LARE Bidding and Contract Administration Questions and Answers

Question 1

A landscape architect discovers a significant error in the irrigation plan five days before the scheduled bid opening. To ensure fairness and clarity for all potential bidders, what is the most appropriate action to take?

Accepted Answer

Issue a formal addendum to all parties who have received the bidding documents.

Answer

An addendum is the correct, formal written instrument used to modify the bidding documents prior to the date of bid opening. This ensures that all bidders are aware of the change and are bidding on the exact same scope of work, maintaining a fair and transparent process. Waiting for a change order would be more costly and inefficient. Verbal notifications are not legally binding and create inconsistencies. Canceling the bid is an extreme measure only used for major, unresolvable issues.

Question 2

What is the primary significance of establishing the date of Substantial Completion for a construction project?

Accepted Answer

It is the date when the owner can occupy or utilize the work for its intended purpose.

Answer

Substantial Completion is a critical milestone defined in standard construction contracts (like the AIA G704) as the stage when the work is sufficiently complete for the owner to occupy and use it for its intended purpose. This date typically triggers the start of warranty periods, the transfer of responsibility for utilities and security to the owner, and allows for the release of most of the retainage, even though minor punch list items may still need to be addressed.

Question 3

Which of the following is submitted by a contractor WITH their bid to provide financial assurance to the owner that the bidder will enter into a contract if their bid is accepted?

Accepted Answer

A Bid Bond

Answer

A Bid Bond is a form of bid security that guarantees the bidder will honor their bid and sign the contract if they are the winning bidder. If the bidder fails to do so, the owner can make a claim on the bond to cover the cost difference to award the contract to the next lowest bidder. Performance and Payment Bonds are typically required after the contract is awarded to guarantee the work will be completed and subcontractors will be paid.

Question 4

During construction, a contractor encounters a conflict between a dimension shown on the drawings and a specification for a pre-manufactured site furnishing, making installation impossible as designed. What is the FIRST formal step the contractor should take to resolve this issue?

Accepted Answer

Submit a formal Request for Information (RFI) to the landscape architect.

Answer

A Request for Information (RFI) is the standard, formal process for a contractor to ask for clarification regarding the contract documents. When a discrepancy, omission, or conflict is found, the contractor should submit an RFI to the design professional (landscape architect) to receive a formal, documented clarification or direction. This protects all parties and ensures the issue is resolved correctly before proceeding with potentially incorrect work.

Question 5

In construction contracts, a percentage of each progress payment is often withheld from the contractor until the end of the project. What is the primary purpose of this practice, known as retainage?

Accepted Answer

To provide a financial incentive for the contractor to complete the project and correct all deficiencies.

Answer

Retainage is a portion of the payment due to the contractor that is withheld to ensure the project is fully completed according to the contract and that any defects or punch list items are corrected. It serves as a financial incentive and provides the owner with leverage to ensure the contractor fulfills all contractual obligations before receiving the final payment.

LARE Test Practice Test

LARE Test Practice Test

LARE Bidding and Contract Administration Questions and Answers