General Contractor License Project Management and Supervision 4

Question 1

What is 'substantial completion' in a construction contract?

Accepted Answer

The stage when the work is sufficiently complete for the owner to use it for its intended purpose

Answer

Substantial completion triggers the start of warranty periods, shifts insurance responsibilities, and is typically when liquidated damages stop accruing.

Question 2

A cost-plus contract with a Guaranteed Maximum Price (GMP) means the contractor:

Accepted Answer

Is reimbursed actual costs plus a fee, but cannot bill the owner above the GMP without a change order

Answer

In a GMP contract, the contractor is reimbursed for actual costs plus a fee up to the agreed maximum; costs above the GMP are the contractor's responsibility unless changed by owner-approved change orders.

Question 3

Which method is used to measure project performance by comparing earned value to planned value and actual cost?

Accepted Answer

Earned Value Management (EVM)

Answer

EVM integrates scope, schedule, and cost to objectively measure project performance using metrics like Schedule Performance Index (SPI) and Cost Performance Index (CPI).

Question 4

If a project's Cost Performance Index (CPI) is 0.85, this means the project is:

Accepted Answer

Getting $0.85 of work done for every $1.00 spent — over budget

Answer

A CPI below 1.0 indicates cost overrun; the project is spending more than the value of work accomplished.

Question 5

When issuing a Notice to Proceed (NTP) to a subcontractor, the general contractor should ensure:

Accepted Answer

The subcontract is fully executed, insurance certificates received, and any required bonds are in place

Answer

Issuing an NTP before the subcontract is executed or insurance/bonds are confirmed exposes the general contractor to unprotected liability and contract disputes.

General Contractor License Practice Test

General Contractor License Practice Test

General Contractor License Project Management and Supervision 4