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 contract price is the total compensation the owner has agreed to pay the contractor in exchange for completing all contracted work.

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

A mechanic's lien is a legal claim filed against a property by an unpaid contractor or supplier, encumbering the property until the debt is settled.

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

GMP contracts commonly include a shared savings clause where any amount spent below the GMP is split between owner and contractor according to an agreed percentage.

Question 4

What is 'retainage' in construction contract payments?

Accepted Answer

A percentage of each progress payment withheld until project completion

Answer

Retainage is a contractually specified percentage (typically 5–10%) held back from each progress payment to ensure contractor performance through final completion.

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

A Differing Site Conditions clause entitles the contractor to additional compensation when subsurface or physical conditions differ materially from what was represented.

(CCT) Certified Cost Technician Practice Test

(CCT) Certified Cost Technician Practice Test

CCT CCT Contract Management & Procurement 3