CCT CCT Procurement & Contract Management 2

Question 1

What is the key advantage of a Cost Plus Incentive Fee (CPIF) contract?

Accepted Answer

It motivates the contractor to control costs by sharing savings above a target cost

Answer

CPIF contracts include a target cost and share ratio so the contractor earns more fee when actual costs are below target, incentivizing cost control.

Question 2

Which document formally defines the rights, responsibilities, and obligations of parties in a construction project?

Accepted Answer

Contract agreement

Answer

A contract agreement is the legally binding document that defines the obligations, rights, and responsibilities of all parties involved in the project.

Question 3

What is 'competitive sealed bidding' designed to ensure?

Accepted Answer

Transparency, fairness, and equal opportunity for all qualified bidders

Answer

Competitive sealed bidding ensures a fair, transparent process where all qualified bidders compete on equal terms and bids are opened simultaneously.

Question 4

In procurement, what does 'sole source justification' mean?

Accepted Answer

Documentation supporting why a contract is awarded without competition

Answer

Sole source justification is formal documentation explaining why competitive bidding is impractical and a specific vendor is the only viable option.

Question 5

What is the primary risk of using a Time and Materials (T&M) contract?

Accepted Answer

Costs can escalate without a ceiling if not carefully managed

Answer

T&M contracts pay for actual hours and materials, creating the risk of cost overruns if a not-to-exceed ceiling or strong oversight is not in place.

(CCT) Certified Cost Technician Practice Test

(CCT) Certified Cost Technician Practice Test

CCT CCT Procurement & Contract Management 2