CAPM Practice Question: Project Management Fundamentals and Core Concepts
A project manager is working on a construction project with a fixed-price contract. The project is in the execution phase, and a key supplier has failed to deliver critical materials on time, causing a delay. The project manager needs to address this issue and prevent further delays. Which action should the project manager take FIRST?
⚠ Common exam trap
The trap here is assuming that immediate escalation or schedule update is the first step, when in fact the project manager must first consult the contract to understand rights and obligations.
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 conditions to determine the supplier's obligations and remedies.
The project manager should first review the contract to understand the supplier's obligations and the remedies available for late delivery. This knowledge informs subsequent actions, such as negotiation or invoking penalties. Other actions like issuing a letter or terminating the contract are premature without this understanding. Updating the schedule should come after a plan is in place.
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 conditions to determine the supplier's obligations and remedies.
Why this is correct
The project manager should first review the contract to understand the supplier's obligations, the agreed delivery dates, and any remedies or penalties for late delivery. This information is crucial to determine the best course of action, such as negotiating a new delivery schedule or invoking contractual clauses. It also helps in assessing the legal and financial implications of the delay.
- ✗
Issue a formal letter to the supplier demanding immediate delivery.
Why it's wrong here
Issuing a formal letter may escalate the situation and damage the relationship with the supplier. While it might be necessary eventually, it is not the first action. The project manager should first assess the impact and explore options, such as expediting or finding alternative sources, before taking formal contractual actions. The first step is to understand the root cause and communicate with the supplier.
- ✗
Immediately terminate the contract and find a new supplier.
Why it's wrong here
Terminating the contract is a drastic step that should be taken only after careful consideration and typically after other remedies have failed. It can lead to legal disputes, additional costs, and further delays. The project manager should first review the contract and explore alternatives such as expediting, negotiating, or accepting partial delivery before resorting to termination.
- ✗
Update the project schedule to reflect the delay and inform the stakeholders.
Why it's wrong here
Updating the schedule and informing stakeholders are important, but they are not the first action. The project manager should first understand the contractual situation and available options before communicating changes. Prematurely updating the schedule without a plan could cause confusion and unnecessary concern. The first step is to analyze the contract and determine the appropriate response.
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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.