A public owner asks why the bid package is set up as one fixed price for a fully designed school addition. Which statement matches a lump-sum contract?
Correct Answer
A) The contractor agrees to complete defined scope for a fixed contract amount
A lump-sum contract sets a fixed price for defined contract work. Other choices describe cost-reimbursable, unit-price, or time-and-material arrangements.
Why This Is the Correct Answer
A lump-sum contract sets a fixed price for defined contract work. Other choices describe cost-reimbursable, unit-price, or time-and-material arrangements.
Why the Other Options Are Wrong
Option B: The owner pays every actual cost without a ceiling
Choice B gives The owner pays every actual cost without a ceiling. Its specific error: it leaves the work at an informal or incomplete stage, while Lump-sum contract requires The contractor agrees to complete defined scope for a fixed contract amount.
Option C: Use unit-quantity measurement as if it were a lump-sum contract
Choice C (Every pay item is measured by unit quantity only) is rejected because the option delays or omits the controlling step.
Option D: Labor is billed only by hourly tickets with no fixed scope
In procurement and contracting, Labor is billed only by hourly tickets with no fixed scope is the wrong selection for Lump-sum contract: the action skips the timing, documentation, or field-control step needed for Lump-sum contract.
Memory Technique
File lump-sum contract under a field note: condition first, number or duty second, answer The contractor agrees to complete defined scope for a fixed contract amount.
Reference Hint
Open Construction Project Management, 5th Ed. (2022); use the index entry or section for "Contract types - lump sum" to confirm that A lump-sum contract sets a fixed price for defined contract work.
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