Contract Management and Project Documentation Flashcards

In construction contracting, 'retainage' refers to:

Answer: A percentage of each pay application withheld until project completion

Retainage is typically 5–10% of each progress payment held by the owner as security for satisfactory project completion.

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.

What is the function of a 'punch list' in project closeout?

Answer: An itemized record of incomplete or deficient work to be corrected before final payment

The punch list documents remaining deficiencies that the contractor must remedy to achieve final acceptance from the owner.

A contractor's daily field report should document all of the following EXCEPT:

Answer: The owner's internal budget figures

The owner's internal budget is not a field condition and has no place in the contractor's daily site report.

The purpose of a 'Notice to Proceed' (NTP) is to:

Answer: Authorize the contractor to begin work on a specified date

The NTP is the owner's written authorization that establishes the official start date for the contract period.

A construction contract's 'differing site conditions' clause primarily protects the contractor when:

Answer: Subsurface or concealed conditions differ materially from what the contract indicated

This clause entitles the contractor to additional compensation or time when actual subsurface conditions vary significantly from those represented in the contract documents.

Final lien waivers are typically exchanged at project closeout to:

Answer: Confirm that all subcontractors and suppliers have been paid and release lien rights

Lien waivers confirm that parties in the payment chain have received their money and will not file a mechanic's lien against the property.