Contract Management & Procurement Flashcards

What is a change order in a public works contract?

Answer: A formal written agreement modifying the scope, price, or schedule of an existing contract

A change order is a formal written amendment to an existing contract that modifies the scope of work, contract price, completion schedule, or other contract terms.

What are 'liquidated damages' in a public works contract?

Answer: A pre-agreed daily penalty the contractor pays for failing to complete work on time

Liquidated damages are a predetermined daily monetary amount the contractor owes the agency for each day the project extends beyond the contract completion date.

What cooperative purchasing approach allows public agencies to use contracts competitively bid by another agency?

Answer: Piggybacking (intergovernmental purchasing)

Piggybacking allows public agencies to purchase goods or services through another agency's competitively awarded contract, saving time and administrative costs while maintaining procurement integrity.

What does 'scope creep' mean in the context of public works contract management?

Answer: Unauthorized or uncontrolled expansion of project scope beyond original contract terms

Scope creep refers to the gradual, often informal expansion of a project's scope beyond what was originally agreed upon, which can lead to cost overruns and schedule delays if not controlled through formal change orders.

What is the key difference between a Request for Proposal (RFP) and an Invitation for Bid (IFB)?

Answer: An RFP allows evaluation of technical approach and qualifications; an IFB awards solely on price

An RFP allows agencies to evaluate multiple factors including technical approach, qualifications, and price, while an IFB awards the contract to the lowest responsive and responsible bidder based solely on price.

What is the purpose of retainage (retention) in public works construction contracts?

Answer: To withhold a percentage of payments as security for satisfactory contract completion

Retainage is a percentage (typically 5-10%) withheld from each progress payment to protect the agency and ensure the contractor completes all work and corrects deficiencies before final payment.

What is a payment bond in a public works project?

Answer: A surety bond guaranteeing the contractor will pay subcontractors, laborers, and material suppliers

A payment bond protects subcontractors, laborers, and material suppliers by guaranteeing they will be paid by the general contractor, preventing mechanics' liens on public property.