Subcontractor and Vendor Management Flashcards

What is 'bid leveling' in the subcontractor selection process?

Answer: Adjusting received bids to a common scope basis so they can be fairly compared

Bid leveling (or bid analysis) involves normalizing subcontractor proposals to the same scope of work, adding or deducting items so that all bids reflect equal coverage before making a selection.

When a superintendent verbally directs a subcontractor to perform additional work outside the contracted scope without issuing a formal written change order, this is known as a:

Answer: Constructive change

A constructive change occurs when the owner or GC directs additional or changed work without issuing a formal change order, yet the subcontractor is still legally entitled to additional compensation.

Which scheduling method is most commonly used to sequence and coordinate multiple subcontractor trades on a complex construction project?

Answer: Critical Path Method (CPM)

The Critical Path Method (CPM) identifies task dependencies and the longest sequence of activities, making it the industry standard for coordinating multiple trades and managing complex project schedules.

A 'flow-down clause' in a subcontract agreement means that:

Answer: The applicable terms and obligations of the prime contract are incorporated into and binding on the subcontract

A flow-down clause makes the subcontractor bound by the same terms the GC is bound to under the prime contract, ensuring consistency of obligations throughout the contracting chain.

What is the primary effect of a 'pay-when-paid' clause in a subcontract agreement?

Answer: It makes the GC's obligation to pay the subcontractor contingent upon first receiving payment from the owner

A pay-when-paid clause conditions the GC's payment obligation to the subcontractor on the GC first receiving payment from the owner for that work, shifting some payment risk to the subcontractor.

Which of the following amounts is typically withheld from each subcontractor progress payment as financial security to ensure project completion?

Answer: Retainage

Retainage (typically 5–10% of each progress payment) is withheld from subcontractor payments throughout the project and released upon satisfactory completion, motivating the sub to finish all punch list items.

A subcontractor's 'schedule of values' serves what primary purpose in the payment application process?

Answer: To allocate the subcontract sum among specific portions of work so that progress payments can be calculated proportionally

The schedule of values breaks the subcontract amount into line items corresponding to phases or components of work, enabling the GC to calculate earned value and process accurate monthly payment applications.