Project Estimation & Cost Bidding Flashcards
7 cards from real CPI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Project Estimation & Cost Bidding flashcards as text
An installer discovers unexpected site conditions (e.g., existing buried conduit) after the bid is awarded. What is the appropriate course of action?
Answer: Notify the customer and submit a change order for differing site conditions
Differing site conditions are typically addressed through change orders that adjust scope and cost with customer approval.
What is the purpose of including a contingency allowance in a project estimate?
Answer: To cover unforeseen costs and risks that may arise during the project
Contingency allowances provide a financial buffer for unpredictable events without requiring immediate scope changes.
Which of the following BEST describes 'burden rate' in labor cost estimation?
Answer: Additional costs beyond base wages, including taxes, insurance, and benefits
Burden rate represents the total employer cost per labor hour beyond base wages, including payroll taxes, workers' comp, and benefits.
A CPI installer is bidding on a project that requires special tools not currently owned by the company. How should tool acquisition costs be treated in the estimate?
Answer: Included as a direct project cost or amortized across projects if reusable
Special tool costs must be captured in the estimate either as a direct cost or spread across projects if the tools will be reused.
When comparing competitive bids, a general contractor notices one bid is significantly lower than all others. What is the MOST likely concern?
Answer: The low bid may omit critical scope items or reflect poor quality
An unusually low bid often signals missing scope, underestimated labor, or inferior materials that could lead to disputes or poor outcomes.
What is 'bid shopping' and why is it considered unethical in the construction and installation industry?
Answer: Using one subcontractor's price to pressure others into lowering their bids
Bid shopping undermines fair competition by using confidential pricing to extract lower bids, violating trust and professional ethics.
In installation project management, 'scope creep' most commonly leads to which financial problem?
Answer: Cost overruns because additional work is performed without contract adjustments
Scope creep adds work beyond the contracted scope without corresponding price increases, eroding profit margins.