Cost Estimating & Financial Management Flashcards
6 cards from real Construction Management practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Cost Estimating & Financial Management flashcards as text
Value engineering in construction is primarily used to:
Answer: Achieve required project functions at the lowest possible life-cycle cost
Value engineering systematically analyzes functions of systems and components to find cost-effective alternatives that deliver the same or better performance over the project's life cycle.
A Construction Manager at Risk (CMAR) project delivery model differs from design-bid-build primarily because the construction manager:
Answer: Provides a Guaranteed Maximum Price (GMP) and bears cost risk above that amount
In CMAR, the construction manager enters the project during design and commits to a GMP, taking on the contractor's financial risk for cost overruns above that guaranteed price.
What is a 'cost-loaded schedule' in construction project management?
Answer: A project schedule where budget costs are distributed across activities over time
A cost-loaded schedule assigns dollar values to each scheduled activity, enabling cash flow forecasting and Earned Value tracking by aligning cost with time.
Certified payroll reports on federally funded construction projects are required under which law?
Answer: Davis-Bacon Act
The Davis-Bacon Act requires contractors on federal and federally assisted construction projects to pay prevailing wages and submit weekly certified payroll reports.
Parametric cost estimating uses:
Answer: Statistical relationships between historical project data and physical parameters
Parametric estimating develops cost models from historical data (e.g., $/bed for hospitals, $/seat for stadiums) to quickly forecast costs when detailed design is unavailable.
On a construction project, an owner's contingency differs from a contractor's contingency in that the owner's contingency is primarily reserved for:
Answer: Owner-initiated scope changes and design development risk
The owner's contingency covers scope evolution, design gaps, and owner-directed changes, while the contractor's contingency covers their own execution and cost risk.