CMGT 3500 FINAL QUESTIONS AND
ANSWERS
List several measures that describe the size of the construction industry -
ANSWER-- accounts for 2/3 of $1-trillion in expenditures per year in new
construction
- constitutes about 5% of GDP
-6% (7.5 mill) of workers of the industrial workforce is employed directly in the
construction industry
-the construction industry represents the largest single production activity in the
American economy
Under what conditions might the funding of public construction projects be
particularly high? - ANSWER-periods of recession
why is the construction industry referred to as an easy entry and easy exit industry? -
ANSWER-high growth rate in construction
low capital requirements
little absolute cots or profit advantage for established firms
most states have no rigid licensing requirements or fees
What are the ramifications of the cyclic tendencies experienced in the construction
industry? - ANSWER-some firms exit the industry without the benefit of choice, they
fail.
periods of recession, weak local economy , competition increases, causing profit
margins to decrease which results in failure of construction companies
Contrast the financing of public versus private construction projects? - ANSWER-
private:
funded through:
-expenditure of existing capital
-direct loans from outside creditors
-sale of fixed assets
-issuance of additional shares of stock/corporate bonds
-endowments
public:
funded through:
-appropriations from annual operating budgets (general taxation)
,-special taxation assessments for specific purposes
-bond issues for specific purposes
-endowments
What are some advantages and disadvantages of the general contract approach?
(design-bid-build) - ANSWER-Advantages:
-gives the owner a firm idea of the final costs of the project
-GC has skills that should reduce cost to owner
-GC maintains a staff of trained supervisors
-clearly defined roles for each contracting party
disadvantages:
-often extends project duration
-owner does not have an agent involved in contractual arrangements
-leads to tight bids and small profit margins
-exposes owner a greater probability to claims
Discuss the criticisms that have been made of public agencies performing
construction services by the self-performance or force account method - ANSWER--
instances in which the public owner submitted a bid on competitively bid projects,
owner is frequently the low bidder
-other cases; owner does not permit private contractors to submit bids- the
contractors state they're placed at an unfair disadvantage
-say that owners do not charge properly for the costs of owning and operating heavy
equipment
What type of project might be ideally suited for the design-build or design-construct
method? - ANSWER-popular in constructing large, industrial type projects
no extensive design on which to compute a bid
it is possible to begin construction before completion of the design for the project
What are the advantages of using the professional construction management
approach? - ANSWER-to the owners benefit
CM gives the owner a GMP that the project cost will not exceed
permits flexibility for changing the project as the design evolves
fast-tracking projects are good for this approach
Which types of contractual arrangements lend themselves to fast-tracking? -
ANSWER-projects to be delivered quickly
what general rule is followed when one party to a contract wants to cancel the
contract, even though the second party has already performed a portion of or all the
obligations under the contract? - ANSWER-If the different parties cannot amicably
resolve any dispute, a lawsuit will be filed and litigation will begin and a court
decision will legally come up with an outcome.
, Give a construction example of a unilateral contract, and a bilateral or a mutual
contract. - ANSWER-unilateral: a one-sided contract in that only one of the
contracting parties makes a promise, while the other party exchanges something
other than a promise, (performance)
bilateral: an agreement created by mutual promises made by the contracting parties.
each party plays two roles: promisor and promisee. most construction projects are
bilateral
Give an example of an implied contract in which estoppel will prevent one party from
canceling the contract - ANSWER-a contract may be created by what a party does or
says, without a written document, and that party is then "estopped" from denying that
a contract exists.
Discuss the significance of a bid being an offer rather than an acceptance -
ANSWER-offer: made when one person signifies to another person a willingness to
enter into a binding contract on certain specified terms.
once an offer is made, it is revocable as long as it has not been accepted
acceptance creates the contract
What is the relationship between eminent domain and condemnation? - ANSWER-
eminent domain is the right of the federal government or state to take possession of
private property and appropriate it for public use.
condemnation is the exercise of eminent domain
Describe the major differences between a right-of-way and an easement - ANSWER-
right-of-way: a tract of land, usually consisting of a series of connected parcels of
property, that is used for the operation of a highway or public utility. owned by public
or private firms
easement: grants a specific right to use of non-owners (neighbors, utilities).
appropriate for the installation of sewer lines, water lines, etc.
Give examples of zoning restrictions that a municipality might enact to control or
guide its growth and development - ANSWER-Zoning restrictions imposed for the
city's growth and development and to regulate usage of land.
Describe some of the conditions that must generally exist for a worker to
successfully file a mechanics lien - ANSWER-a written contract is required
must have performed the obligations of the contract to a substantial degree, as
approved by the engineer
What are some major criticisms that workers have of mechanics liens? - ANSWER--
the laws are complex. notices have to be given all within a specified time
-the laws are inconsistent between states
ANSWERS
List several measures that describe the size of the construction industry -
ANSWER-- accounts for 2/3 of $1-trillion in expenditures per year in new
construction
- constitutes about 5% of GDP
-6% (7.5 mill) of workers of the industrial workforce is employed directly in the
construction industry
-the construction industry represents the largest single production activity in the
American economy
Under what conditions might the funding of public construction projects be
particularly high? - ANSWER-periods of recession
why is the construction industry referred to as an easy entry and easy exit industry? -
ANSWER-high growth rate in construction
low capital requirements
little absolute cots or profit advantage for established firms
most states have no rigid licensing requirements or fees
What are the ramifications of the cyclic tendencies experienced in the construction
industry? - ANSWER-some firms exit the industry without the benefit of choice, they
fail.
periods of recession, weak local economy , competition increases, causing profit
margins to decrease which results in failure of construction companies
Contrast the financing of public versus private construction projects? - ANSWER-
private:
funded through:
-expenditure of existing capital
-direct loans from outside creditors
-sale of fixed assets
-issuance of additional shares of stock/corporate bonds
-endowments
public:
funded through:
-appropriations from annual operating budgets (general taxation)
,-special taxation assessments for specific purposes
-bond issues for specific purposes
-endowments
What are some advantages and disadvantages of the general contract approach?
(design-bid-build) - ANSWER-Advantages:
-gives the owner a firm idea of the final costs of the project
-GC has skills that should reduce cost to owner
-GC maintains a staff of trained supervisors
-clearly defined roles for each contracting party
disadvantages:
-often extends project duration
-owner does not have an agent involved in contractual arrangements
-leads to tight bids and small profit margins
-exposes owner a greater probability to claims
Discuss the criticisms that have been made of public agencies performing
construction services by the self-performance or force account method - ANSWER--
instances in which the public owner submitted a bid on competitively bid projects,
owner is frequently the low bidder
-other cases; owner does not permit private contractors to submit bids- the
contractors state they're placed at an unfair disadvantage
-say that owners do not charge properly for the costs of owning and operating heavy
equipment
What type of project might be ideally suited for the design-build or design-construct
method? - ANSWER-popular in constructing large, industrial type projects
no extensive design on which to compute a bid
it is possible to begin construction before completion of the design for the project
What are the advantages of using the professional construction management
approach? - ANSWER-to the owners benefit
CM gives the owner a GMP that the project cost will not exceed
permits flexibility for changing the project as the design evolves
fast-tracking projects are good for this approach
Which types of contractual arrangements lend themselves to fast-tracking? -
ANSWER-projects to be delivered quickly
what general rule is followed when one party to a contract wants to cancel the
contract, even though the second party has already performed a portion of or all the
obligations under the contract? - ANSWER-If the different parties cannot amicably
resolve any dispute, a lawsuit will be filed and litigation will begin and a court
decision will legally come up with an outcome.
, Give a construction example of a unilateral contract, and a bilateral or a mutual
contract. - ANSWER-unilateral: a one-sided contract in that only one of the
contracting parties makes a promise, while the other party exchanges something
other than a promise, (performance)
bilateral: an agreement created by mutual promises made by the contracting parties.
each party plays two roles: promisor and promisee. most construction projects are
bilateral
Give an example of an implied contract in which estoppel will prevent one party from
canceling the contract - ANSWER-a contract may be created by what a party does or
says, without a written document, and that party is then "estopped" from denying that
a contract exists.
Discuss the significance of a bid being an offer rather than an acceptance -
ANSWER-offer: made when one person signifies to another person a willingness to
enter into a binding contract on certain specified terms.
once an offer is made, it is revocable as long as it has not been accepted
acceptance creates the contract
What is the relationship between eminent domain and condemnation? - ANSWER-
eminent domain is the right of the federal government or state to take possession of
private property and appropriate it for public use.
condemnation is the exercise of eminent domain
Describe the major differences between a right-of-way and an easement - ANSWER-
right-of-way: a tract of land, usually consisting of a series of connected parcels of
property, that is used for the operation of a highway or public utility. owned by public
or private firms
easement: grants a specific right to use of non-owners (neighbors, utilities).
appropriate for the installation of sewer lines, water lines, etc.
Give examples of zoning restrictions that a municipality might enact to control or
guide its growth and development - ANSWER-Zoning restrictions imposed for the
city's growth and development and to regulate usage of land.
Describe some of the conditions that must generally exist for a worker to
successfully file a mechanics lien - ANSWER-a written contract is required
must have performed the obligations of the contract to a substantial degree, as
approved by the engineer
What are some major criticisms that workers have of mechanics liens? - ANSWER--
the laws are complex. notices have to be given all within a specified time
-the laws are inconsistent between states
