Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management...

Vendor: CIPS
Product: L4M5
Update on: Jan 29, 2026
Questions: 395

CIPS L4M5 Question Answer

Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA’s regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?

Allow affected suppliers to review and resubmit their fixed costs

Introduce indexation of contracts linked to the Consumer Prices Index

End the contracts and procure the services

Offer advance payment terms to the affected suppliers