In a lump-sum construction contract, which party generally bears the greater risk of an inaccurate quantity estimate?
Correct answer: C. The contractor, because the agreed price is generally fixed
- A. The employer, because payment follows actual quantities
- B. The consultant, because design review sets the price
- C. The contractor, because the agreed price is generally fixed
- D. The supplier, because material prices are guaranteed
Explanation
In a lump-sum contract, the contractor agrees to complete the defined work for a stated price. Therefore, the contractor usually bears the risk that its estimated quantities or costs are insufficient, unless the contract provides otherwise.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Construction Management and Estimation
Construction management covers planning, scheduling, resource control, contracts, procurement, site organisation, safety, quality assurance and project documentation. Estimation includes quantity take-off, rate analysis, bill preparation, valuation and cost control, with attention to the difference between direct and indirect costs and between an estimate, a tender and a final account.
Practise Construction Management and Estimation
80 free Construction Management and Estimation MCQs from Civil Engineering, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Civil Engineering questions like this
Civil Engineering is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Construction Management and Estimation questions
What is a supplementary estimate generally prepared for in public works?
What is the main purpose of a toolbox talk held before a site task begins?
When using the centre-line method for estimating masonry quantities, what is a key requirement?
What is the main characteristic of a cost-plus contract?
What is the principal purpose of contractor prequalification before tendering?
In construction procurement, what does a negotiated contract usually involve?