CAPM Practice Question: Project Management Fundamentals and Core Concepts
A project manager is leading a large construction project. The project has a fixed-price contract with a penalty clause for late delivery. During execution, a key supplier fails to deliver materials on time, causing a delay. The project manager needs to decide on the best course of action to minimize the impact. Which action should the project manager take first?
⚠ Common exam trap
The trap here is jumping to a solution without first understanding the contract and the full impact of the delay.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Review the contract terms and assess the impact of the delay on the project schedule and costs.
The project manager should first review the contract terms and assess the impact because this provides the necessary information to make informed decisions. Understanding the contractual obligations and the actual impact on the project allows the project manager to choose the best course of action, whether it involves negotiating with the supplier, finding alternatives, or adjusting the schedule.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Review the contract terms and assess the impact of the delay on the project schedule and costs.
Why this is correct
The project manager should first review the contract terms to understand the implications of the delay, including any penalties or clauses. Then, assess the impact on schedule and costs. This is part of the Control Procurements process, where the project manager manages procurement relationships and monitors contract performance. Understanding the contractual obligations is crucial before deciding on corrective actions.
- ✗
Immediately terminate the contract with the supplier and find a new supplier.
Why it's wrong here
Terminating the contract is a drastic step that should only be taken after careful consideration and typically after other remedies have failed. The project manager should first assess the situation, review the contract for termination clauses, and consider the impact on the project. Immediate termination could lead to further delays, legal issues, and increased costs.
- ✗
Accept the delay and do nothing, as the penalty clause will cover the costs.
Why it's wrong here
Doing nothing is not a proactive approach. The penalty clause may provide some compensation, but it does not address the root cause or minimize the impact on the project. The project manager should actively manage the situation, explore alternatives, and communicate with stakeholders. Ignoring the issue could lead to further delays and damage to the project's success.
- ✗
Immediately issue a change request to extend the schedule and inform the customer.
Why it's wrong here
Issuing a change request to extend the schedule should be considered after evaluating alternatives and assessing the impact. The project manager should first analyze the situation, identify options, and then if necessary, submit a change request. Taking this action immediately without proper analysis may lead to unnecessary schedule changes and could affect the contract terms.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PMI exam blueprint
This CAPM practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAPM exam.