CON 496: Construction Contract Administration With
A+ Graded Solutions Version 2026/2027
1. What is a "Letter of Intent" (LOI)?
A) A final contract signed by all parties.
B) An interim document expressing a serious intent to contract, often used to allow
long-lead ordering.
C) A letter from the contractor quitting the job.
D) A letter from the bank approving a loan.
Correct Answer: B. LOIs allow work or procurement to start while the formal legal
contract is being finalized.
2. What is "Unbalanced Bidding"?
A) Bidding on a project while standing on one foot.
B) Inflating unit prices for early work items and deflating later ones to get more cash
early.
C) Bidding the same price as a competitor.
D) Forgetting to include the cost of labor.
Correct Answer: B. While common, it can be grounds for rejecting a bid in public
works because it increases the owner's risk.
3. What is "Job Cost Accounting"?
A) Tracking the contractor’s personal bank account.
B) The process of tracking all expenses and revenues associated with a specific
construction project.
C) Counting the number of workers on site.
D) Paying for the architect's lunch.
Correct Answer: B. It is essential for determining if a project is profitable in real-time.
4. What is the "Critical Path Method" (CPM)?
A) The fastest way to drive to the job site.
B) A scheduling technique that identifies the sequence of tasks that determines the
project duration.
C) A method for choosing a contractor.
D) A safety protocol for high-rise buildings.
Correct Answer: B. Any delay in a critical path task results in a delay of the entire
project.
,5. What is "Total Float"?
A) The amount of time a project can be late.
B) The amount of time an activity can be delayed without delaying the project
completion date.
C) A tool for smoothing concrete.
D) The number of extra workers available.
Correct Answer: B. Tasks with zero total float are on the critical path.
6. What is "Free Float"?
A) Extra materials that were given for free.
B) The amount of time an activity can be delayed without delaying the very next
activity.
C) Working on a barge.
D) A bonus payment.
Correct Answer: B. It is a subset of total float.
7. What is a "No-Damage-for-Delay" clause?
A) A clause saying no one can be late.
B) A provision stating that a contractor's only remedy for owner-caused delay is a
time extension, not money.
C) A clause that pays the contractor for every day they are early.
D) A safety rule.
Correct Answer: B. These are controversial and are banned in several states for
public projects.
8. What is "Constructive Acceleration"?
A) Building a wall very quickly.
B) When an owner refuses a valid time extension, forcing the contractor to spend
more to finish on time.
C) Using a faster crane.
D) Hiring more subcontractors voluntarily.
Correct Answer: B. The contractor can often claim the extra costs associated with
this "forced" speed-up.
9. What is a "Suspension of Work" clause?
A) A clause about building a suspension bridge.
, B) A provision allowing the owner to stop work for a period without terminating the
contract.
C) A rule about hanging lights.
D) A type of insurance policy.
Correct Answer: B. The contractor is usually entitled to an adjustment in price and
time once work resumes.
10. What is "Direct Labor"?
A) Labor performed by the owner.
B) Labor specifically engaged in the physical construction of the project.
C) Labor performed by the office secretary.
D) Labor performed for free.
Correct Answer: B. This is a primary cost driver in construction estimates.
11. What is "Burdened Labor Rate"?
A) The weight a worker can carry.
B) The hourly wage plus all employer-paid benefits, taxes, and insurance (UI, FICA,
etc.).
C) A worker who is unhappy.
D) The cost of tools.
Correct Answer: B. This is the "true" cost of an employee to the company.
12. What is "Prevailing Wage" (Davis-Bacon Act)?
A) The wage the contractor wants to pay.
B) A minimum wage set by the government for workers on public construction
projects.
C) The highest wage in the country.
D) A bonus for working in the rain.
Correct Answer: B. It ensures contractors don't win bids by undercutting local labor
standards.
13. What is "Broad-Form Indemnity"?
A) A very wide insurance policy.
B) A clause requiring the contractor to indemnify the owner even for the owner’s
own negligence.
C) A type of foundation.
D) A project summary.
A+ Graded Solutions Version 2026/2027
1. What is a "Letter of Intent" (LOI)?
A) A final contract signed by all parties.
B) An interim document expressing a serious intent to contract, often used to allow
long-lead ordering.
C) A letter from the contractor quitting the job.
D) A letter from the bank approving a loan.
Correct Answer: B. LOIs allow work or procurement to start while the formal legal
contract is being finalized.
2. What is "Unbalanced Bidding"?
A) Bidding on a project while standing on one foot.
B) Inflating unit prices for early work items and deflating later ones to get more cash
early.
C) Bidding the same price as a competitor.
D) Forgetting to include the cost of labor.
Correct Answer: B. While common, it can be grounds for rejecting a bid in public
works because it increases the owner's risk.
3. What is "Job Cost Accounting"?
A) Tracking the contractor’s personal bank account.
B) The process of tracking all expenses and revenues associated with a specific
construction project.
C) Counting the number of workers on site.
D) Paying for the architect's lunch.
Correct Answer: B. It is essential for determining if a project is profitable in real-time.
4. What is the "Critical Path Method" (CPM)?
A) The fastest way to drive to the job site.
B) A scheduling technique that identifies the sequence of tasks that determines the
project duration.
C) A method for choosing a contractor.
D) A safety protocol for high-rise buildings.
Correct Answer: B. Any delay in a critical path task results in a delay of the entire
project.
,5. What is "Total Float"?
A) The amount of time a project can be late.
B) The amount of time an activity can be delayed without delaying the project
completion date.
C) A tool for smoothing concrete.
D) The number of extra workers available.
Correct Answer: B. Tasks with zero total float are on the critical path.
6. What is "Free Float"?
A) Extra materials that were given for free.
B) The amount of time an activity can be delayed without delaying the very next
activity.
C) Working on a barge.
D) A bonus payment.
Correct Answer: B. It is a subset of total float.
7. What is a "No-Damage-for-Delay" clause?
A) A clause saying no one can be late.
B) A provision stating that a contractor's only remedy for owner-caused delay is a
time extension, not money.
C) A clause that pays the contractor for every day they are early.
D) A safety rule.
Correct Answer: B. These are controversial and are banned in several states for
public projects.
8. What is "Constructive Acceleration"?
A) Building a wall very quickly.
B) When an owner refuses a valid time extension, forcing the contractor to spend
more to finish on time.
C) Using a faster crane.
D) Hiring more subcontractors voluntarily.
Correct Answer: B. The contractor can often claim the extra costs associated with
this "forced" speed-up.
9. What is a "Suspension of Work" clause?
A) A clause about building a suspension bridge.
, B) A provision allowing the owner to stop work for a period without terminating the
contract.
C) A rule about hanging lights.
D) A type of insurance policy.
Correct Answer: B. The contractor is usually entitled to an adjustment in price and
time once work resumes.
10. What is "Direct Labor"?
A) Labor performed by the owner.
B) Labor specifically engaged in the physical construction of the project.
C) Labor performed by the office secretary.
D) Labor performed for free.
Correct Answer: B. This is a primary cost driver in construction estimates.
11. What is "Burdened Labor Rate"?
A) The weight a worker can carry.
B) The hourly wage plus all employer-paid benefits, taxes, and insurance (UI, FICA,
etc.).
C) A worker who is unhappy.
D) The cost of tools.
Correct Answer: B. This is the "true" cost of an employee to the company.
12. What is "Prevailing Wage" (Davis-Bacon Act)?
A) The wage the contractor wants to pay.
B) A minimum wage set by the government for workers on public construction
projects.
C) The highest wage in the country.
D) A bonus for working in the rain.
Correct Answer: B. It ensures contractors don't win bids by undercutting local labor
standards.
13. What is "Broad-Form Indemnity"?
A) A very wide insurance policy.
B) A clause requiring the contractor to indemnify the owner even for the owner’s
own negligence.
C) A type of foundation.
D) A project summary.
