PM-FPX4070 covers procurement management for projects, examining how project managers decide what to buy versus build, select vendors, and manage contracts and vendor relationships.
Procurement planning and vendor selection
PM-FPX4070 covers the make-or-buy decision, procurement planning, and structured vendor selection processes.
Contract types and management
The course covers different contract types and their risk implications, and managing vendor performance throughout the contract.
Key topics in PM-FPX4070
- The make-or-buy decision
- Procurement planning
- Vendor selection processes
- Contract types and risk allocation
- Managing vendor performance
- Contract closeout
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Worked example: contract type shifts risk
- Fixed-price contract: The vendor bears the risk of cost overruns — but may pad the price to cover that risk
- Cost-reimbursable contract: The buyer bears more cost risk but may pay less if work goes smoothly
- Lesson: The contract type isn't just a payment detail; it deliberately allocates risk between buyer and vendor, and choosing it well depends on how much uncertainty the work involves
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Frequently asked questions
Different contract types deliberately shift cost risk between the buyer and the vendor — a fixed-price contract places overrun risk on the vendor (who commits to a set price regardless of actual costs, but typically prices in a margin to cover that risk), while a cost-reimbursable contract places more risk on the buyer (who pays the vendor's actual costs plus a fee, potentially paying less if work goes smoothly but bearing the exposure if costs escalate). PM-FPX4070 teaches contract types because selecting the right one is a genuine risk-management decision — fixed-price makes sense when the work is well-defined and predictable, while cost-reimbursable may be more appropriate when significant uncertainty makes a firm fixed price either impossible or excessively padded.
The make-or-buy decision — whether the project should produce something internally or acquire it from an outside vendor — is a foundational procurement choice that affects cost, timeline, risk, and the project's dependence on external parties, and getting it wrong in either direction is costly: building internally something better bought wastes resources on non-core work, while buying something the organization should have kept internal can create dependency or quality problems. PM-FPX4070 covers the make-or-buy decision because it's the starting point of procurement — determining what actually needs to be procured at all — and it requires genuinely weighing internal capability, cost, timeline, and strategic considerations rather than defaulting reflexively to either building everything or outsourcing everything.