CEP Contract Documentation & Legal Considerations 3

Question 1

In contract law, what does 'substantial completion' legally trigger?

Accepted Answer

Transfer of risk and responsibility for the work from contractor to owner, and start of warranty periods

Answer

Substantial completion marks the point when the work is sufficiently complete for its intended use, transferring occupancy risk to the owner and starting warranty periods.

Question 2

Which type of bond guarantees that a contractor will perform all work in accordance with the contract terms?

Accepted Answer

Performance bond

Answer

A performance bond guarantees the surety will complete the project or compensate the owner if the contractor defaults on contract obligations.

Question 3

A 'spearin doctrine' defense protects a contractor when:

Accepted Answer

The owner-furnished specifications are defective, shifting design responsibility to the owner

Answer

Under the Spearin Doctrine, an owner impliedly warrants the adequacy of its plans and specifications, making the owner liable when defective specs cause contractor losses.

Question 4

What is the primary function of a 'notice to proceed' (NTP) document?

Accepted Answer

Authorizes the contractor to begin work and establishes the official contract start date

Answer

A Notice to Proceed officially authorizes the contractor to mobilize and begin work, and it triggers the contract performance period start date.

Question 5

Under the Federal Acquisition Regulations (FAR), what is a 'constructive change'?

Accepted Answer

An informal directive or action by the government that changes contract work without a formal change order

Answer

A constructive change occurs when government actions—such as defective specs, over-inspection, or wrongful rejection—effectively change the work without issuing a formal change order.

(CEP) Certified Estimating Professional Practice Test

(CEP) Certified Estimating Professional Practice Test

CEP Contract Documentation & Legal Considerations 3