BUSI 401 Lesson 01 || Error-free Answers 100%.
You have decided that a Design-Bid-Build (DBB) process is best for the high-rise office building
that
your company wants to build. Your reason(s) for NOT choosing the alternative Design Build
(DB)
process is/are because of which of the following?
(1) Using a DB process usually results in less control over the quality of the delivered building.
(2) There is a risk that the building may not meet the owner's requirements if the original DB is
not
detailed enough.
(3) A DB process makes obtaining insurance, bonding, and financing more difficult.
(4) All of the above correct answers Answer: 4
Option (4), all of the above, is the correct answer. DBB is the most common approach to
commercial
design and construction. The owner takes responsibility for architectural drawings, bid
specifications, and
solicitation of a general contractor. In contrast, DB is a procedure to deliver a project where the
design and
construction aspects are contracted by a single entity known as the design-builder or design build
contractor.
An owner has hired a contractor to construct a building. The contractor sets a lump sum fixed
price,
regardless of the actual costs incurred by the contractor. This type of contract is referred to as
which of the following?
(1) Unit price contract
(2) Legally unenforceable contract
, (3) Cost plus contract
(4) Stipulated price contract correct answers Answer: 4
Option (4) is correct because a stipulated price contract is a contract between owner and
contractor complete the work required for a pre-determined fixed price or lump sum, regardless
of the contract's
actual cost. Option (1) is incorrect, as a unit price contract is based on agreed upon a fixed dollar
amount
for each specified unit or work performed, NOT a lump sum. Option (2) is incorrect because a
fixed price
contract is a standard contract used between an owner and contractor, and is not illegal. Option
(3) incorrect because a cost plus contract is based on the actual cost of materials and labour plus
a predetermined
percentage mark-up or fixed fee applied to actual costs.
Which of the following would be categorized as "soft costs"?
(1) Removal of excavation soil
(2) Equipment rentals
(3) Environmental site assessment
(4) Installation of ventilation systems correct answers Answer: 3
Soft costs include expenses related to rezoning and development planning, architect fees, civil
engineering and other consulting reports, and real estate appraisal. Option (3), environmental site
assessment, is an example of soft costs. Hard costs are the direct contractor costs for labour,
material,
equipment, and services, together with contractors' overhead and profit. Options (1), (2), and (4)
are
examples of hard costs.
You have decided that a Design-Bid-Build (DBB) process is best for the high-rise office building
that
your company wants to build. Your reason(s) for NOT choosing the alternative Design Build
(DB)
process is/are because of which of the following?
(1) Using a DB process usually results in less control over the quality of the delivered building.
(2) There is a risk that the building may not meet the owner's requirements if the original DB is
not
detailed enough.
(3) A DB process makes obtaining insurance, bonding, and financing more difficult.
(4) All of the above correct answers Answer: 4
Option (4), all of the above, is the correct answer. DBB is the most common approach to
commercial
design and construction. The owner takes responsibility for architectural drawings, bid
specifications, and
solicitation of a general contractor. In contrast, DB is a procedure to deliver a project where the
design and
construction aspects are contracted by a single entity known as the design-builder or design build
contractor.
An owner has hired a contractor to construct a building. The contractor sets a lump sum fixed
price,
regardless of the actual costs incurred by the contractor. This type of contract is referred to as
which of the following?
(1) Unit price contract
(2) Legally unenforceable contract
, (3) Cost plus contract
(4) Stipulated price contract correct answers Answer: 4
Option (4) is correct because a stipulated price contract is a contract between owner and
contractor complete the work required for a pre-determined fixed price or lump sum, regardless
of the contract's
actual cost. Option (1) is incorrect, as a unit price contract is based on agreed upon a fixed dollar
amount
for each specified unit or work performed, NOT a lump sum. Option (2) is incorrect because a
fixed price
contract is a standard contract used between an owner and contractor, and is not illegal. Option
(3) incorrect because a cost plus contract is based on the actual cost of materials and labour plus
a predetermined
percentage mark-up or fixed fee applied to actual costs.
Which of the following would be categorized as "soft costs"?
(1) Removal of excavation soil
(2) Equipment rentals
(3) Environmental site assessment
(4) Installation of ventilation systems correct answers Answer: 3
Soft costs include expenses related to rezoning and development planning, architect fees, civil
engineering and other consulting reports, and real estate appraisal. Option (3), environmental site
assessment, is an example of soft costs. Hard costs are the direct contractor costs for labour,
material,
equipment, and services, together with contractors' overhead and profit. Options (1), (2), and (4)
are
examples of hard costs.
