Construction Management Chapters 7-8
Questions & Answers
Pre-Construction Services - ANSWERSanticipatory planning, analytical, and evaluation
activities that occur before construction begins, often during the design phase in CM at
risk, or design-build is employed as the project delivery method
Capital project - ANSWERSA long-term investment project that will increase the
organization's assets
Capital Expenditure - ANSWERSFunds used by a company to acquire or upgrade
physical assets such as property, industrial buildings or equipment. This type of outlay
is made by companies to maintain or increase the scope of their operations. These
expenditures can include everything from replacing a roof to building a brand new
factory.
Due diligence - ANSWERSobligation of the contractor, usually written into the contract,
to complete the construction project with reasonable care and to avoid harm
Feasibility Study - ANSWERSAn analysis conducted at the very early stages of the
project to help the owner determine if it is a good idea to invest their time and money to
follow-through with the project or whether an alternative solution should be pursued
Cost Model - ANSWERSthe working budget to guide the design process by allocating
budget limits to the various elements or systems of the design
Return on Investment - ANSWERSa financial ratio used to calculate the benefit an
investor will receive in relation to the investment cost
Life-Cycle cost - ANSWERSlong-term cost projections for a particular building
investment over its useful life cycle
Decomissioning - ANSWERSthe process of shutting down a building and removing it
safely from operational use
Lead Time - ANSWERSthe amount of time it takes for a product or equipment to be
delivered to the job site
Liquidated Damages - ANSWERSa daily amount of money paid by the contractor to the
owner for each day that the that the project fails to meet the completion date specified in
the contract. Not all contracts contain a liquidated damages clause
Questions & Answers
Pre-Construction Services - ANSWERSanticipatory planning, analytical, and evaluation
activities that occur before construction begins, often during the design phase in CM at
risk, or design-build is employed as the project delivery method
Capital project - ANSWERSA long-term investment project that will increase the
organization's assets
Capital Expenditure - ANSWERSFunds used by a company to acquire or upgrade
physical assets such as property, industrial buildings or equipment. This type of outlay
is made by companies to maintain or increase the scope of their operations. These
expenditures can include everything from replacing a roof to building a brand new
factory.
Due diligence - ANSWERSobligation of the contractor, usually written into the contract,
to complete the construction project with reasonable care and to avoid harm
Feasibility Study - ANSWERSAn analysis conducted at the very early stages of the
project to help the owner determine if it is a good idea to invest their time and money to
follow-through with the project or whether an alternative solution should be pursued
Cost Model - ANSWERSthe working budget to guide the design process by allocating
budget limits to the various elements or systems of the design
Return on Investment - ANSWERSa financial ratio used to calculate the benefit an
investor will receive in relation to the investment cost
Life-Cycle cost - ANSWERSlong-term cost projections for a particular building
investment over its useful life cycle
Decomissioning - ANSWERSthe process of shutting down a building and removing it
safely from operational use
Lead Time - ANSWERSthe amount of time it takes for a product or equipment to be
delivered to the job site
Liquidated Damages - ANSWERSa daily amount of money paid by the contractor to the
owner for each day that the that the project fails to meet the completion date specified in
the contract. Not all contracts contain a liquidated damages clause
