Contract Administration Flashcards

A contractor submits a pay application that includes costs for stored materials not yet incorporated into the work. Under what condition should the CM certify payment for these materials?

Answer: Only if the materials are stored on-site and properly protected

Payment for stored materials on-site is typically allowed when materials are properly protected, suitably stored, and evidence of ownership/insurance is provided.

What is the purpose of a Construction Change Directive (CCD) as opposed to a standard Change Order?

Answer: A CCD is used when the owner and contractor disagree on price, allowing work to proceed while the cost is resolved

A CCD directs the contractor to proceed with changed work even when the parties haven't agreed on compensation, with the cost to be determined later.

Under typical contract terms, when does the risk of loss for materials pass from the contractor to the owner?

Answer: When the materials are incorporated into the permanent work and the owner accepts them

Risk of loss generally transfers when materials become part of the permanent work and the owner accepts that portion, though contract language may vary.

A subcontractor notifies the general contractor of a potential delay caused by late delivery of owner-furnished equipment. Under the contract, the GC should:

Answer: Issue a formal written notice of delay to the owner within the contractually specified period

Timely written notice of delay is a contractual prerequisite to recovering delay damages or time extensions; failure to notify may waive the right to relief.

What is 'retainage' in a construction contract, and what is its primary purpose?

Answer: A percentage withheld from progress payments to incentivize completion and ensure quality

Retainage is a percentage (typically 5-10%) withheld from each progress payment to encourage the contractor to complete all work and protect the owner from incomplete or defective work.

Which scheduling method is most commonly required on large public construction projects and provides a network-based analysis of project activities?

Answer: Critical Path Method (CPM) scheduling

CPM scheduling is required on most large public projects because it identifies the critical path, shows activity dependencies, and supports delay analysis and claims resolution.

When a contractor requests an equitable adjustment for acceleration costs, which of the following must the contractor typically prove?

Answer: That an excusable delay existed and the owner directed acceleration to recover lost time

A constructive acceleration claim requires proof of an excusable delay, the contractor's timely request for a time extension, owner denial or failure to act, and resulting additional costs.