CCT CCT Contract Management & Procurement 1

Question 1

Which contract type places the most financial risk on the contractor?

Accepted Answer

Firm Fixed-Price (FFP)

Answer

A Firm Fixed-Price contract transfers maximum financial risk to the contractor because payment does not change regardless of actual costs incurred.

Question 2

What is the primary purpose of a Request for Proposal (RFP) in procurement?

Accepted Answer

To invite vendors to propose solutions and pricing for a defined scope

Answer

An RFP invites vendors to submit technical and cost proposals so the buyer can evaluate both approach and price.

Question 3

In cost technician practice, what does 'scope creep' typically lead to?

Accepted Answer

Uncontrolled cost increases beyond the original budget

Answer

Scope creep refers to uncontrolled expansion of project scope, which drives unauthorized cost increases that strain the original budget.

Question 4

Which document formally authorizes a change to a contract's scope, cost, or schedule?

Accepted Answer

Change Order (CO)

Answer

A Change Order is the formal contract amendment that adjusts scope, price, or schedule based on mutual agreement of both parties.

Question 5

What is the purpose of a performance bond in construction contracting?

Accepted Answer

To ensure the contractor completes the project per contract terms

Answer

A performance bond protects the project owner by guaranteeing that the surety will complete the work if the contractor defaults.

(CCT) Certified Cost Technician Practice Test