CPWM Contract Management & Procurement 2

Question 1

What is a change order in a public works contract?

Accepted Answer

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

Answer

A request by the contractor to substitute specified materials

Answer

A notice issued when the contractor fails to meet performance standards

Answer

A document transferring contract obligations to a subcontractor

Question 2

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

Accepted Answer

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

Answer

Damages awarded to a contractor when the agency delays the project

Answer

Legal fees recovered by the agency in contract dispute litigation

Answer

Costs associated with repairing defective contractor work

Question 3

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

Accepted Answer

Piggybacking (intergovernmental purchasing)

Answer

Sole source procurement

Answer

Emergency procurement

Answer

Reverse auction purchasing

Question 4

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

Accepted Answer

Unauthorized or uncontrolled expansion of project scope beyond original contract terms

Answer

A contractor's gradual reduction in workforce during a project

Answer

The natural growth in project complexity discovered during design

Answer

A contractor's practice of adding unauthorized subcontractors

Question 5

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

Accepted Answer

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

Answer

An RFP is used only for construction; an IFB is used only for services

Answer

An RFP requires a bid bond; an IFB does not

Answer

An RFP is used for contracts over $1 million; an IFB for smaller contracts

Question 6

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

Accepted Answer

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

Answer

To fund the agency's project management staff during construction

Answer

To cover the cost of environmental mitigation during construction

Answer

To pay subcontractors directly when the general contractor defaults

Question 7

What is a payment bond in a public works project?

Accepted Answer

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

Answer

A bond guaranteeing the agency will make timely payments to the contractor

Answer

A bond posted by the agency to fund project contingencies

Answer

A financial instrument used to secure project financing