CM 4211 FINAL REVIEW QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026

CM 4211 FINAL REVIEW QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026 T/F: There is a strong correlation between economics prosperity and high levels of construction activities. - Answers True T/F: A subcontract is a contractor working under the prime contractor to do some phase of the construction onsite. - Answers True T/F: A prime contract is one that always involves the prime contractor - Answers True T/F: The four broad categories of construction are residential, commercial, industrial, and heavy highway civil. - Answers False Which one of the following contracts is more likely a bid contract as opposed to a negotiated one? • Cost plus percentage fee • Cost plus fixed fee • Cost plus incentive fee • Guaranteed maximum price • Lump sum - Answers Lump Sum Which one of the following is not an advantage of using pre-engineered metal building? • Speed of Construction • Design Flexibility • Reduced Liability Exposure • Minimal Maintenance • Relative Ease of Future Expansion - Answers Reduced Liability Exposure A Proprietorship is: • Simplest Form of Business • Always Owned by One Person • Business Where All Risks are Assumed by its Owner • All of the Above • A, C, not B - Answers All of the above "LLC" stands for: • Louisiana Liability Company • Limited Liability Company • Louisiana Limited Corporation • Louisiana Limited Company • None of the Above - Answers Limited Liability Company Which one of the following is not a characteristic of a corporation? • Limited Liability of its Owners • Perpetual Life of Company • Ease of Raising Capital • Decentralized Management • Transferability of Ownership - Answers Decentralized Management A construction manager may be required to be licensed: • As an Architect • As an Engineer • As a Contractor • None of the Above - Answers None of the above T/F: A partnership is an association of two or more entities to carry on a business for mutual profit - Answers True T/F: A partnership agreement must be in writing - Answers False T/F: A general partner is an agent of the partnership - Answers True T/F: In a dissolution of a partnership, a commercial lender gets paid before a partner lender - Answers True T/F: A partner may assign some rights to profits from the partnership to an outsides; sub partnership - Answers True T/F: "Duty" is a specifically defined task that cannot be delegated to another person - Answers True T/F: "Authority" is the ability to act or make a decision without having to gain approval - Answers True T/F: "Authority" not be delegated to others - Answers False T/F: "Responsibility" implies the accountability of supervisor for assigned function or duty - Answers True T/F: A list of duties for a construction company should be as detailed as necessary and appropriate considering the size of the company and the number of employees involved. - Answers True T/F: The list of duties for a given position in a company is called the Job Description - Answers True T/F: Organization Charts show every position of responsibility and all lines of supervision and authority - Answers True T/F: Vertical division in a company organization refers to the establishment of lines of supervision - Answers True A positive environment and favorable work atmosphere is created by all but one of the following, which one? • Motivation • Personnel Development • Overtime Work • Training of Replacements • Decision Making - Answers Overtime Work Which one of the following is not one of the Louisiana civil code requirements for a contract to be valid? • A Certain Object • Consent Legally Given • Parties Legally Capable of Contraction • A Lawful Purpose • All of the Above are Requirements - Answers All of the Above T/F: An offer is a conditional willingness to enter into a contract - Answers False T/F: Consideration is the value given by the parties to a contract - Answers True T/F: An acceptance is an unconditional agreement to an offer - Answers True T/F: A counter offer is a conditional agreement to an offer - Answers True T/F: A counter offer requires an acceptance by the original offeror to have an agreement - Answers True T/F: Privity is the existence of a contractual relationship needed for contract liability to flow. - Answers True T/F: A "third party" is someone who is not a party to a contract. - Answers True T/F: A third party may have a beneficiary relationship to the parties of a contract if it can be shown that there was intent for the third party to benefit from the contract. - Answers True T/F: A contract that requires strict adherence to a schedule is usually sufficient to prove a third party beneficiary relationship. - Answers True T/F: Multiple prime contracts never have third party beneficiaries. - Answers False T/F: Tort liability may be intentional or via negligence. - Answers True T/F: Contract liability may be express or implied. - Answers True T/F: Contract liability can only be via negligence and not intentional. - Answers False T/F: Statutory liability may be express or implied. - Answers True T/F: Strict liability is not a source of liability - Answers True Which one of the following is not an entity affected by construction? • The owner of the construction project • The prime contractor on the project • Subcontractors working on the project • The general public near the project • All of the above are affected entities - Answers All of the above Which one of the following is not an option of the Owner when selecting a design firm? • Submissions from interested designers, with selection based on professional qualifications alone. • Submissions that include designation of fees, which become a part of the evaluation criteria. • Bids for professional services and selection on the basis of price alone. • As directed by the prime contractor. • All of the above are options. - Answers As directed by the prime contractor Contractor input into design is common on all of the following construction contracts, except one, which one? • Negotiated contracts • Design-bid-build • Design-build • Construction management • Design manage - Answers Design-bid-build Which one of the following is not an important function of the drawings and specifications? • To designate the materials to be used or provided • To designate the quality of the workmanship required • To show the contractor awarded the contract how the work is to be done • To show the nature and extent of the construction to be done • All of the above are important functions - Answers All of the above are important functions T/F: An Owner's contract with an architect is for design services only. - Answers False T/F: An Architect is usually the lead designer on building projects, both residential and commercial. - Answers True T/F: An Engineer is usually the lead designer on industrial and heavy/highway/civil projects. - Answers True T/F: An Owner may contract with a construction manager for services before design, during design, or for representation during construction. - Answers True T/F: An Owner may contract with a construction company for building services only - Answers True T/F: A cost-plus-percentage-fee contract is one where the contractor is reimbursed for his cost plus a fee that is a percentage of those costs. - Answers True T/F: A contractor has no incentive to hold down costs on a lump sum contract. - Answers False T/F: A cost-plus-fixed-fee contract is one where the contractor receives the same fee no matter how high or low the reimbursable cost. - Answers True T/F: A guaranteed maximum price contract is one where the total payment to the contractor of cost and fees is capped, no matter how high the cost runs. - Answers True T/F: A target estimate contract is one where the contractor has an incentive to hold down costs. - Answers True T/F: A turnkey contract is one where the contractor performs virtually every task required to produce a finished functioning facility. - Answers True T/F: A turnkey contract is always a construct only contract. - Answers False T/F: A fast tracked project is one in which the construction of one phase is started before the design of another phase is completed. - Answers True T/F: A fast track project should be design-construct contract. - Answers True T/F: A drawback to fast tracking a project is the risk that after construction is already in place a problem may develop with subsequent design that requires changes to the work already done. - Answers True Retainage (retention) is the amount the owner keeps from the contractor's progress payments to pay for: • Remedial Work • Extra Work Items in Change Orders • The Attorney's Retainer • Penalties for disagreements between the Contractor and the Owner • None of the Above - Answers Remedial Work An escalation clause is: • An increase in the contract price for a long-term project in the event labor and or material cost decrease. • Applicable when a building contract includes an escalator. • An increase in liquidated damages when a contractor could hae completed the contract on time. • An increase in contract price when the owner willfully interferes. • None of the above. - Answers None of the above. Which one of the following is usually found in a Physical Conditions Report? • Soil Conditions • Subsurface Conditions • Weather Records • All of the Above • None of the Above - Answers All of the Above Which one of the following is not an important consideration the contractor and owner must pay attention to when negotiating a cost-plus type contract? • A definite and mutually agreeable subcontracting procedure. • The determination and payment of the prim contractor's fee. • A common understanding of the accounting methods. • A list of job costs to be reimbursable. • All of the above are important considerations. - Answers All of the above T/F: The main disadvantage to the Owner of using a cost-plus-percentage of cost contract is the incentive for the Contractor to hold down construction cost. - Answers False T/F: Unit-price contracts are based on estimated quantities of defined items of work. - Answers True T/F: A cost-plus-fixed-fee contract encourages the Contractor to finish as soon as possible and move on to another project. - Answers True T/F: Lump sum contracts should be limited to projects that can be accurately and completely described. - Answers True T/F: The main reason a guaranteed maximum cost contract is used is so the total cost will not exceed the Owner's funding ability. - Answers True Which one of the following is not one of the six typical documents comprising the contract documents? • Physical condition reports • Specifications • Plans • Notice to Proceed • General Conditions - Answers Notice to Proceed An advertisement for a bid should always include four items of information which one of the following does not have to be included? • Identity of the Project • Time and Place of the Bid Opening • Bond Information • How and Where to Retrieve the Bid Documents • Identity of the Owner - Answers Bond Information Which one of the following statements is not true regarding the bid form? • It is drafted by the Owner • It is completed by the Contractor • It is the offer by the Contractor • It is the contract • All of the above are true - Answers It is the contract Which one of the following is found in the General Conditions? • The Specifications • The Supplementary Conditions • The Amount Bid • The Physical Conditions Reports • None of the Above - Answers None of the Above The five threshold red flag prime contract clauses include: • Delays of work, Suspensions of Work, Terminations of Work, Partial Terminations of Work, and Identity of the Owner • Changes in the Work, Differing Site Conditions, Delays of Work, Dispute Resolution, and Terminations of Work • Differing Site Conditions, Liquidated Damages, Site Availability, Retainage Provisions, and Changes in the Work • Changes in the Work, Differing Site Conditions, Completion Date of the Work, Liquidated Damages, and Delays/Terminations of the Work • None of the Above - Answers Changes in the Work, Differing Site Conditions, Delays of Work, Dispute Resolution, and Terminations of Work T/F: The parties can agree on a method of dispute resolution other than litigation. - Answers True