CCT Procurement & Contract Management Flashcards

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

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

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

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

Answer: Contract agreement

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

What is 'competitive sealed bidding' designed to ensure?

Answer: Transparency, fairness, and equal opportunity for all qualified bidders

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

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

Answer: Documentation supporting why a contract is awarded without competition

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

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

Answer: Costs can escalate without a ceiling if not carefully managed

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.

Which procurement document establishes the minimum qualifications a contractor must meet before receiving a bid invitation?

Answer: Prequalification questionnaire

A prequalification questionnaire screens contractors on financial strength, experience, and safety record before they are invited to bid.