CPE Bid Preparation & Submission 3 — Questions and Answers
Question 1: In lump sum bidding, the contractor bears the risk of:
- Owner-directed changes to the project scope
- Errors in the contract drawings provided by the owner
- Inaccurate quantity take-offs included in the contractor's estimate (Correct answer)
- Force majeure events beyond either party's control
Correct answer: Inaccurate quantity take-offs included in the contractor's estimate
In a lump sum contract, the contractor assumes responsibility for all quantity and scope interpretation within the bid documents.
Question 2: What is the function of a bid summary sheet in the estimating process?
- It records all subcontractor insurance certificates
- It consolidates all cost components into a final bid total (Correct answer)
- It itemizes the owner's budget line by line for comparison
- It documents the project schedule milestones
Correct 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.
Question 3: Which of the following is an example of a unit price contract bid item?
- Paint the entire building interior for $45,000
- Excavation per cubic yard at $18.50/CY (Correct answer)
- Design-build mechanical system for a fixed fee
- Provide construction management for 15% of costs
Correct answer: Excavation per cubic yard at $18.50/CY
Unit price contracts price discrete measurable work items per unit, such as excavation by the cubic yard.
Question 4: What information is typically included on a bid form submitted to an owner?
- Subcontractor profit margins and markup rates
- Total bid price, alternates pricing, and acknowledgment of addenda received (Correct answer)
- Detailed labor productivity rates by trade
- Estimator's personal qualifications and licensing history
Correct answer: Total bid price, alternates pricing, and acknowledgment of addenda received
Bid forms typically capture the base bid, alternate prices, unit prices if required, and confirmation of all addenda received.
Question 5: An estimator finds an addendum issued 24 hours before the bid deadline changes a major structural system. The correct action is to:
- Ignore the addendum and bid the original drawings to maintain schedule
- Request a bid extension, price the addendum changes, and acknowledge receipt on the bid form (Correct answer)
- Submit the bid as planned and adjust pricing after award
- Withdraw from bidding immediately
Correct answer: Request a bid extension, price the addendum changes, and acknowledge receipt on the bid form
Major late addenda may require requesting an extension to properly evaluate cost impacts while acknowledging the change.
Question 6: What does bid shopping refer to in construction practice?
- Comparing multiple material suppliers to find the best unit price
- A general contractor revealing sub bids to competitors to drive prices down (Correct answer)
- The process of soliciting bids from prequalified subcontractors only
- Submitting bids to multiple owners simultaneously
Correct answer: A general contractor revealing sub bids to competitors to drive prices down
Bid shopping is the unethical practice of using a subcontractor's price to pressure other subs to underbid them.
Question 7: Which element of profit markup should account for the risk level inherent in the project scope?
- Overhead recovery rate
- Risk-adjusted profit percentage (Correct answer)
- Labor burden rate
- General conditions daily cost
Correct answer: Risk-adjusted profit percentage
Profit markup should be adjusted upward for high-risk projects to compensate for the additional uncertainty and exposure.
CPE Bid Preparation & Submission 3
In lump sum bidding, the contractor bears the risk of: