Mixed Deck — All CPE Topics Flashcards

An estimator's labor cost calculation should include which of the following in addition to base wages?

Answer: Labor burden including payroll taxes, insurance, and benefits

Labor burden adds payroll taxes, workers' compensation, health benefits, and other employer costs on top of the base wage rate.

A subcontractor's bid includes labor at $85,000. The general contractor applies a 10% markup on labor for supervision. The supervision cost added is:

Answer: $8,500

Supervision markup = $85,000 × 10% = $8,500.

When soliciting bids from vendors, the estimator should include:

Answer: Detailed specifications, quantity take-offs, and required delivery schedule

A complete vendor solicitation package with specifications, quantities, and schedule enables accurate and comparable vendor quotations.

On a lump-sum bid, the contractor assumes risk for which of the following?

Answer: All costs to complete the defined scope

In a lump-sum contract, the contractor bears the risk for all costs to complete the defined scope, regardless of actual quantities or conditions encountered.

What is the primary risk of using prior-year overhead rates without adjustment when bidding new work?

Answer: Rates may not reflect current cost structure or volume changes

Prior-year rates can be distorted by one-time costs or volume levels that do not represent future conditions.

A project's concrete cost was $120,000 two years ago when the PPI for concrete was 185. The current PPI is 204. What is the inflation-adjusted current cost estimate?

Answer: $132,324

Current cost = $120,000 × (204/185) = $120,000 × 1.1027 ≈ $132,324.

If a project has a labor productivity factor of 1.15 applied to all trades, what does this factor indicate?

Answer: Labor will take 15% more man-hours than the baseline estimate

A factor greater than 1.0 applied to man-hours means actual hours are expected to exceed baseline, indicating reduced productivity.

Which of the following is a common VE technique used by CPE estimators to reduce structural costs?

Answer: Increasing column spacing

Increasing column spacing can reduce the number of footings and columns needed, lowering material and labor costs while maintaining structural integrity.

In competitive sealed bidding, when must addenda be issued to prospective bidders?

Answer: Before bids are submitted, with adequate time to respond

Addenda must be issued prior to bid submission with sufficient time for bidders to incorporate changes into their proposals.

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

Answer: Lump sum (fixed price)

Under a lump-sum contract, the contractor absorbs all cost overruns, making accurate estimation critical.

During peak construction seasons in a hot labor market, which factor most commonly reduces field productivity?

Answer: Craft labor shortages leading to use of less-experienced workers and higher crew turnover

Tight labor markets force contractors to hire less-skilled workers and face higher turnover, both of which reduce crew productivity.

A cost estimator applies a 'square foot cost' method to a new office building. This is an example of which estimating approach?

Answer: Parametric estimating

Parametric estimating uses statistical relationships between historical costs and project parameters (like square footage) to produce rapid cost estimates.

When a project is delayed 6 months after the estimate is locked, the owner requests a revised material cost estimate. The estimator should:

Answer: Re-escalate all materials from the original estimate date to the new anticipated procurement dates using current index data

A schedule shift changes procurement timing; re-escalating each material category to its new purchase date using updated index data produces the most accurate revised estimate.

In budget development, 'cost loading' of a schedule refers to:

Answer: Assigning budgeted costs to specific schedule activities to enable cash flow analysis

Cost loading assigns dollar values to schedule activities, enabling time-phased budget and cash flow forecasting.

When using the expected value (EV) method, a risk has a 25% probability of occurring and a $200,000 cost impact. What is the expected monetary value?

Answer: $50,000

Expected monetary value = probability × impact = 0.25 × $200,000 = $50,000.

When conducting a risk workshop for a large capital project, the primary goal of the facilitator is to:

Answer: Elicit diverse perspectives on potential risks and avoid groupthink

The facilitator's role is to draw out broad team input and ensure all risk perspectives are heard without bias or groupthink.

What is 'design to cost' (DTC) as used in construction estimating?

Answer: Setting a target cost ceiling and designing the project within that constraint

Design to cost establishes a firm cost target before design begins, requiring designers to make scope and system choices that keep the project within budget.

What is the function of a bid summary sheet in the estimating process?

Answer: It consolidates all cost components into a final bid total

The bid summary sheet combines labor, material, subcontractor, equipment, overhead, and profit into the final bid amount.

If a contractor's overhead rate is 18% of direct costs and direct costs for a project are $750,000, what dollar amount is allocated to overhead?

Answer: $135,000

$750,000 × 0.18 = $135,000 allocated to overhead.

Why is project schedule directly relevant to a CPE estimator's work?

Answer: Duration affects time-related costs such as general conditions, equipment rental, and financing

Project duration directly drives time-sensitive costs including superintendent labor, site trailer rental, equipment standby, and construction loan interest.