PMP · Question 08 · Task 8: Negotiate project agreements
A project manager is negotiating a contract amendment with a vendor who is requesting a 20% price increase due to material cost inflation. The vendor is critical to project success, but the budget increase would exceed the project manager's approval authority. What should the project manager do FIRST?
Answer options:
Analyze the vendor's cost justification and explore alternative solutions before escalating
Immediately escalate to the sponsor since the increase exceeds approval authority
Reject the price increase and begin searching for alternative vendors
Accept the price increase and adjust other project costs to compensate
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