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Vendor

An external person or company that delivers goods or services the project organization does not handle as part of its core expertise.

Key Points

  • Vendors are outside the performing organization and are engaged through contracts or purchase orders.
  • They supply capabilities that are not core competencies of the project organization or are more efficient to buy than build.
  • Selection and oversight occur through procurement processes such as RFP/RFQ, evaluation, contracting, and performance monitoring.
  • Clear scope, statements of work, SLAs, acceptance criteria, and change control help manage cost, schedule, and quality risks.

Example

An IT project needs specialized penetration testing that the team cannot perform internally. The project contracts a cybersecurity firm to provide this service under a fixed-price agreement.

PMP Example Question

A project team lacks advanced data analytics capability and signs a service agreement with a third-party company to provide it. What is this third party called?

  1. Functional manager
  2. Vendor
  3. Sponsor
  4. Internal stakeholder

Correct Answer: B — Vendor

Explanation: A vendor is an external entity that provides goods or services not performed within the project's in-house core competencies.

How To Land the Job and Interview for Project Managers Course

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You'll navigate the hiring process like a pro, with expert insights on personal branding, salary negotiation, and career growth strategies. Plus, downloadable templates and step-by-step guidance ensure you're always prepared.

Learn from seasoned professionals and join a community of ambitious project managers. Ready to land your ideal job and thrive in your career? Enroll now and take control of your future!



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HK School of Management delivers top-tier training in Project Management, Job Search Strategies, and Career Growth. For the price of a lunch, you’ll gain expert insights into landing your dream PM role, mastering interviews, and negotiating like a pro. With a 30-day money-back guarantee, there’s zero risk—just a clear path to success!

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