CCM Project Delivery Methods and Procurement 1 — Questions and Answers
Question 1: What is the primary characteristic of the Design-Bid-Build (DBB) project delivery method?
- Design and construction are performed by the same entity under a single contract
- The owner contracts separately with a designer and then a contractor after competitive bidding (Correct answer)
- The construction manager holds financial risk through a guaranteed maximum price
- Multiple prime contractors work simultaneously under separate owner contracts
Correct answer: The owner contracts separately with a designer and then a contractor after competitive bidding
In DBB, the owner sequentially contracts with a designer first, then competitively bids the completed design to select a general contractor, keeping the two phases separate.
Question 2: In a Construction Manager at-Risk (CM at-Risk) arrangement, what does a Guaranteed Maximum Price (GMP) represent?
- The minimum amount the owner is required to pay the CM under any circumstances
- The fixed fee paid to the architect for design services
- The ceiling cost beyond which the CM absorbs cost overruns rather than the owner (Correct answer)
- The maximum allowable markup a subcontractor may apply to self-performed work
Correct answer: The ceiling cost beyond which the CM absorbs cost overruns rather than the owner
A GMP establishes a cost ceiling; if actual project costs exceed it, the CM at-Risk bears the overrun, transferring cost risk away from the owner.
Question 3: Which project delivery method consolidates design and construction responsibility under a single contract, transferring the most integrated risk to one entity?
- Design-Bid-Build
- Agency Construction Management
- Design-Build (Correct answer)
- Multiple Prime Contracting
Correct answer: Design-Build
Design-Build places both design and construction obligations in one entity, making that entity solely responsible for schedule, cost, and design quality risks.
Question 4: A Request for Proposal (RFP) is primarily issued to solicit what type of response from prospective contractors or vendors?
- A lump-sum price based solely on completed construction documents
- A formal statement of financial qualifications only
- Technical approach, qualifications, and pricing in a combined proposal (Correct answer)
- A list of subcontractors the prime contractor intends to use
Correct answer: Technical approach, qualifications, and pricing in a combined proposal
An RFP seeks a holistic response covering methodology, team qualifications, and cost, allowing owners to evaluate factors beyond price alone.
Question 5: Which feature is a defining element of Integrated Project Delivery (IPD)?
- Sequential handoff of responsibilities from designer to contractor to owner
- Multi-party agreement that aligns financial incentives of owner, designer, and contractor (Correct answer)
- Guaranteed maximum price established before any design work begins
- Competitive low-bid selection of all project participants
Correct answer: Multi-party agreement that aligns financial incentives of owner, designer, and contractor
IPD uses a multi-party contract that ties the profits of the owner, designer, and contractor to shared project outcomes, promoting collaborative risk/reward sharing.
Question 6: What does 'best value' procurement evaluate in addition to the proposed price?
- Only the contractor's bonding capacity and insurance levels
- Qualitative factors such as experience, technical approach, and past performance (Correct answer)
- The number of subcontractors the prime contractor plans to self-perform
- The geographic proximity of the contractor's home office to the project site
Correct answer: Qualitative factors such as experience, technical approach, and past performance
Best value procurement scores both price and qualitative criteria—such as schedule approach, qualifications, and references—to select the overall most advantageous offer.
Question 7: Which contract type is most commonly associated with the Design-Bid-Build delivery method?
- Cost-plus-fee with shared savings
- Lump sum (stipulated sum) fixed-price contract (Correct answer)
- Guaranteed maximum price with contingency pool
- Time and materials with not-to-exceed limit
Correct answer: Lump sum (stipulated sum) fixed-price contract
DBB typically uses a lump-sum contract because complete design documents allow accurate bidding, and the selected contractor is bound to deliver for the stated price.
CCM Project Delivery Methods and Procurement 1
What is the primary characteristic of the Design-Bid-Build (DBB) project delivery method?