Types of Owner-Contractor Contracts

What type of Owner-Contractor contract is based on reimbursement for time spent and materials used?

• Single Fixed Fee

• Time and Materials

• Unit Price contracts

• GMP

What is another name for a lump sum contract?

• GMP

• Time and Materials

• Fixed Price

• Cost plus a fee

What is a retainer fee used for in owner-designer contracts?

• To cover the cost of materials and labor

• To ensure the designer will be available for future services when work is not continuous

• To pay for personal services on a per-diem or hourly basis

• To calculate the cost based on a percentage of the construction cost

What type of contract is commonly used for simple projects with a well-defined scope and low risk of unforeseen conditions?

• Time and materials contract

• Cost-plus contract

• Lump sum contract

• Unit price contract

How can work be procured under a Single Fixed Price contract?

• Only through negotiation

• Only through bidding

• Either through bidding or negotiation

What does a Single Fixed Price contract expose the owner to?

• Operational risk

• No risk

• Financial risk due to changes and errors

• Legal risk

What is one of the advantages of a fixed price contract during construction?

• Increases the time spent by field inspectors on measuring quantities

• Reduces the time spent by field inspectors on measuring quantities and preparing invoices

• Requires more detailed quantity measurements

• Decreases the quality of the work

Why might contractors add more contingency to bid prices in fixed-price contracts?

• To cover additional costs due to changes in project scope

• To ensure faster project completion

• To reduce the quality of materials used

• To increase their profit margins without justification

What does the owner reimburse the contractor for in a Time and Materials contract?

• Fixed price regardless of time and materials used

• Only the materials used in the project

• Actual time spent on the project and cost of materials used

• Only the time spent on the project

When is a Time and Materials contract typically used?

• When the project scope is well-defined and unlikely to change

• When the project scope is not known or may significantly change

• Only in large projects