Lecture 4: Construction Contracts

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Questions and Answers

What defines the final price in a unit price contract?

The performance outcomes of the contractor

The estimated quantities of items and their unit prices (correct)

The cost of all labor regardless of itemization

The total value of the project agreed beforehand

Which type of cost plus contract includes a cap on maximum costs?

Cost + Fixed Fee with Guaranteed Maximum Price Contract (correct)

Cost + Fixed Fee Contract

Cost + Fixed Fee with Agreement for Sharing any Cost Saving

Cost + Fixed Percentage Contract

In an incentive contract, what is the basis for compensation?

Quality of materials used

The efficiency of labor employed

The total cost of the completed project

Contracting performance based on targets (correct)

Which of the following is a characteristic of Cost Reimbursement Incentive Contracts?

They adjust the initially negotiated fee based on total allowable costs. Signup and view all the answers

What best describes the Turnkey Contracts?

They release the owner from responsibilities during planning and construction. Signup and view all the answers

In a Cost + Fixed Fee with Bonus Contract, what triggers a bonus for the contractor?

Finishing the project below budget and ahead of schedule. Signup and view all the answers

Which category does Fixed Price Incentive Contract belong to?

Incentive Contracts Signup and view all the answers

What is a key feature of the Cost + Fixed Fee with Agreement for Sharing any Cost Saving?

Cost savings are shared between the owner and the contractor. Signup and view all the answers

Which of the following best describes the nature of Built-Operate-Transfer (BOT) contracts?

Contractors retain all or a portion of the revenues earned during the concession. Signup and view all the answers

What is NOT a typical content of a construction contract?

Requirements for custom designs Signup and view all the answers

What are the primary components involved in the contracting requirements of a project?

General Conditions of the Contract and bonds Signup and view all the answers

Which section of a construction contract includes the title page and introduction to the project?

Introductory information Signup and view all the answers

What does the specifications component of a construction contract typically include?

General rules and directions for project execution Signup and view all the answers

In what situation would a construction manager (CM) operate independently of the contractor?

When the CM acts as the owner's agent Signup and view all the answers

Which division in a specifications template typically addresses general requirements?

Division 01 Signup and view all the answers

Which of the following is NOT typically included in the bidding requirements of a construction contract?

Supplementary contract terms Signup and view all the answers

What is a key characteristic of a Lump-Sum or Stipulated Contract?

It is suitable when the scope and schedule are well defined. Signup and view all the answers

Which of the following is NOT typically a component of a Letter of Intent (LOI) in construction projects?

Detailed architectural plans Signup and view all the answers

Which organization provides guidelines for Government-initiated construction projects in the Philippines?

Government Procurement Policy Board (GPPB) Signup and view all the answers

What is a characteristic of the private industry standard for construction contracts in the Philippines?

It follows the Construction Industry Authority-CIAP document 102. Signup and view all the answers

If a larger scope of work arises, what component of the LOI addresses this situation?

A statement about contingencies Signup and view all the answers

What form of contract is best suited for projects with a clearly defined scope and schedule?

Lump-Sum or Stipulated Contract Signup and view all the answers

Which of the following is one of the common references for construction contracts in private industry?

Construction Industry Authority-CIAP Signup and view all the answers

What does the LOI typically signify in the context of a bidding process?

The firm expresses intent to participate in the bidding process. Signup and view all the answers

Study Notes

Lecture 4: Project Documents

Fundamentals & Types of Construction Contracts:
- A Letter of Intent (LOI) is a contract with limited scope, used in government projects, to signal a company's interest in the bidding process.
- LOIs in international and Philippine private projects usually contain:
  - A stated scope of work
  - A lump-sum cost or cost-plus fee
  - Payment terms
  - A commencement date
  - A statement about contingencies
  - Details for project continuation
- Sources/references for Construction Contracts in the Philippines include:
  - Construction Industry Authority (CIAP) document 102: Uniform General Conditions of Contract for Private Construction
  - Philippine Bidding Documents (PBD)
  - American Institute of Architects (AIA) standard construction contract
  - Associated General Contractors of America (AGCA) standard construction contract
Construction Contract Documents:
- Typical Contents: Introductory information, bidding requirements, contracting requirements (General Conditions of Contracts), specifications, drawings, bill of quantities, and appendices.
- Introductory Information: Title page, table of contents, guides, and introduction to the project.
- Bidding Requirements: Contains bid solicitation forms, instructions to bidders, information to bidders, and bid forms.
- Contracting Requirements: The central part of an individual project, including: Agreements, General Conditions of Contract (GCC), Supplementary conditions, Bonds, and Certificates..
- Specifications: Directions, provisions, and requirements of work.
  - Describes type and quality of products in a project.
  - Outlines fabrication, erection, application, installation, and finishing procedures.
  - Details quality of workmanship.
  - Includes necessary codes and standards for the project.
  - Offers alternate materials, products, or services (if needed).
- Drawings:
  - Technical drawings, for visualization, communication, and documentation.
  - Types of Drawings:
    - Site plan: Shows property boundaries, buildings, driveways, and walkways on the property.
    - Plot map: A detailed view of a part of a city or township, focusing on a specific area (e.g., subdivision).
    - Civil/structural plans showing size and configuration.
    - Electrical systems, showing lighting, electrical outlets, communication, and other details.
    - Plumbing and sanitary systems, showing pipes, fixtures, and drainage.
    - Mechanical systems (HVAC, heating, ventilation, and air conditioning), showing equipment and systems.
    - Architectural drawings: show sizes, materials, connections, and parts of a structure(e.g., elevations, sections, parts).
- Bill of Quantities: Detailed breakdown of work items and associated costs.

Self-Assessment:

Content of a Contract Document or Project Manual: List of documents included in the contract.
Attributes of Good Technical Specifications: Details expected for clear technical specifications.
Implications of Not Having a GCC for a Project: Consequences of not having a General Conditions of Contract.

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Description

This quiz covers the fundamentals and various types of construction contracts, including Letters of Intent (LOIs) and their specific components. It also examines significant sources and references for construction contracts in the Philippines and other standards from the American Institute of Architects. Test your knowledge on these important topics related to project documentation.