CCM Contract Administration 5 — Questions and Answers
Question 1: In a design-build contract, who bears the risk of design errors and omissions?
- The owner, since they provided the initial program and performance criteria
- The design-builder, who is responsible for both design and construction (Correct answer)
- The engineer of record retained by the design-builder
- Both parties share the risk equally under integrated project delivery principles
Correct answer: The design-builder, who is responsible for both design and construction
In design-build delivery, the design-builder assumes responsibility for all design errors and omissions because they hold both the design and construction obligations under a single contract.
Question 2: What is the purpose of project closeout documentation, specifically 'as-built drawings' (record drawings)?
- To document the original design intent for future renovations and maintenance
- To record the actual locations, dimensions, and conditions of installed work as constructed (Correct answer)
- To provide the contractor with proof of work completed for final payment purposes
- To satisfy building department requirements for certificate of occupancy issuance
Correct answer: To record the actual locations, dimensions, and conditions of installed work as constructed
As-built drawings document how the project was actually constructed, capturing field changes and actual conditions to support future maintenance, renovation, and emergency response.
Question 3: A contractor requests a time extension due to abnormally severe weather. Under AIA A201, this is classified as:
- A compensable delay entitling the contractor to both additional time and money
- An excusable non-compensable delay entitling the contractor to time but not additional compensation (Correct answer)
- A concurrent delay that reduces the contractor's recovery under the prevention principle
- An inexcusable delay because weather risk is assumed by the contractor
Correct answer: An excusable non-compensable delay entitling the contractor to time but not additional compensation
Abnormally severe weather is an excusable delay under AIA A201, entitling the contractor to a time extension but not additional compensation unless the contract specifically provides otherwise.
Question 4: Which provision in a construction contract addresses the contractor's obligation to continue working during a dispute rather than stopping work?
- The liquidated damages clause
- The duty to proceed clause (Correct answer)
- The force majeure provision
- The termination for convenience clause
Correct answer: The duty to proceed clause
The duty to proceed (or 'prosecute the work') clause requires the contractor to continue performance during disputes and pursue monetary claims through contractual dispute resolution mechanisms.
Question 5: What is the key distinction between 'termination for default' and 'termination for convenience' in a construction contract?
- Termination for default allows the owner to complete the work at the contractor's expense; termination for convenience allows the contractor to recover anticipated profits (Correct answer)
- Termination for default requires 30 days notice; termination for convenience requires 90 days notice
- Termination for default requires arbitration; termination for convenience is immediate
- Termination for default is only available on federal contracts; termination for convenience applies to private contracts only
Correct answer: Termination for default allows the owner to complete the work at the contractor's expense; termination for convenience allows the contractor to recover anticipated profits
Termination for default is a remedy for contractor breach allowing completion at the contractor's cost, while termination for convenience compensates the contractor for work done and allows recovery of some profit on unperformed work.
Question 6: When a construction contract requires the contractor to submit certified payrolls, this requirement is most commonly associated with:
- Private sector projects where the owner requires labor cost transparency
- Federally funded or Davis-Bacon Act prevailing wage projects (Correct answer)
- Projects where the CM is auditing the contractor's cost-plus fee
- Design-build projects where labor costs are included in the GMP reconciliation
Correct answer: Federally funded or Davis-Bacon Act prevailing wage projects
Certified payroll requirements stem from the Davis-Bacon Act and related laws, which mandate prevailing wage payments on federally funded construction projects and require weekly payroll certification.
Question 7: In a construction contract, what does the 'indemnification' clause typically require of the contractor?
- The contractor must indemnify the owner against all project costs exceeding the GMP
- The contractor must defend and hold the owner harmless from claims arising from the contractor's negligent acts or omissions (Correct answer)
- The contractor must indemnify subcontractors for design errors in owner-furnished documents
- The contractor must provide indemnification bonds equal to 100% of the contract sum
Correct answer: The contractor must defend and hold the owner harmless from claims arising from the contractor's negligent acts or omissions
An indemnification clause typically requires the contractor to protect the owner from third-party claims, losses, and legal costs that arise from the contractor's own negligent performance.
CCM Contract Administration 5
In a design-build contract, who bears the risk of design errors and omissions?