CCT CCT Contract Management & Procurement 3

Question 1

What is the 'contract price' in cost management terminology?

Accepted Answer

The agreed total amount the owner will pay the contractor for the defined scope

Answer

The contractor's internal cost estimate before markup

Answer

The estimated cost of materials only

Answer

The sum of all subcontractor bids

Question 2

Which term describes a contractor's right to retain funds owed until the owner fulfills payment obligations?

Accepted Answer

Mechanic's Lien

Answer

Retainage

Answer

Withholding

Answer

Right of Offset

Question 3

In a Guaranteed Maximum Price (GMP) contract, who benefits if actual costs come in below the GMP?

Accepted Answer

Savings are typically shared between owner and contractor per the contract terms

Answer

Only the contractor keeps all savings

Answer

Only the owner receives all savings

Answer

The savings go to the surety company

Question 4

What is 'retainage' in construction contract payments?

Accepted Answer

A percentage of each progress payment withheld until project completion

Answer

A fee charged by the owner's project manager

Answer

A bonus paid to the contractor for early completion

Answer

A deposit held by the surety company

Question 5

Which clause protects a contractor from costs resulting from unforeseeable site conditions not shown in contract documents?

Accepted Answer

Differing Site Conditions clause

Answer

No-Damage-for-Delay clause

Answer

Indemnification clause

Answer

Force Majeure clause

Question 6

What is the primary purpose of a subcontractor's certified payroll submission?

Accepted Answer

To verify that workers are paid at least the prevailing wage required by law

Answer

To calculate the general contractor's overhead markup

Answer

To track equipment rental costs on federal projects

Answer

To determine the project's direct labor budget