PMP Process — Managing Technical Aspects Practice Question
You are managing a hybrid project with both predictive and agile components. A key risk from the risk register materializes: a critical vendor may go bankrupt, threatening delivery of a hardware component needed for the predictive phase. The risk response plan includes 'mitigate by identifying alternative vendors.' However, the only alternative vendor quotes a price that would exceed the project cost baseline by 10%. What should you do NEXT?
⚠ Common exam trap
Many exam-takers think the risk response plan authorizes immediate action without formal change control, but the PMP exam emphasizes that any change to the cost baseline requires a documented change request, even when executing a pre-planned risk response.
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
✓
Initiate a change request to increase the cost baseline, documenting the risk response and vendor selection
When a risk response (mitigate by identifying alternative vendors) is executed and the chosen response causes a cost overrun, the correct next step is to initiate a change request to formally update the cost baseline. This aligns with the PMBOK Guide's change control process, ensuring the project's budget reflects the approved risk response and maintains traceability. Option B is correct because it follows the formal change management process required for any deviation from the cost baseline.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Proceed with the alternative vendor and inform the sponsor of the cost overrun after the fact
Why it's wrong here
This action is incorrect because proceeding with an alternative vendor that causes a cost overrun without formal approval bypasses the established change control process. Such an approach violates the project management plan and the project's governance framework, potentially leading to unauthorized scope or budget deviations. Informing the sponsor *after* the fact undermines their authority and the project's financial controls, demonstrating a lack of proactive risk and change management.
- ✓
Initiate a change request to increase the cost baseline, documenting the risk response and vendor selection
Why this is correct
This is the correct action because any deviation that impacts a project baseline, such as an increase in the cost baseline due to selecting a more expensive alternative vendor, necessitates a formal change request. This process ensures that the proposed change is properly documented, analyzed for its impact on other project constraints, and approved through the integrated change control process. Documenting the risk response and vendor selection within the change request provides transparency and maintains an accurate record of project decisions and their rationale.
- ✗
Accept the risk and hope the vendor recovers, avoiding the cost increase
Why it's wrong here
Accepting the risk and hoping for a recovery is an inappropriate response in this scenario, especially when a proactive risk response was likely planned or a feasible alternative exists. While risk acceptance is a valid strategy for low-impact or low-probability risks, it is generally not suitable when a known threat has materialized and a more effective response, like finding an alternative vendor, is available. This approach would leave the project vulnerable to further delays and potential failure without a defined mitigation or contingency plan.
- ✗
Escalate to the sponsor for a decision on whether to cancel the project
Why it's wrong here
Escalating to the sponsor with the option to cancel the project is premature and an overreaction at this stage. Project managers are expected to propose solutions and manage issues within their authority, utilizing established processes like change control, before resorting to such drastic measures. A cost increase, while significant, does not automatically warrant project cancellation without first exploring and formally proposing viable alternatives and their impacts through the integrated change control process.
Go deeper
Related to this question
Learn chapter
Introduction to the PMP Exam and Project Management Basics
Key term
Change Control Process
A formal, structured procedure used to manage any changes to a project's scope, schedule, budget, or requirements, ensuring every modification is reviewed, approved, tested, and documented before implementation.
Key term
Organizational Change Management
Organizational Change Management (OCM) is the structured approach to preparing, supporting, and guiding people through changes in an organization to ensure lasting success.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PMP 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 PMP exam.