NPPE Project Management 2 — Questions and Answers

Question 1: Which contract delivery model transfers the greatest design and construction risk to a single entity?

Design-bid-build
Construction management at risk
Design-build (Correct answer)
Unit price contract

Correct answer: Design-build

In a design-build contract, a single entity is responsible for both design and construction, absorbing the interface risk between the two phases. The owner deals with one point of accountability.

Design-build (DB) contracts require the design-builder to deliver a completed facility meeting the owner's performance requirements. Because design and construction are integrated under one contract, the design-builder cannot blame the designer for construction problems or vice versa — all interface risk rests with the design-builder. From an owner's perspective this reduces management complexity and shifts most performance risk. From an engineer's perspective, working within a DB team changes the professional's relationship to the owner and requires careful attention to maintaining independence when public safety is at stake.

Question 2: A project manager identifies that the critical path has slipped by two weeks due to a subcontractor delay. Which schedule recovery technique adds resources to critical-path activities?

Fast-tracking
Crashing (Correct answer)
Resource levelling
Schedule compression by re-sequencing

Correct answer: Crashing

Crashing adds resources (labour, equipment) to critical-path activities to shorten their duration, at additional cost. Fast-tracking overlaps activities that were originally sequential.

Schedule crashing involves adding resources — additional shifts, overtime, extra crews, or equipment — to shorten the duration of critical-path activities. It directly trades cost for time. Fast-tracking, by contrast, starts successor activities before predecessors are complete, increasing schedule risk but not necessarily cost. Resource levelling addresses resource conflicts but may extend the schedule. Re-sequencing may find efficiencies but does not directly add resources. NPPE project management questions test understanding of these PMI-aligned techniques in a Canadian infrastructure context.

Question 3: Under the CCDC 2 Stipulated Price Contract, which party bears the risk of unforeseen subsurface conditions that materially differ from the contract documents?

Always the contractor
Always the owner
The contractor if they did not conduct their own geotechnical investigation
The owner, with the contractor entitled to a change order for extra costs and time (Correct answer)

Correct answer: The owner, with the contractor entitled to a change order for extra costs and time

CCDC 2 GC 6.4 allocates differing site conditions risk to the owner. If subsurface conditions differ materially from the contract documents, the contractor is entitled to a change order for additional cost and time.

CCDC 2 General Condition 6.4 (Concealed or Unknown Conditions) states that if the contractor encounters conditions materially different from those indicated in the contract documents, or from conditions ordinarily encountered, the contractor shall notify the consultant promptly. If confirmed, the consultant shall issue a Change Order for the additional cost and time. This provision prevents contractors from inflating bid prices to cover unknown subsurface risk, encouraging competitive bidding. Engineers acting as consultants under CCDC 2 must be familiar with this provision and the notification requirements.

Question 4: Which element of a project charter formally authorises the project manager to apply organisational resources?

The scope statement
The work breakdown structure
The sponsor's signature authorising the project (Correct answer)
The budget baseline

Correct answer: The sponsor's signature authorising the project

A project charter is a document issued by the project sponsor that formally authorises the existence of a project and grants the project manager authority to apply resources to project activities.

In PMI's project management framework, the project charter is the foundational document that: (1) formally authorises the project, (2) defines high-level objectives and constraints, and (3) grants the project manager authority to engage organisational resources. Without a signed charter, the PM lacks formal organisational authority. For engineers managing projects in Canada, understanding the charter's role is essential for establishing clear lines of authority, especially on multi-stakeholder infrastructure projects involving public agencies.

Question 5: An engineer acting as contract administrator on a CCDC 2 project receives conflicting directions from the owner and a government authority. Under CCDC 2, how should the engineer proceed?

Follow the owner's instructions as the paying party
Follow the government authority's instructions as they take precedence
Issue a written notice to both parties and suspend work pending resolution
Exercise professional judgment and choose the safer course (Correct answer)

Correct answer: Exercise professional judgment and choose the safer course

CCDC 2 requires the consultant to act impartially between owner and contractor. When external regulatory requirements conflict with the contract, the consultant must advise both parties and the engineer must exercise professional judgment prioritising public safety and regulatory compliance.

Under CCDC 2, the consultant acts as an impartial certifier and administrator. Where a government authority's lawful requirement (e.g., a municipal by-law or provincial regulation) conflicts with the contract documents, the regulatory requirement prevails — contracts cannot override law. The engineer must notify both owner and contractor of the conflict and may need to issue a Change Order to bring the work into compliance. Public safety and regulatory compliance take priority over contractual obligations, consistent with the professional engineer's paramount duty under provincial engineering acts.

Question 6: Earned value management (EVM) uses which formula to calculate cost variance?

CV = Planned Value − Actual Cost
CV = Earned Value − Actual Cost (Correct answer)
CV = Earned Value − Planned Value
CV = Budget at Completion − Estimate at Completion

Correct answer: CV = Earned Value − Actual Cost

Cost Variance (CV) = Earned Value (EV) − Actual Cost (AC). A negative CV indicates the project is over budget for the work completed.

In EVM: Planned Value (PV) = budgeted cost of scheduled work; Earned Value (EV) = budgeted cost of work performed; Actual Cost (AC) = actual cost incurred. Cost Variance = EV − AC. If CV is negative, the project is over budget. Schedule Variance = EV − PV. If SV is negative, the project is behind schedule. NPPE project management questions may test EVM formulae and interpretation. Understanding these metrics allows engineers managing Canadian capital projects to provide objective progress reporting.

NPPE Project Management 2

Which contract delivery model transfers the greatest design and construction risk to a single entity?