CCA CCA Change Orders and Claims Management

Question 1

Under a lump sum construction contract, which condition typically gives a contractor the right to submit a change order request?

Accepted Answer

Owner-directed changes to the original project scope

Answer

Contractor's own inefficiency in executing the work

Answer

Increases in the contractor's overhead costs

Answer

Subcontractor defaults on their obligations

Question 2

Which document provides the auditor with the strongest evidence that a change order price was fair and reasonable?

Accepted Answer

Independent cost estimate prepared before the change order was negotiated

Answer

Contractor's invoice for the change order work

Answer

Owner's internal memorandum approving the change

Answer

Subcontractor's verbal quote accepted by the contractor

Question 3

A construction auditor reviewing change order patterns finds that 40% of all change orders involve work that was arguably within the original contract scope. This is called:

Accepted Answer

Scope creep through change order misuse

Answer

Value engineering

Answer

Constructive acceleration

Answer

Differing site conditions claim

Question 4

What is a constructive change in construction contract auditing?

Accepted Answer

An owner action or inaction that forces the contractor to perform extra work without a formal change order

Answer

A value engineering proposal approved by the owner

Answer

A contractor's voluntary improvement to the design

Answer

A change order that reduces the contract price

Question 5

When auditing change order markups for overhead and profit, what should the auditor compare the contractor's claimed markup against?

Accepted Answer

The markup rates specified in the original contract

Answer

Industry average markup rates from trade publications

Answer

The subcontractor's markup on their portion of the work

Answer

The architect's recommended markup schedule

Question 6

An auditor reviewing a construction claim finds the contractor submitted a Total Cost claim. What is the primary weakness of this claim method?

Accepted Answer

It assumes all cost overruns are the owner's responsibility without isolating specific causes

Answer

It understates the contractor's actual costs

Answer

It excludes subcontractor costs from the claim

Answer

It requires an independent auditor to certify the claim amount