CCS Project Delivery & Construction Processes 2 — Questions and Answers
Question 1: In a Construction Manager at-Risk (CMaR) delivery method, when does the construction manager typically provide a Guaranteed Maximum Price (GMP)?
- At project inception before design begins
- After design development or construction documents are sufficiently complete (Correct answer)
- Only after all subcontractor bids are received and construction starts
- At the time the owner selects the construction manager
Correct answer: After design development or construction documents are sufficiently complete
The GMP is established once design is sufficiently advanced—typically at 60–100% construction documents—so the CM can accurately price the work.
Question 2: Which contract type places the greatest financial risk on the contractor when actual project costs are uncertain?
- Cost-plus-fee with a guaranteed maximum price
- Lump-sum (stipulated sum) contract (Correct answer)
- Unit-price contract
- Time-and-materials contract
Correct answer: Lump-sum (stipulated sum) contract
A lump-sum contract fixes the price regardless of actual costs, so the contractor bears the risk of cost overruns.
Question 3: What is the primary purpose of a Notice to Proceed (NTP) in a construction contract?
- To formally authorize the contractor to begin work and start the contract time clock (Correct answer)
- To notify subcontractors that the general contractor has been selected
- To document the substantial completion date for warranty purposes
- To inform the owner that shop drawings have been approved
Correct answer: To formally authorize the contractor to begin work and start the contract time clock
The NTP is the owner's official authorization for the contractor to commence work, which also triggers the contract completion period.
Question 4: Under the Integrated Project Delivery (IPD) method, which of the following BEST describes the relationship among key project stakeholders?
- The owner contracts separately with the designer and contractor, who coordinate independently
- Owner, designer, and contractor share risks and rewards through a multi-party agreement (Correct answer)
- A construction manager oversees design and construction phases as the owner's agent
- The contractor assumes full design-build responsibility after receiving the owner's program
Correct answer: Owner, designer, and contractor share risks and rewards through a multi-party agreement
IPD uses a multi-party agreement where the owner, architect, and contractor share financial risk and reward, incentivizing collaboration.
Question 5: A unit-price contract is MOST appropriate for which type of project situation?
- Projects with a fully defined scope and no anticipated changes
- Projects where quantities of work items are uncertain but unit costs can be established (Correct answer)
- Fast-track projects where design and construction overlap significantly
- Projects using an integrated project delivery approach
Correct answer: Projects where quantities of work items are uncertain but unit costs can be established
Unit-price contracts work best when quantities are hard to predict in advance but a consistent unit cost (per linear foot, cubic yard, etc.) can be agreed upon.
Question 6: During the bidding process, an addendum issued by the architect must be acknowledged in the bid by the bidder primarily to:
- Confirm the bidder has visited the project site
- Ensure the bid reflects all changes and clarifications to the contract documents (Correct answer)
- Satisfy bonding requirements imposed by the surety
- Demonstrate the bidder's financial qualifications to the owner
Correct answer: Ensure the bid reflects all changes and clarifications to the contract documents
Addendum acknowledgment confirms the bidder incorporated all modifications to the documents into their pricing, preventing disputes over scope.
Question 7: Which delivery method is characterized by the owner engaging a single entity responsible for both design and construction under one contract?
- Design-Bid-Build (DBB)
- Construction Manager as Agent (CMa)
- Design-Build (DB) (Correct answer)
- Multiple Prime Contracting
Correct answer: Design-Build (DB)
In Design-Build, a single entity (the design-builder) holds contracts for both design services and construction, providing the owner with a single point of responsibility.
CCS Project Delivery & Construction Processes 2
In a Construction Manager at-Risk (CMaR) delivery method, when does the construction manager typically provide a Guaranteed Maximum Price (GMP)?