Procurement & contracting requirements: NASCLA Commercial General Building Practice Questions
Bidding and bid documents, project delivery and contract types, general conditions, changes and claims, bonds and insurance, payment applications and retainage, closeout, estimating and markup, and earned value.
Often missed
Question 1
What is an addendum during the bidding period?
Correct answer: A written change to the bid documents before bids are due
Contract practice (bidding)
Addenda become part of the contract documents; bidders usually must acknowledge every addendum on the bid form.
Question 2
On public projects, the contract is usually awarded to whom?
Correct answer: The lowest responsive, responsible bidder
Contract practice (bidding)
Responsive means the bid conforms to the bid documents; responsible means the bidder is able to perform (licensing, bonding, finances, record).
Question 3
What is a bid alternate?
Correct answer: A separate price for a stated change to the base scope
Contract practice (bidding)
Alternates (add or deduct) let the owner adjust scope to the budget at award.
Question 4
The bid documents include a $25,000 allowance for door hardware. The hardware actually costs $28,500. What generally happens?
Correct answer: The contract sum goes up $3,500 by change order
Contract practice (bidding)
Allowances carry a stated amount in the contract sum; the difference between the allowance and actual cost is adjusted by change order.
Question 5
What is a unit price in a bid?
Correct answer: A price per unit of measured quantity
Contract practice (bidding)
The owner pays the unit price times the measured quantity actually installed.
Question 6
What is the purpose of a bid bond?
Correct answer: To guarantee that the low bidder will sign the contract and provide the required bonds, or the surety pays the owner up to the bond amount
Contract practice (bidding)
Bid security is commonly 5 to 10 percent of the bid; performance and payment bonds take over after award.
Question 7
Calculation
A contractor's bid is $2,400,000 and the bid documents require a 5% bid bond. What is the bond amount?
Correct answer: $120,000
Contract practice (bidding)
Five percent of the bid amount. Using 0.5% gives $12,000 and 10% gives $240,000.
Worked solution
1
Formula
Bond = bid × percent
2
Values
Bond = $2,400,000 × 0.05
3
Result
Bond = $120,000
Question 8
After bid opening, the low bidder finds a large clerical error in its bid. What is generally true?
Correct answer: Relief may be possible if the mistake is clerical, material and promptly reported, but rules vary and errors in judgment usually get no relief
Contract practice (bidding)
Courts and public agencies often allow withdrawal (not correction upward) for honest clerical mistakes; a bad estimate of productivity is a judgment error.
Question 9
In the design-bid-build delivery method, which is true?
Correct answer: The owner hires a designer to complete the documents, then bids them and holds a separate contract with the contractor
Contract practice (delivery methods)
Design-bid-build is the traditional sequential method with two separate owner contracts (designer and contractor).
Question 10
What is the defining feature of design-build?
Correct answer: One entity contracts for both design and construction
Contract practice (delivery methods)
Single-point responsibility can save time by overlapping design and construction.
Question 11
How does construction management at-risk (CMAR) differ from construction management as agent (CMa)?
Correct answer: The CM at-risk holds the trade contracts and usually guarantees a maximum price; the CM agent advises the owner, who holds the trade contracts
Contract practice (delivery methods)
At-risk means the CM takes cost and performance risk like a general contractor; the agent CM is a paid consultant to the owner.
Question 12
In a lump-sum (stipulated sum) contract, who carries the risk that the work costs more than estimated?
Correct answer: The contractor
Contract practice (contract types)
The price is fixed for the defined scope; the contractor keeps savings and absorbs overruns, except for changes and other contract adjustments.
Question 13
Calculation
A cost-plus contract has a guaranteed maximum price (GMP) of $5,000,000 with a 50/50 shared savings clause. Final cost plus fee is $4,800,000. How much of the savings does the contractor keep?
Correct answer: $100,000
Contract practice (contract types)
The savings below the GMP are split by the stated ratio; overruns above the GMP are the contractor's alone.
Correct answer: When the type of work is known but quantities cannot be accurately determined in advance, such as earthwork and utilities
Contract practice (contract types)
Heavy civil and site work often uses unit prices; payment follows measured quantities.
Question 15
What is a change order?
Correct answer: A written instrument signed by the owner, contractor and architect agreeing on a change in the work and any adjustment to contract sum and time
AIA A201-2017 Art. 7
A change order records agreement on scope, cost and time; work without a signed change order risks non-payment.
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Practice questions are written in our own words and cite code sections by number. Always study from your own copy of the code and the official candidate bulletin.