CONTRACT ADMINISTRATION Flashcards
What are the six basic components of an owner-vendor agreement (or owner-contractor agreement)?
This document is composed of:
- the agreement itself
- the conditions of the contract (general, supplementary, and other)
- the drawings
- the specifications
- all addenda
- all modifications issued after the execution of the agreement
What are the four types of written modifications that can be made after the execution of a contract?
Four examples of this are:
- a change order
- an amendment to the contract
- a written order for minor changes in the work
- a written interpretation by the interior designer
What are five of the most common variables that can affect the cost of a project when bidding occurs?
This aspect of a project bid can be affected by the:
- actual costs to the contractor and subcontractors
- current competitiveness of the market
- project schedule
- desire of a contractor to get the job
- level of profit required by the contractor
What seven types of information are typically included in the instructions to bidders?
This document typically gives information about:
- procedures for submitting bids
- where to obtain bidding documents
- procedures for opening bids
- submittals required with the bids
- bidders’ representation statements
- required bonds
- procedures for issuing addenda and other modifications
What is an addendum?
This is a written or graphic document issued by the interior designer before the execution of the contract that modifies or interprets the bidding documents by additions, deletions, clarifications, or corrections.
What are five of the responsibilities of the owner during furniture installation?
During this phase of a project, the owner is responsible for:
- providing facilities for delivery, unloading, and staging
- providing a route from the delivery point to the final placement point
- giving a firm schedule to the contractor for unloading facilities
- paying for costs due to the owner’s failure to conform to the schedule
- providing security
What are liquidated damages?
These are moneys paid by the contractor to the owner for every day the contractor is late at completing a project.
What form does a vendor or contractor use to request payment from the owner?
An Application for Payment form is used for this.
What is a unit price?
This is a set cost for providing a portion of the construction work that is based on an individual quantity, such as per unit or per square foot.
What is retainage (also called holdback in Canada)?
This is a percentage (usually 10%) of each payment to a contractor or vendor that is withheld by the owner for the purpose of protecting the owner against incomplete or defective work.
At the owner’s request, a contractor may include alternates in the bid documents. What is an alternate?
This is a construction item that could, at the owner’s discretion, be substituted for a similar item in the base bid to reduce project costs.
If all bids on a project exceed the owner’s budget, what four options are available to the owner?
If this happens, the owner can:
- rebid (or renegotiate) the contract
- authorize an increase in construction costs
- work with the designer to reduce the scope of the project
- abandon the project
What is the purpose of a labor and material payment bond?
This is used to guarantee payment for labor and materials on a project if the contractor defaults or otherwise fails to make payments.
Under what conditions can a contractor propose substitutions during bidding?
Bidders must request written approval of these at least 10 days before bid opening. The request must include documentation showing that the proposal meets the requirements of the contract documents.
What is a performance bond?
This is a statement by a surety company that obligates the surety company to complete construction of the owner’s project if the contractor defaults.
What is bid security?
This is a certified check, cashier’s check, or bid bond requested by the owner to ensure that the successful bidder will fulfill the contract.
What are the four primary advantages of negotiating a contract?
Some of the advantages of this process include:
- the owner can use a specific contractor
- a realistic project cost is developed from the beginning
- the contractor can assist in reducing the cost of the project
- the contractor can point out potential problems in the design