Contract Lifecycle and Delivery Methods

The contract lifecycle from discovery to close-out, Lean Integrated Project Delivery and the IFOA, the clauses that support delivery, delivery methods and contract structures with their risk apportionment and roles, and advising senior leadership on the fit.

5 minutes 5 Questions

In the PMI Construction Professional (PMI-CP) framework, the contract lifecycle and project delivery methods are core knowledge areas. Together they determine how risk, responsibility, and value are shared among owners, designers, and contractors. The contract lifecycle usually has three broad pha…

Concepts covered
Risk Apportionment Across Delivery MethodsDesign-Build and EPC DeliveryConstruction Management at Risk and Agency CMClauses on Changes, Delays and Extensions of TimeContract Administration During ExecutionAlliancing and Collaborative ContractingStandard Forms of Construction ContractLean Integrated Project DeliveryTermination, Suspension and Force MajeureThe Integrated Form of Agreement (IFOA)Liquidated Damages, Indemnity and Liability ClausesMulti-Party Agreements and Shared Risk and RewardRoles and Responsibilities by Contract StructureCommunication Gaps from Contractual ArrangementsGuaranteed Maximum Price and Target CostPublic-Private Partnerships and ConcessionsProcurement and Tendering StrategyKey Contract Clauses: Scope, Time and PaymentContract Award and MobilizationLump Sum, Unit Price and Cost-Reimbursable PricingContract Close-Out and Final AccountAdvising Leadership on Delivery Method SelectionDesign-Bid-Build DeliverySupporting Leadership Through the Contract LifecycleSubcontracting and Supply Chain ContractsThe Contract Lifecycle from Discovery to Close-Out
Test mode:
Start practice test

PMI-CP - Contract Lifecycle and Delivery Methods Example Questions

Test your knowledge of Contract Lifecycle and Delivery Methods

Question 1

A unit price pipeline contract pays trench excavation per linear metre, with the rate priced for depths up to 2 m. An owner design revision lowers the invert, so a 300 m stretch must now be dug to 4 m and needs heavier shoring. The contract says bid rates apply only to work of similar character and conditions. Otherwise, a new rate is built from the bid rate breakdown. The contractor proposes measuring that stretch as 600 m. How should the project manager value this work?

Correct Answer: Set a new rate for the 4 m stretch built up from the bid rate breakdown

The deeper 4 m trench with heavier shoring is no longer work of similar character and conditions, so the contract requires a new rate built up from the bid rate breakdown, adjusted for the extra depth, shoring and productivity loss.
Measuring 600 m distorts the unit of measurement; the work is still 300 m long, and the depth change belongs in the rate, not the quantity. Paying the bid rate ignores the changed character of the work; this is not a simple quantity variation. Daywork at cost plus fee is a fallback only when a rate cannot be derived, and here the breakdown is available.
Key concept: valuing changed work under unit price contracts when character and conditions differ.

Question 2

A contract defines substantial completion as the point when the facility can be occupied for its intended use with only minor items outstanding. It requires the owner's project manager to respond to a contractor's request for a substantial completion certificate within 7 days. At the joint inspection, the fire alarm system has not passed its required acceptance test, and several rooms need paint touch-ups. What should the project manager do?

Correct Answer: Decline the certificate, cite the untested fire alarm, and list the touch-ups as punch items

An untested fire alarm is a life-safety deficiency that prevents occupancy for the intended use, so the project manager should decline the certificate within the 7 days, state the reason, and record the paint touch-ups as punch items, which are minor and do not block substantial completion.
Issuing the certificate with the fire alarm as a punch item is wrong because a failed life-safety test is not a minor item, and holding extra retention does not make the building fit to occupy. Requiring every paint touch-up to be finished first is wrong because minor items should not delay substantial completion. Letting the 7-day period lapse breaches the contract's response requirement.
Key concept: substantial completion criteria and timely contract administration.

Question 3

On a unit price contract, the final account is valued on quantities actually executed, as measured jointly by both parties while the work proceeds. At close-out, the contractor's final statement prices the earthworks line using the bill of quantities estimate. That estimate exceeds the signed joint measurement sheets by 8%. The contractor argues the bill figure was agreed at award. How should the project manager value this line in the final account?

Correct Answer: Price the line on the signed joint measurement quantities at the bid unit rate

Under a unit price contract, payment equals the quantities actually executed multiplied by the bid unit rates, and the signed joint measurement sheets are the agreed record of those quantities, so they govern the final account.
Pricing on the bill of quantities estimate fails because bill quantities are only estimates used to compare bids, not fixed payment quantities. Splitting the 8% gap is an unjustified concession that ignores the contract's valuation mechanism. A fresh remeasurement is unnecessary because both parties already signed joint measurements, and it would only delay close-out.
Key concept: unit price contract valuation, where remeasured actual quantities times the bid rates determine payment.

More Contract Lifecycle and Delivery Methods questions
387 questions (total)
Practice 100 questions
One session at a time, always new questions