Practice Exam 1 Flashcards
What does the net multiplier account for when preparing a profit plan?
Net multipliers include profit as the final step in the profit plan. Multiplying billable rates by the net multiplier ensures profit is already accounted for.
What are direct expenses, and how do they relate to the gross fee in a project work plan budget?
Direct expenses are project-related costs for a firm and its consultants that are not reimbursable. These include firm overhead, computers, equipment, and other business costs. In the project work plan budget, direct expenses are subtracted from the gross fee.
What is a contingency, and how is it accounted for in the project work plan budget?
A contingency is allocated for unplanned expenses, such as direct labor, direct expenses, consultant fees, or other unforeseen project costs. It should not be treated as additional profit. In the project work plan budget, contingency is subtracted from the gross fee.
What are indirect expenses, and how do they differ from profit?
Indirect expenses are costs associated with running a firm, such as office leases, employee benefits, computers, and plotters. These are necessary for the firm’s operations but are not the same as profit, which is not categorized as an expense.
What does AIA B101 specify as the first procedure for conflict resolution, and is it legally enforceable?
AIA B101 specifies non-binding mediation as the first procedure for conflict resolution (Article 8.2). The decision from mediation is not legally enforceable, and the architect and owner agree on the next method of dispute resolution when executing the contract.
According to NCARB Rule of Conduct 2.4, who should an architect favor when acting as the interpreter of building documentation?
No one. According to NCARB Rule of Conduct 2.4, an architect shall render decisions impartially, favoring neither party to the contract when acting as the interpreter of building documentation.
What should a retired architect do to address a conflict of interest when voting on a project?
Refrain from voting. The retired architect should refrain from voting to remove the conflict of interest.
What does NCARB Rule of Conduct 2.4 say about impartiality when an architect is acting as the interpreter of building documentation?
According to NCARB Rule of Conduct 2.4, when an architect is acting as the interpreter of building documentation, they must render decisions impartially, favoring neither party to the contract.
What is the purpose of a memorandum in documenting project decisions?
A memorandum documents project decisions made during phone conversations or outside of official team or client meetings. It is a more abbreviated description than meeting minutes but provides the necessary level of detail about project decisions.
What is the purpose of meeting minutes in project management?
Meeting minutes are created for scheduled team meetings and include a task list that keys each item to the meeting. Tasks are assigned to a firm or individual and are not removed from the list until resolved. They are not used for documenting decisions made outside of scheduled meetings.
What does technology liability coverage protect an architect from?
Technology liability coverage protects the architect in the event of a negligent act in managing the security of a computer system. It covers claims related to data or information theft electronically, with the insurer defending and paying claims on the architect’s behalf.
What does a fidelity bond protect a firm from?
A fidelity bond protects a firm from theft by employees, especially those with access to the firm’s accounts. It would cover situations like an employee in payroll overpaying themselves or a friend to steal money from the firm.
What does commercial general liability insurance protect a firm from?
Commercial general liability insurance protects a firm from third parties personal injury, bodily injury, physical property damage, libel and slander, and stolen intellectual property. Firms can opt to include a provision for cyber liability, but it is not typically covered under this insurance.
What are key factors that an insurance provider considers when underwriting insurance policies for a firm?
When underwriting insurance policies, key factors include the amount of the firm’s annual billings, types of services the firm offers, the firm’s risk management procedures, and current financial markets. These factors help determine the level of risk associated with insuring the firm.
When are operating agreements used in relation to a limited liability company (LLC)?
Operating agreements are used when forming an LLC to establish rules and guidelines for how the company will operate, including percentages of ownership.
What determines the required limits for a firm’s worker’s compensation policy?
Each jurisdiction sets the statutory limits for worker’s compensation policies, and it’s important to ensure that your firm provides coverage that meets or exceeds those statutory limits.
When should the commissioning authority be engaged in the design process for the best outcome?
As early in the design process as possible. Engaging the commissioning authority in the pre-design or design phases allows for the best outcome, as they can provide input on building systems and energy savings when the most impact can be made and the cost of modifications is lowest.
