CCA Construction Procurement and Subcontracting 2

Question 1

A construction auditor reviewing subcontracts should verify that they include flow-down clauses that:

Accepted Answer

Pass applicable prime contract terms (e.g., audit rights, insurance, prevailing wage) to subcontractors

Answer

Flow-down clauses extend key prime contract obligations—such as audit rights, safety standards, and prevailing wage requirements—to subcontractors.

Question 2

Bid shopping in construction procurement refers to:

Accepted Answer

A general contractor using a subcontractor's bid to pressure other subs to lower their prices after award

Answer

Bid shopping is the unethical practice of using a subcontractor's price as leverage to obtain lower quotes from competitors, undermining competitive integrity.

Question 3

Which internal control helps ensure that a contractor does not award subcontracts to related parties without disclosure?

Accepted Answer

Competitive bidding requirement with mandatory conflict-of-interest disclosure

Answer

Requiring competitive bids and mandating disclosure of any relationships between the contractor and prospective subcontractors prevents undisclosed related-party transactions.

Question 4

A Disadvantaged Business Enterprise (DBE) or Minority Business Enterprise (MBE) participation requirement on a federally funded construction project is enforced through:

Accepted Answer

Documentation of solicitation efforts, subcontract awards, and payments to certified firms

Answer

DBE/MBE compliance requires documented evidence of good-faith solicitation efforts, awarded subcontracts, and verified payments to certified firms during and after the project.

Question 5

When auditing a construction project, an auditor finds that a subcontract was executed after work was already performed. This condition indicates:

Accepted Answer

Failure of procurement controls allowing unauthorized commitments

Answer

Executing subcontracts after work begins means commitments were made without proper authorization, creating legal exposure and a breakdown in procurement controls.

(CCA) Certified Construction Auditor Practice Test

(CCA) Certified Construction Auditor Practice Test

CCA Construction Procurement and Subcontracting 2