CHC CHC Cost Management & Contract Administration 2 — Questions and Answers
Question 1: In a Design-Build project delivery method, who is responsible for both design and construction?
- The owner directly manages both
- Separate firms under separate contracts to the owner
- A single entity contracted to the owner (Correct answer)
- The local government authority
Correct answer: A single entity contracted to the owner
In Design-Build delivery, a single entity holds one contract with the owner and is responsible for both design and construction services.
Question 2: The primary advantage of the Construction Manager at Risk (CMAR) delivery method for healthcare projects is:
- The owner performs all construction management in-house
- The CM provides a GMP and preconstruction services while managing subcontractors (Correct answer)
- All work is self-performed by the construction manager
- Design is completed entirely after construction begins
Correct answer: The CM provides a GMP and preconstruction services while managing subcontractors
CMAR provides early contractor involvement through preconstruction services including cost, schedule, and constructability review, ultimately delivering under a Guaranteed Maximum Price.
Question 3: In competitive bidding for public healthcare construction, projects are typically awarded to:
- The most experienced contractor
- The lowest responsive, responsible bidder (Correct answer)
- The contractor with the best safety record
- The contractor recommended by the architect
Correct answer: The lowest responsive, responsible bidder
Public projects require award to the lowest responsive, responsible bidder to ensure fair and transparent use of public funds.
Question 4: A subcontractor default insurance (SDI) policy in healthcare construction protects:
- Subcontractors from general contractor non-payment
- The general contractor from financial losses due to subcontractor defaults (Correct answer)
- The owner from design errors
- Workers from on-site injuries
Correct answer: The general contractor from financial losses due to subcontractor defaults
SDI protects the general contractor from financial losses when a subcontractor fails to complete their scope, serving as an alternative to traditional performance bonds.
Question 5: A bid bond in healthcare construction ensures that:
- Subcontractors will complete their work on schedule
- The winning bidder will enter into the contract at the submitted bid price (Correct answer)
- Workers will be paid prevailing wages
- Materials will meet specification quality standards
Correct answer: The winning bidder will enter into the contract at the submitted bid price
A bid bond guarantees that if a bidder is awarded the project, they will execute the contract and provide the required performance and payment bonds.
Question 6: Which document establishes the primary contractual relationship between the owner and general contractor?
- The project schedule
- The Request for Proposal (RFP)
- The Owner-Contractor Agreement (Correct answer)
- The subcontractor's scope letter
Correct answer: The Owner-Contractor Agreement
The Owner-Contractor Agreement (such as AIA A101 or A102) is the foundational contract document establishing the legal relationship, price, and key terms between owner and contractor.
CHC CHC Cost Management & Contract Administration 2
In a Design-Build project delivery method, who is responsible for both design and construction?