GCC Construction Contracts and Business Administration 2

Question 1

Under a cost-plus-fee contract, which cost is typically NOT reimbursable to the contractor?

Accepted Answer

Home office overhead unrelated to the project

Answer

Home office overhead unrelated to the specific project is generally not reimbursable under cost-plus contracts.

Question 2

A 'no-damages-for-delay' clause in a construction contract means the contractor:

Accepted Answer

Is only entitled to time extensions, not money, for owner-caused delays

Answer

No-damages-for-delay clauses limit the contractor's remedy for owner-caused delays to time extensions only, not monetary compensation.

Question 3

What is the primary purpose of a 'schedule of values' submitted with a payment application?

Accepted Answer

To allocate the contract sum among work items for payment tracking

Answer

A schedule of values breaks down the total contract amount by work components so progress payments can be calculated accurately.

Question 4

Which contract document typically takes precedence when there is a conflict between drawings and specifications?

Accepted Answer

The order of precedence is defined in the contract's general conditions

Answer

The contract's general conditions establish a specific order of precedence among contract documents, which governs in cases of conflict.

Question 5

A contractor's 'overhead and profit' markup on a change order typically covers:

Accepted Answer

Administrative costs and business profit not included in direct costs

Answer

Overhead and profit markups compensate the contractor for indirect business costs and return on investment beyond direct field costs.

(GCC) General Contracting Certification Practice Test