CDT Project Delivery Methods 3 — Questions and Answers
Question 1: What is the primary document used to define project scope and requirements before selecting a Design-Build team?
- Instructions to Bidders
- Owner's Project Requirements (OPR)
- Basis of Design report
- Program of Requirements / Request for Proposal (Correct answer)
Correct answer: Program of Requirements / Request for Proposal
An Owner's Program of Requirements or Request for Proposal defines scope, budget, schedule, and performance criteria that Design-Build teams respond to.
Question 2: Which statement accurately describes a lump sum (stipulated sum) contract type?
- The owner reimburses the contractor for all actual costs plus a fee
- The contractor agrees to complete defined scope for a fixed total price (Correct answer)
- Payment is based on actual quantities installed in the field
- The GMP adjusts based on final project cost
Correct answer: The contractor agrees to complete defined scope for a fixed total price
A lump sum contract fixes the total contract price; the contractor bears the risk of cost overruns and gains the benefit of cost savings.
Question 3: What is a unit price contract most suitable for?
- Projects with highly defined and fixed scope
- Projects where quantities cannot be determined accurately until construction (Correct answer)
- Design-Build projects requiring a GMP
- Projects using Integrated Project Delivery
Correct answer: Projects where quantities cannot be determined accurately until construction
Unit price contracts are used when quantities are uncertain — payment is based on actual units installed, with prices pre-agreed per unit.
Question 4: What does 'substantial completion' mean in a construction contract?
- 100% of the work is complete and all punch list items are resolved
- The work is sufficiently complete that the owner can use it for its intended purpose (Correct answer)
- The contractor has submitted all closeout documents
- The certificate of occupancy has been issued by the building department
Correct answer: The work is sufficiently complete that the owner can use it for its intended purpose
Substantial completion is the stage when the work is sufficiently complete per the contract documents for the owner to occupy and use it for its intended purpose.
Question 5: In a Cost-Plus-Fee contract, what incentive mechanism can be added to motivate the contractor to control costs?
- A penalty clause for delays only
- A shared savings provision where cost underruns are split between owner and contractor (Correct answer)
- A fixed overhead markup applied to all change orders
- A retainage increase tied to project complexity
Correct answer: A shared savings provision where cost underruns are split between owner and contractor
A shared savings clause in a cost-plus contract splits any savings below the GMP between the owner and contractor, incentivizing the contractor to control costs.
Question 6: Which procurement method is legally required for most U.S. federal and state public construction projects?
- Negotiated Design-Build
- Lowest responsible responsive bidder via competitive sealed bids (Correct answer)
- Construction Manager at Risk with GMP
- Integrated Project Delivery multiparty agreement
Correct answer: Lowest responsible responsive bidder via competitive sealed bids
Most public agencies are legally required to award construction contracts to the lowest responsible and responsive bidder through competitive sealed bidding to ensure fairness and public accountability.
CDT Project Delivery Methods 3
What is the primary document used to define project scope and requirements before selecting a Design-Build team?