HCC Healthcare Construction Cost Estimating & Budget Management

Question 1

During the design development phase of a healthcare facility project, what is the typical range for owner's contingency as a percentage of total construction cost?

Accepted Answer

10–15%

Answer

During design development, an owner's contingency of 10–15% is standard to account for scope refinements and unforeseen conditions before construction documents are finalized.

Question 2

In healthcare construction budgeting, which of the following is classified as a 'soft cost'?

Accepted Answer

Architectural and engineering fees

Answer

Soft costs are non-construction expenses such as design fees, permits, and financing costs, whereas hard costs are direct physical construction expenses.

Question 3

What is 'value engineering' in the context of healthcare construction?

Accepted Answer

A systematic approach to achieve required functions at the lowest cost

Answer

Value engineering is a systematic, organized process that seeks to provide necessary project functions at the lowest possible cost while maintaining quality and performance requirements.

Question 4

Which type of cost estimate is typically prepared when only basic program information such as square footage and building type is available?

Accepted Answer

Conceptual (order-of-magnitude) estimate

Answer

A conceptual or order-of-magnitude estimate is prepared using minimal information and typically carries an accuracy range of ±25–50%, making it appropriate for early planning and feasibility studies.

Question 5

In a Guaranteed Maximum Price (GMP) contract for healthcare construction, if actual costs come in below the GMP, the savings typically:

Accepted Answer

Are shared between owner and contractor per contract terms

Answer

Most GMP contracts include a shared savings clause in which cost savings below the GMP are split between the owner and contractor according to pre-negotiated percentages, incentivizing cost control.

(HCC) Healthcare Construction Certification Practice Test

(HCC) Healthcare Construction Certification Practice Test

HCC Healthcare Construction Cost Estimating & Budget Management