Construction & Project Delivery NPPE Practice Questions

Q: Which project delivery method has the owner contracting directly with the various trades instead of hiring a general contractor, leaving the owner exposed to the risk of increased costs?

Correct answer: B. Construction management - In construction management, the owner hires the trades directly rather than a general contractor, so the owner carries the risk of cost increases. Design-bid-build uses a contractor to build a completed design, and design-build has one party both design and build.

Q: A performance bond, used to guarantee a contractor's performance of a construction contract, is generally issued for an amount equal to approximately:

Correct answer: C. 50% of the contract value - A performance bond, in which the surety guarantees the contractor's performance, is generally about 50% of the contract value. By contrast, a bid bond is generally about 10% of the contract value.

Question 1

Which project delivery method has the owner contracting directly with the various trades instead of hiring a general contractor, leaving the owner exposed to the risk of increased costs?

Accepted Answer

Correct answer: B. Construction management

In construction management, the owner hires the trades directly rather than a general contractor, so the owner carries the risk of cost increases. Design-bid-build uses a contractor to build a completed design, and design-build has one party both design and build.

Question 2

A 'holdback' under provincial lien legislation works by having the owner:

Accepted Answer

Correct answer: B. Retain a percentage (e.g., 10%) of each progress payment until the lien period expires, to protect unpaid subcontractors and suppliers

A holdback (retainage) requires the owner to hold back a set percentage of each progress payment (commonly 10%) until the project is complete and the lien period passes. It gives unpaid subcontractors and suppliers a fund to claim against if they file a lien.

Question 3

In a fixed-price (lump sum) construction contract, which standard CCDC document is most commonly used?

Accepted Answer

Correct answer: A. CCDC 2 - CCDC 2 is the standard form fixed-price (stipulated price) contract. CCDC 3 is the standard cost-plus contract and CCDC 4 is the standard unit price contract.

Question 4

The primary purpose of a construction (builders' or mechanics') lien is to:

Accepted Answer

Correct answer: B. Provide security so that those who supply labour and materials get paid

A lien facilitates credit in the construction industry and provides security for payment for labour and materials. It places a charge against the property, making it difficult to sell, until those who did the work are paid.

Question 5

A performance bond, used to guarantee a contractor's performance of a construction contract, is generally issued for an amount equal to approximately:

Accepted Answer

Correct answer: C. 50% of the contract value

A performance bond, in which the surety guarantees the contractor's performance, is generally about 50% of the contract value. By contrast, a bid bond is generally about 10% of the contract value.

Question 6

During a project, a delay occurs that extends completion but for which the contractor is NOT contractually entitled to recover money, although the completion date can be extended. This is known as a(n):

Accepted Answer

Correct answer: B. Excusable delay - An excusable delay can extend the completion date but is not compensable (no money is recovered). A compensable delay entitles the party to recover damages. Items must be on the critical path to qualify for a time extension.

Question 7

Bid shopping is considered unethical because:

Accepted Answer

Correct answer: B. Price negotiations occur after the tender closes, undermining the bidding process

Bid shopping happens when price negotiations happen after the tender closes, which undermines the fair bidding process.

Question 8

Arbitration is preferred over litigation because:

Accepted Answer

Correct answer: B. It is less costly, takes less time, and is less public - Arbitration is used because it is often less costly, takes less time, and is less public than litigation.

Question 9

A "construction lien" allows:

Accepted Answer

Correct answer: B. Contractors, subcontractors, and suppliers to secure payment by encumbering the property

A construction lien is a legal claim registered against a property by a contractor, subcontractor, or supplier who has not been paid for work or materials.

Question 10

"Substantial completion" in construction triggers:

Accepted Answer

Correct answer: B. Release of holdback after the lien period and start of the warranty period

Substantial completion means the work is sufficiently complete for its intended use. It triggers the release of holdback (after the lien period expires) and starts the warranty period.

Question 11

A "performance bond" guarantees that:

Accepted Answer

Correct answer: B. The contractor will complete the work according to contract terms

A performance bond is a surety bond guaranteeing the contractor will complete the work per the contract. If the contractor defaults, the surety may complete the work or pay damages.

Question 12

In a CCDC 2 contract, the consultant (engineer/architect) serves as:

Accepted Answer

Correct answer: B. A neutral contract administrator between owner and contractor

Under CCDC 2, the consultant acts as a neutral administrator: reviewing payment applications, interpreting contract documents, issuing certificates, and making initial decisions on disputes.

Question 13

Fair tendering requires:

Accepted Answer

Correct answer: B. Treating all bidders equally, not disclosing bid information, and evaluating objectively

Fair tendering requires equal treatment of all bidders, confidentiality of bid information, objective evaluation, and no bid shopping or improper negotiations after tender close.

Question 14

A "bid bond" is submitted with a tender to:

Accepted Answer

Correct answer: B. Guarantee the bidder will enter into the contract if awarded

A bid bond guarantees the bidder will enter into the contract if awarded. If the bidder refuses, the surety pays the difference between that bid and the next acceptable bid.

Question 15

"Design-build" project delivery differs from "design-bid-build" in that:

Accepted Answer

Correct answer: B. A single entity is responsible for both design and construction

In design-build, a single entity handles both design and construction, providing single-point responsibility. In design-bid-build, these are separate sequential phases with different parties.

Question 16

A "change order" in construction must be:

Accepted Answer

Correct answer: B. Written, authorized, and agreed upon before additional work is performed

A change order must be a written agreement between the owner and contractor documenting changes to scope, price, or schedule, authorized before the additional work is performed.

Construction & Project Delivery: NPPE Practice Questions

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