CEM 201 EXAM I REVIEW QUESTIONS
AND ANSWERS WITH SOLUTIONS 2024
notice to bidders - ANSWER document announcing to prospective bidders that design documents are
available for
consideration and that
the owner is ready to receive bids.
supplementary conditions - ANSWER are a portion of the bid package that cover aspects of the
contractual relationship and specific provisions of the project that include the duration of the project,
additional
instructions regarding commencement of work, owner-procured materials, mandatory wage rate
characteristic of the local area, format required for project progress reporting, and amount of liquidated
damage
two types of items included in supplementary conditions - ANSWER 1. Modifications of the articles of
the general conditions
2. Additional articles that are legally binding
bid bond - ANSWER a surety purchased by bidders to protect the owner in the case the awarded
contractor did not
sign the contract with the owner
What percentage is a bid bond usually issued at? - ANSWER 5-10% of the bid amount
how to calculate the damage of a bid bond - ANSWER difference between the bid price and second
lowest bid price
performance bond - ANSWER a bond that protects the owner against default on the part of the
contractor in performing the project as required.
, if the contractor fails to perform the work as required, the surety must provide what two things? -
ANSWER 1. completion of the project in compliance with the plans
2. specifications at the price originally quotes by the defaulting contractor
lien - ANSWER claims made against a property by a contractor or other professional
who has supplied labor or
materials for work on that prop
construction leins - ANSWER are designed to protect professionals from the
risk of not being paid for services rendered
addenda - ANSWER any changes in detail, additions, corrections, and contract conditions that arise
before bids are
opened that are intended to become part of the bid package and the basis for bidding are
incorporated into the bid package through addenda
T/F an addendum becomes part of contract documents and provides the vehicle or the owner (and
owner rep) to modify the scope and detail of contract before it is finalized - ANSWER True
what is the performance bond required on a federally funded contract worth $4M? - ANSWER $4 M;
federally funded projects are 100% the value
what is the payment bond required on a federally funded contract worth $4M? - ANSWER $1.6 M; fixed
rate of 40% if contract value > $1M and < $5M
miller act - ANSWER established the required bonding level for federally funded projects
The total project price on an
Indiana Department of Transportation (INDOT) project is $8.5 M. What would be the amount of bid
bond be for this project? Why? - ANSWER $1.7 M; 20% for government contracts; this is a typical value
as stated in text, individual jurisdictions may set different levels
AND ANSWERS WITH SOLUTIONS 2024
notice to bidders - ANSWER document announcing to prospective bidders that design documents are
available for
consideration and that
the owner is ready to receive bids.
supplementary conditions - ANSWER are a portion of the bid package that cover aspects of the
contractual relationship and specific provisions of the project that include the duration of the project,
additional
instructions regarding commencement of work, owner-procured materials, mandatory wage rate
characteristic of the local area, format required for project progress reporting, and amount of liquidated
damage
two types of items included in supplementary conditions - ANSWER 1. Modifications of the articles of
the general conditions
2. Additional articles that are legally binding
bid bond - ANSWER a surety purchased by bidders to protect the owner in the case the awarded
contractor did not
sign the contract with the owner
What percentage is a bid bond usually issued at? - ANSWER 5-10% of the bid amount
how to calculate the damage of a bid bond - ANSWER difference between the bid price and second
lowest bid price
performance bond - ANSWER a bond that protects the owner against default on the part of the
contractor in performing the project as required.
, if the contractor fails to perform the work as required, the surety must provide what two things? -
ANSWER 1. completion of the project in compliance with the plans
2. specifications at the price originally quotes by the defaulting contractor
lien - ANSWER claims made against a property by a contractor or other professional
who has supplied labor or
materials for work on that prop
construction leins - ANSWER are designed to protect professionals from the
risk of not being paid for services rendered
addenda - ANSWER any changes in detail, additions, corrections, and contract conditions that arise
before bids are
opened that are intended to become part of the bid package and the basis for bidding are
incorporated into the bid package through addenda
T/F an addendum becomes part of contract documents and provides the vehicle or the owner (and
owner rep) to modify the scope and detail of contract before it is finalized - ANSWER True
what is the performance bond required on a federally funded contract worth $4M? - ANSWER $4 M;
federally funded projects are 100% the value
what is the payment bond required on a federally funded contract worth $4M? - ANSWER $1.6 M; fixed
rate of 40% if contract value > $1M and < $5M
miller act - ANSWER established the required bonding level for federally funded projects
The total project price on an
Indiana Department of Transportation (INDOT) project is $8.5 M. What would be the amount of bid
bond be for this project? Why? - ANSWER $1.7 M; 20% for government contracts; this is a typical value
as stated in text, individual jurisdictions may set different levels
