CPE Contract Management and Project Documentation 3

Question 1

In construction contracting, 'retainage' refers to:

Accepted Answer

A percentage of each pay application withheld until project completion

Answer

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

Question 2

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

Accepted Answer

Lump sum (fixed price)

Answer

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

Question 3

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

Accepted Answer

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

Answer

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

Question 4

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

Accepted Answer

The owner's internal budget figures

Answer

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

Question 5

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

Accepted Answer

Authorize the contractor to begin work on a specified date

Answer

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

(CPE) Certified Professional Estimator Practice Test