CBP Contract Administration and Legal 2

Question 1

What is the purpose of a Notice to Proceed (NTP) in construction?

Accepted Answer

It formally authorizes the contractor to begin work on a specified date

Answer

A Notice to Proceed is the owner's written authorization for the contractor to begin work, establishing the official project start date.

Question 2

What is retainage in a construction contract?

Accepted Answer

A percentage of each payment withheld by the owner until project completion

Answer

Retainage is a portion (typically 5–10%) of each progress payment that the owner withholds until the project reaches substantial completion.

Question 3

What type of construction contract pays the contractor for all actual project costs plus an agreed-upon fee or percentage?

Accepted Answer

Cost-plus contract

Answer

A cost-plus contract reimburses the contractor for verified project expenses and adds a fixed fee or percentage markup as profit.

Question 4

What is the primary function of a surety in a construction surety bond?

Accepted Answer

To guarantee the contractor's performance or payment obligations to the owner

Answer

The surety is the third-party guarantor that promises to fulfill the contractor's obligations if the contractor defaults.

Question 5

What is the purpose of a Request for Information (RFI) in construction?

Accepted Answer

To seek clarification on unclear contract documents or design details

Answer

An RFI is a formal written question submitted by the contractor to the architect or owner to resolve ambiguities or gaps in the project documents.

CBP - Certified Builder Professional Practice Test