Certified Professional Public Buyer (CPPB) Practice Test

What is a requirements contract?

1. A contract where all delivery timelines are strictly defined

2. An indefinite delivery/indefinite quantity contract filled by selected suppliers

3. A contract that guarantees fixed prices for the duration

4. A one-time purchase agreement

The correct answer is: An indefinite delivery/indefinite quantity contract filled by selected suppliers

A requirements contract is an agreement where a buyer commits to purchase all of their specific needs for a particular product or service from a selected supplier for a defined period. This type of contract provides a flexible framework for procurement, allowing the buyer to fulfill varying demand without needing to create a new contract for each order. The essence of option B highlights the indefinite delivery and indefinite quantity nature of the contract, recognizing that while the buyer has a guaranteed source for their needs, the exact quantities and delivery timings can fluctuate based on usage and market conditions. This flexibility is crucial for businesses that face uncertain demand or want to ensure that they can obtain goods and services as needed without excessive administrative burden. The other options describe different types of procurement agreements. A contract with strictly defined delivery timelines typically refers to fixed contracts, where timelines are crucial to in-time delivery. Fixed pricing agreements are another type of contract that might not allow for changes based on market conditions. A one-time purchase embodies a straightforward transaction rather than the ongoing purchasing relationship established in a requirements contract. Thus, the selected answer accurately captures the unique characteristics of requirements contracts.