DBIA DBIA - Design-Build Institute of America Cost Management and Value Engineering Questions and Answers 4

Question 1

In design-build cost management, what is the primary purpose of a Guaranteed Maximum Price (GMP) contract structure?

Accepted Answer

To cap the design-builder's total compensation while allowing savings sharing

Answer

A GMP caps the design-builder's maximum compensation while often including a shared savings clause if final costs come in below the GMP.

Question 2

Which value engineering technique involves systematically questioning each project function to identify unnecessary costs?

Accepted Answer

Function Analysis System Technique (FAST)

Answer

FAST diagramming maps project functions hierarchically to identify which functions are necessary versus redundant, enabling targeted cost reduction.

Question 3

During design-build procurement, an owner issues an RFP requiring an Allowance for bidder's design development risk. What does this allowance primarily cover?

Accepted Answer

Cost uncertainty between bridging documents and final design

Answer

Design development allowances account for the cost gap that exists because design is incomplete at proposal time, covering refinement risk assumed by the design-builder.

Question 4

A value engineering proposal on a design-build project saves $500,000. The contract specifies a 50/50 VE savings split. How much does the owner receive?

Accepted Answer

$250,000

Answer

A 50/50 split means each party receives half of the documented savings, so the owner receives $250,000.

Question 5

In design-build cost management, what distinguishes an 'owner contingency' from a 'design-builder contingency'?

Accepted Answer

Owner contingency covers unforeseen site conditions; design-builder contingency covers estimating risk

Answer

Owner contingency covers scope changes and unforeseen conditions the owner controls, while design-builder contingency covers the design-builder's estimating and execution risks.

DBIA - Design-Build Institute of America Certification Practice Test

DBIA - Design-Build Institute of America Certification Practice Test

DBIA DBIA - Design-Build Institute of America Cost Management and Value Engineering Questions and Answers 4