Construction Management Contract Administration & Procurement

Question 1

What document formally establishes the legal relationship between an owner and a general contractor on a construction project?

Accepted Answer

Prime contract

Answer

Subcontract agreement

Answer

Letter of intent

Answer

Purchase order

Question 2

Which contract type places the greatest financial risk on the contractor?

Accepted Answer

Lump sum (fixed price)

Answer

Cost plus fee

Answer

Time and materials

Answer

Unit price

Question 3

A Request for Proposal (RFP) differs from a Request for Quotation (RFQ) primarily because an RFP:

Accepted Answer

Invites solutions and methodology, not just pricing

Answer

Requires a fixed-price bid only

Answer

Is only used for public projects

Answer

Eliminates the need for bonding

Question 4

What is the purpose of a Notice to Proceed (NTP) in construction contracting?

Accepted Answer

Officially authorizes the contractor to begin work

Answer

Transfers ownership of the site

Answer

Releases final payment to the contractor

Answer

Approves shop drawings

Question 5

Under the AIA A201 General Conditions, who is responsible for coordinating the work of subcontractors?

Accepted Answer

General contractor

Answer

Owner's representative

Answer

Architect

Answer

Construction manager at risk

Question 6

A performance bond protects the project owner by:

Accepted Answer

Guaranteeing the contractor completes the project per contract terms

Answer

Covering unpaid suppliers and laborers

Answer

Insuring against worker injuries

Answer

Providing design error coverage