CHC CHC Cost Management & Contract Administration 4 — Questions and Answers
Question 1: A healthcare construction project experiences a scope change requiring additional infection control measures. Which contract document typically governs the process for pricing and approving this change?
- The project schedule
- The general conditions of the contract (Correct answer)
- The project closeout checklist
- The owner's design standards manual
Correct answer: The general conditions of the contract
The general conditions of the contract establish the procedures for submitting, pricing, and approving changes in scope, including change orders.
Question 2: When preparing a cost estimate for a hospital NICU renovation, which factor most significantly differentiates it from a standard commercial renovation estimate?
- Higher finish material costs
- Infection control and interim life safety measure (ILSM) costs (Correct answer)
- Longer warranty periods
- Additional permit fees
Correct answer: Infection control and interim life safety measure (ILSM) costs
NICU renovations in occupied hospitals require extensive infection control and ILSM measures that add significant cost not present in standard commercial work.
Question 3: A GMP contract includes an owner's contingency of 5% and a contractor's contingency of 3%. Who controls each contingency?
- The contractor controls both contingencies
- The owner controls both contingencies
- The owner controls owner's contingency; contractor controls contractor's contingency (Correct answer)
- The architect controls both contingencies
Correct answer: The owner controls owner's contingency; contractor controls contractor's contingency
In a GMP contract, the owner's contingency is used at the owner's discretion for scope changes, while the contractor's contingency covers unforeseen construction costs.
Question 4: Which method of subcontractor procurement is most appropriate for a highly specialized healthcare MEP scope with limited qualified bidders?
- Open competitive bidding
- Negotiated contract with prequalified subcontractors (Correct answer)
- Lowest-bid-wins public tender
- Random selection from a vendor list
Correct answer: Negotiated contract with prequalified subcontractors
Negotiated contracts with prequalified subcontractors are preferred when the pool of qualified firms is limited and specialized expertise is critical.
Question 5: A healthcare contractor receives a Request for Information (RFI) that reveals a design conflict adding cost. What is the correct immediate action?
- Proceed with the least expensive solution and document it
- Issue a unilateral change to the scope
- Submit the RFI and follow with a change order request if cost is confirmed (Correct answer)
- Stop all work until the issue is resolved in writing
Correct answer: Submit the RFI and follow with a change order request if cost is confirmed
The contractor should submit the RFI to document the conflict, then follow the contractual change order process if additional cost or time is required.
Question 6: Under the AIA A133 contract (CMAR), what is the primary purpose of the preconstruction phase fee?
- To fund subcontractor mobilization
- To compensate the construction manager for estimating, scheduling, and constructability review services before construction begins (Correct answer)
- To cover permit application costs
- To pay for owner-furnished equipment procurement
Correct answer: To compensate the construction manager for estimating, scheduling, and constructability review services before construction begins
The preconstruction phase fee compensates the CMAR for early involvement services such as cost estimating, scheduling, and design review before the construction phase begins.
Question 7: A healthcare project's schedule of values shows front-loaded early payment allocations. What risk does this create for the owner?
- Higher subcontractor productivity
- Overpayment relative to work in place, reducing leverage if the contractor defaults (Correct answer)
- Faster project completion
- Reduced retainage requirements
Correct answer: Overpayment relative to work in place, reducing leverage if the contractor defaults
Front-loading creates a situation where the owner has paid more than the actual value of work completed, leaving less leverage if the contractor fails to perform.
CHC CHC Cost Management & Contract Administration 4
A healthcare construction project experiences a scope change requiring additional infection control measures.
Which contract document typically governs the process for pricing and approving this change?