CE LAW LONG QUIZ

Question 1

Is a type of agreement in which one party gets compensated for the price of the materials needed to accomplish a task, together with a fixed hourly salary and other expenses connected to the service being done. This type of contract is common in the construction industry. It is common for contractors to bill their clients for time spent on the project, the materials used, and a markup for the cost of materials in a T&M contract.

Answer 1

Time and materials (T&M)*

Question 2

• Is a standard phrase in a contract for construction, product development or any other piece of work in which the employer agrees to pay the contractor based upon the time spent by the contractor’s employees and subcontractors’ employees to perform the work, and for materials used in the project

Answer 2

.Time and materials (T&M)

Question 3

the primary components of the T&M contract include:

Answer 3

o Labor rates
o Maximum labor hours
o Materials markup
o Time and materials not-to-exceed clause (T&M NTE)
o Payment milestones

Question 4

• Wages for hourly workers as well as independent contractors, administrators, and managers that oversee projects and contracts are included in labor rates.

Answer 4

Labor rates

Question 5

Clients might request a maximum number of hours of labor to guard against unanticipated increases in labor costs.

Answer 5

Maximum labor hours

Question 6

Individuals will be charged the real cost of materials plus the markup. Typically, a markup of 15% to 35% will be added to the real cost of supplies (including freight) that the client is responsible for paying,

Answer 6

Materials markup

Question 7

To ensure that the client knows the project’s maximum cost, a not-to-exceed quote might be included.

Answer 7

Time and materials not-to-exceed clause (T&M NTE)

Question 8

In some circumstances, one may want to specify agreed-upon milestones for progress payments to protect the contractor’s workflow

Answer 8

Payment milestones

Question 9

Disadvantages of T &M Contract

Answer 9

Clients often prefer a fixed price contract because their risk is lower and budgeting is easier. When bidding against a fixed price contract, the contractor with a time and materials contract may lose the bid. Tracking materials costs and labor hours is extra work for the contractor. With open-ended labor hours, the contractor’s laborers may not be motivated to work efficiently. Including a not-to-exceed clause can help offset this problem

Question 10

Advantages of T &M Contract

Answer 10

• Therefore, Time and materials contracts work best when the scope and duration of a project is unpredictable before work begins. The simplicity of a time and materials contract ensures the contractor, a profit but adds an administrative burden in terms of tracking time and costs.
• However, good accounting software can automate much or all of that added burden.

Question 11

Guaranteed maximum price (GMP)

Answer 11

The maximum price can be increased via a change order if the project’s scope changes but not for cost overruns or estimating errors.

Question 12

Elements of GMP

Answer 12

1. The project’s tasks
2. Direct project costs
3. The indirect overhead costs a contractor incurs
4. The profit a contractor wants to make

Question 13

BOT

Answer 13

Build Operate and Transfer contract

Question 14

a private company is granted a concession by the government to finance, design, construct, and operate a public infrastructure project such as a toll road, power plant, or water treatment facility.

Answer 14

Build-Operate-Transfer (BOT)

Question 15

The mechanics of a BOT contract can be broken down into three phases:

Answer 15

1. Build
   2.Operate
   3.Transfer

Question 16

: In the first phase, the private company finances,
designs, and constructs the infrastructure project
according to the specifications agreed upon with the
government. This phase is typically financed by the
private company through loans or equity investment.

Answer 16

Build Phase

Question 17

: In the second phase, the private company
operates the infrastructure project and is responsible
for its maintenance and upkeep. The company
generates revenue from user fees, such as tolls or
electricity bills, and uses this revenue to pay off its debt
and cover its operating expenses.

Answer 17

Operate Phase

Question 18

In the final phase, the private company
transfers ownership of the infrastructure project to the
government. This transfer may occur after a set period
of time or after the private company has recouped its
initial investment, depending on the terms of the
contract.

Answer 18

Transfer

Question 19

Advantages of a Build-Operate-Transfer (BOT) contract:

Answer 19

1. Private sector financing: The BOT scheme allows
   governments to leverage private sector financing to deliver
   public infrastructure projects without relying on public funds.
2. Efficient project delivery: Private companies have the
   expertise and experience to deliver projects efficiently,
   which can lead to faster completion times and lower costs.
3. Risk transfer: The private company assumes much of the
   financial and operational risk associated with the project,
   reducing the government’s exposure to these risks.
4. Quality assurance: Private companies have a strong
   incentive to ensure that the infrastructure project is well designed, built to high standards, and operated efficiently,
   in order to maximize their revenue.

Question 20

Disadvantages of a Build-Operate-Transfer (BOT) contract:

Answer 20

1. Potential for high user fees: The private company must
   generate sufficient revenue to recoup its investment and
   make a profit, which can result in high user fees for the
   public.
2. Long-term commitment: The government may be
   committed to a long-term contract with the private company,
   which can limit its flexibility to adapt to changing
   circumstances or terminate the contract.
3. Limited public control: The government may have limited
   control over the design and operation of the infrastructure
   project during the contract period, which can limit its ability
   to respond to public needs or demands.

Question 21

PPP

Answer 21

Public-Private Partnership (PPP) contract

Question 22

a type of agreement between a public sector entity, such as a government agency or municipality, and a private sector partner, such as a corporation or consortium, to jointly finance, design, construct, operate, and maintain a public infrastructure project.

Answer 22

Public-Private Partnership (PPP) contract

Question 23

Mechanics of a PPP contract can be broken down into
several stages:

Answer 23

1. Planning and Procurement:
2. Design and Construction:
3. Operation and Maintenance:
4. Transfer or Renewal:

Question 24

RA 544

Answer 24

Civil Engineering Law
* RA 544 is the civil engineering law which covers all the practices of civil engineering in the Philippines.
* The practice of civil engineering within the meaning and intent of this Act shall embrace services in the form of consultation, design, preparation of plans, specifications, estimates, erection, installation and supervision of the construction of streets, bridges, highways, railroads, airports and hangars, port works, canals, river and shore improvements, lighthouses, and dry docks; buildings, fixed structures for irrigation, flood protection, drainage, water supply and sewerage works; demolition of permanent structures; and tunnels. The enumeration of any work in this section shall not be construed as excluding any other work requiring civil engineering knowledge and application

Question 25

The public sector entity determines the need for a particular infrastructure project and evaluates the feasibility of using a PPP approach. It then develops a procurement strategy and solicits proposals from private sector partners through a competitive bidding process.

Answer 25

1. Planning and Procurement:

Question 26

The private sector partner is responsible for designing and constructing the infrastructure project according to the specifications agreed upon with the public sector entity. The private partner typically finances the construction phase through loans or equity investment.

Answer 26

2. Design and Construction:

Question 27

The private sector partner is also responsible for operating and maintaining the infrastructure project, often through a long-term concession agreement. The private partner generates revenue from user fees or other sources, and uses this revenue to pay off its debt and cover its operating expenses.

Answer 27

3. Operation and Maintenance:

Question 28

At the end of the concession period, the ownership of the infrastructure project may revert back to the public sector entity, or the concession may be renewed for an additional period of time.

Answer 28

4. Transfer or Renewal: