PX : Contract Administration

Question 1

177

What is a performance bond?

Answer 1

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.

Question 2

178

What is the purpose of a labor and material payment bond?

Answer 2

This is used to guarantee payment for labor and materials on a project if the contractor defaults or otherwise fails to make payments.

Question 3

179

At an owner’s request, a contractor may include alternates in the bid documents. What is an alternate?

Answer 3

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.

Question 4

180

What is a unit price?

Answer 4

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.

Question 5

181

What is an allowance in interior design?

Answer 5

This is a set amount of money that the interior designer estimates will cover the cost of a particular item (construction or furnishing) when that cost cannot be determined precisely at the time of the bid or negotiated proposal.

Question 6

182

What are the four types of written modifications that can be made after the execution of a contract?

Answer 6

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

Question 7

183

What is retainage (also called holdback in Canada)?

Answer 7

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.

Question 8

184

What form does a vendor or contractor use to request a payment from the owner?

Answer 8

An application for payment form is used for this.

Question 9

185

In regard to interior design, what is substantial completion?

Answer 9

In a construction project, this is the stage when work, or a designated portion of it, is sufficiently complete according to the contract documents that the owner can occupy or use the site, even though a few minor items may yet to be finished or corrected.

Question 10

186

Who has the authority to stop construction?

Answer 10

On a construction project, only the owner can authorize this action.

Question 11

187

What is a change order?

Answer 11

This is a form used to authorize a change in contract time, contract cost, or both, made after the execution of the contract. It is generally prepared by the interior designer and must be signed by the designer, contractor, and owner.

Question 12

188

What are shop drawings?

Answer 12

These are detailed drawings, diagrams, and other data, prepared by a subcontractor or supplier, that show exactly how the provider intends to supply and install work to meet the contract requirements. They are submitted to the contractor and interior designer for approval.

Question 13

189

What is the basic process for getting approval on submittals from subcontractors or suppliers?

Answer 13

First, the submittal is sent to the general contractor, who reviews it and then sends it to the interior designer for approval.
If the submittal also requires a review by one of the designer’s consultants, it is sent to the consultant for review.
The submittal is then sent back to the contractor, who returns it to the party who originally made the submittal.

Question 14

190

What are the interior designer’s obligations during construction observation?

Answer 14

During this phase of the work, the interior designer

becomes generally familiar with the progress and quality of the work
keep the owner informed about the progress of the work
endeavor to guard the owner against defects in the work
determine, in general, if the work is progressing in such a way that it is in accordance with the contract documents

Question 15

191

Who has the authority to reject work that does not conform to the contract documents?

Answer 15

The interior designer can reject work that does not conform to these.

Question 16

192

What is a claim in interior design?

Answer 16

This is a demand or assertion by the contractor or owner seeking payment of money, and extension of time, or an adjustment in interpretation of the contract terms.

Question 17

193

What are two common types of construction claims?

Answer 17

Two common types are

claims for additional time
claims for concealed or unknown conditions

Question 18

194

What are six things the interior designer is NOT responsible for during contract administration?

Answer 18

During this phase of a project, the designer is NOT responsible for

the means, methods, or techniques of construction
safety on the job site
fabrication, shipment, or installation of construction elements or furnishings
acts or omissions of contractors, subcontractors, or suppliers
stopping the work if there are problems
receipt, inspection, and acceptance of furniture or fixtures

Question 19

195

What is a construction change directive?

Answer 19

This is a written order, prepared by the interior designer, directing the contractor to make a change before the owner and contractor have agreed on the amount of adjustments in cost, time, or both.

Question 20

196

What are six common reasons why a designer might withhold payment to a contractor?

Answer 20

This action may be taken because

the work is defective
the contractor failed to pay the subcontractors
the contractor has damaged property of the owner or another contractor
third-party claims have been filed
evidence exists that the work will not be completed on time
the contractor failed to conform to the contract documents

Question 21

197

What is a punch list (known in Canada as a deficiency list)?

Answer 21

This is a list of items made by the interior designer during the final inspection. It includes anything that needs to be completed or corrected by the contractor if not in accordance with the contract documents.

Question 22

198

What is a purchase order?

Answer 22

This is a document sent to a manufacturer or vendor that lists all the items to be purchased along with the prices, catalog numbers, and shipping information.

Question 23

199

What is required from a manufacturer after it receives a purchase order from the designer?

Answer 23

A confirmation or acknowledgement is required from the manufacturer after receiving this from the designer.

Question 24

200

What is a packing list?

Answer 24

This is a detailed list of item descriptions and quantities in a shipment that is attached to one of the items shipped.

Question 25

201

What is a drop ship order?

Answer 25

This is a request to ship furniture or other goods to an address different from the address of the company placing the order.

Question 26

202

What is a bill of lading?

Answer 26

This is a document that lists the contents of a shipment from a manufacturer or vendor.

Question 27

203

What is a freight bill?

Answer 27

This is the invoice from a shipping company.

Question 28

204

What is a sales agreement?

Answer 28

This is a document signed by the client that obligates the client to pay for the various items listed in the agreement.

Question 29

205

If all bids on a project exceed the owner’s budget, what four options are available to the owner?

Answer 29

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

Question 30

206

What are seven of the items the contractor must submit to the owner during project closeout?

Answer 30

During this phase of a project, the contractor must give the owner

the bonds
all warranties
any extra stock of materials
a set of record drawings
the certificate of occupancy
documentation required by the final application for payment
maintenance contracts and equipment operating instructions

Question 31

207

What are the five basic activities of project management?

Answer 31

This task involves five basic activities.

planning
monitoring 
coordinating and directing
documenting
closing out a project

Question 32

208

What are the two common ways to notify prospective contractors that a project is being bid?

Answer 32

The two common ways to accomplish this are to

advertise for bids in local newspapers and trade journals
send invitation to bid forms to prospective bidders

Question 33

209

What is an addendum?

Answer 33

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.

Question 34

210

Under what conditions can a contractor propose substitutions during bidding?

Answer 34

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.

Question 35

211

What seven types of information are typically included in the instructions to bidders?

Answer 35

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

Question 36

212

What is big security?

Answer 36

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.