8. Project Procurement Management

Question 1

Owner

Answer 1

Define the scope of work
Provide evidence for having the financial capability
Provide evidence for the site title
Ect

Question 2

Designer

Answer 2

Design the project 
Construction administration services 
Advising and consulting services 
Observing work progress
Ect.

Question 3

Constructor (general contractor)

Answer 3

Review contract documents and field conditions
Construct the work safely according to the specs and drawings
Superintendence (supervise and direct the work)
Etc.

Question 4

Multiple prime contractors

Answer 4

Advantages:
Save the cost of the GC profit and overhead
To finish the work early

Disadvantages:
Owner must perform the day to day management and coordination
Owner must perform general conditions responsibilities (site access, cleaning, office space, utilities)
Schedule challenges

Question 5

Design-Bid-Build (DBB) method

Answer 5

Most common government used method
Linear (sequential) process with no task overlap
Plans and specs are completed by the architect
After design is complete and accepted by the owner, bids are issued
Contractors bid the project exactly as it is designed and the lowest responsible responsive bidder is awarded the contract

Question 6

Responsible bidder

Answer 6

Provide required payment bond and performance bond

Demonstrate the managerial and financial capabilities

Question 7

Responsive bidder

Answer 7

Submit bid on time

Submit bid using required forms

Question 8

Construction management (CM) methods

Answer 8

Construction manager as advisor

Construction management at risk

Question 9

CM as advisor

Answer 9

Consulting services

The owner interview and selects a fee-based firm

Question 10

Construction manager (CM)

Answer 10

The CM provides pre construction services
Review the design
Ect

Question 11

Construction management at risk

Answer 11

Guaranteed maximum price (GMP) 
The final construction price 
CM’m fees 
Overhead 
Contingencies 
All subcontractors selected by owner

Question 12

Design Build (DB)

Answer 12

The contractor and architect are only entity
Hired by the owner to deliver a complete project
GMP can be provided by DB

Question 13

Engineering procurement construction (EPC)

Answer 13

The owner procures a single contract for design, equipment, construction

The EPC firm provides pre-construction services
Examples: oils refineries, mining plants

Question 14

Integrated project delivery (IPD)

Answer 14

Multiparty contract

Shared risk/ reward delivery method

Question 15

Consumption contracts (there are types)

Answer 15

Fixed price (lump sum)

Unit price

Question 16

Fixed price (lump some)

Answer 16

Scope is fully defined
Quantities are known
The owner knows the construction costs
The contractor accepts the bulk of the project risk

Question 17

Unit pride

Answer 17

Fixed unit price
Scope is fully defined
Quantities are unknown (the

Question 18

Cost reimbursable contracts

Answer 18

Known as cost plus fee
Scope is not fully defined
Uniqueness, schedule, and quality take precedent
Allows for construction to begin before design is completed
Owner typically assumes the risk of cost overrun
Contractor assumes the risk of schedule, quality, constructability, etc

Question 19

Guaranteed Max Price (GMP)

Answer 19

Can’t pay more than the max price

Question 20

Construction contract

Answer 20

An agreement between two parties that is enforceable by law

to control and allocate construction risk

Question 21

Mutual agreement

Answer 21

There must be a meeting of minds

Question 22

Purpose of construction contract is to deliver/produce

Answer 22

Safely
A quality construction project
On time
Within budget

Question 23

Typical contract provisions include

Answer 23

Scope for the work
Time of completion 
Contract sum 
Progress payment 
Retained percentage 
Schedule of value (SOS) - contract prices for specific items 
Work in place (% complete) and stored materials 
Acceptance and final payment

Question 24

Essential contract document

Answer 24

The agreement 
The general conditions 
The special conditions 
The drawings 
The technical specs

Question 25

The agreement

Answer 25

Date 
Names and addresses 
Description of the scope of work 
Time limitations 
Contract considerations 
Payment conditions 
References to other documents 
Signatures

Question 26

The general conditions (GCs)

Answer 26

Defines roles and responsibilities
Risk
Clauses used for contract administration

Question 27

The special/supplementary conditions

Answer 27

# of copies of contract documents 
Survey information 
Materials provided by the owner 
Cost and ached reporting requirements 
Deliverables start and finish dates  
Traffic controls requirements 
Testing requirements

Question 28

The drawings

Answer 28

Arch 
Struct 
Mech 
Elect 
Plumb

Question 29

The technical specs

Answer 29

Written requirements
Fully define requirements for materials, equipment, systems, standards, ect 
Quantity of materials 
Quantity of workmanship 
Election and instillation methods 
Etc

Question 30

Project manual

Answer 30

The complete written document or a set of documents that accompanied the plans

Question 31

Bonds (surety bong)

Answer 31

Written documents that describe the conditions and obligation related to the agreement

If the contractor is in breach of contract, the surety must complete the terms of the contract

Question 32

Bid bond

Answer 32

Assured the owner that the contractor will sign the contract or at least begin to perform on the contract

Question 33

Performance bond

Answer 33

Assured the owner that the contractor will compete the job

Question 34

Payment bond

Answer 34

Assured the owner that the contractor will pay labor, subcontractors, and suppliers