Jun 27, 2026A is the right call here, and I landed on it when this exact scenario showed up on my exam last spring. Before I pivoted into IT project management I spent years in construction logistics, and the first thing you do when a vendor comes back with a price hike is check the contract terms and run the impact analysis, not react emotionally or start shopping for new carriers.
Lena V.Jun 23, 2026A is correct because the PMs first move in execution is always impact assessment plus contract adherence, not absorbing costs or firing vendors on impulse. What I keep wondering is whether anyone has seen an exam variant of this where the contract explicitly has a T&M or cost-reimbursable clause, would that change the expected answer or does follow the contract still cover it?
Samuel O.Jun 25, 2026Agreed on A, and to your question, the contract type shifts the mechanics of how you absorb or pass through costs but the first move is still impact assessment plus following whatever the contract actually says, so the answer holds.