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CIPS L5M5 Exam
Managing Ethical Procurement and Supply (Page 5 )

Updated On: 1-Feb-2026
Page 3 of 19
PDF with 89 Questions

Which of the following statements is TRUE about the adjudication form of dispute resolution? Select TWO

  1. It is an informal process
  2. It is quicker than going through the courts
  3. A decision must be made within 28 days
  4. The decision cannot be legally binding

Answer(s): B,C

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Adjudication is a formal ADR method, widely used in construction and supply disputes. The L5M5 study guide (p.237) outlines its key features: it is designed to be faster than court proceedings and legally requires that a decision is reached within 28 days of referral. Decisions made can also be legally binding. Contrary to option A, adjudication is not informal; it follows structured legal processes. Option D is also incorrect, as adjudicator decisions may carry binding authority unless overturned later in arbitration or litigation. The process ensures disputes are resolved promptly, preventing long project delays.


Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.237



During the transition period at the end of a contract, which of the following is usually the most difficult or complicated to organise?

  1. Returning of physical assets
  2. Drawing up an exit strategy
  3. Document transfer
  4. Knowledge transfer and IP rights

Answer(s): D

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Knowledge transfer and Intellectual Property (IP) rights are often the most difficult elements to manage during contract termination. The L5M5 study guide (p.241) explains that physical assets and documents can be returned easily, but IP rights and tacit knowledge (e.g., processes, experience, trade secrets) are harder to transfer and may be contested between parties. Disputes may arise over ownership of IP developed during the contract. Procurement professionals must establish clear exit strategies early in the contracting process to address these issues and avoid disputes at termination. This ensures continuity and protects business interests while maintaining ethical standards.


Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.241



Freedom of association is a protected right under the ILO convention.
What does this allow workers to do?

  1. Have a second job
  2. Have work-life balance
  3. Join a union
  4. Avoid slavery

Answer(s): C

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The International Labour Organization (ILO) sets global labour standards, and freedom of association is one of its fundamental rights. According to the L5M5 study guide (p.249), this right allows workers to form or join trade unions and workers' organisations to collectively defend their interests. It ensures employees can negotiate working conditions, pay, and rights without discrimination or retaliation. This principle underpins fair labour practices and corporate social responsibility. Other options such as "having a second job" or "avoiding slavery" are separate issues covered under different ILO conventions, but they do not define freedom of association.


Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249



Charlie is 13 years old and sometimes helps his parents in their corner shop on weekends, while attending school during the week. Is this an example of child labour?

  1. Yes ­ any work by under 16s is child labour
  2. Yes ­ Charlie should report his parents to the police
  3. No ­ Charlie is old enough not to be a child
  4. No ­ helping in a family business does not count as child labour

Answer(s): D

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The ILO defines child labour as work that deprives children of their childhood, education, or well- being. According to the L5M5 study guide (p.252), light work, such as assisting in a family business outside school hours, is not considered child labour if it does not interfere with education or harm physical and mental health. Charlie is attending school, completing homework, and only helping part-time in a family-owned shop. Therefore, this is not classified as child labour. The ILO guidelines make clear distinctions between exploitative labour (such as sweatshops or hazardous industries) and permissible family assistance.


Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.252



Which of the following statements about the ILO (International Labour Organisation) is incorrect?

  1. It is a body of the WTO
  2. The ILO has a representation and complaints process
  3. The ILO sets standards on health and safety in the workplace and maternity protection
  4. A principle of the ILO is to eliminate child labour

Answer(s): A

Explanation:

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The ILO (International Labour Organisation) is an agency of the United Nations (UN), not the WTO. The L5M5 study guide (p.249) explains that the ILO promotes labour rights globally, sets international standards, and provides mechanisms for complaints and representation. Its principles include eliminating child labour, eradicating forced labour, and promoting safe and fair working conditions, including maternity protection. By contrast, the WTO (World Trade Organisation) deals with trade rules and disputes, not labour standards. This distinction is essential in procurement, as professionals must understand which bodies regulate trade versus labour practices.


Reference:

Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249



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