Contract Administration

Delivery methods and contract types, design phase reviews, construction procurement and bidding, contract document precedence, submittals and RFIs, change orders, progress payments, claims processing and project closeout.

5 minutes 5 Questions

Contract Administration, in the context of the Certified Construction Manager (CCM) credential, is one of the core knowledge domains defined by the Construction Management Association of America (CMAA). It refers to the systematic management of all contractual relationships and obligations from con…

Concepts covered
Progress Payments and RetainageChange Orders, Field Orders and Change DirectivesOrder of Precedence of Contract DocumentsMonitoring Contractor Compliance and NoticesSubstantial Completion and the Punch ListBid Packaging and Package InterfacesProprietary Specifications and SubstitutionsDiffering Site ConditionsPermits, Insurance and Labor RequirementsSubmittals, Shop Drawings and RFIsDesign Milestone ReviewsPublic Bidding Protocol and Bid ProtestsDelivery Method SelectionFinal Payment, Lien Waivers and Contract CloseoutBid Evaluation and Award RecommendationBid Bonds, Performance and Payment BondsContract Types and Risk SharingClaims Processing and DocumentationWarranties, O&M Manuals and Owner Training
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CMAA CCM - Contract Administration Example Questions

Test your knowledge of Contract Administration

Question 1

On a courthouse renovation, the general contractor submits its final payment application. The application includes its own unconditional final lien waiver and a closeout checklist showing all punch list items complete. The contract requires final waivers from all subcontractors and suppliers, plus the surety's consent, before final payment. The day before, a second-tier supplier notified the construction manager that it has not been paid for light fixtures. What should the construction manager do NEXT?

Correct Answer: Hold the final payment recommendation until the supplier's release and the surety's consent arrive

The contract makes final payment conditional on lower-tier final waivers and the surety's consent, so with an unpaid supplier on record the construction manager must hold the recommendation until those documents are received.
A contractor's own waiver releases only its own claims, not those of lower-tier subcontractors or suppliers. Pointing the supplier to the payment bond ignores the contract's conditions and risks releasing funds that may be needed to resolve the claim. A joint check from retainage skips the required documents and closes the contract too early.
Key concept: final payment requires full documentation, including lower-tier lien releases and the surety's consent.

Question 2

On a water treatment plant contract, the general conditions require the contractor to purchase builder's risk insurance. The supplementary conditions state that the owner will furnish that coverage. The contract's precedence clause ranks the documents in this order: the agreement, the supplementary conditions, the general conditions, the specifications, and then the drawings. After award, the owner's risk manager asks the construction manager to have the contractor obtain the policy at the contractor's cost. What should the construction manager advise?

Correct Answer: The owner carries the coverage, because the supplementary conditions modify the general terms

The owner must furnish builder's risk coverage. The precedence clause ranks the supplementary conditions above the general conditions, so the project-specific modification controls, and the construction manager should advise the risk manager accordingly.
Having the contractor buy the policy because the general conditions set the base duties ignores the fact that supplementary conditions exist precisely to amend those standard terms. Splitting the premium is wrong because the precedence clause resolves the conflict, so the clause is not ambiguous. Requiring the contractor to buy the policy until a change order reassigns it is wrong because the contract already assigns the coverage to the owner. Shifting that cost to the contractor would itself require a change order.
Key concept: order of precedence of contract documents.

Question 3

Bids for a public courthouse renovation were opened publicly, and the apparent low bid falls within the construction manager's estimate. The construction manager serves as the owner's agent. The owner's procurement rules require award to the lowest responsive, responsible bidder. The owner asks the construction manager to move the project toward contract award. What should the construction manager do NEXT?

Correct Answer: Confirm the low bid is responsive and the bidder responsible, then give the owner a written recommendation

Before any award, the construction manager must verify that the low bid conforms to the bid documents (responsive) and that the bidder can perform (responsible), then give the owner a written recommendation, because award authority rests with the owner.
Issuing the notice of award directly oversteps the agent's role, and releasing the other bid bonds too early removes protection if the low bidder fails to sign. Requesting best and final offers violates sealed-bid rules for public procurement. Recommending the bid closest to the estimate ignores the lowest responsive, responsible bidder requirement.
Key concept: bid evaluation and award recommendation in public competitive bidding.

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